Conflict Minerals and the Dodd-Frank Act
Dodd-Frank was a major financial reform bill passed in 2010. It also includes section 1502: which intends to stop the trade in conflict minerals by informing consumers if the goods they purchase include conflict minerals.
Dodd-Frank imposes new supply-chain reporting requirements on U.S. companies sourcing conflict minerals from Democratic Republic of Congo (DRC), where the extraction and trade of tin, tantalum, tungsten, and gold are used to finance armed conflicts that have led to atrocious human rights violations, gender-based violence, rampant rape, and slavery. (UN Human Rights Report, State Dept. DRC Report).
This is not a ban on minerals from eastern DRC, it simply requires any company using these minerals to disclose whether those minerals originated from the war-torn eastern DRC.
Congress passed these requirements with the intention of curbing the trade of conflict minerals because “the exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo is helping to finance conflict characterized by extreme levels of violence in the eastern Democratic Republic of the Congo, particularly sexual- and gender-based violence, and contributing to an emergency humanitarian situation therein”
The Securities and Exchange Commission’s Role
In 2012, the SEC adopted rules to uphold the Conflict Minerals law by requiring companies to disclose the use of conflict minerals to the agency. Since then, industry groups such as the US Chamber of Commerce have been fighting these rules, even taking the SEC to court, though the rules have been upheld so far. Meanwhile, companies are gearing up for May 2014, when the first annual disclosures will be due.
For more information:
- Earthworks: Conflict minerals
- Earthworks' Letter to the SEC on the conflict mineral rules
- Earthworks' blogs on Dodd-Frank
- International Corporate Accountability Roundtable’s letter urging the SEC to issue the conflict mineral rules.
- Enough Project’s continued work in the region