US Government Considering Scaling Back Dodd-Frank Conflict Minerals’Rule
The US Securities and Exchange Commission (SEC) may soon change its Conflict Minerals Rule, which requires companies to trace and report whether their products contain minerals from a war-torn part of Africa.
The regulation, issued in Y 2012 under the Dodd-Frank financial overhaul law, has targeted the Democratic Republic of Congo (DRC), where several armed groups still have mineral-rich areas under their control.
A change in such law, experts say, could benefit the armed groups and escalate the potential for conflict in DRC or help regular citizens who have suffered the impact of companies choosing to do business somewhere else.
“It is unclear that the rule has in fact resulted in any reduction in the power and control of armed gangs or eased the human suffering of many innocent men, women, and children in the Congo and surrounding areas.” — Michael Piwowar, acting SEC Chairman said frecently.
Mr. Piwowar thinks the best thing to do is to modify the rule.
In his 1st official statement as acting SEC Chairman, he said this week the current guidelines are “misguided” and that its disclosure requirements have caused a de facto boycott of minerals from portions of Africa, with effects far beyond the DRC regions.
“Legitimate mining operators are facing such onerous costs to comply with the rule that they are being put out of business,” Mr. Piwowar said in the statement. “It is also unclear that the rule has in fact resulted in any reduction in the power and control of armed gangs or eased the human suffering of many innocent men, women, and children in the Congo and surrounding areas.”
His view follow the independent reports claiming that international regulations, such as the Conflict Mineral Rule in question, have failed to prevent foreign firms and armed groups from profiting from illegal mining in African countries, particularly DRC.
Contraband of Gold remains a large source of income for those groups, as insurgents and elements of government forces in the DRC have their hands on 65% of the country’s Gold mines. And the operations, some say,a re the foundation for an international smuggling network worth an estimated $400-M annually.
Have a terrific weekend…
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