Briefing Document / Aug. 30, 2012

Global Witness comment on SEC conflict minerals rule

Click here to read our initial comment on some of the key provisions relating to companies’ implementation. 

On 22 August the U.S. Securities and Exchange Commission (SEC) voted on the rules for the Dodd Frank Act’s Section 1502 – a provision that aims to stop the minerals trade fuelling violence in eastern Democratic Republic of Congo (DRC).

Global Witness welcomes the long overdue publication of these rules but regrets that the SEC has caved in to industry pressure and introduced a temporary measure allowing companies to declare that they do not know where the minerals they use come from. This risks further delaying the point at which companies take responsibility for the impacts of their purchases on people in the DRC. Companies have known about the devastating impacts of the conflict minerals trade for over a decade. The idea of legislation to address it was mooted in 2008 and the Dodd Frank Act was passed over two years ago. Moreover, the rules were held up for 16 months beyond the deadline set by the statute in response to companies’ lobbying and thinly-veiled threats to sue the SEC. There is broad agreement that the situation in eastern DRC requires urgent action and the SEC’s decision to introduce a measure that could mean an additional two to four year delay is seriously misguided.

With the rules now issued, investors, consumers and the general public will be expecting prompt and transparent action from American firms. The SEC’s unfortunate decision notwithstanding, the imperative now is for companies to implement the regulation and make sure they are not financing warring parties in DRC. Companies should do so immediately rather than waiting the further two to four years permitted by the law.