SEC sets vote on conflict minerals rule

After a nearly two-year delay, the U.S. Securities and Exchange Commission has set a date to vote on a ruling that requires public companies to disclose if they use conflict minerals from the Democratic Republic of Congo and surrounding areas.

The SEC announced Monday that it would meet on Aug. 22 to consider the rule, a provision of the 2010 Dodd-Frank Act, the financial reform package.

The ruling comes amid rising pressure from consumers and humanitarian and environmental groups for companies to improve the transparency of their supply chains.

“The issue is not limited to a single humanitarian effort in Africa,” said Jess Kraus, CEO of Source 44, a company that helps businesses improve the transparency of their suppliers. “Rather, it’s about companies looking deeper into their supply chain.”

The SEC faced mounting criticism for taking so long to vote on the rule, after missing the April 17, 2011 statutory deadline.

On June 22, more than fifty members of Congress sent a letter to SEC Chairwoman Mary Schapiro urging the agency to finalize the rule after the 18-month delay.

“There is no clear reason for the delay," the lawmakers wrote. “The Commission has had more than enough time to consider and respond to all of the substantive comments from industry, civil society, investors and others."

The rule, called Section 1502, requires companies to examine their supply chains and report whether they use tin, tantalum, tungsten and gold from the DRC in their products.

The DRC is rife with corruption, child slavery and violence. Humanitarian groups accuse large companies of fueling the conflict by sourcing key minerals from mines operated by warlords and armed groups. 

“I believe conflict has gone on for as long as it has because the conflict minerals and revenues from mining go to feed the rebel groups,” Patricia Jurewicz, director for the Responsible Sourcing Network, said during a recent webinar run by Source 44.

Next page: Eliminating conflict minerals? Not my job.