The Dodd-Frank Wall Street Reform and Consumer Protection Act (pdf), as signed into law by President Obama on July 21, 2010, creates the following new disclosure obligations for resource extraction issuers and users of “conflict minerals”:
- resource extraction issuers that are required to file reports with the Securities and Exchange Commission will now be required to disclose in their annual reports any payment made by the issuer, its subsidiaries or an entity under the issuer’s control, to any non-U.S. government or to the U.S. federal government for the purpose of the commercial development of oil, natural gas, or minerals;
- any U.S. reporting issuer that uses conflict minerals in its products will now be required to determine whether the minerals originated in the Democratic Republic of Congo (the “DRC”) or any country bordering the DRC and if so, to file a report with the SEC including, among other things, a description of the due diligence measures taken by the issuer on the source and chain of custody of the minerals; and
- each U.S. reporting issuer that is an operator, or that has a subsidiary that is an operator, of a coal or other mine will now be required to disclose information regarding violations of, and other matters relating to, the [U.S.] Federal Mine Safety and Health Act.
This article provides a brief summary of these provisions of the Dodd-Frank Act, as well as some of the issues you may wish to consider as the SEC drafts and seeks public comment on the regulations that will set out the specifics of the new disclosure requirements.
