U.S. Court Upholds Conflict Minerals Rules

The logic of the rules is uncertain; the process to publish them took forever; the cost of them is debatable; and their effects may be largely unintended. Nonetheless, the SEC conflict mineral rules mandated by the Dodd-Frank Act are still moving forward — propelled by a favorable ruling by a U.S. District Court judge. Here is the coverage from Reuters on the ruling.

To remind us all — the SEC rules require public manufacturing companies to try to trace the sources of any tantalum, tin, tungsten or gold in their products, and to disclose whether or not they think any of those minerals came from the Democratic Republic of the Congo (DRC). The idea is that public disclosure will pressure companies to source someplace else, because mining those minerals has helped fund DRC militant groups with a history of human rights abuses.

A consortium of business groups fought the rules on First Amendment grounds, among other arguments, and are now considering an appeal. In some ways, though, actions by Apple and other technology companies that use those minerals have already moved beyond the scope of the rules because they faced pressure from customers and investors.

And while the rules may be flawed, their intent is consistent with the ISM principles on corporate social responsibility in the supply chain. On the issue of human rights, ISM has these standards:
* Ensure and uphold human rights internally and through the supply chain.
* Respect and support protections explicitly set forth in internationally proclaimed human rights principles, declarations and documents.

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