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Congressmen to Schapiro: SEC Has Missed Conflict Minerals Rule Deadline by ‘More Than a Year’

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Congressmen to Schapiro: SEC Has Missed Conflict Minerals Rule Deadline by ‘More Than a Year’

Posted by Katy Johnson on June 26, 2012

Congressmen to Schapiro: SEC Has Missed Conflict Minerals Rule Deadline by 'More Than a Year'

The U.S. Securities and Exchanges Commission, or SEC, has failed to publish regulations implementing section 1502 of the Dodd-Frank Act nearly two years since the act’s passage. The purpose of section 1502 is to address an urgent humanitarian crisis in Congo by cutting off the trade in conflict minerals fueling violence and human rights abuses in the country’s volatile eastern region. Last week, 58 members of Congress signed a letter to the chairperson of the SEC, Mary Schapiro, asking her to schedule a vote on these vital regulations before July 1, 2012. 

A bipartisan group of congressmen signed the letter, including House Natural Resources Committee Ranking Member Ed Markey (D-MA); Rep. Barney Frank (D-MA), the top Democrat on the Financial Services Committee; Rep. Howard Berman (D-CA), the ranking democrat on the Foreign Affairs Committee; and Rep. Frank Wolf (R-VA), a leading Republican on the House Appropriations Committee.

According to the initial timeframe, the SEC had until April 2011 to publish regulations to implement sections 1502 and 1504. The commission has held hundreds of meetings with interested stakeholders and received more than 200,000 comments on the two rules—the majority of these messages from American citizens urging the commission to promptly issue strong final rules. 

The congressional letter expresses a “growing concern regarding the delayed rulemaking” and stresses the urgency of the situation. If the rules are not released soon, many companies will not have to file their first reports until summer 2014—four years after Dodd-Frank was passed. Every month that passes undermines efforts in the Democratic Republic of Congo to stem the brutal violence and increase transparency in the mining industry.

Section 1502 requires publicly listed companies to disclose whether their products contain minerals originating in Congo or neighboring countries and to disclose the steps they have taken to avoid sourcing from mines operated by illegal armed groups. It also requires companies to list any products that are not conflict free. Section 1504 calls for publicly-listed firms engaged in commercial oil, gas, or mineral extraction to disclose any payment made to the U.S. government or any foreign government for the purposes of commercial development. Furthermore, companies must also identify the type and total amount of each payment, and make this information publicly available.

It is time for the SEC to schedule a vote on these two crucial rules. The bipartisan letter urging the SEC to issue the rules is a welcome step in the movement to end the conflict in Congo.

Photo: Cassiterite in the palm of a miner in eastern Congo (Enough / Laura Heaton)