The U.S. Court of Appeals for the District of Columbia ruled on the 18th August for a second time that the Securities and Exchange Commission (SEC) cannot force public companies to declare whether their products contain ‘conflict minerals’ because such a declaration would violate free speech. The Court gave the same decision in April 2014, saying that the disclosure requirement violated the First Amendment because it forced a company to ‘confess blood on its hands’, but in November 2014 it agreed to review this in light of a separate yet similar case requiring companies to disclose country-of-origin information about their meat products. The meat labelling case was considered distinct from the conflict minerals rule because labelling meat relates to ‘curing consumer deception’ while disclosing conflict minerals does not deal with advertising or point of sale disclosures. The Court determined that ‘We see no reason to change our analysis’ in light of the meat-disclosure ruling. An SEC spokesman said the commission is reviewing the decision and has not further commented.
Disclosure on the conflict status of products was strongly backed by human rights groups who claim that such disclosures can help consumers and investors who wish to avoid any minerals that might have helped fund rebel groups, but trade groups including the National Association of Manufacturers argued the rule was costly, burdensome and damaging. In ITRI’s view the labelling requirement in Dodd Frank, and the SEC Rule, was a key cause of the de-facto embargo on central African minerals by risk-averse buyers.