The regulation obliges US-traded corporations to file so-called battle mineral stories to the Securities and Change Fee on whether or not their merchandise might embody gold, tin, tantalum or tungsten from Congo or its 9 neighboring international locations.
The GAO “discovered the rule was related to a selection of violence, notably round casual, small-scale gold mining websites,” based on the report. “This can be partly as a result of armed teams have more and more fought for management of gold mines since gold is extra transportable and fewer traceable than the opposite three minerals.”
The principles, which got here into impact in 2014, are supposed to assist sever the hyperlink between the illicit mineral commerce and violence in Congo. They have been initially a part of the 2010 Dodd-Frank act.
Violence has persevered in jap Congo for practically three many years. Greater than 100 armed teams are lively within the area, combating for land, political illustration and financial alternative. Some teams help themselves by promoting or taxing minerals. Beneath the US regulation, there are not any sanctions if an organization discovers its mineral purchases supported battle in Congo; it’s merely required to report it.
The variety of corporations submitting a report back to the SEC elevated barely in 2023 to 1,017, however was nonetheless nicely under the 1,321 stories the fee obtained in 2014, based on the GAO.
The rule has inspired corporations to enhance due diligence and transparency concerning their provide chains, although “many corporations continued to report being unable to find out their minerals’ origins,” the GAO mentioned.
“Given the complexity and entrenched nature of battle in jap DRC, specialists mentioned they’d not count on the SEC disclosure rule alone to meaningfully cut back violence,” based on the report.
(By Michael J. Kavanagh)