Politically-divided commission narrowly approves new SEC ‘Conflict Minerals’ rule – by Dorothy Kosich (Mineweb.com – August 23, 2012)


Beginning in 2014, public companies listed on U.S. exchanges will have to disclose their reliance on minerals from the DRC and surrounding nations.

RENO (MINEWEB) –  While not the only unhappy ones, it could be argued that the unhappiest stakeholders in the Securities and Exchange Commission’s adoption of a controversial provision governing conflict minerals may have been the Republican members of commission.
On a 3 to 2 vote, the commission voted for Section 1502, the “conflict minerals provision”, requiring companies listed on U.S. stock markets to examine their supply chains to determine and disclose if their productions contain minerals from the Democratic Republic of the Congo or its neighboring nations.
SEC Chairman Mary Schapiro and fellow Democrats Luis A. Aguilar and Elisse Walter voted in favor of the new regulation, while Republican commissioners Daniel Gallagher and Troy Paredes opposed the rule.
“I believe the final rule faithfully implements the statutory requirement as mandated by Congress in a fair and balanced manner,” said Schaprio.
Aguilar called the rule “the culmination of a careful and comprehensive process and a clear Congressional directive. …Today’s rule will bring clarity to the various stakeholder that have already developed initiatives to conduct the due diligence and trace supply chains.”
‘We all want the violence in the DRC to end,” said Paredes. “Unfortunately, the adopting release does not offer a reasoned basis for concluding that the final rule will help bring this about, and there is cause for concern that the hardship and suffering could worsen if the outcome is a de facto embargo.”
“…there is a failure to assess whether and, if so, the extent to which the final rule will in fact advance its humanitarian goal as opposed to unintentionally making matters worse,” he added.
Gallagher asserted “it seems to me that taking the fight directly to the warlords would be a much more efficient process than waiting and hoping for some positive trickle-down effect attributable to new SEC reporting requirements under section 1502.”
He expressed concerns that the “one size to fit all” bundle of costs to comply with the rule will fall most heavily on smaller businesses. “There is no exemption for smaller companies. That, I believe is a fundamental flaw.”
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