A federal judge tossed out a legal challenge to the Dodd-Frank Act provision on conflict minerals on July 23, saying financial regulators acted appropriately after Congress passed the law.
In October, the National Association of Manufacturers, U.S. Chamber of Commerce, and the Business Roundtable sued the Securities and Exchange Commission, hoping to nix the the regulating agency’s final rule on Dodd-Frank Section 1502.
The provision of the finacial reform legislation mandates publicly traded companies to disclose whether they source conflict minerals, including gold, from certain areas of the Democratic Republic of the Congo and surrounding African countries. Critics charge that the provision has caused companies to pull out of the DRC, devastating its economy.
The business groups argued in U.S. District Court in the District of Columbia that the SEC’s rule, issued in August 2012, was “arbitrary,” and that forcing companies to make certain disclosures runs contrary the First Amendment.
But U.S. District Judge Robert L. Wilkins approved the government’s request for summary judgment and upheld the law, saying that in developing the final rule, the SEC “appropriately deferred” to the judgment of Congress, which believed the rule would increase peace and stability in the DRC. He also said that the rule does not violate the First Amendment.
“The court’s ruling on Section 1502 is a major victory for human rights and corporate accountability,” Sophia Pickles of the advocay group Global Witness said in a statement. “Yesterday’s ruling will help stop some of the world’s worst human rights abusers from funding their fight using illegal proceeds from the minerals trade.”