March 8, 2013 – March 15, 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.

Kimball Electronics, Inc.-Statement on Conflict Minerals

Kimball Electronics Group, a diversified furniture and electronics manufacturer, released a statement on conflict minerals. Excerpts from the statement follow. “Kimball International is committed to ethical practices and compliance with all applicable laws and regulations. To comply with SEC reporting regulations relating to conflict minerals, Kimball requires chain of custody declarations from our suppliers to verify the origin of the conflict minerals contained in their products. The process of tracing the conflict minerals through the supply chain is complicated and time-consuming. Therefore, we will rely on industry initiatives, such as the Conflict Free Smelter Program, for assistance in complying with the SEC reporting requirements on conflict minerals.”

For Kimball Electronics Group’s complete statement on conflict minerals, including what it requires in addition to the chain of custody declaration it requires from its suppliers, please see Kimball Electronics Group Statement on Conflict Minerals.

Oral Arguments in Conflict Minerals Rule Legal Challenge Set for May 15th

American Coatings Association, a party to the January 23, 2013 amicus brief  in support of the October 2012 lawsuit filed by the National Association of Manufacturers, reminds us that oral arguments in the case of National Association Manufacturers v. SEC are slated for May 15, 2013. In addition, it should be noted that March 2013 is a very active month in the rule challenge as reply briefs and final briefs are due at the end of the month.

For a complete schedule of the conflict minerals rule legal challenge, see our past blog post titled Challenging the Conflict Minerals Rule – A Review of the Docket.

Nucor-Yamato Steel Co. – Conflict Minerals Customer Letter

Last month, Nucor-Yamato Steel Co., an Arkansas steel producer, released its customer letter confirming its metals to be “DRC conflict free” as defined by the conflict minerals rule. In general, customer letters are a common tool suppliers use to describe their use of conflict minerals. In general, customers accept these customer letters in their due diligence, but they cannot ignore warning signs or other circumstances that contradict the statements made in the letter or indicate other facts. Excerpts from Nucor-Yamato Steel Co.’s customer letter follow. “We affirm that no metals derived from minerals defined as ‘Conflict Minerals’ from the Democratic Republic of Congo (‘DRC’) are used in the production of our company’s products. Metals used by Nucor-Yamato Steel are sourced from the post-industrial or post-consumer scrap that we melt as part of the “melt and cast” operation to produce new material. As such, Nucor declares that the metals used in its products are ‘DRC conflict free,’ as defined by paragraph (d)(4) of the rule.”

For Nucor-Yamato Steel Co.’s complete conflict minerals customer letter, please see Nucor-Yamato Steel Co. – Conflict Minerals Customer Letter.

Protests Outside of London Apple Inc. Store Regarding Conflict Minerals

Despite having updated its latest Supplier Responsibility Progress Report for 2013 to represent that it “will continue to work to certify qualified smelters, and [will] require [its] suppliers to move their sourcing of tin, tungsten, and gold to certified conflict-free sources as smelters become certified,” Apple recently found itself subject to protests outside of its flagship London store in regards to conflict minerals. Sheniz Raif, in her blog post, quotes a bystander who stumbled upon the protest as it was occurring and took video footage of the protest. The bystander, going by the YouTube name Memsie80, stated, “The protest was in response to Apple’s lack of social responsibility in the African countries where the raw minerals and materials used in their products originate from.” Social media and spontaneous actions by passerby are very much part of the story in connection with certain of these protests.

This latest protest may serve as a reminder to companies of the potential consequences of continuing to source conflict minerals from the Congo and therefore have to disclose such activities in a Form SD and Conflict Minerals Report. Although the SEC conflict minerals rule does not directly prohibit or limit the use of conflict minerals, companies could be subject to consumer boycotts, protests and negative press.

To read Sheniz Raif’s complete blog post concerning the latest round of protests, which includes Memsie80′s video footage of the protest, please see Demonstrators Gather Outside Apple’s Flagship London Store Protesting Over “Congo Conflict Minerals.”