Republicans on the House Financial Services Committee have proposed a full repeal of the US’s conflict minerals reporting rules through discussion of the Financial CHOICE Act, released last week. CHOICE stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs and is the Republican plan to replace what they see as the failed Dodd-Frank Act and promote economic growth. The ‘conflict mineral’ section of Dodd Frank is said to ‘impose a number of overly burdensome disclosure requirements … that bear no rational relationship to the SEC’s statutory mission to protect investors, maintain fair, orderly and efficient markets, and promote capital formation.’ The proposal calls for repeal of the law to be ‘restored or revived as if [it] had not been enacted.’ The CHOICE Act describes how ‘There is overwhelming evidence that Dodd-Frank’s conflict minerals disclosure requirement has done far more harm than good to its intended beneficiaries – the citizens of the Democratic Republic of Congo and neighboring Central African countries.’ It is also claimed, through quotes selected from US Government Accountability Office reports, that the ‘SEC’s rule has not illuminated companies’ sourcing of conflict minerals to any meaningful degree.’
In reaction, Holly Dranginis, senior policy analyst at the Enough Project, told Chemical Watch there has been ‘noticeable, measurable progress’ connected to 1502 and its implementation and repeal would be the worst case scenario. Although there is limited chance the CHOICE Act will pass in this Congress the situation could change following the US elections later this year. This move is separate to a proposal to strip section 1502 of funding for enforcement.
In ITRI’s view, the conflict mineral rule is far from perfect and its introduction without planning or support from the US for affected actors in the African region led to the negative consequences described by CHOICE. Nevertheless, the rule has driven significant change, which, with additional and better coordinated support from the international community could continue to generate positive outcomes. Changing the rule at this time is unlikely to undo the unintended consequences felt in the past, and is likely to lead to new problems. The key lesson from Dodd Frank must be that no mineral regulation or supply chain actions should be introduced without well informed consideration of impacts on livelihoods in mining regions.