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SEC Rule on Conflict Minerals Causes Vastly Different Reactions

Gina-Marie Cheeseman
| Wednesday October 24th, 2012 | 0 Comments

Conflict minerals from the Democratic Republic of the Congo (DRC), the second largest African country, fund militias. Those militias have been fighting each other for two decades during which at least 5.5 million people have been killed. Conflict minerals include tantalum, tin, gold or tungsten. The Dodd-Frank Act of 2010 included Section 1502 which requires companies to publicly disclose their use of conflict minerals from the DRC. The SEC adopted the rule in August. If the U.S. Chamber of Commerce and National Association of Manufacturers (NAM) have their way, the rule will be either stopped or modified.

The U.S. Chamber of Commerce and National Association of Manufacturers (NAM) filed a lawsuit in a federal court to modify or stop the SEC rule on conflict minerals. “Petitioners request that this rule be modified or set aside in whole or in part,” NAM and the Chamber of Commerce said in a filing filed with the U.S. Court of Appeals for the District of Columbia Circuit on October 19.

GE takes a different approach to SEC rules, conflict minerals

General Electric (GE) takes a completely different approach to the SEC rule, and to conflict minerals. In a report on conflict minerals, the company acknowledges that conflict minerals are used in most electronics manufactured today. The report states that the company is working with companies, NGOs, investors and government agencies “to foster a system that supports cutting out conflict minerals from the supply chain and improves reporting.”

Its GE Citizenship site contains a section about conflict minerals. In that section, the electronics manufacturer proclaims that it participated with other companies, NGOs and socially responsible investors “to provide advice and comments” to the SEC on Section 1502. “This multi-stakeholder group has advocated for regulations that will effectively accomplish the objectives of the legislation in a manner that recognizes the practical difficulties that face all interested parties,” GE states. In addition, GE participated in an SEC roundtable on conflict minerals last year.

GE suggests in its report on conflict minerals that one way to stop conflict minerals from winding up in electronics is to “create a network of certified conflict-free smelters.” There are only about 200 “significant” smelters worldwide. GE works with the Electronics Industry Citizenship Coalition and Global e-Sustainability Initiative which created a program to verify the origins of minerals at the smelters.

The GE Foundation participates in the Conflict-Free Smelter Early Adopters Fund, which provides grants to small smelters to help defray the costs of being audited. HP and Intel also participate. In addition, GE adopted a Conflict Minerals Statement of Principles that includes commitments to work toward the elimination of all conflict minerals in its products, support for industry initiatives, and conflict-free sourcing.


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