On April 29, 2014, U.S. Securities and Exchange Commission (SEC) Chair Mary Jo White told members of the House Financial Services Committee that the agency will continue to implement the conflict minerals rule upheld by the U.S. Court of Appeals.
On April 14, 2014, U.S. Court of Appeals for the District of Columbia Circuit ruled that a section of the SEC’s conflict minerals reporting rule violates the First Amendment. White said SEC staff will release guidance by the end of April on what public companies will be required to report by the May 31 deadline (reports will be due on June 2, 2014 as the May 31 deadline falls on a Saturday) under parts of the rule that the court upheld.
Yesterday, Republican SEC Commissioners Dan Gallagher and Michael Piwowar said the agency should put on hold the entire rule.
On April 21, 2014, 12 Democratic Senators and Members of Congress, led by Assistant Majority Leader Dick Durbin (D-IL), wrote to the SEC urging them to, “continue implementation of this rule in light of the judicial validation of both the underlying statute and the SEC’s promulgated rule.”
Although the court struck down the requirement that companies publically identify whether the conflict minerals in their products are conflict free or not conflict free, the remainder of the reporting requirements in the SEC conflict minerals rule remain intact. The rule was sent back to the lower court for further action. According to lawyers from Sidley Austin, who represented industry in the suit, the lower court’s role is largely administrative and they expect the court to defer to the SEC.
IPC will continue to monitor analysis of the decision and provide additional information as it becomes available. On July 10, 2014, IPC will hold a conference on conflict minerals in Santa Clara, Calif. Industry experts will discuss lessons learned from the first reporting deadline as well as future reporting requirements.