The head of the US Securities and Exchange Commission has said that public companies whose products contain certain so-called “conflict minerals” will benefit from more time to consider how to deal with new disclosure rules set to be adopted this year, Reuters reported.
“The commission is working to finalize the adoption and I’m hopeful in the next couple of months, it will be done,” SEC Chairman Mary Schapiro told lawmakers during a hearing on the agency’s 2013 budget request on 29 February. “We will have a phase-in period, I don’t know how long, that will give sufficient time for some of the supply chain due diligence mechanisms to be developed and put in place.”
Section 1502 of the Dodd-Frank Financial Reform Act passed in July 2010 mandated that US companies report use of conflict minerals (defined as tungsten, tin, tantalum and gold emanating from DR Congo and neighbouring countries), and charged the SEC with writing, implementing and enforcing the reporting rules. The SEC missed two deadlines for doing so in 2011 and is currently scheduled to issue the rules in the first half of this year although the likely release date may not be until June 2012.
Companies and business groups like the US Chamber of Commerce have strongly cautioned the SEC to slow down and scale back its proposal. They say it will be costly and difficult to put into practice, as these minerals can be used in minuscule amounts and are almost impossible to track through the numerous layers of the supply chain. Chairman Schapiro also mentioned that the rule “will try to give latitude and flexibility in some areas”, recognising that the issue is complex and very much out of the ordinary for US regulators.