In early 2017, in response to a possible suspension of the Conflict Minerals Rule for Section 1502 of the Dodd-Frank law, numerous companies, investors, activists, NGOs, and others have come out publicly in support of the Rule. Several of these have come in the form of letters to the Securities and Exchange Commision (SEC) in response to a call for comments on the Conflict Minerals Rule from Acting Chairman of the SEC, Michael Piwowar.
Additionally relevant to U.S. business interests in the Conflict Minerals Rule are:
A comment from ELM Sustainability Partners, an independent advisory firm, demonstrates that compliance costs to businesses are 74-85% less than the initial SEC estimate. While the SEC projected $3-4 billion for total company costs, ELM estimates costs at $600-800 million for all companies. Additionally, these costs have dropped significantly as new tools and processes have been developed which streamline compliance – and ELM notes several other tangible benefits the rule has had to U.S. business interests.
A comment from investors and investor groups with over $4.8 trillion in assets under management, which cites specifically how and why “As sustainable and responsible investors, we look to the U.S. Administration and the SEC to continue their essential role in promoting responsible management and sourcing of raw materials. Through regulated disclosures, not only do companies and investors benefit, but we all indirectly contribute to a peaceful, prosperous, and stable conflict-free minerals trade in the DRC region, thereby further advancing respect for human rights in the global supply chains of U.S. companies.”
Below are excerpts from some of the statements or comments issued by U.S.-based companies directly affected by compliance with the Rule.
“We believe that the rule has not caused a “de facto boycott of minerals,” and that it has in fact led to the development of a more stable supply chain with many social and economic benefits for the people of the Democratic Republic of Congo (DRC) and adjoining countries…Soon after Dodd-Frank’s passage, we decided that Section 1502 gave us a blueprint to enable our company to stabilize the tantalum supply chain, to keep our products affordable, and to make a difference on the ground in the DRC where a large and critical source of tantalum exists….Without Section 1502, this would not have been possible. Our solution helps stabilize the supply chain of tantalum for many of the largest electronics companies in the world.”
“As a leading member of the U.S. Jewelry industry, we are writing to express our support for Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the corresponding Securities and Exchange Commission’s Conflict Minerals Rule. We do believe that the due diligence and traceability measures required by Section 1502 are an essential component to breaking the links between conflict and the minerals trade in eastern Democratic Republic of Congo. This legislation has helped strengthen our own responsible supply chain management practices. The major jewelry industry association, The Responsible Jewellery Council, has modeled conflict minerals guidance from this precedent. We further acknowledge that this provision has led to the development of several important private sector schemes that promote and facilitate responsible sourcing from the region, including one that we are actively a participant.”
“Signet believes that Section 1502 has been a global driving force in the supply chains of 3TG to establish and maintain responsible, conflict-free supply chains.”
“While we intend to maintain the guiding principles of our Conflict Minerals Policy regardless of regulation, we firmly believe that the continued existence of Federal regulation that addresses the sourcing of conflict minerals provides an important framework for industry, laying the foundation for protection of human rights and responsible sourcing efforts in the DRC and beyond.
“We urge Congress to support legislation that effectively promotes due diligence and transparency for the sourcing of all conflict metals and gemstones.”
“The Trump administration has prepared a draft Executive Order that will suspend the requirement that US firms need to carry out due diligence to ensure that the products they sell do not contain conflict minerals, including gold, from the Democratic Republic of Congo.
“In what reads like a story from the farcical newspaper The Onion, the draft claims the obligation to prove that no conflict minerals are in a company’s supply stream “caused harm to some parties in the Democratic Republic of the Congo.” (Who? Congolese warlords profiting from the sale of conflict minerals?)
“We have worked with both Democrats and Republicans on a variety of human rights issues. In over two decades of these efforts we have found that, when it comes to human rights concerns, both sides of the aisle have traditionally found common ground and a shared willingness to take a stand. We are at a loss to understand how the White House can justify this proposed action that, if signed by the President, would undercut a powerful tool to help the people of the Democratic Republic of Congo and undermine efforts to end the trade in conflict minerals.”