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After a one year delay, the Securities and Exchanges Commission, or SEC, announced yesterday, June 3, that it will meet on August 22 to finally vote on the adoption of conflict minerals regulations required by Section 1502 of the Dodd-Frank Financial Reform Act.
Section 1502, which was passed in July 2010, requires companies to disclose whether they use conflict minerals—gold, tin, tungsten, or tantalum sourced from Congo or its neighboring countries— to ensure their products are not financing armed groups in eastern Congo. For more than a year, activists, human rights groups and legislators have been working to push the SEC to implement section 1502 by passing conflict minerals rules.
Rules and regulations for companies affected by 1502 were supposed to be released on April 17, 2011, along with a rule requiring oil, gas, and mining companies to disclose payments to governments. However, delays caused by companies, bureaucratic processes, and the threat of a lawsuit by the Chamber of Commerce have pushed back the release of the rules for a full year.
Since October 2010, activists have petitioned, called, and written to the SEC, asking the commissioners to deliver on the intended purpose of Section 1502: to create clean and transparent supply chains that do not source minerals from conflict mines in eastern Congo or contribute to the ongoing violence by indirectly funding armed groups.
Some electronics companies tried to slow the process down by calling on the SEC to ease reporting requirements in the rules, which they felt put undue burden on American business. In the face of this opposition, in January 2011 more than 7,000 activists pressured the SEC to uphold section 1502 and help end violence in eastern Congo. Thanks to countless phone calls and in-district meetings with representatives, 58 members of Congress have called on the SEC to release the rules as soon as possible.
It is not just the activist and corporate community awaiting the release of the rules. Ten universities, three cities, and two states have passed resolutions calling for conflict-free products, and the implementation of 1502 is a major step towards that direction.
"The chorus of voices from a movement of students, faith-based groups, cities, and states from California to Connecticut is growing by the day, saying that they do not want conflict minerals in their cell phones, laptops, or jewelry,” said Enough Project Senior Policy Analyst Sasha Lezhnev. “Tens of thousands of people wrote to Chairperson Schapiro over the past year asking her to act on the minerals legislation, which has a concrete impact on people's lives in war-torn eastern Congo. The SEC should issue robust rules that give companies clear guidance on how to trace their supply chains and ensure that they can invest in a responsible, clean minerals trade from Congo that helps communities."
This past month, major electronics companies Microsoft, General Electric, and Motorola Solutions publicly stated that they do not support the Chamber’s attempts to repeal conflict minerals regulations.
Heading into the vote on August 22, it is key that the SEC delivers on the legislation’s intended purpose and that the following essential points remain in the rules:
- Supply chain checks by companies that are specific and verified
- Equal reporting standards for all four minerals – gold, tin, tungsten, and tantalum
- All manufacturing companies are included
Photo: Securities and Exchanges Commission crest