The controversial Dodd-Frank Section 1502 will likely be weakened by the new administration.
Just as there is much uncertainty over how the new administration will handle conflict diamonds and the Kimberley Process, the fate of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act appears pretty unclear.
That provision, snuck in at the last minute, calls for public companies to publicly report their procedures for avoiding the “conflict minerals” fueling the civil war in the Democratic Republic of Congo. In the jewelry industry, that meant public companies had to publicly report their procedures for sourcing gold and tungsten.
Today, President Trump is expected to sign an executive order weakening some aspects of Dodd-Frank. It is not clear whether Section 1502 will be among them. However, this week the acting chair of the Securities and Exchange Commission, Michael S. Piwowar, said he may rework the agency’s guidance on the provision—and even if he doesn’t weaken it, his expected successor, Wall Street lawyer Jay Clayton, likely will. Even so, experts believe companies will not be relieved of this year’s reporting requirement.
Section 1502 has been the subject of endless lawsuits and considerable controversy. Many felt that the SEC should not be handling what is essentially a foreign policy issue, and there is considerable evidence that it’s hurt the DRC as much as it’s helped.
