Carly Oboth, a policy adviser at human rights group Global Witness, said in a statement on Wednesday that she was deeply concerned about Trump’s planned executive action. “This law helps stop U.S. companies funding conflict and human rights abuses in the Democratic Republic of Congo and surrounding countries,” she said. “Suspending it will benefit secretive and corrupt business practices. Responsible business practices are starting to spread in eastern Congo. This action could reverse that progress.”
A White House executive order last week took aim more broadly at the Dodd-Frank rules that were put into place after the 2007-2009 financial crisis. That order did not single out a particular rule but called on the Treasury Secretary to consult with other regulators, including the SEC, and come back with a report outlining possible regulatory changes and legislation. A Dodd-Frank SEC disclosure rule that required oil, gas and mining companies to disclose payments to foreign governments was repealed by the Republican-controlled Congress last week.
The conflict minerals rule is one of several disclosure regulations in Dodd-Frank that are unrelated to the financial crisis. In 2014, a U.S. appeals court struck down part of the conflict minerals law after the Business Roundtable, the U.S. Chamber of Commerce and the National Association of Manufacturers sued the SEC over it.The court found part of it violated free speech rights of companies by forcing them to publicly state that their products were not conflict free. The rest of the rule was left intact and companies are required to conduct due diligence and report the details of those inquiries in public reports filed with the SEC.
The SEC cannot repeal the rule without a law passed by Congress. It can, however, use its broad exemptive powers to scale back some of the requirements or stop enforcing the rule entirely. Last week, Acting SEC Chair Michael Piwowar took steps toward doing that by announcing that he had asked SEC staff to reconsider how companies should comply with it and whether “additional relief” was warranted. House Financial Services Chairman Jeb Hensarling is planning to reintroduce his Financial CHOICE Act bill, which contains a provision to repeal the conflict minerals rule.