How Are Companies Dealing With Conflict Minerals Regulation?
Earlier this month, the U.S. Government Accountability Office (GAO) released its annual report on implementation of the U.S. Security and Exchange Commission’s (SEC) conflict minerals regulation.
(As a reminder, this rule was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, was implemented by the SEC in 2012 and was opposed by the Metals Service Center Institute. Click here for more information on MSCI’s stance on this regulation.)
The GAO found that, in 2018, company filings with the SEC on mineral sourcing were “similar in number and content” to those filed in the previous two years. More than 1,100 companies filed disclosures. Of those, 56 percent reported whether the conflict minerals – tin, tungsten, tantalum, and gold – in their products came from the Democratic Republic of the Congo (DRC) or any of the countries adjoining it. That figure also was similar to the estimated 53 and 49 percent who made the same claim in the prior two years.
The GAO noted that the percentage of companies able to make such a determination significantly increased between 2014 and 2015, but has since leveled off.
The GAO also said companies continue to report difficulties in determining origin due to access to suppliers and complex supply chains. Of those that conducted due diligence, an estimated 61 percent reported they were unable to confirm the source of minerals in their products.
Click here to read the full report.