Update: November 29, 2017
ECIA is renaming and expanding the mission of the Supply Chain Council, a key member-driven element of the association. Now with a global focus, the scope of challenges tackled by the Supply Chain Council has been expanded to include issues such as IT Security/Testing and Customer Experience.
"The leadership of the newly reorganized Global Industry Practices Council (GIPC) will oversee the group of volunteers that work on behalf of the industry to develop best practices and guidelines that address inefficiencies within the global authorized channel today and in the future," explained Victor Meijers, senior vice president. "This will be accomplished through issue-specific Subject Matter Expert (SME) Groups headed by ECIA members who have knowledge and expertise in that area."
SME Group members will be recruited from both within and outside the ECIA member community to identify and tackle issues on an ad hoc basis. "The goal will be to enable the Council to be more nimble and responsive to the global authorized channel challenges of the industry," Meijers predicted. "The wider scope of the expanded Council will make it possible for ECIA to take a leadership role in being the global champion for the authorized channel and really make a difference in solving industry challenges," he concluded.
The other SME Groups are International Trade Compliance, Business Process Operations, Logistics Services, Environmental Compliance, and Quality. Next steps for the Global Industry Practices Council will be to populate the SME Groups with leaders and committee members who have the creativity, experience and knowledge to bring about real change. Anyone interested in learning more should contact Victor Meijers.
Update: March 30, 2017
- Downstream manufacturers, importers and sellers of finished goods would not be required to conduct due diligence.
- Applies to all conflict-affected and high-risk regions in the world, not just the DRC.
- Companies can become a "responsible importer" by declaring they follow the due diligence requirements.
- Each EU member country will be responsible for ensuring compliance and determining non-compliance penalties.
Update: November 11, 2015
The U.S. Court of Appeals on Monday, November 9, denied petitions by Amnesty International and the Securities and Exchange Commission (SEC) for a rehearing in the conflict minerals case. This is good news – the full appeals court did not want to revisit the ruling of a 3-judge panel in August finding that certain, compelled disclosures in the rule are unconstitutional.
According to the National Association of Manufacturers (NAM), it is still possible that the SEC and Amnesty International could ask the U.S. Supreme Court to consider the case. That appeal would have to be filed within 90 days. Assuming a Supreme Court appeal is not made, or is unsuccessful, the case will return to federal district court in D.C. to consider other issues. That court could decide whether the entire rule falls because the unconstitutional disclosure requirement is not severable from the rest of the regulation, or it could send the regulation back to the SEC for revision. Expect further updates in the New Year.
Update: May 14, 2014
The Appeals Court denied a request for a stay of the conflict minerals disclosure rule thus requiring companies affected by the regulations to file their reports.
Update: May 7, 2014
The National Association of Manufacturers and other business organizations have filed an emergency motion for stay of the rule in its entirety until the trial court has addressed the unresolved questions. The argument is that the rule’s compelled confessions, which have been declared unconstitutional, constitute the entire basis for the rule, imposing astronomical costs on affected companies. It makes no sense to enforce a rule that no longer achieves its goals.
Update: May 1, 2014
The SEC has issued a statement on the effect of the recent Circuit Court ruling regarding the Conflict Minerals disclosure rule. The SEC is still expecting companies to file any required reports (conflict minerals report (CMR) and Form SD). Due to the court’s ruling, companies are no longer required to describe their products as “DRC Conflict Free,” having not been found to be DRC Conflict Free,” or “DRC conflict undeterminable.”
From the SEC statement: “If a company voluntarily elects to describe any of its products as “DRC conflict free” ™ in its Conflict Minerals Report, it would be permitted to do so provided it had obtained an independent private sector audit (IPSA) as required by the rule. Pending further action, an IPSA will not be required unless a company voluntarily elects to describe a product as ‘DRC conflict free’ in its Conflict Minerals Report.”
Update: April 29, 2014
The current SEC Chair, Mary Jo White, told lawmakers that the SEC will implement the conflict minerals rules, despite the recent court ruling that held a part of the rule unconstitutional. This would require companies to file conflict minerals reports by June 2.
The National Association of Manufacturers, the Chamber of Commerce and Business Roundtable filed a Motion for a Stay (of the entire rule) with the SEC.
Update: April 15, 2014
The U.S. Court of Appeals for D.C. Circuit recently its ruling on a challenge by the National Association of Manufacturers (NAM) regarding the SEC’s conflict minerals rule. NAM argued that the Securities and Exchange Commission (SEC) lacked the authority to require due diligence and reporting in implementing the Dodd-Frank law’s provisions regarding conflict minerals. Unfortunately, the Appeals Court upheld the SEC’s authority to require due diligence and reporting to the SEC. However, the court also ruled that the public reporting aspects of the rule were unconstitutional “compelled speech” under the First Amendment. Specifically, the Court held that the government could not require the inclusion of the statement “not DRC conflict free” in reports to the SEC.
The decision has created a great deal of uncertainty regarding what happens next and what companies need to include in their conflict minerals reports. There are several possible scenarios following the ruling:
The Appeals Court could, on its own initiative, do an en banc review of its ruling.
- Either party could request an en banc review by the Court of Appeals.
- The SEC could delay the June 2 deadline for reporting pending its resolution of the First Amendment violation.
- The SEC could start a new rule-making proceeding to correct the constitutional defect. This re-opening of the regulation could be limited to resolving the compelled speech issue or it could be a broader examination of the conflict minerals regulation.
Update: February 2014
Appeals court hears arguments challenging the conflict mineral rule.
On Tuesday, January 7, 2014, the U.S. Court of Appeals for the District of Columbia heard oral arguments challenging the conflict minerals rule. Those attending the arguments observed the court’s skepticism with the rule, specifically from the two conservative judges on the panel.
No timetable is set for when a decision may be made but some are optimistic there will be one prior to the May filing date. However, companies subject to the requirements should continue their preparations for filing.
Update: August 2013
Court Upheld Section 1502 Conflict Minerals of the Dodd-Frank Act.
On July 23, 2013, the US District Court for the District of Columbia (District Court) upheld the rule adopted by the SEC implementing Section 1502 Conflict Minerals of the Dodd-Frank Act.
The National Association of Manufacturers, the Chamber of Commerce of the United States of America, and the Business Roundtable filed suit challenging various portions of the SEC’s Final Rule. They thought it was arbitrary and capricious and claimed that the required disclosures violated the First Amendment. The District Court disagreed and granted summary judgment to the SEC on all claims. The conflict minerals disclosure rule remains in effect.