The SEC extended the period for submitting comments on the following proposed rules:
- Conflict Minerals
- Mine Safety
- Resource Extraction Disclosure
The SEC has proposed rules to implement the sections of the Dodd-Frank Act that address conflict minerals, mine safety and resource extraction disclosure. Originally, the SEC required comments to be submitted by January 31, 2011; however, the SEC has decided to extend the comment period for 30 days until March 2, 2011.
The proposed rules addressing conflict minerals require issuers for which conflict minerals are necessary to the functionality or production of a product manufactured, or contracted to be manufactured, by that issuer to disclose in its annual report whether its conflict minerals originated in the Democratic Republic of Congo or an adjoining country. If the issuer’s conflict minerals originated in the Democratic Republic of Congo, the issuer must provide a separate report as an exhibit to its annual report that provides a description of the measures the issuer took to exercise due diligence on the source and chain of custody of its conflict minerals.
The intention of the Dodd-Frank Act is to encourage companies using conflict minerals to encourage their suppliers to provide them with conflict-free minerals. Conflict minerals include the following:
Since many companies use these components in their products, this section of the Dodd-Frank Act has the potential to be extremely burdensome on companies. In addition, companies may have a difficult time in determining whether their minerals are from the Democratic Republic of Congo. As a result this section of the Dodd-Frank Act may impact a large number of companies.
The proposed rules addressing mine safety disclosure require issuers that are operators (or that have a subsidiary which is an operator) of a coal or other mine to disclose in their periodic reports information regarding specified health and safety violations, orders and citations, related assessments and legal actions and mining-related fatalities. In addition, the Dodd-Frank Act requires the filing of a Form 8-K disclosing the receipt of certain orders and notices from the Mine Safety and Health Administration.
The proposed rules addressing disclosure of payments by resource extraction issuers require issuers to include in an annual report information relating to any payment made by the issuer, or by a subsidiary or another entity controlled by the issuer, to a foreign government for the purpose of the commercial development of oil, natural gas or minerals. The Dodd-Frank Act added Section 13(q) to the Exchange Act, which requires a resource extraction issuer to provide certain information regarding those payments in interactive data format, as required by the SEC.
Comments on conflict minerals, mine safety and resource extraction disclosure are due on March 2, 2011.
Conflict Minerals: http://sec.gov/rules/proposed/2010/34-63547.pdf
Mine Safety Disclosure: http://sec.gov/rules/proposed/2010/33-9164.pdf
Disclosure of Payment by Resource Extraction Issuers: http://sec.gov/rules/proposed/2010/34-63549.pdf