Slate published a story this week that may turn a few heads with the release of the new iPhone iterations: the biggest manufacturing trade group in the United States is in the midst of a court battle with the Securities & Exchange Commission over whether or not consumers should be made aware of the primary sources of the minerals used in their smartphones. The battle is being fought to determine which groups get to make regulations regarding multinational manufacturing, either Congress or manufacturers themselves.
Back in 2010, when the Dodd-Frank Act was passed by Congress, a lesser known provision was included that requires companies to track and report when conflict minerals are used in their products.
Conflict minerals include tantalum (Coltan), tungsten, gold, and tin, all of which are used in the manufacture of phones, disc players, laptops, gaming consoles, and hard drives. The materials are mined in the Democratic Republic of the Congo or Rwanda, where militia groups force children and slaves to dig in unregulated mines. The proceeds are used to fund violence against government forces in Congo and Rwanda.
The Dodd-Frank Act’s provision regarding conflict minerals does not go into effect until 2014, but Congress included it to try and alleviate the “resource curse” that afflicts poorer developing nations, and often turns their resource-rich industries into mob-run slave plantations. “The exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo is helping to finance conflict characterized by extreme levels of violence in the eastern Democratic Republic of the Congo, particularly sexual- and gender-based violence, and contributing to an emergency humanitarian situation therein,” the bill reads.
The bill was partially implemented in August 2012 when the SEC issued a rule that required companies to disclose which devices contain conflict minerals “necessary to the functionality or production [of the device]” while also requiring them to report in detail which mines their minerals came from. That information would be required to be available on the company’s website.
The National Association of Manufacturers teamed up with the U.S. Chamber of Commerce to respond to the SEC’s new rule with a lawsuit, which argued that the new rule was too expensive to follow and that the SEC was unable to prove that the people of the Congo would benefit. They also argued that the rule violated the companies’ First Amendment Rights by compelling them to speak.
Microsoft, General Electric, and Motorola were all among the companies that opposed the new SEC rule. If you want to read more, Slate has the story here.
[Image via VICE-TV’s YouTube documentary on conflict minerals in the Congo]