Sunday, January 6, 2013
One of the hot topics for corporate counsel is the conflict minerals legislation. Karen E.Woody of Cadwalader, Wickersham & Taft LLP has a new article that was recently published in 81 Fordham Law Review (2012) titled "Conflict Minerals Legislation: The SEC's New Role as Diplomatic and Humanitarian Watchdog." SSRN describes it as:
"Buried in the voluminous Dodd-Frank Wall Street Reform and Consumer Protection Act is an oft-overlooked provision requiring corporate disclosure of the use of "conflict minerals" in products manufactured by issuing corporations. This article scrutinizes the legislative history and lobbying efforts behind the conflict minerals provision to establish that, unlike the majority of the bill, its goals are moral and political, rather than financial. Analyzing the history of disclosure requirements, the article suggests that the presence of conflict minerals in a company’s product is not inherently material information, and that the Dodd-Frank provision statutorily renders non-material information material. The provision, thus, forces the SEC to expand beyond its congressional mandate of protecting investors and ensuring capital formation by requiring issuers engage in additional non-financial disclosures in order to meet the provision’s humanitarian and diplomatic aims. Further, the article posits that the conflict minerals provision is a wholly ineffective means to accomplish its stated humanitarian goals, and likely will cause more harm than good in the Democratic Republic of Congo. In conclusion, this article proposes that a more efficient regulatory model for conflict minerals is the Clean Diamond Trade Act and the Kimberley Process Certification Scheme."