RILA Raises Concerns over Reach of SEC Conflict Minerals Rule
Arlington, VA –In testimony submitted to the House Financial Services Committee, Subcommittee on International Monetary Policy and Trade, the Retail Industry Leaders Association (RILA) expressed full support for ending the unlawful activities of armed groups controlling mines in the Democratic Republic of Congo (DRC) but raised concern about the proposed rule issued by the Securities and Exchange Commission (SEC) on Conflict Minerals. Specifically, RILA suggests that the SEC proposed rule exceeds the scope intended by Congress.
The subcommittee hearing entitled “The Costs and Consequences of Dodd-Frank Section 1502: Impacts on America and the Congo” begins at 10a today.
Profits earned by guerilla forces on the sale of certain “conflict minerals” originating from the war-torn DRC are used to finance ongoing violence in the country. The minerals specifically targeted by the law, tantalum, tin, gold and tungsten (3TG), are found in a wide variety of products including electronics, apparel and food packaging.
“RILA members are committed to identifying solutions to ease the suffering in the Congo and are prepared to work with stakeholders towards this eventual goal. However, even human rights abuses do not grant the Securities and Exchange Commission the license to exceed the bounds of the authority granted to it by Congress,” said Stephanie Lester, vice president for international trade.
Section 1502 of the Dodd Frank Wall Street Reform Act requires publicly traded companies that manufacture products containing 3TG to report to the SEC the due diligence undertaken to ensure the minerals were not sourced from mines controlled by armed rebels in the DRC. In its proposed rule, the SEC expanded the universe of companies required to file reports beyond the scope of the law by including companies that “contract to manufacture,” which is interpreted to include retailers.
“…the SEC takes the “contract to manufacture” concept out of the statutory description of the type of information that must be included in a report, inserts it into the scope of parties covered, and further expands the concept to include anyone who might have even the most tenuous connection to the production design or specifications of a product manufactured by a stand-alone manufacturing entity,” said Lester.
The final SEC rule, which was due in April 2011, has yet to be completed.
The subcommittee hearing entitled “The Costs and Consequences of Dodd-Frank Section 1502: Impacts on America and the Congo” begins at 10a today.
Profits earned by guerilla forces on the sale of certain “conflict minerals” originating from the war-torn DRC are used to finance ongoing violence in the country. The minerals specifically targeted by the law, tantalum, tin, gold and tungsten (3TG), are found in a wide variety of products including electronics, apparel and food packaging.
“RILA members are committed to identifying solutions to ease the suffering in the Congo and are prepared to work with stakeholders towards this eventual goal. However, even human rights abuses do not grant the Securities and Exchange Commission the license to exceed the bounds of the authority granted to it by Congress,” said Stephanie Lester, vice president for international trade.
Section 1502 of the Dodd Frank Wall Street Reform Act requires publicly traded companies that manufacture products containing 3TG to report to the SEC the due diligence undertaken to ensure the minerals were not sourced from mines controlled by armed rebels in the DRC. In its proposed rule, the SEC expanded the universe of companies required to file reports beyond the scope of the law by including companies that “contract to manufacture,” which is interpreted to include retailers.
“…the SEC takes the “contract to manufacture” concept out of the statutory description of the type of information that must be included in a report, inserts it into the scope of parties covered, and further expands the concept to include anyone who might have even the most tenuous connection to the production design or specifications of a product manufactured by a stand-alone manufacturing entity,” said Lester.
The final SEC rule, which was due in April 2011, has yet to be completed.