January 18, 2013 – January 25, 2013
The summaries provided in this Weekly Recap do not necessarily represent the views of Squire Sanders (US) LLP and should not be deemed to be endorsements of them. The Recap is intended to be a compilation of articles and events to encourage discussion within the conflict minerals community and to keep our readers updated on the most recent developments.

EHS Journal: Multi-Part Series on Conflict Minerals Rule

The Environmental, Health, and Safety Journal (“EHS”) is publishing a multi-part series of articles that provides background information and guidance on the conflict minerals rule. The articles in the multi-part series are as follows: Part 1: Background and Proposed Rule; Part 2: Conflict Minerals Final Rules: What Changed?; Part 3: Dodd-Frank Conflict Minerals Rule by the Numbers; and Part 4: Suggestions for Effective Compliance and Risk Management.

As of January 22, 2013, EHS has published the first two parts of the series. Part I provides an overview of the issues that arose during the public comment period of the conflict minerals rule. For example, representatives from small companies and small-company interest groups re-affirmed the complexity of the proposed conflict minerals rule and sought relief from some of its most burdensome aspects. Part II provides a comparison of the conflict minerals rule, comparing the rule in its proposed form to the final form of the rule.

CSRwire: Conflict Minerals Compliance Challenges Ahead as Businesses Worry About Penalties

A Corporate Social Responsibility Newswire guest column by Joe Verrengia (a senior administrator for public affairs at the National Renewable Energy Laboratory) highlights the challenges companies are facing in complying with the conflict minerals rule. On one side of the argument, Michael Goeringer, President of Arc-Tronics states, “[w]e do not want to purchase any components where the manufacturer purchases raw materials from the DRC region. However, we have no mechanism to determine if they are doing that or not.” Mr. Goeringer continues, “[t]his regulation does nothing but add costs without any way to ensure what our supply chain, many tiers down, is doing to prevent raw materials from being sourced from that region.”

Other companies, such as Motorola Solutions, are embracing the opportunities afforded by the new reporting requirements. In addition to sourcing from conflict-free mines, the company was able to reduce the size and complexity of its supply chain and reduce the number of suppliers by half.

CFO Magazine: Board Takeaways for 2013 – Conflict Minerals

In briefing CFO’s on the issues that are sure to affect their company in 2013, CFO Magazine’s 2013 list of Board Takeaways starts with conflict minerals rule compliance. CFO Magazine states, “the Securities and Exchange Commission’s new regulation regarding ‘conflict minerals’ promise to be prominent in boardroom discussions this year and perhaps next.” In addition, CFO Magazine warns that compliance starts effective January 1, 2013 and notes that “[m]ost public companies in the aerospace, automotive, construction, electronics, industrial equipment and tools, jewelry, and medical equipment industries will be subject to the rules.” CFO Magazine’s memo to CFO’s: “get ready to scour your supply chain.”

ACA Files Amicus Brief on SEC Conflict Minerals Rule

On January 23, 2013, the American Coatings Association (“ACA”), along with other affected industry associations, filed an amicus brief in support of an October 2012 lawsuit filed by the National Association of Manufacturers (“NAM”), U.S. Chamber of Commerce, and the Business Roundtable (“BRT”). For reference, an amicus brief is filed by someone who is not a party to the case, but offers unsolicited information concerning the case to assist the court in its judgment. Among other things, the amici curiae argue “[b]y failing to adopt a sensible de minimis exception, the SEC rule imposes wholly unreasonable and burdensome requirements on manufacturers who do not make significant use of conflict minerals in their products, but whose products may (or may not) contain trace elements of such minerals (which often will not originate in the Congo) as a result of the manufacturing process (e.g., the use of catalysts) employed by third party suppliers of ingredient materials at one state, or more, in long upstream supply chains.”