Conflict Minerals Disclosure Rule: SEC's Actions and Stakeholder-Developed Initiatives Page: 2 of 57
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G A O CONFLICT MINERALS DISCLOSURE RULE
Accountability * Integrity * Reliability
Hi ghlig t SEC's Actions and Stakeholder-Developed
Highhgts Initiatives
Highlights of GAO-12-763, a report to
congressional committeesWhy GAO Did This Study
In eastern DRC, armed groups
continue to commit severe human
rights abuses and profit from
exploitation of minerals and other
trades. In 2010, Congress included a
provision in the Dodd-Frank Wall
Street Reform and Consumer
Protection Act to address the trade of
conflict minerals-tin, tantalum,
tungsten, and gold. Section 1502(b) of
the act requires SEC to issue a
disclosure rule for companies using
these minerals in their products. The
act also requires GAO to assess the
rule's effectiveness and the rate of
sexual violence in war-torn areas of
DRC and neighboring countries.
Since a rule has not been issued, this
report examines (1) steps SEC has
taken toward issuing a conflict minerals
disclosure rule; and (2) stakeholder-
developed initiatives that may help
covered companies comply with the
anticipated rule. This report also
examines (3) any additional
information available on the rate of
sexual violence in eastern DRC and
neighboring countries since GAO's
2011 report on that subject.
GAO reviewed and analyzed reports
and documents from SEC, other U.S.
agencies, industry associations and
other nongovernmental stakeholders;
and interviewed representatives from
those organizations.
What GAO Recommends
GAO recommends that the Chairman
of SEC identify remaining steps and
associated time frames to issue a final
rule. SEC neither agreed nor disagreed
with the recommendation, but noted
that it will expedite the completion of its
rule making to provide certainty.
View GAO-12-763. For more information,
contact Michael J. Courts at (202) 512-8980 or
courtsm@gao.gov.What GAO Found
The Securities and Exchange Commission (SEC) has taken some steps toward
developing a conflict minerals disclosure rule, but it has not issued a final rule.
For example, SEC published a proposed rule in December 2010 and has
gathered and reviewed extensive input from external stakeholders through
comment letters and meetings. SEC has also announced, on several occasions,
new target dates for the publication of a final rule, as shown in the table below. In
July 2012, SEC announced that the Commission will hold an open meeting in
August 2012 to consider whether to adopt a final rule. According to SEC officials,
various factors have caused delays in finalizing the rule beyond the April 2011
deadline stipulated in the act, including the intensity of input from stakeholders
and the public; the amount of time required to review this input; and the need to
conduct a thorough economic analysis for rule making.
SEC Announcements of Target Publication Dates for Final Conflict Minerals Disclosure RuleDate of announcement
April 2011
November 2011
Mid-December 2011
End of December 2011New target date for publication of final rule
August 2011-December 2011
November 2011-December 2011
December 2011
January 2012-June 2012Source: SEC.
Various stakeholders have developed initiatives that may help covered
companies comply with the anticipated rule, but some initiatives have been
hindered by SEC's delay in issuing a final rule. Industry associations, multilateral
organizations, and other stakeholders have developed global and in-region
sourcing initiatives, which include the development of guidance documents, audit
protocols, and in-region sourcing systems. These initiatives may support
companies' efforts to conduct due diligence and to identify and responsibly
source conflict minerals. In the absence of SEC's final rule, however,
stakeholders note that uncertainty regarding SEC's reporting and due diligence
requirements has complicated their efforts to expand and harmonize their
initiatives. For example, in the absence of a final rule, one initiative is facing
difficulty engaging additional participants, while stakeholders' efforts to
harmonize two initiatives have been hindered.
Little additional information on the rate of sexual violence in eastern Democratic
Republic of the Congo (DRC) and neighboring countries has become available
since GAO's 2011 report on that subject. For example, only one population-
based survey has been published on sexual violence in Rwanda, and it reports
that 22 percent of women ages 15-49 have experienced sexual violence there in
their lifetimes. No additional surveys have been conducted in eastern DRC;
however, one organization is currently conducting a survey and another is
planning to conduct a survey there in 2012.United States Government Accountability Office
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United States. Government Accountability Office. Conflict Minerals Disclosure Rule: SEC's Actions and Stakeholder-Developed Initiatives, report, July 16, 2012; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc300544/m1/2/: accessed April 25, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.