Posted on 03/05/2011 6:55:23 PM PST by jazusamo
Business groups are warning that it might be impossible to comply with proposed rules requiring companies to track whether minerals came from combat-torn parts of Africa.
But the two lawmakers behind the so-called "conflict minerals" provision are telling regulators to stand firm and issue strict rules as quickly as possible.
The standoff played out this week in a series of comment letters filed with the Securities and Exchange Commission (SEC), which is required by the Dodd-Frank financial reform law to implement a provision forcing companies to take stock of how they obtain certain minerals.
The provision is intended to make companies more accountable for the trade of minerals that has driven the conflict in the Democratic Republic of Congo (DRC) and the surrounding region.
In proposed rules unveiled in December, the SEC said American companies that rely on conflict minerals would have to file annual reports with the agency and post their findings on their websites listing where the minerals came from. The specific minerals that must be tracked are tin, tantalum, gold and tungsten, which are used in a variety of products, such as jewelry and cell phones.
If a company determines its minerals came from the combat-affected region, or even if it is unable to determine where they came from, it would be required to file a report with the SEC, informing the regulator of its findings, and publish that report on its website.
The U.S. Chamber of Commerce blasted the SEC's proposal in a letter to the agency Monday, calling the rules "burdensome and difficult, if not impossible to comply with." The SEC needs to scrap its original effort and rewrite the rules from scratch, the nation's largest business lobby said.
In a separate letter sent Wednesday, a coalition of 14 business groups, including the National Retail Federation and the Consumer Electronics Association, warned that any rules need to recognize "the facts on the ground" and avoid rules that are "unduly burdening industry and harming American competitiveness."
They told the SEC that any rules must be flexible, and should include a transition process stretching to 2015, so that businesses can set up the infrastructure needed to meet the new requirements.
But the two primary authors of the conflict mineral provision, Sen. Dick Durbin (D-Ill.) and Rep. Jim McDermott (D-Wash), sent their own letter to the SEC this week, urging regulators to not delay and finalize the rules by April, as spelled out in Dodd-Frank.
"Conflict minerals legislation was first considered in 2008 and the current law is almost a year old. Many companies have been involved in this conversation for years," they wrote in a Monday letter. "We currently see no justification for delaying compliance."
The coalition of business groups told the SEC that since most companies do not directly purchase minerals, but rather obtain them through third parties, time is needed to set up systems allowing them to work through the supply chain to determine the point of origin.
"The lack of infrastructure is a serious issue and must be acknowledged," they wrote, adding that the SEC should be flexible and recognize "no two supply chains are identical."
If the rules are too strict and come too quickly, the groups also warned that it could result in a "de facto embargo" of the African region. If rules make it too difficult for businesses to obtain minerals from the region, they might avoid it altogether, they said.
But Durbin and McDermott dismissed such claims as scare tactics. In their letter, they cite experts who say that about 1 percent of Congolese workers depend on the mining industry.
"Even if a de facto ban came to pass — which we doubt — the economic impact would not be as great as commonly assumed," they wrote.
In fact, they argue their provision could end up helping the Congolese economy by helping to starve the black market, defunding the war, and help lead to the creation of a legitimate mining sector in the region.
The lawmakers made clear in their letter that they want companies to know where their minerals came from and publicly disclose that knowledge — and suffer the consequences if they do not.
"In short, the intent behind [the provision] is that companies must know the origin of their conflict minerals and be liable for penalties if they do not report or are not transparent," Durbin and McDermott wrote.
...proposed rules requiring companies to track whether minerals came from combat-torn parts of Africa... required by the Dodd-Frank financial reform law... The specific minerals that must be tracked are tin, tantalum, gold and tungsten, which are used in a variety of products, such as jewelry and cell phones... the two primary authors of the conflict mineral provision, Sen. Dick Durbin (D-Ill.) and Rep. Jim McDermott (D-Wash)
But since China does most of world's manufacturing anyway, they can simply use the minerals internally, and nobody is going to ask where the gold for a new LCD TV came from.
‘Dodd-Frank financial reform law.
That’s like putting mengele in charge of jewish hospitals.
Yep, it sure sounds like it’s another law putting us at a disadvantage.
When is the SEC going to enforce Sorbanes Oxley?
Eventually, Uncle Sam will come begging when he runs out of rare earths, the US has the lowest stock in the world, and nothing can replace 'em.
Precisely jaz. Been in the works for awhile. I read about this long ago. I believe during the Clinton adminifiasco the fact that Leftists wanted to place burdensome regulations on American Companies to report their sources, as though that’s going to do something towards ending conflicts in the Congo LMAO.
It figures it would come about now with this capitalism unfriendly Marxist administration that so wants to hamstring our business, our economy, and bring down this Nation.
It seems a lot of lawmakers stay awake at night thinking of new ways to screw American business. Of course Durbin is a left winger and McDermott is an out and out Communist.
/bingo
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