(Adds background on rule, opposition)
By Sarah N. Lynch
WASHINGTON May 14 A U.S. appeals court on
Wednesday denied a request by industry groups to delay the
implementation of a new rule that requires companies to
determine if their products may contain "conflict minerals" from
a war-torn part of Africa.
Wednesday's decision means that companies will have to start
complying with parts of the Securities and Exchange Commission's
new rule on June 2.
It also marks a blow to the National Association of
Manufacturers, the U.S. Chamber of Commerce and the Business
Roundtable, the three groups that had challenged the rule and
most recently sought to have it delayed.
The SEC's conflict minerals rule is a requirement from the
2010 Dodd-Frank Wall Street reform law.
It requires publicly traded manufacturers to determine if
any tantalum, tin, gold or tungsten used in their products may
have originated from the conflict-ridden Democratic Republic of
Congo (DRC) and disclose the findings to investors.
In April, the U.S. Appeals Court for the District of
Columbia struck down a narrow part of the rule on free speech
grounds, saying companies should not be forced to say that their
products are not "conflict free."
The rest of the rule, however, was left intact.
In recent guidance released by the SEC, the agency said it
expects companies to continue to conduct the proper due
diligence to determine the origin of the minerals and file the
reports with the commission.
However, companies will be relieved from certain audit
requirements in the rule and also will not be forced to state
whether or not the products are conflict free.
The trade groups that challenged the rule had hoped the
court would agree to stay the rule, and argued the SEC should
not proceed with implementing part of the "costly" measure
without first seeking public input.
(Reporting by Sarah N. Lynch; Editing by Steve Orlofsky and Dan