Industry Groups Sue Over “Conflict Minerals” Rule
The rule, designed to limit trade of minerals from conflict areas, is too burdensome to administer, according to the groups.
Several industry groups want to set aside regulations designed to cut down on the use of minerals from conflict zones.
The National Association of Manufacturers, U.S. Chamber of Commerce, and Business Roundtable have sued the Securities and Exchange Commission (SEC) over a rule regarding so-called conflict materials, which the commission adopted in August under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
“Petitioners request that this rule be modified or set aside in whole or in part,” the groups say in their petition to the U.S. Court of Appeals for the District of Columbia Circuit [PDF], filed Friday.
The rule requires businesses to disclose whether their products are manufactured with precious metals, such as gold, tungsten, tin, or tantalum, that come from the Democratic Republic of the Congo or any nearby regions. The petition does not specify the basis for the challenge to the rule.
The SEC stands behind its interpretation of the Dodd-Frank law.
“While the petitioners did not state a basis for a challenge in their filing,” spokesman John Nester told the Wall Street Journal, “we believe our legal interpretation and economic analysis are sound and we look forward to defending the rule that Congress directed us to write.”
Meanwhile, activist groups lashed out against the lawsuit.
“To ask for a stay at this point would be completely unreasonable,” Global Witness’ Jana Morgan told the WSJ. “These companies need to stop hiding behind these industry groups and using them as proxies. Companies need to explain why they are placing their bottom lines over the lives of people in Congo.”
The rule is one of many implementing the Dodd-Frank legislation that business associations have contested. One of the more recent challenges — involving disclosures of payments by oil, mining, and gas companies to foreign governments — covered similar ground.
(TMG archive photo)