Conflict Minerals and California
California has enacted a statute that will require public companies contracting with the state to comply with thewith the Securities and Exchange Commission (“SEC”) regulations on “conflict minerals.”
“Conflict minerals” are gold, tantalum, tin and tungsten from the Democratic Republic of the Congo (DRC), and the prohibition comes from the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). The requirements from Dodd-Frank that the SEC is implementing are of disclosure and reporting by required companies of the use of “conflict minerals” in their manufacturing processes. The concept is to force companies to find alternative sources or materials from those supplied by DRC.
At the SEC level, the issue is one of administrative proceedings before the SEC. At the California level, the stakes are a bit higher – loss of contracting with the state and its agencies.