Conflict minerals are considered any minerals mined in areas of armed conflict and/or occurring in areas where human rights violations are regularly performed. While many conflict-free minerals are now available to the general public, conflict minerals are still very much in demand, and companies that sell them are now obligated to abide by the Conflict Minerals Rule passed in the U.S. in 2012, and in effect as of 2013. The provisions of the rule have required a heightening of compliance for such companies.
The Democratic Republic of Congo is the central location for many debated minerals -- thus the specified country from which companies must declare obtaining minerals as per the Conflict Minerals Rule.
The Securities and Exchange Commission's statement on the ruling mentions:
"The regulatory reform law directed the Commission to issue rules requiring certain companies to disclose their use of conflict minerals that include tantalum, tin, gold, or tungsten if those minerals are 'necessary to the functionality or production of a product' manufactured by those companies."
Lawyers from Schulte Roth & Zabel -- an American law firm -- put forth some recommendations for companies required to comply with the Conflict Minerals Rule as many businesses navigating the new legislation strive to align their compliance standards and file the required report to the SEC. They include performing gap assessments and building proper teams to maintain compliance with "multi-disciplinary teams,” according to the authors.
As the conflict mineral debate continues on a global humanitarian level, U.S.-based companies that fall under the ruling should be prepared -- with personnel and paperwork -- to build out compliance teams that are equipped for the legal parameters.