Friday, December 30, 2011

The UN on the SEC

In sharp contrast to Enough, Global Witness, and ICAR, the latest Group of Experts Report proposes that companies be allowed in certain cases to avoid having to describe a product as either conflict-free or not:

United States Securities and Exchange Commission
(bb) The Securities and Exchange Commission of the United States should make reference, in the implementing rules of the Dodd-Frank Act, to the due diligence recommendations of OECD and the Group as reliable due diligence processes for meeting relevant aspects of the reporting requirements set out in section 1502 of the Act. As a time-bound measure, “issuers” should describe a product as neither “DRC conflict free” nor “not DRC conflict free” when the issuer and the mineral processor have:
(i) Taken reasonable steps and made good-faith efforts to conduct due diligence;
(ii) Know and can show that they have identified, assessed and responded to risks in accordance with the risk management strategies recommended by the due diligence recommendations of OECD and the Group;
(cc) Where risks of direct or indirect support for public or private security forces are identified, and issuers and mineral processors decide to continue to trade, they must demonstrate significant measurable improvement within six months and have their due diligence practices audited by an independent third party. If, within six months of the adoption of the risk management plan, there is no significant, measurable improvement, issuers and mineral processors should discontinue their engagement or suspend their relationship with the supplier for a minimum of three months.
By contrast, this is what the International Corporate Accountability Roundtable wrote to the SEC about this matter:
Specifically, companies should not be allowed to report that the minerals in their products are of indeterminate origin; rather, if companies fail to determine the origin of the minerals in their products, they must describe them as “Not DRC-Conflict Free” in their Conflict Minerals report.
The International Corporate Accountability Roundtable (“ICAR”) is a coalition of human rights groups including Amnesty International, EarthRights International, Global Witness, Human Rights First, and Human Rights Watch.

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