August 23, 2012, 6:15 AM — The U.S. Securities and Exchange Commission (SEC) adopted a regulation on Wednesday requiring companies to publicly disclose if they used minerals that originated in the Democratic Republic of Congo or adjoining countries, a measure that will impact technology companies as well.
Companies should disclose their use of conflict minerals such as tantalum, tin, gold, or tungsten if those minerals are necessary to the functionality or production of a product manufactured by those companies, the SEC said in a news release. The minerals are described as conflict materials because their sale benefit armed groups in these countries. The rule was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The named materials are used in the production of electronics. Tungsten, also known as wolfram, is used in the production of integrated circuits. Gold is used in high-end wiring such as audio or USB cables because it is a good conductor. Tantalum is a rare metal that is used in the manufacturing of mobile phones and computers because it makes good capacitors, and tin can be used as solder.
Companies that use those materials for manufacturing are required to conduct a country of origin inquiry and if the company knows or has reason to believe that the minerals may have originated in one of the covered countries, or knows or has reason to believe that the minerals may not be from scrap or recycled sources, the company should file a Conflict Minerals Report with the SEC. The companies that use conflict minerals are obliged to make that report available on its website, it said.
The companies will file their first specialized disclosure reports by May 31, 2014, and annually on May 31 every year thereafter, the SEC said.
While the regulations are a positive step, after more than a year's delay in issuing the rules, it is disappointing that the SEC added an unnecessary two year phase-in period, said the Enough Project, an organization that fights to end genocide and crimes against humanity, and has voiced its concern about conflict mineral trade in Congo, in a blog post. "Such an extended phase-in period clearly caters to corporate interests over the people of eastern Congo," stated Enough Project Executive Director John Bradshaw.