Saturday, May 29, 2010

Senator Feingold Explains Genesis of Congolese Conflict Minerals Disclosure Requirement in Senate Reform Bill

A provision in the Senate financial reform legislation requiring public companies to disclose in SEC filings their use of Congolese conflict minerals was authored by Senator Sam Brownback. A co-sponsor of the provision, Senator Russ Feingold explained that the provision specifically responds to the continued crisis in the eastern region of the Democratic Republic of Congo. Despite efforts to curb the violence, mass atrocities and widespread sexual violence and rape continue at an alarming rate. One of the underlying reasons this crisis persists is the exploitation and illicit trade in natural resources, specifically cassiterite, columbite-tantalite, wolframite and gold. The United Nations Group of Experts has reported for years how parties to the conflict in eastern Congo continue to benefit and finance themselves by controlling mines or taxing trading routes for these minerals. In response to these reports, the UN Security Council adopted Resolution 1857 (2008), encouraging Member States to ensure that companies handling minerals from the DRC exercise due diligence on their suppliers. Cong. Record, May 19, 2010, S3976.

The provision is intended to do just that by requiring public companies for which these minerals constitute a necessary part of a product they manufacture to disclose annually to the SEC if the minerals in their products originated or may have originated in Congo or a neighboring country. Furthermore, it will require those companies to provide information on measures they have taken to exercise due diligence on the source and chain of custody to ensure activities involving such minerals did not finance armed groups. The amendment was narrowly crafted in consideration of local economies and thus includes waivers and a sunset clause after five years. Cong. Record, May 19, 2010, S3976.

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