SEC Regulated Manufacturers Must Report Use of "Conflict Minerals"
Thursday, September 20, 2012

On Aug. 22, 2012, the SEC adopted a final rule requiring SEC regulated manufacturers to report the use of “Conflict Minerals” in their manufactured products on a form to be filed with the SEC. Conflict Minerals are generally considered to be metals originating in the Democratic Republic of Congo (Conflict Minerals). The metals that are of particular concern include tin, tungsten, tantalum and gold. The first report is due on May 31, 2014 and is to report on the 2013 calendar year.

In performing due diligence for compliance with this rule, manufacturers should first identify whether these metals are contained in the manufacturer's products; then the manufacturer needs to determine from its supply chain(s) if the metals came from the Democratic Republic of Congo region. There are some exemptions for recycled or scrap minerals under the SEC rule, which a manufacturer should consider if applicable. Following the manufacturer's due diligence, the manufacturer determines if the products containing these metals are “DRC Conflict free,” “not DRC Conflict free,” or “DRC Conflict undeterminable” (during a 2 or 4 year phase-in period only).

For companies with good supply chain management and strong material safety database controls, this additional information gathering and reporting should not be unduly burdensome. However, the SEC rule requires reporting for calendar year 2013 by May 31, 2014. It is not too soon to determine if the SEC rule is applicable and to put the systems in place to gather the necessary information.


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