By Sarah N. Lynch
WASHINGTON, July 2 (Reuters) - After a long delay, the U.S. Securities and Exchange Commission has set a date to vote on controversial new rules requiring companies to disclose payments to governments and whether any of their products use certain African “conflict minerals.”
The SEC said it would meet on Aug. 22 to publicly vote on the two sets of rules, which are required by the 2010 Dodd-Frank Wall Street reform law.
The conflict minerals rule would require companies to disclose whether they use tantalum, tin, gold or tungsten from the Democratic Republic of the Congo. The other rule would require oil, gas and mining companies to disclose payments they make to governments.
In addition, the SEC said it would also vote on a proposal required by the newly enacted JOBS Act which would lift a ban on general advertising for private securities offerings.
U.S. lawmakers in favor of the conflict minerals and resource extraction rules have in recent weeks sought to apply increasing pressure on the SEC to finalize the rules after the agency missed its April 17, 2011, deadline.
The delays have been fueled by a bitter dispute between human rights groups who say the rules will help reduce corruption and companies who say they will be too costly and difficult to implement.
Fifty eight members of Congress on June 22 sent a letter to SEC Chairman Mary Schapiro criticizing the agency for taking so long. It was signed by a variety of prominent U.S. House members, including Democrats Barney Frank, Edward Markey, Henry Waxman and Louise Slaughter.
“There is no clear reason for the delay,” the lawmakers wrote. “It has been nearly 18 months since the proposed rules were issued, and the comment period for both rules closed over a year ago.”
The conflict minerals rule has been arguably one of the most controversial rules in the Dodd-Frank law.
As proposed, companies would need to identify if any conflict minerals are used in their products. If the minerals are present, the companies would then need to conduct a due diligence check to track them through the supply chain to their origins.
Companies and business groups like the U.S. Chamber of Commerce have strongly cautioned the SEC to slow down and scale back its proposal.
They say it will be hard to put into practice, as these minerals can be used in minuscule amounts and are almost impossible to track through the numerous layers of the supply chain.