Sections 1502 and 1504 of the 2010 Dodd-Frank Act, which have been delayed for more than one year, are designed to eliminate corruption and promote transparency among those firms that participate in natural resource extraction, according to The Wall Street Journal.
Section 1502, also known as the conflict minerals provision, requires firms to examine and disclose whether any of their products contain resources from the Democratic Republic of Congo or surrounding areas, which are rife with corruption and violence despite their resource wealth. Section 1504 requires those firms to report to the SEC all payments made to any government, foreign or domestic, for the extraction of natural resources.
“This issue is too serious to allow further delay,” the letter said, The Wall Street Journal reports. “Conflict minerals and non-transparent payments for natural resource extraction continue to be a weight on developing nations’ growth and are a risk to investors and the public.”
Though the SEC did issue proposed rules for the provisions in December 2010, the agency has made little mention of the rules since that time. Schapiro said during a March appropriations hearing that rules for the conflict mineral provision would not be ready anytime soon.
“The commission and staff are working hard to adopt effective rules as soon as possible, with the emphasis on effective,” SEC spokesman John Nester said, according to The Wall Street Journal.
The letter urged the SEC to prepare a final vote on the rules before July 1 or reply in a letter explaining the reason for the delay.