The Dodd-Frank Act’s Interventionist Approach to Business and Human Rights; Transparency, reporting and due diligence

In December 2010, the U.S. Securities and Exchange Commission (SEC) published proposed changes to the annual reporting requirements for issuers that file reports pursuant to the Exchange Act of 1934 to implement Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposed rules will require any issuer for which conflict minerals are necessary to the functionality or production of a product manufactured or contracted to be manufactured by that issuer to disclose in the body of its annual report whether its conflict minerals originated in the Democratic Republic of Congo or an adjoining country. If so, the issuer should demonstrate the measures taken to exercise due diligence on the source and chain of custody of its conflict minerals. Next to the proposed rules on conflict minerals, the SEC has also issued rules on payments to third country governments. On 22 August 2012, the SEC has issued the final rules on both conflict minerals and payments. These interventionist rules are discussed, and compared with the EU amended Transparency Directive that will incorporate some similar yet different reporting requirements on business and human rights.