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Firms to report DRC minerals

23 August 2012, 13:19

Washington - US public companies will be required to disclose whether they use "conflict minerals" sourced from the Democratic Republic of Congo, under a new securities rule adopted.

The Securities and Exchange Commission said companies using tantalum, tin, gold, tungsten and other minerals in their products have to report to the authorities if the minerals came from DR Congo or neighbouring countries.

The new rule, part of the broader Dodd-Frank package of mostly finance industry regulations, aims to support efforts to curb the exploitation of mines by rebel groups in eastern DR Congo.

"A company that uses any of the designated minerals is required to conduct a reasonable 'country of origin' inquiry that must be performed in good faith and be reasonably designed to determine whether any of its minerals originated in the covered countries or are from scrap or recycled sources," the SEC said in a statement.

The rule can apply to a company that contracts other manufacturers, in China for instance, to make their products.


Rights groups have placed growing pressure on the business world to stop directly or indirectly fuelling the conflict in DR Congo by buying valuable rare minerals mined in the region to the benefit of insurgents and rebels.

The rule raised protests from companies and some regulatory officials saying that it places international social goals into regulations aimed mainly at protecting investors.

"The SEC just isn't the right tool for this type of social policy exercise, as we should know from past experience," said SEC Commissioner Daniel Gallagher.

"As the chairman stated when proposing the 'conflict minerals' rulemaking nearly two years ago, 'expertise about these events does not reside within the commission.'"

The Information Technology Industry Council, which represents electronics producers, cautiously applauded the measure.

"Any mining activities that fuel conflict are unacceptable, and the tech sector will continue to work with the international community to ensure transparency and responsible practices within global supply chains," said ITIC vice president Rick Goss.

"While the release of the conflict-minerals rule is a milestone in the effort, it cannot on its own replace the results to be gained through a robust, co-ordinated international effort that addresses the underlying causes [of] conflict in Central Africa," he added.

But human rights group Global Witness said the new law had been modified to give manufacturers a large loophole.

"We are extremely disappointed that the rule will allow companies to describe the origin of their minerals as 'undeterminable' for a period of two years - or four years for small companies," it said.

"The minerals trade is fuelling violent conflict and human rights abuses in eastern DRC and delays in implementing the law postpone the moment at which companies take responsibility for the impact of their purchases, jeopardising efforts to stop minerals funding conflict and seriously undermining the aim of the law."



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