Date: March 16, 2017
Issue: Corporate Governance; Conflict Minerals
Filing Type: Letter
Description: The Coalition and its member companies believe that the decades-old human rights crisis in the Congo (―Congo‖ or the ―DRC‖) needs to be resolved. However,we fundamentally believe that the disclosure mechanism envisioned by section 1502 isa tragically misguided approach that, according to a growing body of evidence, has very possibly made the crisis in the DRC worse, not better. The conflict minerals rule has also imposed a significant burden upon the shareholders in public companies and contributed to the phenomenon of ―information overload‖ at a time when there is broad agreement that SEC disclosures need to be modernized for the 21st Century. A major portion of the conflict minerals rule (which forced companies to disclose whether or not their products were ―conflict-free‖) was also struck down by the courts as a violation of the First Amendment.
Given these developments we believe that at a minimum, the Commission should consider the following modifications to the implementation of the rule:
- Form an interagency working group with the State Department to monitor the complex, technical, humanitarian, diplomatic, and geopolitical issues impacted by the rule.
- Provide that a reporting company is only subject to the rule to the extent it exercises a significant level of direct control over the manufacturing of its products.
- Implement safe harbor and de minimis standards.
- Provide a more definite statement that scrap and recycled sources are out of scope.
- Simplify required reporting on Form SD.