Companies in the United States are waiting for Security and Exchange Commission (SEC) clarification on their conflict minerals disclosure responsibilities. The SEC issued proposed rules in December and accepted public comments through March. The agency has stated it will evaluate the comments before finalizing the rules later this year.
What are conflict minerals? They are minerals being sourced from rebel-controlled mines in the Eastern region of the Democratic Republic of the Congo (DRC), where armed conflicts are resulting in thousands being killed. Horrific human rights violations are occurring, and profits from inhumanely-run mines are helping fuel these conflicts.
Conflict minerals include columbite-tantalite (coltan), cassiterite, wolframite, and gold. Four derivatives of these materials (tantalum, tin, tungsten, and gold) are used in the electronics industry. The US enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, and a provision in the act requires all US public companies that use any of four minerals -- tin, tantalum, tungsten, and gold -- to trace the supply back to their source. If they come from the DRC region, the company must file an audited report with the SEC declaring whether the minerals they used came from a mine that directly or indirectly financed or benefited armed groups in the region.
While this law is an historic attempt to address a serious problem, there is debate about whether it will help resolve the conflict in the DRC. Some believe the task is too daunting (only smelters know the source of their raw materials), and the reporting timetable too aggressive (companies must start reporting beginning January 2012), that it will cause companies to stop sourcing minerals from the Congo. This could lead to economic hardship for millions of innocent people who make their livings from the mining and minerals trade.
All of this is weighing on the SEC as it carefully reviews the comments it has received before issuing its final rules. In the meantime, the electronics industry is gearing up to comply. The Electronics Industry Citizenship Coalition and the Global e-Sustainability Initiative have rolled out encouraging programs to assist the electronics industry by certifying DRC smelters as conflict-free.
While we advise electronics companies to take action as soon as possible, some are waiting until final SEC clarification is provided. What is your company doing?
More details available on this and other legislation at element14.