On Monday, the US Circuit Court of Appeals for the District of Columbia issued a ruling in National Association Of Manufacturers, Et Al.,v. Securities And Exchange Commission(SEC). Citing freedom of speech, the court ruled that companies cannot be compelled to disclose whether the minerals they use to manufacture their products came from “conflict mineral” areas.
Conflict minerals involve tin, tantalum, tungsten and gold, and are often associated with electronics devices, or the Information Technology (IT) industry. The term refers to minerals that are mined in the remote eastern Congo region of Africa, in unregulated mines under conditions of armed conflict and human rights abuses. Warlords obtain and profit from the minerals utilizing rape, child labor, child soldiers, extortion and other business methods that are legendary for human exploitation, including slavery, torture and murder by starvation. In addition, the real profiteers of the literal gold mine do not live in the Congo. Rather, many of them live here.
Congress responded in 2010 to the human rights catastrophe with the Dodd-Frank Consumer Protection Act, requiring the Securities and Exchange Commission (SEC) to initiate regulations compelling companies to disclose whether or not the minerals originated from a conflict-free area. The SEC Conflict Minerals Rule was set to require manufacturers to disclose conflict mineral information on their websites and file a report with the SEC with full compliance this year.
The manufacturers responded by suing the SEC in the United States District Court for the District of Columbia claiming that their first amendment right to freedom of expression is violated by a rule that compels them to disclose unfavorable information that might hurt their bottom line. The district court rejected their argument and granted summary judgment for the SEC and the ACLU. The Manufacturer’s Association appealed to the US Circuit Court of Appeals for the District of Columbia.
The Court writes (at page 20):