- The U.S. Securities and Exchange Commission's 3-2 vote to approve
rules regarding conflict minerals shows some small progress, but
could go further, said groups for human rights and sustainable
Under sections 1502 and 1504 of the 2010 Dodd-Frank Wall Street
Reform and Consumer Protection Act, manufacturers need to disclose
to investors if their products include certain minerals from the
Democratic Republic of the Congo. That country has used mineral
trade to fuel a long-term war. The rules were delayed because of
industry complaints the rules were too burdensome and risked
revealing competitive information.
Human rights group Global Witness and US SIF: The Forum for
Sustainable and Responsible Investment, welcomed the rules, but
said some regulations were weaker than they could be. Their
comments are on the sections of the rulemaking that were released
to the public on Wednesday.
Global Witness said the rule to allow companies to describe the
origin of their minerals as "undeterminable" for a period of two
years, or four years for small companies, is "extremely
"The minerals trade is fueling violent conflict and human rights
abuses in eastern DRC and delays in implementing the law postpone
the moment at which companies take responsibility for the impact of
their purchases, jeopardizing efforts to stop minerals funding
conflict and seriously undermining the aim of the law," Global
Both Global Witness and US SIF applauded the SEC's decision to
use the OECD's five-step due diligence framework as the benchmark
to measure a company's due diligence should be measured.
US SIF said the SEC's ruling requiring the disclosure of
payments to foreign governments or the U.S. government "will help
establish much needed transparency in the extractive industries and
help foster an environment that promotes accountability and sound
corporate governance practices."
The rules on resource extraction payment disclosure must be
filed, but US SIF said "we are disappointed that the filing will be
on a new and unfamiliar Form SD and not in the annual report."
US SIF said the SEC could have strengthened some of the
provisions in the rules, but said "the issuance of these rules
represents an important step forward in providing greater clarity
on material environmental, social and corporate governance
disclosure to millions of investors."
By Debbie Carlson of Kitco News