Following the publication of the Securities and Exchange Commission (SEC) conflict minerals rule in 2012, several trade groups launched a legal challenge to various requirements, one of which was supported by the District of Columbia Court of Appeals. On 14th April 2014 the Court agreed that “The label ‘conflict free’ is a metaphor that conveys moral responsibility for the Congo war….By compelling an issuer to confess blood on its hands, the statute interferes with that exercise of the freedom of speech under the First Amendment” as reported by ITRI here.

Many legal processes later, the SEC had the opportunity to support its rule by appeal to the US Supreme Court by the 7th April 2016 but chose not to do so. In fact this was explained in detail in March in a now public letter (available here) from the Attorney General Loretta Lynch to the US House of Representatives Speaker Paul Ryan. While it is possible that the SEC may seek to issue a revised rule, previous guidance remains relevant – that no company is required to describe its products as ‘DRC conflict free,’ having ‘not been found to be ‘DRC conflict free,” or ‘DRC conflict undeterminable.’ If a company voluntarily elects to describe any of its products as ‘DRC conflict free’ in its Conflict Minerals Report, it would be permitted to do so provided it had obtained an independent private sector audit (IPSA).

ITRI considers this a positive development since the requirement in the Rule to determine ‘conflict’ status is overly simplistic and contradictory to the widely supported concepts of progressive improvement under the OECD due diligence guidance. This disclosure concept is a major driver behind disengagement from purchase of African supply sources.