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Nov. 22 — Technology companies such as Apple Inc., HP Inc. and Intel Corp. say they will continue to root out conflict minerals from their supply chains, even if Congress rolls back source reporting requirements.
“Apple is deeply committed to the responsible sourcing of materials that go into our products,” the company told Bloomberg BNA in a statement. “We do this because it’s the right thing to do, not because it’s required by law.”
U.S. companies that use tin, tantalum, tungsten and gold in computers, cell phones and a range of other products are required to report to the Securities and Exchange Commission each year on their source under a provision of the 2010 Dodd-Frank Act. The minerals have been linked to armed conflict and human rights abuses in the Democratic Republic of the Congo and neighboring countries.
Those disclosure rules, as well as others for extractive industries and mine safety, would be eliminated by Republican-backed legislation (H.R. 5983) introduced this year that may serve as a blueprint for an overhaul of financial regulations next Congress. The bill’s prospects are likely to improve once Republicans control both chambers and the White House, though a repeal of the disclosure rules isn’t expected before the next conflict minerals reports are due in May.
Apple said its work goes “far beyond” the law’s reporting requirements. “We will continue to work to safeguard the well-being of the people who help make our products, to protect the places where these materials are found, and to ensure that the sale of minerals does not finance armed conflict,” the company said.
“Should [the disclosure rule] be repealed or changed, I really think that the industry’s going to continue to work on responsible sourcing,” Tim Mohin, director of corporate responsibility at Advanced Micro Devices Inc., told Bloomberg BNA. AMD makes computer processors and related technologies.
The Conflict-Free Sourcing Initiative, which helps companies and their suppliers audit mineral smelters and refiners, will keep up its efforts regardless of what happens to the act, its director Leah Butler told Bloomberg BNA. AMD, Intel and other companies have been members of the initiative since its founding in 2008. That means their work on conflict minerals predates Dodd-Frank.
“Intel started its efforts in this area before there was a Dodd-Frank, and we will continue our efforts regardless of changes in U.S. legislation,” a company spokesman told Bloomberg BNA.
HP also said it started working on conflict minerals long before the reporting requirement existed. “HP’s commitment and programs to responsibly source materials will continue regardless of U.S. legislation requirements,” the company said in a statement to Bloomberg BNA.
Corporate disclosure and due diligence on conflict minerals is still a work in progress. Only a third of the 1,220 companies that submitted filings with the SEC for reporting year 2015 were able to account for the minerals’ origin, an analysis by the nonprofit Development International showed.
Without the disclosure rules, “there would be less attention and momentum behind the effort, and corporate leaders would have a harder time implementing the efforts that are still necessary,” Development International’s Chris Bayer told Bloomberg BNA.Groups such as the National Association of Manufacturers have called the disclosure rules overly burdensome and challenging.
“Some companies are heavily invested in this effort—in terms of time, labor, reputation, money and emotion—and feel committed to trying to mitigate the violence in the region,” Cydney Posner, who counsels companies on SEC reporting and compliance at the Palo Alto, Calif.-based law firm Cooley LLP, told Bloomberg BNA. So they may want to continue their work on conflict minerals, Posner said, unless they decide it isn’t having a positive impact on the ground.
“There is overwhelming evidence that Dodd-Frank’s conflict minerals disclosure requirement has done far more harm than good to its intended beneficiaries--the citizens of the Democratic Republic of Congo and neighboring Central African countries,” according to a summary of the legislation to repeal the rules. Rebels are still profiting from gold mining in the region, the U.N. Security Council said in June.
“For a country with a long history of wars, human rights violations, and labor exploitation, private sector due diligence is an essential contribution to peace,” Bayer said. Dodd-Frank recognized this, he said, and now “most stakeholders recognize that due diligence is here to stay.”
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