One of the biggest legal shifts in the mining business recently has been conflict minerals law in the U.S.
And this week, the rules took another major turn.
That’s because of a ruling from the Washington, D.C. Circuit court on Tuesday. Which struck down large swaths of new rules that the Securities and Exchange Commission (SEC) has been trying to impose around conflict minerals.
Those rules have been evolving since 2010 — when Dodd-Frank legislation mandated the SEC to take a harder line on conflict materials. With the backbone being forced disclosure about the sources for minerals produced and processed by SEC-registered companies.
But the D.C. Circuit said this week there’s a big problem with those rules. Namely, they force companies to act against the First Amendment right to free speech.
The three-judge panel said in a divided opinion that forcing companies to disclose potential issues in their operations is contrary to the principals of free speech.
The judges also noted that the heavy financial burden imposed on companies for conflict reporting was unlikely to reduce the humanitarian problems that prompted the legislation.
For the time being then, it looks as if the burden of conflict reporting will be reduced. Which will give a financial and administrative lift to companies operating in scrutinized locations like the Democratic Republic of Congo.
The saga is far from over though. With challenges expected from the SEC and other parties — who argue that securities law allows compelled disclosure of financials and other business matters, so why not mineral sourcing information.
It’s likely this contentious matter will now end up before the U.S. Supreme Court over the coming months. Watch for news on specific cases — which could have a big impact on the resource business globally.