Some expected that the big new SEC regulations on industrial users of tin, tungsten, tantalum and gold would mostly affect electronics and jewelry makers, but the actual net being cast is far wider. Manufacturers in general must investigate the supply chains of their products in order to comply with the disclosure requirements, no small matter at a firm like Kraft with 40,000 products and 100,000 suppliers. (Kraft found that the minerals may turn up in pouch packaging of juice products.) No wonder the SEC’s absurd initial estimates of a mere $70 million economy-wide compliance cost have given way to estimates a hundred times higher or more. In an echo of the infamous CPSIA statute, “the rule provides no de minimis exemption for trace amounts.” [Melissa Maleske, Inside Counsel, earlier here, here, and here] (& Bainbridge)
More: the Dodd-Frank conflict minerals provision and the Democratic Republic of the Congo [Marcia Narine, Conglomerate via Bainbridge]
2 Comments
Does this law apply to goods sold in the United States, or only to goods manufactured in the United States? Because if it’s the latter, perhaps the affected manufacturers should consider moving their manufacturing operations abroad. I hear China is a good place to relocate to.
Strikes me that there’s no rational basis for making a company disclose a trace amount of something they don’t add as such to their products, because they’re not buying it as such. And if they’re not buying it as such, there’s no nexus with preventing trafficking in such materials.
But that’s just an off the cuff theory of the sort that turns into nightmare once the litigation begins . . . .