By Cydney Posner
Someone at the WSJ apparently found a willing leaker with knowledge of the version of the conflict minerals rules currently being circulated among the SEC commissioners. The proposal is scheduled for a vote on August 22.
The WSJ characterized the draft as, contrary to some expectations (including my own), tougher than the original proposal: "Compared with the original proposal, a final draft circulated to SEC commissioners would outline a series of items for companies to review before they can assume their goods don't contain minerals from the area, people familiar with the document said. If adopted, the rule could create more costs for companies trying to determine whether they need to submit a ‘conflict-minerals report' to the SEC….The draft tightens the standards for an independent audit that must be conducted on the report and would require top executives to sign off on the report, something companies believe could subject them to greater liability.
"Under the draft, the SEC would give companies a two-year transition period to determine if certain goods contain conflict minerals, one of several concessions sought by business groups. The details of the final rule could change ahead of next month's vote, but people familiar with the matter said they didn't expect major negotiations among the SEC's five commissioners."
As you may recall, the proposal has been subject to a lot of lobbying on both sides: nonprofits, corporations, legislators and even clergy. According to the article, the U.S. Chamber of Commerce is once again threatening to intercede: "in a July letter to the SEC, [the Chamber] warned the rule could be overturned by the courts if the agency doesn't fix certain flaws. The trade group's letter cast doubt on the SEC's roughly $71 million cost estimate for all U.S. public companies that need to comply with the rule and said the agency needs to include in its estimate the costs for corporate suppliers and vendors." Remember that that kind of argument was a winner for the Chamber in connection with proxy access.