Conflict Mineral Rules Shouldn’t Disrupt Manufacturing Supply Chain

By October 7, 2010Regulations, Trade

In reacting against the murderous civil war in the Congo and neighboring countries, Congress has passed a law meant to restrict the trade in “conflict minerals.” For manufacturers, the concern is that these new provisions of the Dodd-Frank financial reform law will make U.S.-based companies less competitive in the global marketplace, even as the restrictions do little to accomplish their well-intended goal.

The Hill today reports on the regulatory process to put into effect TITLE XV, Section 1502, Conflict Minerals, of Public Law 111-203, the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Securities and Exchange Commission is in charge of writing the rules due for release next spring, which will require companies to determined and disclose the origin and use of these minerals, most prominently gold, tungsten, cassiterite, and columbite-tantalite (coltan).

As The Hill reports, manufacturers and retailers are urging the SEC to be methodical, careful, and not to overstep in the process. From “Tiffany’s among companies wary of new rules to limit use of conflict minerals“:

“For lots of companies, we’re talking about hundreds of products that have to be evaluated throughout global supply chains,” said Catherine Robinson, director of high-tech trade policy at the National Association of Manufacturers (NAM)….[snip]

An informal group of manufacturing and social-responsibility organizations, along with non-governmental organizations, is meeting to build consensus and craft a set of guidelines.

“Our focus is on making sure that we’re coming up with standards that are practical and rational and that can be implemented without unduly burdening legitimate trade,” Robinson said.

The SEC has a list of comments already submitted posted at its website here. Venable LLP has prepared a briefing paper on the topic, “SEC News Alert: New SEC Reporting Requirements for Issuers Using Conflict Minerals.”

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