SEC sets date for conflict minerals rule vote

After a long delay, the U.S. Securities and Exchange Commission said it will meet August 22 to vote on the controversial “conflict minerals” rule proposed in the 2010 Dodd-Frank Wall Street reform law

The U.S. Securities and Exchange Commission announced this week that it will meet August 22 to vote publicly on rules requiring companies to disclose whether any of their products contain “conflict minerals” sourced from the Democratic Republic of the Congo.  The rules are required by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act and have been a source of controversy for more than a year-and-a-half as business groups, government leaders, human rights activists and others argue over implementation details.

The conflict minerals rule would require publicly traded companies to disclose annually whether or not they have used tantalum, tin, tungsten and gold mined from the DRC, where trade in such minerals fuels criminal networks and is perpetuating violence in the region. The legislation aims to stem violence in the area by curtailing trade and stopping the flow of money to violent regimes.

The legislation will have a profound effect on the electronics industry, as the minerals in question are widely used in electrical and electronic equipment. Industry leaders and other business groups have urged the SEC to consider phasing in the regulations to allow them time to develop traceability and compliance data. They argue that the complexity of the supply chain, political controversy over the rules and refusal of countries such as China to divulge the sources of its raw materials further complicate the issue.

The SEC was scheduled to finalize the rules in April 2011, but extended its deadline following overwhelming input from business leaders over the difficulty involved in implementing the regulations.  The SEC was supposed to issue its final rules early this year—between January and June—and set the August 22 date following increasing pressure from lawmakers in support of the legislation. On June 22, 58 members of Congress sent a letter to SEC Chairman Mary Schapiro criticizing the agency for the delays.

TAGS: Supply Chain
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