After protracted delays, the US Securities and Exchange Commission is due to vote on draft conflict minerals reporting rules at an open meeting on 22 August. Assuming the rules are approved for adoption, they will then be published and take effect. In the SEC’s statement there is no indication of what the rules may require, although some kind of phase-in period is expected.
The first of three items on the agenda for the public meeting is that “The Commission will consider whether to adopt rules regarding disclosure and reporting obligations with respect to the use of conflict minerals to implement the requirements of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.” The other items are transparency of payments to governments by oil and mining companies and the advertising of private securities offerings.
The original deadline set for the SEC under the 2010 law was 17 April 2011, and two further deadlines announced by the SEC itself have come and gone. 58 members of Congress on June 22 sent a letter to SEC Chairman Mary Schapiro criticizing the agency for taking so long, Reuters reported. “There is no clear reason for the delay,” the lawmakers wrote. “It has been nearly 18 months since the proposed rules were issued, and the comment period for both rules closed over a year ago.”
As proposed, SEC reporting companies would need to identify if any conflict minerals are used in their products. If the minerals are present, the companies would then need to conduct due diligence to reasonably establish if their production did in any way fund conflict in the DR Congo or adjoining countries. Companies and business groups like the US Chamber of Commerce have strongly cautioned the SEC to slow down and scale back its proposal.