US law requires new disclosure on conflict minerals

The US has passed legislation requiring companies involved in the sale of minerals to show their products are not fuelling conflict or human rights violations in the Democratic Republic of Congo (DRC).

The law, an amendment to the Wall Street Reform and Consumer Protection Act, accepts that the sale of minerals including coltan, tin, tungsten and gold is, in some cases, helping armed groups to buy weapons.

The requirement is likely to affect several industries including the aerospace, automotive, mining and jewellery sectors.

Companies will have to prove that minerals do not come from conflict areas in the DRC by making annual disclosures to the Securities and Exchange Commission (SEC), reporting on supplies from the DRC and/or adjoining countries, and auditing all such information.
 
In their reporting to the SEC, companies will need to submit a breakdown of products they manufacture that are not ‘conflict-free’. The requirements apply to any company listed on a US stock exchange.

Meanwhile, an international pressure group is taking the UK government to court for failing to publicly list companies that trade conflict minerals obtained from the DRC.

In a High Court application for a judicial review, Global Witness has said the government acted unlawfully by not reporting companies involved in DRC minerals to the United Nations Sanctions Committee after a 2008 UN Security Council (UNSC) resolution.

The non-profit group argues that in failing to investigate the companies properly, the government is breaching its international legal obligations.

The case refers to UNSC Resolution 1857, passed in December 2008, which requires travel bans and asset freezing for all individuals and organizations deemed to be supporting armed groups in the eastern DRC through mineral trading.

The UK government claims insufficient evidence of violations has been available, although the UN has named a number of British companies and individuals known to be involved with armed groups in the country.