July 24, 2013
Federal Court Upholds Corporate Accountability Disclosure Rule
WASHINGTON, D.C. – In a decision issued late Tuesday, a federal district court upheld in full the Securities and Exchange Commission’s (SEC) “conflict minerals rule” and the statute that required adoption of the rule. The conflict minerals rule requires corporations reporting to the SEC to investigate and publicly disclose whether their sourcing practices finance armed groups in the Democratic Republic of the Congo.
The rule will bring much-needed transparency to companies’ sourcing of conflict minerals and provide critical information to investors and consumers.
Industry groups, including the U.S. Chamber of Commerce, filed a lawsuit to invalidate the rule and corresponding statutory requirement. They contended that the conflict minerals rule was arbitrary and that the public disclosure requirement violated companies’ First Amendment rights.
In the decision, the court rejected every claim advanced by the industry groups. It agreed with the SEC and Amnesty International, which intervened in the litigation to defend the rule, that the industry groups’ arguments lacked merit.
“We are very pleased with the court’s resounding decision, which lays to rest industry’s baseless challenge to this commonsense disclosure provision,” said Julie Murray, an attorney at Public Citizen and counsel for Amnesty International.
“This is an important step toward corporate accountability for a trade in minerals that helps fuel human rights abuses,” said Vienna Colucci, director of policy for Amnesty International USA.
“It will help ensure that investors and consumers have the information they need to make more informed decisions.”