Companies unprepared for conflict minerals rule, U.S. court ruling looms – by Sarah N. Lynch (Reuters India – April 9, 2014)

http://in.reuters.com/

WASHINGTON – (Reuters) – Many public companies are on track to miss a May deadline for complying with new rules that require them to file disclosures that tell investors whether their products contain certain “conflict minerals” from a war-torn part of Africa, a new survey has found.

The survey, conducted by PricewaterhouseCoopers, comes at the same time as a U.S. appeals court continues to weigh whether to strike down the conflict minerals rule after industry groups challenged it.

Despite the pending legal challenge, the U.S. Securities and Exchange Commission has not granted companies a temporary reprieve from complying with the rule, which kicks in on May 31.

Of 700 companies surveyed across 15 industries, Pricewaterhouse said it found that a mere 4 percent of companies have completed a draft of their SEC conflict minerals filings. (PwC survey: r.reuters.com/vux38v) Another 90 percent are not ready with a substantive draft document, PwC added, noting that conflict minerals compliance “has proven more intensive” than anticipated.

“Time is running out and companies need to move fast,” said Bobby Kipp, a partner with PwC’s risk assurance practice, in a press release announcing the findings.

The SEC’s conflict minerals rule stems from a provision in the 2010 Dodd-Frank Wall Street reform law.

Human rights groups convinced lawmakers to tuck in the provision, in an effort to empower consumers who want to avoid products that encourage mining in areas gripped by rebel violence and humanitarian conflict.

The measure requires companies to determine if certain types of minerals, in products such as laptops and car parts, may have originated from the Democratic Republic of the Congo (DRC) region.

The results of the inquiry into the minerals’ origin also must be disclosed to the SEC and posted on company websites.

The findings in PwC’s survey help bolster some of the complaints made by the business groups that filed a lawsuit against the SEC to challenge the rule.

For the rest of this article, click here: http://in.reuters.com/article/2014/04/09/sec-conflictminerals-survey-idINL2N0N01IR20140409