• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 7 hours EU has already lost the Trump vs. EU Trade War
  • 1 hour Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 22 mins Science: Only correct if it fits the popular narrative
  • 4 hours ''Err ... but Trump ...?'' *sniff
  • 49 mins China's Renewables Boom Hits the Wall
  • 9 mins What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 6 hours Tesla Launches Faster Third Generation Supercharger
  • 15 hours Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 7 hours Passerby doused with flammable liquid and set on fire by peaceful protesters
  • 5 hours Crazy Stories From Round The World
  • 1 day Haaretz article series _ Saudi Arabia: A Kingdom in Turmoil | Part 1 - Oil Empire

Breaking News:

Russia Plans To Boost Crude Oil Exports

Global Risk Insights

Global Risk Insights

GlobalRiskInsights.com provides the web’s best political risk analysis for businesses and investors. Our contributors are some of the brightest minds in economics, politics, finance, and…

More Info

Premium Content

Funding War: U.S. Companies Disclose Conflict Mineral Use

The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which mainly focused on strengthening the U.S. banking and financial system in the wake of the Great Recession, included a lesser-known provision.

The ‘conflict mineral’ provision required companies to conduct due diligence in their supply chains and certify whether their products incorporated tungsten, tin, gold, or tantalum and if so, whether these minerals were sourced from the Democratic Republic of the Congo (DRC) or neighboring states.

These four minerals all played a role in helping finance militias involved in the long-running internal conflict in the DRC, a particularly ugly struggle marked by widespread human rights abuses.

An April 2014, a U.S. appeals court ruling modified the rule’s impact, decreeing that a requirement for companies to positively ascertain whether their supply chains were “conflict free” was an unconstitutional violation of freedom of speech rights.

Nonetheless, publicly listed U.S. firms were still required to demonstrate that they had conducted an appropriate investigation, with the initial reporting requirements for the 2013 calendar year due at the beginning of this past June.

Approximately 1,300 companies (out of an estimated 6,000 companies required to do so) have filed reports with the U.S. Securities and Exchange Commission (SEC). Here are three key takeaways from the reports filed so far:

Baby steps first.

The initial set of submissions last month were a mixed bag, to put it gently. The majority of companies submitting reports declared no concrete information on the use of conflict materials in their products.

This was a predictable result – multinational corporations often rely on a large multitude of third-party suppliers and previously lacked incentive to closely track supplies sourcing. However, we can expect more detailed and more accurate reports in coming years as companies adjust to the new expectations of transparency and disclosure.

Related Article: The Islamic State: Be Afraid, Be Very Afraid

Market pressure: a greater motivator than statutory requirements.

That only 25 percent of the initially estimated 6,000 companies required to comply with this SEC regulation have done so by the initial June deadline demonstrates the absence of a genuine enforcement mandate.

The conflict minerals provision is self-enforced – companies make the determination whether they are legally obligated to comply with the reporting requirement. Some reports indicate the recent U.S. appeals court ruling may have produced some confusion on whether the overall provision had been voided.

Although the SEC has the authority to sanction companies that fail to submit any reporting, it is less clear what, if anything, the agency can do to companies that provide low quality reports.

Some companies may be more influenced by social activists and NGO groups that apply public pressure for greater transparency and disclosure. Indeed, such groups are already reviewing the initial submissions and producing their own evaluations on whether companies have made the grade.

To the proactive go the spoils.

While many companies opted to provide minimal information or refrain from submitting a report at all, there were several notable exceptions. Companies like Apple, Boeing and Intel provided significant detail in their reports, not only summarizing their supply chains, but also identifying specific entities, allowing third parties to conduct further investigations and ensure accountability.

These firms chose to provide this level of detail for entirely pragmatic reasons – it furthers the principles laid out in their corporate responsibility statements and facilitates a bond with those consumers who prioritize such issues. These firms recognize that supply chain transparency is not only an inevitable cost of doing business in the 21st century, but if properly handled, can also represent a growth opportunity.

By Jofi Joseph    




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • Kwame Attah on July 20 2014 said:
    I have a question. Is it true that most of these conflicts are started by some powers behind the scenes? If it is true, they should seriously consider what they are doing now and in future. People should create a problem in their bedrooms and later make it the problem of everybody as we are seeing now.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play