On January 31, the Acting Chairman of the Securities and Exchange Commission (“SEC”), Michael Piwowar, issued an call for comments with regard to the conflict minerals rule. The rule was originally adopted by the SEC in August 2012 and published in September 2012. It was drafted pursuant to Section 1502 of the Dodd-Frank Act.
Sending a strong signal as to the rule’s potential fate, the Acting Chairman’s call for comments refers to the rule as “misguided.” The statement notably includes a long paragraph pointedly calling into question whether implementation of the rule has addressed the humanitarian objectives originally set forth by Congress in enacting Section 1502:
The disclosure requirements have caused a de facto boycott of minerals from portions of Africa, with effects far beyond the Congo-adjacent region. Legitimate mining operators are facing such onerous costs to comply with the rule that they are being put out of business. It is also unclear that the rule has in fact resulted in any reduction in the power and control of armed gangs or eased the human suffering of many innocent men, women, and children in the Congo and surrounding areas. Moreover, the withdrawal from the region may undermine U.S. national security interests by creating a vacuum filled by those with less benign interests.
The Acting Chairman then states “[g]iven these facts on the ground, I believe that it is essential to hear from interested persons on all aspects of the rule and guidance.” Comments on the rule may be submitted here. No specific deadline has been provided.
Michael Piwowar was appointed Acting Chairman of the SEC on January 23. Jay Clayton has been nominated to serve as SEC Chairman by President Trump, but his confirmation hearing has not yet been scheduled.