On July 2, 2012, the Securities and Exchange Commission announced it would vote on long-delayed regulations on “conflict minerals” on August 22. The new rules were required by section 1502 of the Dodd-Frank Act. That law set an April 2011 deadline for issuance of the rules, but the SEC missed that date and additional, internal December 2011 June 2012 targets.
The rules, which have proven extremely controversial and difficult to write, will implement Dodd-Frank requirements that publicly traded companies determine whether their products are derived from four minerals associated with the metals gold, tin, tungsten, and tantalum. These metals are widely used in electronics and a broad array of products, including jewelry, tools, engines, medical equipment, chemicals, packaging, and even ballpoint pens. If a company uses any of these metals, it must trace their origins through upstream supply sources to see whether any were mined in the Democratic Republic of the Congo or surrounding Central African countries. If they were, or if the possibility cannot be ruled out, the company must conduct extended diligence efforts, potentially including costly independent audits.
Fifty-eight members of Congress (including one Republican), frustrated by the SEC’s delays in issuing the rules, sent a letter June 22 to SEC Chairman Mary Schapiro demanding a vote on the rules by July 1.
(For previous coverage of the conflict minerals issue in this blog, see here).