Subscribe Subscribe   Find us on Twitter Follow POL on Twitter  



Conflict Minerals Conflict Continues

| No Comments

Earlier this week, the Securities and Exchange Commission's conflict minerals rule went back to court as the rule's challengers asked for a stay. The SEC adopted the rule under a Dodd-Frank provision intended to mitigate the violence in the Democratic Republic of the Congo. The Court of Appeals for the DC Circuit held last month that "to the extent the statute and rule require regulated entities to report to the Commission and to state on their website that any of their products have 'not been found to be 'DRC conflict free,''" they violate the First Amendment. The court remanded the case to the district court, but the actual mandate for the district court to act will not be issued until early June--after the conflict mineral rule's impending reporting deadline of June 2. It would have made sense for the SEC to stay the enforcement of the rule until the district court clarifies the degree to which the First Amendment violation impairs the rule. SEC Commissioners Daniel Gallagher and Michael Piwowar argued for a full stay on the grounds that the whole rule carries the First Amendment taint. Instead, the SEC issued only a partial stay of the elements of the rule that the court clearly identified as unconstitutional. Companies were directed to comply with the remainder of the rule on the existing timeline. Even if the SEC has technical legal grounds to proceed without waiting to hear from the district court, doing so displays a troubling lack of sensitivity to practical realities. Such indifference to the rule's costs, complexities, and unintended consequences is typical of the SEC's approach to implementing the conflict minerals provision. The SEC has failed to take steps within its discretion to identify and minimize these effects. For example, the SEC decided to require companies to file reports under the rule, rather than furnish them--a wording change with serious implications for legal liability. Once again, in refusing to tweak the rule's compliance timeline, the SEC is acting with unnecessary inflexibility.

Leave a comment

Once submitted, the comment will first be reviewed by our editors and is not guaranteed to be published. Point of Law editors reserve the right to edit, delete, move, or mark as spam any and all comments. They also have the right to block access to any one or group from commenting or from the entire blog. A comment which does not add to the conversation, runs of on an inappropriate tangent, or kills the conversation may be edited, moved, or deleted.

The views and opinions of those providing comments are those of the author of the comment alone, and even if allowed onto the site do not reflect the opinions of Point of Law bloggers or the Manhattan Institute for Policy Research or any employee thereof. Comments submitted to Point of Law are the sole responsibility of their authors, and the author will take full responsibility for the comment, including any asserted liability for defamation or any other cause of action, and neither the Manhattan Institute nor its insurance carriers will assume responsibility for the comment merely because the Institute has provided the forum for its posting.

Related Entries:



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.