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GAO-17-517R 1 (2017-04-26)

handle is hein.gao/gaobaaktk0001 and id is 1 raw text is: G A O U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 April 26, 2017 Congressional Committees SEC Conflict Minerals Rule: 2017 Review of Company Disclosures in Response to the U.S. Securities and Exchange Commission Rule The exploitation of the mining and trade of conflict minerals-in particular, tin, tungsten, tantalum, and gold from the eastern region of the Democratic Republic of the Congo (DRC)- has contributed to the displacement of people and severe human rights abuses. Section 1502 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), 1 which addresses the exploitation of conflict minerals,2 required several U.S. agencies, including the Securities and Exchange Commission (SEC), to take certain actions to implement its conflict minerals provisions. The Dodd-Frank Act required SEC, in consultation with the Department of State (State), to promulgate disclosure and reporting regulations regarding the use of conflict minerals from the DRC and adjoining countries (which this report refers to as covered countries).3 SEC adopted a conflict minerals disclosure rule in August 2012 and published the adopting release in the Federal Register in September 2012.4 In addition, the Dodd-Frank Act included a provision for GAO to report, beginning in 2012 and annually thereafter, on the effectiveness of the SEC rule in promoting peace and security in the DRC and adjoining countries, among other things.5 In this report, we examine companies' disclosures filed with SEC in 2016, compared with disclosures filed in the prior 2 years.6 To examine company disclosures filed with SEC in 2016 in response to the conflict minerals disclosure rule, we reviewed specialized disclosure reports-Form SD-and related documentation publicly available from the SEC's Electronic 1Pub. L. No. 111-203, § 1502, 124 Stat. 1376, 2213-18. 2The Dodd-Frank Act defines conflict minerals as columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives, or any other mineral or its derivatives that are determined by the Secretary of State to be financing conflict in the DRC or an adjoining country. See Pub. L. No. 111-203, § 1502(e)(4). Columbite-tantalite, cassiterite, and wolframite are the ores from which tantalum, tin, and tungsten, respectively, are processed. 3The term adjoining country is defined in section 1 502(e)(1) of the Dodd-Frank Act as a country that shares an internationally recognized border with the DRC. When SEC issued its conflict minerals rule, such countries comprised Angola, Burundi, Central African Republic, the Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda, and Zambia. Pub. L. No. 111-203, § 1502. For the purposes of the conflict minerals rule, SEC refers to these countries as covered countries. 477 Fed. Reg. 56,274. According to SEC, when SEC proposes or adopts a set of rules, those rules are published in a document called a proposing release or adopting release. See enc. I for additional information on the conflict minerals disclosure rule. 5Pub. L. No. 111-203, § 1502(d). This report-as well as a separate report on the gold supply chain and sexual violence in the DRC and adjoining countries that we will issue in the summer of 2017-contributes to our work in response to the annual reporting requirements in section 1502 of the Dodd-Frank Act. 6Conflict minerals disclosures filed with SEC in a given year-in this report, 2016, 2015, or 2014-contain information about conflict minerals used in the previous year-in this report, 2015, 2014, or 2013, respectively. All years cited in this report are calendar years (January-December). GAO-17-517R SEC Filings Review Page 1

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