SEC Rule on Conflict Minerals supported by US Court

US District Court Judge Robert L. Wilkins yesterday agreed with the SEC Rule on ‘conflict minerals’ rejecting a case filed by US business groups seeking to overturn the regulation. In a 63-page ruling, the judge rejected numerous arguments from the National Association of Manufacturers, the Business Roundtable, and the US Chamber of Commerce claiming that the Rule violated companies’ First Amendment rights by forcing them to make disclosures linking their products to human-rights abuses, and also noted that the SEC wasn’t required to evaluate whether the Rule would achieve the humanitarian objectives Congress had in mind in the Dodd Frank Act; both the Act and the Rule have been heavily criticised for the negative consequences which are said to have resulted in the mining communities of DRC and the surrounding countries implicated in the disclosure requirements. The business groups, in a joint statement, said they would review their options after the ruling. “We continue to believe this rule, while well intentioned, is unsupported by the Agency’s own record,” and seem likely to appeal against the Rule considered too costly and a poor and simplistic solution to the complex issues existing in eastern DRC. The SEC was pleased that the agency had been found to act reasonably in drafting of the Rule.