You will have heard about the financial regulatory reform package making its way through Congress — it passed the Senate at the end of last week. What you may not have heard much about is that the Senate-passed bill contains a provision that will not only interest your company's finance folks but also your supply chain managers.
With backing from Banking Chairman Chris Dodd (D-CT), Majority Whip Richard Durbin (D-IL) and author Sam Brownback (R-KS), the Senate bill contains a provision that directs the Securities and Exchange Commission (SEC) write a regulation that will require any company that is already required by law to report to the SEC — that is, U.S. public companies or foreign companies that have their shares listed on a U.S. exchange — whether certain minerals or mineral derivatives used in the manufacture of their products may have originated in the Democratic Republic of Congo or a neighboring country. The SEC regulation, according to the Amendment added on Tuesday, May 18 (see page S3866 of the Congressional Record), would also require the reporting country to describe due diligence measures the company has taken to ensure that use of the minerals did not directly or indirectly benefit armed groups that are perpetrating violence in that region of Central Africa. The aim is to push companies into policing their supply chains for gold, tin, tantalum and tungsten, and to help move the Eastern Congo toward peace. Several NGOs and IT industry due-dilgence groups are active in this policy area.
The financial regulatory bill will have to be reconciled with a version passed by the House earlier, but the "conflict minerals" provision is likely to remain in the final bill and become law. The fate of a more onerous competing proposal, advanced by Rep. James McDermott (D-WA) and House Banking Committee Chairman Barney Frank (D-MA). is unclear at this point. The McDermott-Frank proposal would require, among other things, all companies to make declarations to U.S. Customs whether manufactured goods they are importing contain "conflict minerals" originally mined in the DR Congo.
NEMA is actively working these issues on behalf of its members.