Law Requires Disclosure Of Congo-Sourced Minerals; Giant Loophole For Wal-Mart, Target
Advocates for ethically sourced minerals scored a big win this month when the Securities and Exchange Commission voted for a rule that requires public companies in the U.S. to reveal whether their products contain conflict minerals, or minerals mined in the Democratic Republic of Congo, that are helping to fund violence in the area. Theres just one problem: a loophole in the rule says that retailers dont have to report conflict-mineral connections--meaning big box stores such Walmart and Target escape scrutiny.
According to the just-passed rule, originally mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, manufacturers have to reveal use of conflict minerals such as gold, tin, tantalum, and tungsten if they are "necessary to the functionality or production of a product."
An earlier version of the rule also required retailers that sold their own brand-name products to disclose conflict-mineral use, even when those products are manufactured by outside contractors. But the retailers lobbied against this, and the final version now includes a provision saying that companies that dont directly control production over their products--like many big-box stores--dont have to disclose. The reason is that they ostensibly cant figure out the origins of their products, and so theres no way for them to know whether the products contain conflict minerals. Retailers who do control production all the way from contracting to manufacture do have to disclose.
The National Retail Federation is, of course, happy with the decision. Its very important that a distinction be made between a retailer who is acting as a manufacturer and has control over what is in a product and the vast majority who do not. While retailers abhor the violence in the Congo, compliance with these regulations could still be extremely difficult and there is considerable debate on whether filing reports with the SEC will make any difference," said Jonathan Gold, the National Retail Federations vice president for supply chain and customs policy, in a statement. Co.Exist contacted Walmart for comment, but we have yet to hear back.
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http://www.fastcoexist.com/1680446/walmart-target-dont-have-to-reveal-conflict-mineral-connections