Press release / 18 Aug 2015

Conflict Minerals Law Remains on the Books despite Damaging Decision

Global Witness response to U.S. Conflict Minerals court case decision

Global Witness fundamentally disagrees with a decision reached today by the United States Court of Appeals for the District of Columbia Circuit that misinterprets the First Amendment in order to grant corporations a constitutional right to conceal information about whether minerals in their supply chains may have funded conflict. Today’s court decision applies only to the requirement to describe companies’ products as “not been found to be DRC conflict free” and leaves the rest of the regulations intact.

“This dangerous and damaging ruling could allow corporations to hide information they would prefer their consumers and investors not to know, said Zorka Milin, Senior Legal Advisor at Global Witness. “Today’s decision affects not only the conflict minerals rule but could also be exploited by companies to bring legal challenges to other corporate transparency laws.” 

In order to justify their decision that the phrase “not been found to be DRC conflict free” is unconstitutional, two of the three judges capriciously narrowed down what is considered commercial speech under the First Amendment based on whether or not such speech is advertising. The court suggests that it could have been constitutional for the regulators to mandate advertising speech. The conflict minerals disclosures are not advertising speech because the law does not require companies to physically label the conflict free status on the products themselves. Ironically, doing so would have limited the physical space for the companies’ speech by preventing them from explaining how they came to their determination, yet the court suggested that this could have been more acceptable.

“The convoluted logic of the decision is a perversion of the First Amendment and intrudes on the mandate of a democratically-elected Congress. Given the potential implications of the ruling, in particular, the warped interpretation of the First Amendment, we urge the court to reconsider and overrule this decision,” Milin added.

The U.S. conflict minerals law has catalyzed reforms along international mineral supply chains. Properly undertaken conflict minerals disclosures provide consumers and investors with truthful and factual information about companies’ supply chains. Despite the ruling today, companies reporting under Section 1502 of the Dodd Frank Act, known as the conflict minerals law, are still legally required to submit meaningful and detailed information about their supply chain due diligence, on an annual basis, and clearly demonstrate compliance with each of the five steps of the OECD guidance in subsequent conflict minerals reports.

/ ENDS

Contacts

Zorka Milin, Senior Legal Advisor

[email protected]

+1 202 807 8999

Sophia Pickles, Senior Campaigner

[email protected]

Notes to editor:

Notes for editors

Today’s decision comes in response to an earlier decision by the Court of Appeals to re-examine whether certain aspects of Section 1502 rule violated the First Amendment. In December 2014 Global Witness and Free Speech for People submitted an Amici Curiae brief responsive to the Court’s November 18, 2014 order, see https://www.globalwitness.org/sites/default/files/library/GW%20brief.pdf

In December 2014 Global Witness published a blog on whether corporations have a constitutional right to hide information about whether their products contain conflict minerals https://www.globalwitness.org/blog/do-us-corporations-have-constitutional-right-conceal-information-about-conflict-minerals/

An April 2015 Global Witness report Digging for Transparency analysed the first round of annual company disclosures under Section 1502 and noted that companies reporting under Section 1502 of the Dodd Frank Act should submit meaningful and detailed information about their supply chain due diligence and clearly demonstrate compliance with each of the five steps of the OECD guidance in subsequent Conflict Minerals Reports, filed with the Securities and Exchange Commission https://www.globalwitness.org/campaigns/democratic-republic-congo/digging-transparency/

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