SEC Sued Over ‘Conflict Minerals’ Rule by Business Groups
The U.S. Chamber of Commerce and National Association of Manufacturers asked a federal court to modify or scrap U.S. Securities and Exchange Commission rules governing so-called conflict minerals.
The SEC adopted a regulation in August that requires companies using gold, tin, tungsten and tantalum in their products to make “reasonable” efforts to determine if those materials came from the Democratic Republic of Congo or an adjoining country. Business groups have complained the measure is burdensome, costly to administer and ineffective.
Trade in those minerals -- used in electronic devices -- is helping to finance conflict and contributing to a humanitarian crisis in the central African nation, according to the SEC.
“Petitioners request that this rule be modified or set aside in whole or in part,” the two Washington-based business advocacy groups said in a joint filing with the U.S. Court of Appeals in Washington on Oct. 19.
The measure was mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. It applies to companies with SEC-reporting obligations for whom the minerals are “necessary to the functionality or production” of an item they manufacture, the agency said in an Aug. 22 statement announcing the rule’s adoption.
The first disclosure reports are due by May 31, 2014, the agency said.
“While the petitioners did not state a basis for a challenge in their filing, we believe our legal interpretation and economic analysis are sound and we look forward to defending the rule that Congress directed us to write,” John Nester, a spokesman for the SEC, said in a statement.
In a joint statement, the groups that though the measure was well-intentioned, it “is not an effective approach to this complex issue.”
“The final conflict mineral rule imposes an unworkable, overly broad and burdensome system that will undermine jobs and growth and may not achieve Congress’s overall objectives.”
The case is National Association of Manufacturers v. U.S. Securities and Exchange Commission, 12-1422, U.S. Court of Appeals for the District of Columbia Circuit (Washington).
To contact the reporter on this story: Andrew Harris in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Hytha at email@example.com