Conflict Mineral Update – A Must Read For Compliance Teams!

Conflict Mineral Update – A Must Read For Compliance Teams!

In 2 days from now the SEC will hold a vote on the final rules for the Conflict Mineral provisions in the Dodd Frank Act. To be clear, this act has already been passed. The vote is to determine the compliance standards that will be required and enforced. Assent has consulted directly with the SEC on the matter and recent articles in the Wall Street Journal and a MineWeb.com (excerpt below) outline much of the debate / foreshadowing of what the rules will entail. We have also linked directly to the US Government Accountability Office report which makes a strong call for the definition and ratification of the required compliance standards associated with Conflict Minerals.

The general consensus is that the final ruling will be more stringent that initially thought as reported by the WSJ.
See below:

“A recent Wall Street Journal article suggests the SEC may toughen its proposed conflict minerals rules. “Compared with the original proposal, a final draft circulated to SEC commissioners would outline a series of items for companies to review before they can assume their goods don’t contain minerals from the area, people familiar with the document said.”

“Final rules will take the issues of non-transparent payments [made by mining companies] and conflicts minerals out of the shadows and into the open, making it possible to fight corruption, increase government accountability and end the resource curse,” said the representatives. “They will also provide material information for investors to reduce their risk and increase the choices of ethical investment.”
The lawmakers argued continued delay “undermines efforts in the DRC to make the mining industry more transparent and to diminish the link between minerals and the funding of the brutal violence carried out by warlords. If the rules are not released soon, some companies will not have to file their first reports until summer 2014, four years after Dodd-Frank was passed.”
In a Jul 2, 2012 notice, the SEC said it would consider adoption of the rules regarding disclosure and reporting obligations with respect to the use of conflict minerals on August 22.
A recent Wall Street Journal article suggests the SEC may toughen its proposed conflict minerals rules. “Compared with the original proposal, a final draft circulated to SEC commissioners would outline a series of items for companies to review before they can assume their goods don’t contain minerals from the area, people familiar with the document said.”
“The reports require companies to say what steps they took to verify whether the minerals were taxed or controlled by rebel groups,” said the WSJ. “For some companies, the report may require scouring supply chains made up of hundreds or even thousands of suppliers and vendors.”
The newspaper said the SEC would give companies a two-year period to determine if their goods contain conflict minerals.

Source:

http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=155633&sn=Detail&pid=102055

To view the full GAO Report Visit: http://www.gao.gov/products/GAO-12-763

If you or your team has any Conflict Mineral Compliance related questions please visit: https://www.assentcompliance.com/conflictmineral.asp

 

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