although corporate issuers generally
were more informed about conflict mineral supply chains than
before, the issuers continued to face challenges when determining
the origins of conflict minerals; and
even though Commerce has provided
lists of known conflict minerals processing facilities, it has not
yet made plans to assess audits of conflict mineral filings.
Director Gianopoulos stated that the Department of Commerce
concurred with an August 2016 GAO report recommendation
previous coverage) that it establish an audit plan for conflict
Commentary / Steven Lofchie
Anyone reading this report might be puzzled over what the United
States hopes to accomplish with the conflicts minerals rule
disclosure requirements. More than half of all issuers report that
they do not have the information necessary to make the disclosures.
Of the companies that are able to determine whether the minerals
that they use are from conflict zones, 60 percent report that they
are using minerals from such zones. This leaves only 20 percent
that report that they do not use minerals from conflict zones.
There is really no way to determine if these reports are accurate
(even assuming that they are made in good faith) and the government
does not attempt to audit these reports.
If the United States wishes to help civilians in the Democratic
Republic of Congo, and in various surrounding countries –
which is the intent of the conflict minerals rules – there
simply must be a more effective way. The rule has proven to be
totally irrelevant to anything happening in the real world, except
that – according to the GAO report – the rule has
"increased awareness" of events in the Congo (page 2).
The government could have obtained even more increased awareness,
at a much lower price, by running a one-minute advertisement during
the Super Bowl. Good intentions do not necessarily produce good
results, or even any results.
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