SEC Reconsidering “Conflict Minerals Rule”

In January 31, 2017 public statements, Acting SEC Chairman Michael S. Piwowar addressed both the overall future of the SEC’s “Conflict Minerals Rule” as well as a technical issue under the rule.

Public comments are being solicited on both topics.  Companies impacted by this rule should consider filing comments.


The Conflict Minerals Rule imposes reporting requirements on all U.S. publicly listed companies that manufacture or contract to manufacture merchandise containing any amount of columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives (specifically, tantalum, tin, and tungsten), regardless of their origin, provided that they are necessary for the functionality of a product the company manufactured or contracted to manufacture.  Additional requirements are triggered with respect to such minerals that may originate in the Democratic Republic of the Congo (“DRC”) or any adjacent country (“the covered countries”).  The intended purpose of the rule is to end the ongoing violent conflict in the DRC, which has been partially financed by the exploitation and trade of conflict minerals originating in the DRC.

January 31st Public Statements

In his statements, the Acting SEC Chairman observed that, while visiting Africa last year, he heard numerous complaints about the rule from those directly affected.  These included that: the disclosure requirements have caused a de facto boycott of African minerals with effects far beyond the covered countries; onerous compliance costs are driving legitimate mining operators out of business; it is unclear whether the rule has accomplished any of its objectives; and, a withdrawal from the region may undermine U.S. national security interests.

Separately, Acting Chairman Piwowar observed that, after an April 2014 decision by the U.S. Court of Appeals for the D.C. Circuit held that a technical aspect of the Conflict Minerals Rule violated the First Amendment, the SEC issued a stay of the problematic provision (along with other interim guidance) pending the completion of judicial review.  The matter was remanded to the lower court for further consideration (where it continues to sit).

Comments Solicited

The Acting Chairman has encouraged interested parties to submit detailed comments in connection with the above by March 17, 2017.  If you have questions about this recent development or would like assistance preparing a comment, please contact Arthur W. Bodek or any other attorney in our office. 

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