Court Upholds Conflict Minerals Rule — Is Your Compliance Program on Track?
July 23, 2013
This afternoon, the D.C. District Court rendered its decision in the Conflict Minerals Rule case. Rejecting all of the plaintiffs’ claims, the court denied the plaintiffs’ motion for summary judgment and granted the SEC’s summary judgment motion. The Conflict Minerals Rule therefore continues in effect as adopted. Accordingly, there continues to not be a de minimis exception under the rule. In addition, retailers and other companies that only contract to manufacture products remain subject to the rule.
The plaintiffs may ultimately decide to appeal the decision. Although the court of appeals could disagree with the district court and vacate the rule on appeal, companies are unlikely to have enough of a cushion to wait for an appellate court decision before implementing their compliance programs.
The first report under the Conflict Minerals Rule is due on May 31, 2014. Although still slightly more than 10 months away, given the complexities of, and time required for, scope determinations, vendor outreach, data review and the development and implementation of policies, procedures and frameworks to comply with the Conflict Minerals Rule and to conform to the OECD’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, now is the time for companies that have been taking a wait-and-see approach to begin their compliance efforts in earnest.
For a copy of the D.C. District Court’s decision, click here.
Authored by Michael R. Littenberg,
and Cecilia Wang.
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