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Industry Coalition Submits Comments to the SEC on Conflict Minerals

Mar 2, 2011 7:06 PM   By Press Release
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Press Release: Jewelers of America (JA), the Jewelers Vigilance Committee (JVC), the American Gem Society (AGS), the Manufacturing Jewelers & Suppliers of America (MJSA) and the Fashion Jewelry and Accessories Trade Association (FJATA) have jointly submitted comments to the Securities and Exchange Commission (SEC), regarding its proposed rules for the implementation of the conflict minerals provisions within the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Under the law, companies that already file annual reports with the SEC will have to disclose whether or not their products contain conflict minerals, including gold or tungsten, from the Democratic Republic of the Congo (DRC) or adjoining countries. Under the SEC’s proposed rules, companies would be required to submit reports that describe due diligence measures used to determine whether or not any of their gold or tungsten has been sourced from the conflict regions. For those companies that source from the DRC or adjoining countries, the reports would be independently audited, filed with the SEC and posted on the company’s website.

The SEC’s final rules are set to go into effect upon publication on April 15, 2011.

The Associations’ submission focused on those aspects of the law that the SEC has the authority to address through the rulemaking process. Among the points made:

•The industry strongly supports the human rights objectives of the law, which seek to sever the link between conflict and the trade of gold, tungsten and other minerals in the DRC and adjoining countries.

•While the Associations believe that the diligence infrastructure essential to achieving full compliance with the SEC’s proposed rules does not yet exist, commendable progress is being made by viable global initiatives to accomplish these objectives.

•Future progress by industry is therefore tied to the achievement of specified milestones in the building of this infrastructure. This must be accomplished not only by industry groups such as the Responsible Jewellery Council (RJC) and the World Gold Council (WGC), but by key stakeholders including the U.S. Department of State, the U.S. Department of Commerce, the Organization for Economic Cooperation and Development, the UN Group of Experts and key governments in the region working in collaboration.

•The industry is committed to working with governmental and non-governmental organizations to create a transparent and effective due diligence system for gold and tungsten.

•During the implementation period, the Associations have recommended companies submit reports – as required by the law – on the progress made to date. Once the steps outlined in the submission have been taken by the industry and other stakeholders, the necessary elements will be in place to enable companies to comply in full.

•The submission also addresses other issues including: the complexity of the gold and jewelry supply chains (noting the small percentage of gold that is currently sourced from the DRC), the treatment of recycled and scrap metals (recommending that use of these not require an audited conflict minerals report), suggested “grandfathering” of existing gold stocks and the types of businesses that would be covered by the law.

The Associations acknowledge the efforts of the drafting team, led by Catherine T. Dixon of Weil, Gotshal & Manges, together with Cecilia Gardner, President, CEO & General Counsel of JVC, Suzan Flamm, Assistant General Counsel of JVC, and Matthew A. Runci, President & CEO of JA.


Rapaport News is not responsible for, and does not endorse, the content of any press release. Press releases are not written by us and are provided only as additional information for our clients.

 

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