Conflict Minerals, Meet US Sanctions

Here comes another layer of “conflict minerals” restrictions.

President Obama last week set the stage for expanded sanctions against the Democratic Republic of the Congo and vicinity’s militia-ravaged region. A new Executive Order specifies that sanctions are called for against “individuals and groups tied to militias involved in the illicit trade of natural resources from the region” of the Democratic Republic of the Congo or DRC. If that criteria doesn’t include conflict minerals, what does?

Penalties to companies and individuals that fail to adhere to the expanding sanctions can include:

  1. Fines of at least $250,000
  2. Fines twice the amount of the underlying transaction
  3. Criminal penalties of up to $1,000,000
  4. Imprisonment for up to 20 years

Other conduct that will trigger future US sanctions:

  1. Actions or policies that threaten the peace, security, or stability of the DRC
  2. Actions or policies that undermine democratic processes or institutions in the region (DRC)
  3. The targeting of women and children with acts of violence (including killing, maiming, torture, and rape or other sexual violence), abduction, forced displacement, or attacks on schools, hospitals, religious sites, or locations where civilians are seeking refuge, or through conduct that would constitute a serious abuse or violation of human rights or a violation of international humanitarian law
  4. The use or recruitment of children by armed groups or armed forces
  5. Obstructing the distribution of, or access to, humanitarian assistance
  6. Attacks against United Nations missions, international security presences, or other peacekeeping operations.

Earlier this month, ahead of the Executive Order, US and United Nations Security Council added a Ugandan rebel group, the Allied Democratic Forces, to the sanction lists for “targeting children in situations of armed conflict through rape, killing, abduction and forced displacement.”

As far as conflict minerals go, this is yet another reason to know thy product ingredients and to continue tracking conflict minerals for compliance.

Thanks to many sources for these updates, for this one in particular thanks to Christopher T. McClure, Crowe Horwath LLP.

SEC Upholds Conflict Minerals Reporting Deadline

US Securities and Exchange (SEC) Commission Chair Mary Jo White on April 29 said that the agency will continue to implement the conflict minerals rule upheld by the US Court of Appeals.

The SEC has also issued guidance on meeting the May 31 reporting deadline. The gist is that companies must meet the deadline as expected, but may omit aspectsstruck down recently by the US Court of Appeals.

SEC Division of Corporation Finance Director Keith Higgins said companies should comply with parts of the rule that the court upheld and file initial reports by June 2 (reports will be due on June 2, 2014 as the May 31 deadline falls on a Saturday). Thing is, most parts of the rule were upheld, so there is very little change to requirements on the whole.

Higgins said no company will be required to describe products as “not been found to be ‘DRC conflict free'” but companies will still have to disclose the origins of the products.

Legal outlook.Insiders at IPC say that yesterday the industry petitioners, led by the National Association of Manufacturers, filed a Motion for a Stay with the SEC in the conflict minerals case. If the SEC denies the stay, the petitioners will consider filing a stay request with the DC Circuit.

On April 14, U.S. Court of Appeals for the District of Columbia Circuit ruled that the requirement that firms report whether their products have “not been found to be ‘DRC conflict free,’ included in the SEC conflict minerals regulation, violates the First Amendment.

If there is no stay requested or granted, and the case is remanded to the district court, that court may simply remand to the SEC to implement the DC Circuit’s decision in the first instance.

Do I have to file? So it’s business as usual for conflict mineral compliance. And the deadline at the end of May approacheth.

There are two categories of companies who must report.

  1. The first is standard: a company that uses minerals including tantalum, tin, gold or tungsten if that company a)files reports with the SEC under the Exchange Act, b) the minerals are “necessary to the functionality or production” of a product manufactured or contracted to be manufactured by the company. For more on this, visit this helpful FAQ.
  2. The second category of company that must report is a softer definition, for these are companies whose downstream customers demand information on raw materials so that the downstream company can then file with the SEC. So, even though your company may not have to file with the SEC, if you’re a supplier to a company that does, then you’ll have to report to them on your conflict mineral uses. Yes, it will be challenging. But it’s not impossible.

Mineral Uses

If a mine is controlled by armed groups who use mineral profits to purchase weapons — or other supplies or luxuries — the minerals from the mine are sometimes called conflict minerals. Tantalum, tin, tungsten and gold are useful minerals mined in many parts of the world. But sometimes those minerals come from a very conflicted area in Africa, most notably but not exclusively from the Democratic Republic of Congo (DRC).

Four so-called conflict minerals and their uses are highlighted below.

Tantalum / coltan

  1. Tantalum capacitors enable energy storage in electronic products
  2. Tantalum capacitors are used in every laptop, smartphone, camera and video game console you’ve heard of – as well as in aircraft engines and military equipment
  3. Highly conductive and corrosive-resistant, tantalum is considered virtually “irreplaceable”
  4. Some alternatives include aluminum, ceramic and passivated nichrome – but none have the industry devotion of tantalum
  5. Armed groups in regions of the DRC who control mines earn an estimated $8 million per year from sales of coltan (the raw ore where tantalum comes from)
  6. 12% of all tantalum was mined in the DRC in 2011 (USGS data)
  7. Tantalum is predominantly mined in areas such as Australia, Brazil, and Canada but the amount mined in the DRC is not insignificant. A spike in tantalum export from the DRC since the tech boom of 2000 is apparent in the chart at bottom of page

The so-called “Africa’s World War” has been ravaging the eastern parts of the DRC for over a decade (map below).

Tin / casserite / coltan

  1. Tin is found in food packaging, in steel coatings on automobile parts, and in some plastics. Many industries use tin in the form of tin solder, for example, as solder on circuit boards
  2. Tin is predominantly mined in China, Indonesia, Peru, and Bolivia, as well as in the DRC
  3. About 3% of the global tin supply of the global gold supply, was mined in the DRC in 2010
  4. Tin earns armed groups in the DRC an estimated $85 million per year

By conservative estimates, the war and its effects has killed over 5 million people, making it the deadliest conflict since World War II.

Tungsten

  1. Tungsten is used in automobile manufacturing, drill bits and cutting tools, and other industrial manufacturing tools. It is also the primary component of filaments in light bulbs
  2. From 2006 through 2011, 77% to 87% of tungsten was mined in China
  3. Less than 1% of all tungsten was mined in the DRC in 2011 (USGS data)
  4. Yet, tungsten brings armed groups in the DRC about $2 million a year

The idea behind conflict mineral restrictions is no funds = no weapons = less violence and less war.

Gold

  1. Gold is used as currency, by the automotive industry in catalytic convertors, in electronics, medicine, coatings, nanotech, high tech; used in jewelry, fashion, fuel cells, jet engines, space exploration, and almost anywhere you can think of
  2. Gold is mined in many different countries, including the DRC
  3. Industry uses about 440 tons of gold per year globally
  4. Less than 1% of the global gold supply was mined in the DRC in 2010
  5. Only 23 kilograms of gold were “officially” exported from eastern Congo in the first half of 2012
  6. It’s estimated that 2 tons to 4 tons of gold was exported through illegal routes in the first half of 2012
  7. Roughly $30,000 worth of gold can fit in a pocket, and around $700,000 in a briefcase (source: The Enough Project)
Resources:

Chart: How much tantalum is mined each year?

Coltan-quantity-mined-mining

Useful reference:

Download a complimentary white paper here.

Information on software for minerals management – and SEC compliance – click here.

Map of Conflict Mineral region (note how green it is, with ample fresh water lakes):

mineral-uses

Afterword: Some say it’s not the international community’s place to monitor human rights issues in a distant country. Yet — such a huge event as this WWII-scale reality demands international attention. And don’t be duped into thinking conflict mineral legislation is strictly a humanitarian gesture.

Economic interests are involved. Consider: many say Africa is the new Asia in terms of potential for production, industry and an economic boom. But regional warring drains resources and restrains the region’s growth. This in turn badly affects western nations and corporations who would prefer to invest there rather than Asia – if the political landscape is stable enough to do so.

If the regional warring could simmer down, look out world. In ten years we’ll be talking about Africa before India, Brazil and possibly China.

EU Conflict Mineral Rule — Requires Attention

Reminder: time is slimming for public feedback on an EU conflict minerals initiative.

Here’s the European Commission info page. Insider comments and notes follow below.

Insider comments and notes. The Commission says it will use results to help decide whether – and how in a reasonable and effective manner – to complement and/or continue on-going due diligence initiatives and support for good governance in mineral mining, especially in developing countries affected by conflict.

The consultation is open until June 26, 2013.

The contributions received, together with the identity of the contributor, will be published on the Internet, unless the contributor objects to publication of the personal data by checking the appropriate box in the questionnaire (see question 1.1. in the EC’s questionnaire, scroll down).

IPC’s PoV. The North American electronics association IPC believes that it may be impractical to encourage the EU to take no action and that “the best strategy is to encourage a voluntary regimen based on the OECD process,” according to a recent comment from IPC’s frontperson, Fern Abrams.

OECD process. The OECD process was developed by a multi-national group with NGO and industry participation. Although the OECD process is far from perfect, IPC and others believe it’s more flexible than Dodd-Frank and other regulatory schemes. Therefore the OECD process may be the best option in terms of not having a new/competing regulatory regimen. If interested, IPC has drafted suggestions for industry in responding to the EU’s questioning.

In the US. The US conflict mineral rule was put into place in summer of 2012. Companies are required to collect data in 2013. The first deadline for reporting is in spring of 2014.

Companies who do not yet have a compliance initiative are encouraged to contact Actio or preferred vendor. Quickly. And weigh in on the EU’s possible initiative — especially if you agree that the OECD process is preferable to the Dodd-Frank compliance requirements. Take action tout de suite. Schnell. Vlug. Rapidamente.

Cheers.

What are the Conflict Minerals?

Currently, the U.S. Securities and Exchange Commission (SEC) list of conflict minerals consists of four named minerals. They are tantalum, tin, tungsten (referred to as the three T’s) and — no surprise here — gold, which somehow came into being with the potential for conflict hidden deep in its very molecular structure, it seems.

Here, let’s take a look at the four conflict minerals in more detail.

Tantalum. Columbite-tantalite (often called coltan in Africa) is the metal ore from which the element tantalum is extracted. Tantalum is used in making capacitors, particularly for high performance applications with a compact size and high reliability, ranging from hearing aids and pacemakers to airbags, GPS and ignition systems, vehicle anti-lock brake systems to laptops, mobile phones, video game consoles, video cameras and digital cameras. In its carbide form, tantalum is very hard and resistant to wear and corrosion. This makes it ideal for jet engine turbine blades, drill bits, end mills and similar “heavy duty” tools.

Tin.  Cassiterite is the chief ore needed to produce tin. Tin is ubiquitous in our culture, seems we can never have enough. It’s light and durable. Perfect for cans. Used a lot in solder on electronic circuit boards — in other words it’s used in all electronic equipment. Tin is also commonly used in biocides, fungicides and as tetrabutyl tin/tetraoctyl tin, an intermediate in polyvinyl chloride (PVC) and high performance paint manufacturing.

Tungsten.  Wolframite is a key source of tungsten. Tungsten is a very dense metal element. Because it’s dense and heavy it’s used to make things like fishing weights, dart tips and golf club heads. Like tantalum carbide, tungsten carbide possesses hardness and wear resistance properties and is frequently used in applications like metalworking tools, drill bits and milling. Smaller amounts are used to substitute lead in so-called “green ammunition”. Minimal amounts are used in electronic devices, for example, in the vibration mechanism of cell phones.

Gold. Gold is of course used in jewelry, electronics, and dental products. It is also present in some chemical compounds used in certain semiconductor manufacturing processes.

These minerals are sometimes referred to as “the 3T’s and gold”, 3TG, or simply the “3T’s.”

Europe is currently looking at taking conflict mineral action. And, under the US Conflict Minerals Law, additional minerals may be added to the current list in the future.

Going for Gold — and 3T’s

Background information, compliance assistance and other resources on Conflict Minerals can be found here: Actio Conflict Mineral Public Library.

gold-and-the-SEC

Conflict minerals are widely used in many industrial sectors such as electronics and communications, aerospace, automotive, jewelry, healthcare devices, and persified industrial manufacturing. That touches a lot of our supply chains.

So for those wondering about the status of the lawsuit against the SEC regarding the Conflict Minerals rule under the August 1012 Dodd-Frank law, below is a plain-English summary of the charges against the SEC. The SEC is expected to respond tomorrow, March 1, so it’s important to know what charges the SEC will be answering. Please read on.

In discussing a lawsuit against the SEC regarding the Conflict Minerals law, corporate attorney Dynda A. Thomas of Squire Sanders has this to say:

There can hardly be any disagreement with the stated goal of the SEC’s Conflict Minerals Rule. Congress directed the SEC to enact rules requiring disclosure about the use of conflict minerals because it believed that the exploitation and trade of conflict minerals from the DRC were helping to finance armed conflict there — conflict characterized by extraordinary levels of violence, including sexual- and gender-based violence. …

What’s wrong with the SEC conflict minerals rule

It’s worth mentioning that one unintended consequence of the SEC rule is that companies engage in “unofficial embargo” of materials from the area. Not wanting to expose themselves to conflict mineral risk, companies simply look for their raw materials elsewhere.  According three Katten lawyers from the the ACC affiliated Lexicology group, the petitioners argue that the court should “strike down” the conflict minerals rule. These are the core reasons behind the lawsuit:

  1. the SEC failed to conduct a proper cost-benefit analysis — not only did not determine if the Congo and surrounding areas would measurably benefit from the rule but also did not determine whether costs to issuers were reasonable. While it’s not mandatory that legislation like this rule do a cost/benefit analysis in order to become law, according to its own internal rules, the SEC does have to study the costs and benefits; whether this was done sufficiently is unclear
  2. the SEC mistakenly interpreted the statute to apply to companies that do not manufacture any products; companies that “contract for the manufacture of products” should be considered separately
  3. the rule seems to create an impossible loop: it allows smaller issuers four years to create the infrastructure necessary to trace conflict minerals in their supply chain, while giving larger issuers only two years, despite acknowledging that many large issuers cannot meet their obligations under the rule without obtaining information from smaller companies
  4. the rule requires a violation of the First Amendment in its material disclosure requirements:  requiring companies to describe their products as “not DRC conflict free,” even in circumstances in which a company is simply unable to trace their supply chains to determine their minerals’ origins, thereby possibly forcing companies to associate themselves falsely with groups engaged in human rights violations
  5. the rule wrongly (and vaguely) requires due diligence and a Conflict Minerals Report from companies that merely have a “reason to believe” their minerals “may have originated” in the covered region (rather than limiting the rule’s application to companies whose minerals “did originate” in the region)

About Purchasing Mining Rights in Africa’s Congo

The United States Securities and Exchange Commission (SEC) voted last summer in favor (3-2) of a final conflict minerals regulation. This affects companies who report to the SEC and who source raw materials from areas of the Democratic Republic of Congo (DRC) as well as certain areas in neighboring countries. As quality and data are sometimes easier to trace and manage if you own the supply, some companies are looking towards buying mining rights in the region. This is usually done on a geographical basis; but it can also be done in regards to a specific deposit.

Purchasing mining rights in the Congo

Administrative procedure. Any private party can engage in non-artisanal research or exploitation of mineral substances in the DRC provided he or she is the holder of a valid mining right (research or exploitation), which is obtained upon completion of the corresponding administrative procedure.

First come, first served. The granting of mining titles is based on a first-come, first-served basis.

By area, except when…  Applications for mining rights for a given “perimeter” (demarcated surface area with indefinite depth) composed of quadrangles or “squares” are registered in the chronological order of their filing. In exceptional cases, the minister of mines may submit to tender, open or by invitation, mining rights relating to a specific deposit.

Begin within 6 months. To maintain the validity of its mining rights, the holder must commence exploration within six months (research permit) or commence development and construction works within three years (exploitation permit) as of the date the title evidencing its right is issued, and pay the surface duty per square relating to its title at the counter of the Mining Registry. If he or she fails to fulfill any of these obligations, the holder may be deprived of its right.

Foreign vs. domestic. There are no stated distinctions between mining rights that may be acquired by domestic parties and those that may be acquired by foreign parties, except for:

  1. artisanal diggers and traders, who can only be individual DRC nationals
  2. foreign companies that are requested to incorporate a local company before they apply for an exploitation permit

Foreign parties must elect domicile with an authorized domestic mining and quarry agent and act through its intermediary.

We hope this helps give a general perspective on how possible it is or isn’t for your business to purchase DRC mining rights if needed. For some, software for supply chain traceability will do the compliance and quality trick. But others may want to go deeper into ownership of their supply chain. For more information on purchasing mining rights, may we refer you to this excellent document on the subject:

http://www.mcguirewoods.com/news-resources/publications/international/mining-drcongo.pdf  

It’s Official: US Conflict Mineral Rule

The US Securities and Exchange Commission (SEC) has voted in favor (3-2) of a final conflict minerals regulation.

Good as gold? Overall, the final regulation is an improvement over the proposed rule. IPC, the electronics association, says the modified rule addresses 80% of IPC’s voiced concerns about the proposed version.

The SEC has not posted the final regulation text, but is expected to do so shortly. [Update August 27, 2012: click to see Final Rule, a 356-page PDF.]

Compliance will still be a significant burden for industry. But in fairness, the final rule makes reasonable efforts to lower the burden while achieving Congressional intent.

The final rule provides burden relief to industry by:

  • establishing a unified reporting schedule
  • creating an indeterminate category
  • implementing a phase-in period
  • removing the requirement that a CMR report is required for any recycled or scrap materials contained in a product

At the center of the final rule are three key amendments from proposed rule:

  • Following a reasonable country of origin inquiry, companies unable to determine the origin of the conflict minerals in their product may report the source of their conflict minerals as indeterminate for 2 years. Small companies have 4 years (the SEC did not define a small company as far as we know).
  • Unlike the proposal which would have required a CMR for all recycled or scrap sources of conflict minerals, companies need only conduct, disclose and describe a reasonable inquiry to verify that the conflict minerals come from scrap or recycled sources. A CMR is required only if the reasonable inquiry indicates that the source may not be from scrap or recycled sources.
  • CMR reports will be filed as part of a new SD form. The deadline for submitting the SD will be May 31 of each year, with data from January to December reported. The first report will be due May 31, 2014 for data from January 2013-December 2013. The SEC had originally proposed that each company would file according to their fiscal year. By providing a uniform reporting deadline, the burden on the supply chain will be reduced.

The Rule itself If adopted by the Commission, the final rule would apply to a company that uses any of the four designated minerals— gold, tin, tantalum or tungsten— if:

• The company files reports with the SEC under the Exchange Act.

• The minerals are “necessary to the functionality or production” of a product manufactured or contracted to be manufactured by the company.

Contracting to manufacture. A company would be considered to be “contracting to manufacture” a product if it has some actual influence over the manufacturing of that product. This determination would be based on the facts and circumstances, taking into account the degree of influence the company exercises over the product’s manufacturing.

A company would not be deemed to have influence over the manufacturing if it merely:

• Affixes its brand, marks, logo, or label to a generic product manufactured by a third party.

• Services, maintains, or repairs a product manufactured by a third party.

• Specifies or negotiates contractual terms with a manufacturer that do not directly relate to the manufacturing of the product.

Requirements apply equally to domestic and foreign issuers.

Determining if conflict minerals originated in the DRC or other covered countries

Under the final rule, a company that uses any of the designated minerals would be 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.

If the inquiry determines either of the following to be true:

• The company knows that the minerals did not originate in the covered countries or are from scrap or recycled sources.

• The company has no reason to believe that the minerals may have originated in the covered countries and may not be from scrap or recycled sources.

… then the company must disclose its determination, provide a brief description of the inquiry it undertook and the results of the inquiry on a new form (Form SD) filed with the Commission.

Then the company also would be required to:

• Make its description publicly available on its Internet website.

• Provide the Internet address of that site in the Form SD.

If the inquiry otherwise determines both of the following to be true:

• The company knows or has reason to believe that the minerals may have originated in the covered countries.

• The company knows or has reason to believe that the minerals may not be from scrap or recycled sources.

… then the company must undertake “due diligence” on the source and chain of custody of its conflict minerals and file a Conflict Minerals Report as an exhibit to the Form SD.

Then the company also would be required to:

• Make publicly available the Conflict Minerals Report on its Internet website.

• Provide the Internet address of that site on Form SD.

What must be included in the Conflict Minerals Report. Under the final rule, companies that are required to file a Conflict Minerals Report would have to exercise due diligence on the source and chain of custody of their conflict minerals. The due diligence measures must conform to a nationally or internationally recognized due diligence framework, such as the due diligence guidance approved by the Organisation for Economic Co-operation and Development (OECD).

DRC Conflict Free – then what? If a company determines that its products are “DRC conflict free” – that is the minerals may originate from the covered countries but did not finance or benefit armed groups – then the company would have to undertake the following audit and certification requirements:

• Obtain an independent private sector audit of its Conflict Minerals Report

• Certify that it obtained such an audit.

• Include the audit report as part of the Conflict Minerals Report.

• Identify the auditor.

Not “DRC Conflict Free” – If a company’s products have not been found to be “DRC conflict free,” then the company in addition to the audit and certification requirements would have to describe the following in its Conflict Minerals Report:

• The products manufactured or contracted to be manufactured that have not been found to be “DRC conflict free.”

• The facilities used to process the conflict minerals in those products.

• The country of origin of the conflict minerals in those products.

• The efforts to determine the mine or location of origin with the greatest possible specificity.

DRC Conflict Undeterminable – For a temporary two-year period (or four-year period for smaller reporting companies), if the company is unable to determine whether the minerals in its products originated in the covered countries or financed or benefited armed groups in those countries, then those products would be considered “DRC conflict undeterminable.”

Then, in that case, the company must describe the following in its Conflict Minerals Report:

• Its products manufactured or contracted to be manufactured that are “DRC conflict undeterminable.”

• The facilities used to process the conflict minerals in those products, if known.

• The country of origin of the conflict minerals in those products, if known.

• The efforts to determine the mine or location of origin with the greatest possible specificity.

• The steps it has taken or will take, if any, since the end of the period covered in its most recent Conflict Minerals Report to mitigate the risk that its necessary conflict minerals benefit armed groups, including any steps to improve due diligence.

For those products that are “DRC conflict undeterminable,” the company would not be required to obtain an independent private sector audit of the Conflict Minerals Report regarding the conflict minerals in those products.

Recycled or scrap due diligence. There are special rules governing the due diligence and Conflict Minerals Report for minerals from recycled or scrap sources. If a company’s conflict minerals are derived from recycled or scrap sources rather than from mined sources, the company’s products containing such minerals are considered “DRC conflict free.”

About gold sources If a company cannot reasonably conclude after its inquiry that its gold is from recycled or scrap sources, then it would be required to undertake due diligence in accordance with the OECD Due Diligence Guidance, and get an audit of its Conflict Minerals Report. Currently, gold is the only conflict mineral with a nationally or internationally recognized due diligence framework for determining whether it is recycled or scrap, which is part of the OECD Due Diligence Guidance.

For the other three minerals if a company cannot reasonably conclude after its inquiry that its minerals are from recycled or scrap sources, until a due diligence framework is developed, the company will be required to describe the due diligence measures it exercised in determining that its conflict minerals are from recycled or scrap sources in its Conflict Minerals Report. Such a company is not required to obtain an independent private sector audit regarding such conflict minerals.

Conflict mineral deadlines Under the final rule, the issuer would be required to provide the disclosure on the new Form SD. All issuers will file for the same period – a calendar year – regardless of their fiscal year end. Companies would be required to file their first specialized disclosure report on May 31, 2014 (for the 2013 calendar year) and annually on May 31 for each calendar year thereafter.

References:

SEC relevant page: http://www.sec.gov/news/press/2012/2012-163.htm

IPC relevant page, with kudos to Stephanie Castorina for consistently providing well-crafted messages on the subject: http://www.ipc.org/ContentPage.aspx?pageid=Conflict-Minerals

Software for conflict minerals compliance assurance: http://www.actio.net/default/index.cfm/products/material-disclosure/

For a list of likely-relevant softwares, mostly “cloud” solutions, click here: http://supply-chain-data-mgmt.blogspot.com/2012/08/35-will-outsource-to-saas-or-cloud.html

Conflict Mineral Regulation: Vote Slated for August

The Securities and Exchange Commission (SEC) has announced an open meeting (see below) to vote on the final conflict minerals rule on August 22, 2012.

IPC says it will be making one last lobbying push to emphasize the importance of a phase in period, reasonable treatment of recycling, and other issues of concern. Additionally, they will continue to move forward with drafting of our due diligence guidance document, participation in the OECD guidance pilot implementation, and other tools to help our members.

Finally, assuming regulations are adopted on August 22, 2012, IPC will plan to hold educational seminars in California, Chicago, and Boston in late October or early November.

Other associations and lobbying groups are likely doing the same.

SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting

The announcement:
“Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Pub. L. 94-409, that the Securities and Exchange Commission will hold an Open Meeting on Wednesday, Aug. 22, 2012, at 10 AM, in the Auditorium, Room L-002.

The subject matters of the Open Meeting will be:

  1. Item 1: The Commission will consider whether to adopt rules regarding disclosure and reporting obligations with respect to the use of conflict minerals to implement the requirements of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
  2. Item 2: The Commission will consider whether to adopt rules regarding disclosure and reporting obligations with respect to payments to governments made by resource extraction issuers to implement the requirements of Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
  3. Item 3: The Commission will consider rules to eliminate the prohibition against general solicitation and general advertising in securities offerings conducted pursuant to Rule 506 of Regulation D under the Securities Act and Rule 144A under the Securities Act, as mandated by Section 201(a) of the Jumpstart Our Business Startups Act

At times, changes in Commission priorities require alterations in the scheduling of meeting items.  Keep your eyes peeled and/or subscribe to this blog — or to IPC updates or the like.

Conflating a Conflict

Following up on Monday’s item, this kind of report is what scares me.

Companies failing to responsibly source minerals essential for manufacture of electronic goods

According to the slightly more responsible Globe and Mail, which has actually seen the unpublished report, its authors rapped the knuckles of several OEMs not for sourcing from the Congo but for failing to have (in its opinion) proper audit and traceability measures in place.

Putting aside for the moment that tin has no DNA, the eagerness with which media that is not well informed on the nuances might well jump to the conclusion that everyone and their dog is buying metal from the war-ravaged DRC. Comments from US Congressmen asserting that “everyone who has a cellphone has a piece of the action,” as just as ill-informed and damaging.

Given that the Congo supplies a minute amount of the world’s tin and other minerals used in electronics, the concerns, though well-intentioned, are overblown.

The Solder Products Value Council, ITRI and other trade groups should consider bringing this to the attention of legislators around the world.