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Two Democratic lawmakers want the Securities and Exchange Commission to reverse its relaxed stance toward policing corporate reporting on conflict minerals.
U.S.-listed companies such as Intel Corp. and Tiffany & Co. must report to the SEC each year on their use of certain minerals that have been linked to conflict in Africa. The commission told companies earlier this year that they wouldn’t get into trouble if they only provided basic disclosures on where they think the minerals in their products come from.
“This non-enforcement position is misguided and irresponsible,” Reps. Maxine Waters (Calif.), the top Democrat on the House Financial Services Committee, and Gwen Moore (D-Wis.) wrote in an Aug. 28 letter to the commission’s chair. They urged SEC Chairman Jay Clayton to “clarify immediately” that the commission would be enforcing the rule behind conflict minerals disclosure, which came out of the 2010 Dodd-Frank Act.
A spokeswoman for the SEC declined to comment. Until recently, the reporting rule faced a lawsuit from industry groups, which didn’t want companies to be forced to say if their products aren’t conflict-free. Human rights groups have defended the disclosure requirement, saying it gives insight into how companies address risk in their supply chains.
Michael Piwowar, the commission’s Republican member, took the first step toward a possible rollback of conflict minerals reporting, now in its fourth year, when he opened the rule up for review while acting as chairman. He did the same with another disclosure rule on executive compensation.
That got the attention of other Democrats in Congress, including Sen. Elizabeth Warren (Mass.), who asked for an investigation into whether the acting chairman had overstepped his authority. The SEC’s inspector general reviewed Piwowar’s actions and found no evidence that he abused his powers, according to an Aug. 24 statement.
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