New Conflict-Minerals Disclosure Rules Impact U.S. and Foreign Companies Using or Supplying Minerals

by Holland & Knight LLP

The Securities and Exchange Commission (SEC) recently approved the much debated "conflict minerals" due diligence disclosure rules originally developed in the Dodd-Frank Wall Street Reform Act of 2010. The rules, which were adopted on August 22, 2012, require public companies to disclose the use of any conflict minerals that “are necessary to the functionality or production of a product manufactured” or “contracted to be manufactured” by that company.

Public companies, and any company that supplies public companies, will have to engage in due diligence for any minerals in their supply chains. They will also have to be ready and willing to handle public relations exercises to protect and/or promote their brand.

The SEC ruling is likely to have moderate to major impacts on consumer and leading original equipment manufacturer (OEM) behavior. Manufacturers and suppliers need to act fast and thoroughly on the compliance, legal and public affairs fronts in order to be able to bolster their corporate social responsibility credentials and protect their customers, consumers and investors.

The process of determining the presence of conflict minerals in products sold and distributed is complex. While the rule does not ban companies from using conflict minerals, it does force companies to identify, verify and audit the source; outline the chain of custody; and make a public disclosure of use.

Do These Disclosure Requirements Affect Your Company?

The rule impacts thousands of companies — both U.S. and foreign — that file reports with the SEC. Any company whose products intentionally include any amount of tin, tantalum, tungsten or gold will face some level of required due diligence, and may be subjected to consumer scrutiny by consumer groups and non-governmental organizations (NGOs). Even private companies that do not file reports with the SEC may need to conduct due diligence, especially if they are suppliers to public companies. Companies that manufacture "in-house" or contract to manufacture any product with these minerals will be affected. There are several industries using these minerals, including the following:

  • electronics
  • information and communications
  • food and beverage
  • agriculture
  • consumer products
  • energy
  • aerospace
  • automotive
  • defense and military
  • transportation
  • jewelry
  • retail
  • medical devices
  • construction
  • diversified industrial manufacturing across a number of applications and markets

Importantly, the final rule has no exemptions for small- to medium-sized companies, no phase-ins and no de minimis exceptions.

Consequences of Not Complying with the Rules

Given extensive and intricate global supply chains, any company whose products intentionally include any amount of tin, tantalum, tungsten or gold must undertake a due diligence process. While there is no direct enforcement mechanism in the SEC's ruling, companies not undertaking the required due diligence will face mounting pressure from customers, competitors and investors. The rules, in essence, provide consumer groups and NGOs with information to use against a company in a negative public relations campaign. In addition to the SEC's rule, industry groups have begun setting their own standards for conflict mineral due diligence, often mirroring the SEC's rule, and in some cases going a step further. These industry efforts along with NGOs and consumer groups will add pressure for companies to comply with the rule and to take necessary steps to strengthen their corporate responsibility.

What Questions Your Company Needs to Ask Today

As a starting point, the following are some questions that are best addressed as soon as possible in order to avoid any negative impact to your company.

Compliance and Regulation

  • Does my company produce or contract to produce any products manufactured with tin, tantalum, tungsten or gold?
  • Are there exemptions, exceptions and phase-ins in the SEC rule that apply to my company?
  • Can we trace these minerals to the exact mine and region of extraction?
  • How do we establish a due diligence program that meets the SEC requirements?
  • Where do we find an independent auditor who is knowledgeable?
  • Are other companies or industries already on top of this issue? Are there lessons learned that our company can benefit from?

Public Relations

  • How can my company anticipate new regulations and ensure we are ready for the new and changing reporting standards?
  • What does having or not having conflict minerals mean for my investors, customers and consumers? What does it mean for my brand?
  • How have my competitors and other companies in my industry reacted to these rules?
  • Is this an opportunity to promote my brand?
  • How do we effectively use this as part of our ongoing government relations strategy?

Holland & Knight Can Assist

During the past two years of development and adoption of the SEC conflict-minerals rule, Holland & Knight's Public Policy & Regulation Group has gained the experience and tools to help you comply and understand the impacts of the rule. Our team has developed and implemented comprehensive strategies for our clients in relation to conflict-minerals disclosure. Utilizing this experience and perspectives to advance your strategic objectives, we can help you navigate this complex, new regulatory regime on a number of fronts, including compliance and regulatory guidance, outreach, strategic communications, and the development of broader public relations and corporate responsibility strategies.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Holland & Knight LLP | Attorney Advertising

Written by:

Holland & Knight LLP

Holland & Knight LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.