Conflict Mineral Disclosure Rules Adopted By The U.S. Securities And Exchange Commission

On August 22, 2012, the U.S. Securities and Exchange Commission (SEC) adopted a new rule to give effect to the conflict mineral disclosure requirements of section 1502 of the Dodd-Frank Act, an act passed by the U.S. Congress predominantly to increase transparency of financial institutions. Despite the general focus of the Act on financial transparency, section 1502 and the newly adopted regulations create reporting requirements for companies that use in the manufacture of their products certain minerals, defined as conflict minerals, mined in the Democratic Republic of the Congo (DRC), and adjacent countries.

Section 1502 is one of an increasing number of regulatory frameworks which focus on tracking and reporting the source of natural resources, and the processes used to extract and refine them. The approach, which takes cues from the Kimberly Process developed for diamonds, aims to encourage the resource extraction sector to develop processes which allow for an