The US Securities and Exchange Commission may opt to take a tough line in proposed rules expected shortly requiring US publicly traded companies to disclose whether their goods contain minerals linked to violence in central Africa, the Wall Street Journal reported. The proposed rules, required by the 2010 Dodd-Frank financial law, cover due diligence procedures on supply chains of “conflict minerals”—tin, tantalum, tungsten or gold mined from DR Congo or adjoining countries.

The SEC plans to vote on the rule on 22 August. A final draft circulated to SEC commissioners would outline a series of items for companies to review before they can assume their goods don’t contain minerals from the area which may be funding conflict, people familiar with the document told WSJ.

The draft reportedly puts forward tight standards for an independent audit that must be conducted on each conflict minerals report and would require top executives to sign off on their report, something companies believe could subject them to greater liability.

Under the draft, the SEC would give companies a two-year transition period to determine if their goods contain conflict minerals, one of several concessions sought by business groups, some of which have threatened legal action on the grounds of high compliance costs.

The details of the final rule could change ahead of next month’s vote, but WSJ’s sources said they didn’t expect major negotiations among the SEC’s five commissioners. A three-person majority of the SEC’s five-member commission is required for the rule to pass.

ITRI comment: Although the Dodd-Frank law does not outlaw the use of Congolese minerals, its impact so far has led companies to avoid purchases of African sourced metal and a de-facto embargo on ore mined in the Kivu provinces in particular; an area now suffering increases in violence and economic downturn. More onerous reporting procedures are likely to cause more companies to boycott even conflict-free mines in the region, which was not the intention of the proponents of the law.