As contemplated by the briefing schedule, on January 16, 2013, the Petitioners filed their Opening Brief in their bid for a review of the SEC’s conflict minerals rule. In their 198-page brief, the Petitioners (Business Roundtable, US Chamber of Commerce, and the National Association of Manufacturers) addressed each of the grounds for review that they described in their Statement of Issues filed on November 21, 2012.
The Petitioners argue that:
- The SEC failed to do the proper cost/benefit analysis of the rule and imposed the rule’s high cost of compliance without determining that the rule would provide the intended benefit.
- The SEC did not exercise appropriate agency judgment and acted arbitrarily when it imposed more stringent requirements and rejected less burdensome ones.
- The SEC was wrong to conclude that it could not create a de minimis exception to the rule.
- The SEC required an unreasonably stringent “reasonable country of origin inquiry” when it provided that the rule covers conflict minerals that companies have “reason to believe… may have originated” in the covered countries.
- The SEC was wrong to extend the rule to those who contract with others for the manufacture of products.
- The SEC acted arbitrarily when it included a shorter phase-in period for larger companies when they often depend on disclosure from smaller companies which are given a longer phase-in period.
- The Rule violates the First Amendment by compelling companies to make misleading and stigmatizing public statements indicating that their products contribute to human rights abuses.
The Petitioners are represented in this case by Sidley Austin. The SEC’s Brief is due on March 1st.