A US appeals court determined on Monday that a US Securities and Exchange Commission rule compelling public companies to disclose whether or not their products contain “conflict minerals” is a violation of their free speech rights.
The rule, Section 1502 of the Dodd-Frank financial regulation bill, has been controversial from its inception. It’s intent is to track where minerals that appear in everyday electronics, such as cell phones, are fueling conflict and supporting armed groups. The corporations that extract the minerals say the new rules place an undue burden on their work and violate their rights.
The court partially agreed. The Securities and Exchange Commission (SEC) rules were not entirely struck down by the ruling. It does represent a minor set-back for the advocates who have campaigned for transparency in the mining sector in conflict-affected countries. The real losers are the corporate lobby groups that brought forward the lawsuit.
“At the end of the day this is a huge loss for the National Association of Manufacturers,” said Laura Seay, assistant professor of Government at Colby College, to Humanosphere. ”They still have to file through the SEC whether their supply chains were audited and free of conflict minerals. What has changed is that these companies do not have to disclose to their investors whether or not they are using conflict free minerals. ”
The Enough Project, a Washington DC-based advocacy group who took an active role in crafting and campaigning for 1502, called the ruling a ‘step backward for atrocity prevention.”