The U.S. Securities and Exchange Commission (SEC) has implemented new rules that will require certain companies to disclose their use of key minerals originating from the Democratic Republic of Congo (DRC) and adjoining countries.
Implemented in August 2012, the SEC’s so-called conflict mineral rules are intended to monitor the use of tin, tantalum, tungsten and gold extracted from DRC mines. The DRC has endured a 20 year civil war, and investigators from the United Nations and non-government organizations believe that the war is being perpetuated in part by the exploitation of mine workers and resources.
The SEC’s conflict mineral rules apply to public companies who file reports with the SEC and for whom the use tin, tantalum, tungsten and gold are “necessary to the functionality or production of a product manufactured or contracted to be manufactured by the company.” All companies subject to the SEC’s conflict mineral reporting requirements must file annual reports with the SEC, with the first reporting deadline in May 2014 for activities during the 2013 calendar year.
Tin, tantalum, tungsten and gold are widely used in electronic products intended for consumer, medical or industrial use. In addition to the reporting requirements noted above, the SEC’s conflict minerals reporting rules impose rigorous due diligence requirements on those companies who know or who have reason to believe that the minerals they use originated in the DRC. Companies who use specific minerals originating from the DRC will also be required to post information regarding their practices on their company website.
The new SEC rules were mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law by U.S. President Obama in 2010.