Conflict Minerals Scope Analysis – Metal Compounds (Catalysts)

Conflict Minerals Scope Analysis – Metal Compounds (Catalysts)

Conflict Minerals scope analysis is an essential component to a successful Conflict Minerals program. The inclusion or exclusion of metal compounds (for example: organotin compounds) can have a huge impact on the scoping process.

Metal compounds under the Conflict Minerals rule have, of late, been an especially hot topic of discussion. Just around the filing deadline there was a call between the SEC and various stakeholders (one of whom being Keller and Heckman LLP who represent the plastics industry) in regards to whether metal compounds  actually fall under the scope of the Conflict Minerals Rule.

On this phone call, it was confirmed that the Securities and Exchange Commission (SEC) has exempted chemical compounds manufactured from tin, tantalum, and tungsten from the scope of the final rule implementing the Conflict Minerals provision (Section 1502) of the Dodd-Frank Wall Street Report and Consumer Protection Act.

Assent recently attended a conflict minerals conference where Eric Gotting, a partner at Keller and Heckman LLP, discussed this issue.

Firstly – the largest impact is on the plastics industry and they depend on these compounds. As mentioned, the most common example would be organotin compounds. These are used in small amounts and are found/used for products such as silicones, polyurethanes, vinyls, and polyesters.

Secondly, there is currently nothing in writing from the SEC to confirm this call or clearly state this exemption. Keller and Heckman, as well as other interested parties, are still pushing for written confirmation. 

Here is the summary of the situation:

  • SEC confirmed metal compounds are not covered
    • o They have agreed compounds are chemically distinct from metals
  • SEC rule does not apply in following situations:
    • o Manufacturers using compounds
    • o Companies downstream from such manufacturers
  • SEC rule still applies in the following circumstances:
    • o Alloys containing a 3TG
    • o Manufacturers of chemical compounds

Any pressure on the SEC so far for written confirmation has yielded the reply that there was already existing wording that pointed to this interpretation in 2 footnotes (1 in each litigation brief). Here is one of those briefs with the footnote: http://www.chamberlitigation.com/sites/default/files/cases/files/2013/SEC%20Brief%20–%20Nam%20and%20Chamber%20of%20Commerce,%20et%20al.%20v.%20SEC%20(D.C.%20Circuit).pdf [p.36].

It will ultimately be a business decision to determine if you are comfortable moving forward without these compounds included until the point where written confirmation is provided, IF it is ever provided.

Email us at info@assentcompliance.com

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