Tag Archives: GAO report

GAO issues annual report showing only slight progress in disclosures on conflict minerals

by Cydney Posner

The GAO has recently issued its third annual report on conflict minerals. The GAO is required by Dodd-Frank to report annually on the effectiveness of the SEC’s conflict minerals rule in promoting peace and security in the DRC and adjoining countries  (the “covered countries”) as well as on the rate of sexual violence in war-torn areas of the covered countries. (To read about last year’s report, see this PubCo post.) One sentence in the report says it all: “Our review of companies’ conflict minerals disclosures filed with SEC in 2016 found that, in general, they were similar to disclosures filed in prior years.” In light of the provision in the Financial CHOICE Act of 2017 that would repeal the Dodd-Frank conflict minerals mandate, you have to wonder if this will be the GAO’s last report on the topic?  (See this PubCo post.) Continue reading

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GAO issues second annual conflict minerals report

by Cydney Posner

The GAO has issued its annual conflict minerals report to Congress, entitled  “Companies Face Continuing Challenges in Determining Whether Their Conflict Minerals Benefit Armed Groups.” The GAO is required to report annually on the effectiveness of the SEC’s conflict minerals rule in promoting peace and security in the DRC and adjoining countries  (the “covered countries”) as well as on the rate of sexual violence in war-torn areas of the covered countries. (For a discussion of last year’s report, see this PubCo post.) This report is particularly instructive in outlining the many challenges to supply chain due diligence arising out of fraud risk associated with reliance by processing facilities on documentary evidence from upstream stakeholders and compounded by the complexity of processing operations. If the title of report didn’t clue you in, the bottom line is that, although the GAO’s reviews “indicate some progress in companies’ efforts to comply with some key provisions of the rule, they also indicate that companies continue to face some challenges in their supply chain due diligence efforts.” For most companies, the sources of their conflict minerals remain a mystery. Continue reading

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New GAO report on conflict minerals compliance

by Cydney Posner

By coincidence, the same day that the three-judge panel of the D.C. Circuit  struck down (again) a portion of the conflict minerals rule (see this post), the GAO issued a report to Congressional Committees entitled “SEC CONFLICT MINERALS RULE Initial Disclosures Indicate Most Companies Were Unable to Determine the Source of Their Conflict Minerals.”   The GAO is required to report annually on the effectiveness of the SEC’s conflict minerals rule in promoting peace and security in the DRC and adjoining countries  (the “covered countries”) and on the rate of sexual violence in war-torn areas of the covered countries. The report examines conflict minerals disclosures filed by public companies with the SEC for the first time in 2014, as well as State Department and USAID actions related to the U.S. conflict minerals strategy in the covered countries. The GAO analyzed a random sample of company disclosures from the SEC database to collect the data. Although the study examined data from 2014 filings – which is not the most current available —  it still provides an interesting insight into the results from the government’s perspective, especially given that this information is being furnished to Congress. Continue reading

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