Buried in the voluminous Dodd-Frank Wall Street Reform and Consumer Protection Act is an oft-overlooked provision requiring corporate disclosure of the use of “conflict minerals” in products manufactured by issuing corporations. This Article scrutinizes the legislative history and lobbying efforts behind the conflict minerals provision to establish that, unlike the majority of the bill, its goals are moral and political, rather than financial. Analyzing the history of disclosure requirements, the Article suggests that the presence of conflict minerals in an issuer’s product is not inherently material information and that the Dodd-Frank provision statutorily renders nonmaterial information material. The provision, therefore, forces the SEC to expand beyond its congressional mandate of protecting investors and ensuring capital formation by requiring issuers to engage in additional nonfinancial disclosures in order to meet the provision’s humanitarian and diplomatic aims. Further, the Article posits that the conflict minerals provision is a wholly ineffective means to accomplish its stated humanitarian goals and likely will cause more harm than good in the Democratic Republic of the Congo. In conclusion, this Article proposes that a more efficient regulatory model for conflict minerals is the Clean Diamond Trade Act and the Kimberly Process Certification Scheme.
Karen E. Woody,
Conflict Minerals Legislation: The SEC’s New Role as Diplomatic and Humanitarian Watchdog,
81 Fordham L. Rev. 1315
Available at: http://ir.lawnet.fordham.edu/flr/vol81/iss3/3