Over Easy: Conflict Minerals
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):
Products and minerals do not fight conflicts. The label ‘conflict free’ is a metaphor that conveys moral responsibility for the Congo war. It requires an issuer to tell consumers that its products are ethically tainted, even if they only indirectly finance armed groups. An issuer, including an issuer who condemns the atrocities of the Congo war in the strongest terms, may disagree with that assessment of its moral responsibility. And it may convey that ‘message’ through ‘silence.’ See Hurley, 515 U.S. at 573. By compelling an issuer to confess blood on its hands, the statute interferes with that exercise of the freedom of speech under the First Amendment.
Hogwash! Silence is not disclosure. Up is not down. The First Amendment protects our freedom to express our opinions and it protects the freedom of the press so that we have the necessary information to form evidence based opinions and vote intelligently. In other words, the First Amendment protects the public’s right to know. It was never intended to protect silence.
The Fifth Amendment protects silence. A person cannot be compelled to testify against himself in a criminal case. It does not protect a corporation like a tobacco company from disclosing that cigarettes are harmful to health and may cause cancer. Likewise, since a company’s decisions about sourcing in its supply chain can impact the funding of conflict, it must be able to make informed choices about conflict minerals in its supply. Furthermore, “conflict free” is not a metaphor. It is a yes or a no to a question.
Our right to know is what this case is about. We have a right to know if products we buy are available for purchase as a result of outlaws, thieves, murderers-for-hire, rapists and butchers specializing in human rights violations conducting their business.
That said, it is likely that the SEC will seek an en banc review in this case, as the ruling issued on Monday was not unanimous. One of the justices held back, pending the outcome of en banc review in a similar case that has to do with disclosure in meat labeling.
Amazingly enough, today is Emancipation Day, a holiday in Washington DC to mark the anniversary of the signing of the Compensated Emancipation Act, which president Abraham Lincoln signed on April 16, 1862.
Electronic Industry Citizenship Coalition -EICC – Extractives and Conflict Minerals Resources