Senator Richard Durbin (D-IL) and a coalition of Members of Congress continue to show leadership on bringing peace to the Democratic Republic of Congo. On April 14, the US District Court of Appeals issued its decision on a case challenging the validity of the Securities and Exchange Commission’s (SEC) conflict minerals rule that originated from Section 1502 of the Dodd Frank Wall Street Reform Act. The appeals court upheld most aspects of the rule in a largely favorable judgment. However, it found the requirement for companies to report whether or not their materials are “DRC conflict-free” to be unconstitutional under the first amendment. There are still a number of phases of litigation that will answer pending questions, including whether and how the rule might change in light of this finding.
Meanwhile, the looming June 2 deadline for companies to file their reports remains unchanged. As of now, companies must still comply with most aspects of the rule’s reporting requirements, including investigating the origin of their minerals and reporting on what activities they are undertaking to ensure their minerals supply has not contributed to the financing of armed groups in the Great Lakes region. However, the SEC now has the option to voluntarily stay the rule, which would put the rule on hold and allow companies to abstain from filing their reports until further notice.
Today, 12 members of Congress led by Senator Durbin issued a letter to the SEC, strongly encouraging it to proceed with the implementation of the rule. The letter discourages the SEC from putting the rule on hold with a stay, insisting that companies should still have to report on the aspects of the rule that the court upheld, including country of origin and due diligence. It notes the overwhelmingly supportive stance the courts have taken so far on the validity and importance of the rule.
The letter also highlights the value of the rule’s country of origin and due diligence requirements for promoting peace in the Great Lakes region: “Such transparency allows consumers and investors to know which companies source materials more responsibly in DRC and serve as a catalyst for industries to finally create clean supply chains for Congo.”
The Enough Project agrees with and applauds the letter’s signatories for their critical attention to the litigation and their support in creating and supporting the implementation for the Conflict Minerals Rule.
See the full text of the letter below and view the official version here.
April 21, 2014
Chair Mary Jo White
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Dear Chair White:
With the Securities and Exchange Commission’s Final Rule on Conflict Minerals now fully upheld by the United States District Court for the District of Columbia and with that decision largely affirmed by the United States Court of Appeals for the District of Columbia Circuit, we write to urge that all due diligence and other reporting requirements due on the May 31, 2014, initial filing deadline move forward as promulgated. This SEC rule was drafted in a balanced and thoughtful way that followed Congressional intent in trying to provide greater transparency in the use of key minerals that fuel horrific violence in the Democratic Republic of Congo (DRC). With strong court decisions affirming the key components of the rule, no delay is warranted in the implementation of those requirements while any remaining free speech issues are resolved (namely the listing of specific products that are not “DRC Conflict Free” and the requirement for companies to also post their reports on their own websites).
This original conflict minerals law sought to address the conflict minerals black market and resulting violence in DRC – violence which has claimed more than five million lives and earned eastern Congo the ominous designation as the “Rape Capital of the World.” This deadliest conflict since World War II is fueled, in part, by the mining and trade of minerals used in everything from cell phones, to jewelry, to airplanes.
As such, the law we passed was simple. Congress said that any company registered in the United States which uses any of a small list of key minerals from the DRC or its neighbors has to disclose in its SEC filing the use of those minerals and what is being done, if anything, to mitigate sourcing from those perpetuating DRC’s violence. Such transparency allows consumers and investors to know which companies source materials more responsibly in DRC and serves as a catalyst for industry to finally create clean supply chains out of Congo. This key provision was upheld in both court rulings.
We urge the SEC to continue implementation of this rule in light of the judicial validation of both the underlying statute and the SEC’s promulgated rule. We also thank the Commission for its notable work on this important topic.
Sincerely,
Senator Dick Durbin
Senator Tim Johnson
Senator Benjamin Cardin
Senator Barbara Boxer
Senator Sherrod Brown
Senator Edward Markey
Representative Jim McDermott
Representative Maxine Waters
Representative Raul Grijalva
Representative Jim Moran
Representative John Lewis
Representative Gwen Moore