Cell Phone and Computer Companies Required to Disclose Use of “Conflict Minerals”

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While you may be familiar with the term “blood diamonds”, diamonds are not the only thing which are mined in the violent, war-torn mining regions of the Democratic Republic of Congo (“DRC”). In addition to diamonds, many minerals used in the manufacturing of electronics – cell phones and computers, to name just two – are also mined in the DRC. These minerals, which include gold, columbite-tantalite, cassiterite, and wolframite (from which tungsten is derived), when mined in the Democratic Republic of Congo, have come to be known as “conflict minerals” or “blood minerals”, and their use in manufacturing electronics by companies based in the United States is now the subject of Federal regulation by the U.S. government.

Part of the recently enacted “Dodd Frank Wall Street Reform and Consumer Protection Act” (“Dodd Frank Act”), which, through enforcement by the Securities and Exchange Commission (SEC), is primarily aimed at controlling financial institutions following the 2008 financial meltdown in the U.S., the “Conflict Minerals” clause, which is Section 1502 of the Dodd Frank act, requires U.S. companies to declare whether they have used any minerals from the DRC and, if they can prove that they have not, allows them to label their products as “Conflict Free”.


Says the preamble to Section 1502, the Conflict Minerals section, “It is the sense of Congress that the exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo is helping to finance conflict characterized by extreme levels of violence in the eastern Democratic Republic of the Congo, particularly sexual- and gender-based violence, and contributing to an emergency humanitarian situation therein, warranting the provisions of section 13(p) of the Securities Exchange Act of 1934, as added by subsection (b).”

That new section 13 requires the development of regulations requiring manufacturers “to disclose annually, beginning with the person’s first full fiscal year that begins after the date of promulgation of such regulations, whether conflict minerals that are necessary as described in paragraph (2)(B), in the year for which such reporting is required, did originate in the Democratic Republic of the Congo or an adjoining country and, in cases in which such conflict minerals did originate in any such country, submit to the Commission a report that includes, with respect to the period covered by the report:

(i) a description of the measures taken by the person to exercise due diligence on the source and chain of custody of such minerals, which measures shall include an independent private sector audit of such report submitted through the Commission that is conducted in accordance with standards established by the Comptroller General of the United States, in accordance with rules promulgated by the Commission, in consultation with the Secretary of State; and

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(ii) a description of the products manufactured or contracted to be manufactured that are not DRC conflict free (‘DRC conflict free’ is defined to mean the products that do not contain minerals that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo or an adjoining country), the entity that conducted the independent private sector audit in accordance with clause (i), the facilities used to process the conflict minerals, the country of origin of the conflict minerals, and the efforts to determine the mine or location of origin with the greatest possible specificity.”

The law then spells out that “a product may be labeled as ‘DRC conflict free’ if the product does not contain conflict minerals that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo or an adjoining country.”

Finally, the Dodd Frank act defines the term “conflict mineral” to mean “(A) columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives; or (B) any other mineral or its derivatives determined by the Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country.”

 

We say “finally”, but actually the Conflict Minerals section of the Dodd Frank act is 15 pages long, and that is a mere drop in the bucket; the entire Dodd Frank act is 2319 pages long, and you can download the PDF of the full act here.

No Paywall Here!
The Internet Patrol is and always has been free. We don't hide our articles behind a paywall, or restrict the number of articles you can read in a month if you don't give us money. That said, it does cost us money to run the site, so if something you read here was helpful or useful, won't you consider donating something to help keep the Internet Patrol free?
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