GAO Issues Report Regarding SEC's Conflict Minerals Rule (with Lofchie Comment)
The United States Government Accountability Office ("GAO") issued a report examining company disclosures reported in 2014 under the SEC's Conflict Minerals Disclosure Rule. Companies cited in the report described difficulties in obtaining necessary information from suppliers due to delays and other communication challenges. Most companies (67%) were unable to determine whether the conflict minerals they used came from the Democratic Republic of Congo ("DRC") or other covered countries, and none could determine whether the minerals financed or benefited armed groups in those countries. Officials from the Department of State and the U.S. Agency for International Development reported taking action to implement the U.S. conflict minerals strategy, but found that a difficult operating environment complicated its implementation. The GAO did not make any recommendations in the report.
Lofchie Comment: In short, the disclosures provided under the conflict minerals rule are likely to be inaccurate.