SEAL BEACH, Calif. A U.S. Securities and Exchange Commission (SEC) rule requiring that publicly reporting companies determine whether they use conflict minerals could pose a challenge for service centers, chairman and chief executive officer of Reliance Steel & Aluminum Co. David H. Hannah said.
Hannah told an Association of Women in the Metal Industries chapter meeting that the requirement that companies disclose involvement with so-called conflict minerals in documents filed with the SEC is ridiculous.
The regulations came out of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. In a rule adopted last August, the SEC requires publicly reporting companies to establish if minerals in their products are sourced from the Democratic Republic of the Congo or adjoining countries (amm.com, Aug. 23
). If so, the companies must make a reasonable effort to determine whether the purchase of these minerals is funding armed groups in the country. The legislation applies to tin, tantalum, gold, and tungsten.
Hannah noted that the reporting requirement kicks in 2014 for business conducted in 2013. Why it got into the rules, I dont know, said Hannah, who argued that this issue has no business being with the SEC.
While producers and consumers of specialty metals and electronic device manufacturers have been seen as most vulnerable to the regulation, industry observers noted that that publically held companies such as Reliance which distribute a broad range of products may also be affected.
Reliances team overseeing the conflict minerals issue includes Tricia Emmerman, associate general counsel, and David Sargent, manager of supplier relations for aluminum and stainless products. Hannah noted the two will participate in a telephone conference about these new rules held by the Metals Service Center Institute (MSCI).
An MSCI spokesman in Rolling Meadows, Ill. said the conference and webinar for MSCI members is slated on Feb. 18.
Business groups are challenging the regulation in the courts. In October, the National Association of Manufactures and the U.S. Chamber of Commerce claimed that the rule is burdensome and asked the U.S. Court of Appeals for the District of Columbia Circuit to set aside the regulation, at least in part.
Hannah, noting court challenges to the SEC regulation, said, Id like to think it will be overturned. On the other hand, he acknowledged, Were not counting on it.