Contrary to the expectations of many that the SEC would imminently release its final conflict minerals rules, on March 6, 2012, at a hearing before the House Committee on Appropriations on the SEC fiscal year 2013 budget request, SEC Chairman Schapiro indicated that the rules will not be adopted until “the middle of the year.” Schapiro stated that the SEC needs “the next couple of months” to complete the rules as the conflict minerals rulemaking is “so complex” and “so out of the ordinary for the SEC.
Schapiro also indicated that the final rules will “try to give latitude and flexibility in some areas” to help companies comply. She noted that the final rules will include a phase-in period (but did not say how long) to allow time for supply chain due diligence mechanisms to be developed and implemented. In this regard, Schapiro noted that the SEC is looking closely at the OECD Guidance, which provides a due diligence framework for sourcing conflict minerals. In response to questions, Schapiro stated that the statute would not allow for a de minimis exception from the requirements for companies whose products use a small amount of conflict minerals.
In addition, Schapiro indicated that the final rules on the disclosure of payments by resource extraction issuers will be issued in the same timeframe as the conflict minerals rules.