Dodd-Frank Wall Street Reform and Consumer Protection Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), passed in 2010, directs the U.S. Securities and Exchange Commission (SEC) to issue regulations requiring companies that manufacture products to report on “conflict minerals” in corporate supply chains under Section 1502. Congress enacted Section 1502 because of concerns that the exploitation and trade of conflict minerals by armed groups is helping to finance conflict in the Democratic Republic of the Congo (DRC) region and is contributing to an emergency humanitarian crisis. The law requires reporting companies that submit SEC filings to disclose annually whether their products use tin, tantalum, tungsten or gold (together considered “conflict minerals” under the provision) from the DRC or an adjoining country.
The implementing regulation issued by the SEC in 2012 requires covered companies to first determine whether they use such minerals. If so, then they must determine whether such minerals are necessary to the functionality or production of a product manufactured or contracted to be manufactured by the company. Based on the inquiry, a company may have to conduct due diligence on the source and chain of custody of its conflict minerals to determine the country of origin. Depending on the results of the due diligence, the company may have to describe the products containing conflict minerals that are not “DRC conflict free” in a conflict minerals report submitted to the SEC, and also obtain an independent private sector audit of that report. Companies are required to make available on their websites the information they disclose to the SEC. The first disclosure report, covering the 2013 calendar year, is due in May 2014.
- Read the press release that summarizes the final rule.
- Read the full text of the Dodd-Frank Act.
- Read the Final Rule, which includes a summary and flow chart for the steps to take.