SEC votes on Section 1502 of the Dodd Frank Act

Global Witness welcomes the long-overdue vote on implementation rules for Sections 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act by the United States Securities and Exchange Commission (SEC). 

Click here to read our comment on the final rule

Follow the conversation on #DoddFrank and #ConflictMinerals

For over fifteen years abusive armed groups and members of the Congolese army have used the minerals trade to fund a brutal conflict in eastern DRC. The warring parties have made millions of dollars per year by imposing illegal taxes at mine sites and controlling mineral transport and smuggling routes. Civilians have borne the brunt of the violence in a conflict characterised by rape, pillage and murder.

Click here for more information about the current situation in eastern DRC.

The minerals involved in this trade – cassiterite (tin ore), coltan (tantalum ore), wolframite (tungsten ore) and gold – are traded into international supply chains and used in the production of consumer goods such as laptops, cell phones and jewellery. Compelling companies to find out where the metals they use come from and whether their purchases are fuelling human rights violations can help to reduce financing to warring parties in eastern DRC.

Landmark legislation passed by the U.S. Congress in July 2010 calls for companies to do just that. Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires companies using cassiterite, coltan, wolframite and gold to find out whether the metals originated in the DRC or neighbouring countries. If so, firms are required to carry out checks on their supply chain – known as due diligence – to determine whether their minerals purchases have benefited abusive armed groups in eastern DRC. Companies must report publicly to the SEC on the measures they've taken, and commission an independent third party audit of their report.

Since the Act was passed over two years ago Global Witness has called on the SEC to ensure that the final rules include a clear due diligence standard based on the five-step supply chain due diligence framework developed by the Organisation for Economic Cooperation and Development (OECD). Global Witness has also argued that the final rules should not contain any phase-in period or delay to the reporting requirements of the law. The situation in eastern DRC requires urgent action and companies should be required to implement Section 1502 as soon as possible to determine whether any of their purchases are fuelling conflict.

Click on the links below to read statements by two Congolese NGOs.

Statement by CREDDHO

Statement by ASSODIP

“I am encouraged that on August 22 the Securities and Exchange Commission will vote on new regulations to implement the Conflict Minerals Provision of the Dodd-Frank Act. As I stated in letters to the SEC in October 2011 and February 2012, I hope the SEC will issue strong regulations with no phase-ins, exemptions or delays so that this important law can at long last be fully and meaningfully implemented. The mining and trade of conflict minerals in the Democratic Republic of Congo fuels horrific violence and these new regulations will help prevent these minerals from being purchased by companies in the U.S. and around the world.” - Senator Barbara Boxer

“The conflict in the DRC, and especially eastern Congo, is largely over who gets to steal the mineral wealth that rightfully belongs to the Congolese people. We have a moral duty to put an end the conflict that has already resulted in five-million war-related deaths, displaced another million and a half people, and caused untold destruction and suffering in DRC. It is morally indefensible to buy conflict minerals, knowing full well the barbarism that those minerals are funding, instead of developing legitimate, conflict-free mineral supplies from Congo.” - Representative Brad Miller

“We are pleased to see the Securities and Exchange (SEC) set a date for this meeting to potentially vote on the rules.  GAM believes that strict adherence to Dodd-Frank along with a short phase-in period is both socially responsible and financially feasible…We believe that GAM has demonstrated that producers and end users of tantalum can reject “conflict mining” and utilize “conflict free” sources while doing so at minimal expense.” - Letter sent from GAM, a producer of tantalum ore with mines in Western Australia and processing facilities for electronics, aerospace, automotive industries  in Japan and U.S., to Chairman Schapiro on August 16, 2012.

“Employing only EICC/GeSI independently validated, conflict-free smelters, in addition to our own supply chain assessment activities has allowed us to assure our customers of our compliance with the Organization for Economic Cooperation and Development, due diligence guidelines as well as with the provisions detailed in the Dodd-Frank law,” said Bill Millman, director of quality and technology for AVX’s tantalum division. “We also expect that the conflict-free tantalum policies that we already have in place will make us compliant with related and currently pending SEC regulations. Several other manufacturers are making efforts to attain validated compliance with these provisions; but, at present, AVX is the only company that meets these exacting standards.” - AVX (a manufacturer and supplier of electronic components, uses tantalum, headquarter in the U.S.)