Industry Coalition Jointly Submits Comments to the SEC on Conflict Minerals

Jewelers of America, the Jewelers Vigilance Committee, the
American Gem Society, the Manufacturing Jewelers & Suppliers of America, and
the Fashion Jewelry and Accessories Trade Association have jointly submitted
comments to the Securities and Exchange Commission regarding its proposed
rules for the implementation of the conflict minerals provisions within the
Dodd-Frank Wall Street Reform and Consumer Protection Act.

Under the law, companies that already file annual reports
with the SEC will have to disclose whether their products contain
conflict minerals, including gold or tungsten, from the Democratic Republic of
the Congo or adjoining countries. Under the SEC’s proposed rules, companies
would be required to submit reports that describe due diligence measures used
to determine whether any of their gold or tungsten has been sourced from
the conflict regions. For those companies that source from the DRC or adjoining
countries, the reports would be independently audited, filed with the SEC, and
posted on the company’s website.

The SEC’s final rules are set to go into effect upon
publication on April 15.

The associations’ submission focused on those aspects of the
law that the SEC has the authority to address through the rulemaking process.
Among the points made:

  • The industry strongly supports the human rights objectives
    of the law, which seek to sever the link between conflict and the trade of
    gold, tungsten, and other minerals in the DRC and adjoining countries.
  • While the associations believe that the diligence
    infrastructure essential to achieving full compliance with the SEC’s proposed
    rules does not yet exist, commendable progress is being made by viable global
    initiatives to accomplish these objectives.
  • Future progress by industry is therefore tied to the
    achievement of specified milestones in the building of this infrastructure.
    This must be accomplished not only by industry groups such as the Responsible
    Jewellery Council and the World Gold Council, but by key stakeholders including
    the U.S. Department of State, the U.S. Department of Commerce, the Organization
    for Economic Cooperation and Development, the UN Group of Experts and key
    governments in the region working in collaboration.
  • The industry is committed to working with governmental and
    nongovernmental organizations to create a transparent and effective due
    diligence system for gold and tungsten.
  • During the implementation period, the associations have
    recommended companies submit reports—as required by the law—on the progress
    made to date. Once the industry and other stakeholders have taken the steps
    outlined in the submission, the necessary elements will be in place to enable
    companies to comply in full.
  • The submission also addresses other issues including: the
    complexity of the gold and jewelry supply chains (noting the small percentage
    of gold that is currently sourced from the DRC), the treatment of recycled and
    scrap metals (recommending that use of these not require an audited conflict
    minerals report), suggested “grandfathering” of existing gold stocks and the
    types of businesses that would be covered by the law.

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