#34. Rep. Bill Huizenga (R-MI) – This amendment states no funds appropriated in this Act may be used to enforce a SEC rule pursuant to Section 1502 of Dodd-Frank relating to “conflict minerals.”
The U.S. House of Representatives drew unusual attention to their interworking through a sit-in on the House Floor last week. Democrat lawmakers demanded a vote on gun control bills; Republican lawmakers called it a futile publicity stunt. After the public video feed was cut, the drama was witnessed through shaky videos of the proceedings uploaded by the members themselves to Periscope.
Tabled* was the Financial Services Appropriations Bill, and of particular interest to those operating in the conflict minerals space: consideration of an amendment to that bill that would totally defund SEC enforcement of Dodd-Frank 1502. If passed, it would kill any ability of the US Government to collect, enforce, or report on due diligence filings by companies.
We’re a long way off from that amendment becoming U.S. law.
Even at the basic level of How a Bill Becomes a Law: the Amendment would have to be approved, the Bill passed by the House, the Senate passes its own version of the bill (possibly with this amendment language, possibly not), the Senate and House versions must be reconciled (possibly dropping the amendment if both versions didn’t include it). The final Bill then goes to the President for signing or veto (likely the latter). Those of you desirous of a longer discussion on the legislative process, how this process actually works, or U.S. Congressional procedure: let’s be friends.
What would the world look like with a dead DFA 1502?
One could argue the genie is out of the bottle in terms of expectations for companies to better understand their sourcing of conflict minerals. If the EU conflict minerals legislation passes, many companies would have to do some reporting anyway.
But maybe not. Maybe defunding enforcement of 1502 would fuel exasperated companies’ inclination to give up entirely (or embolden those who defy reporting requirements), maybe things would rubberband to pre-2008 transparency on minerals due diligence. Maybe.
1502 has been contentious since it was standalone Senate and House Bills, and certainly since passage in the DFA. The narrative dichotomy is set up as:
- Pro-U.S. business: – especially manufacturing – struggling under unreasonably burdensome legal requirements. See the Majority members’ testimonies and questions during this committee hearing. The origin, impact, and future of the requirements are all debated.
- Pro-DRC peace & development: This argument is underpinned by a humanitarian narrative that links the brutal conflict in the Great Lakes Region and associated human rights violations to armed groups, to minerals, to companies, to consumers. Here's Holly Draginis and Sasha Lezhnev from the Enough Project arguing against the amendment and in favor of maintaining enforcement of 1502.
We haven't seen anything publicly supporting this amendment (e.g. a U.S. Chamber of Commerce press release or something on Rep. Huizenga's – the Bill’s author – social media). He's a Michigan guy so likely very pro Made in America and manufacturing. This may be representative of a strategy to avoid it playing out in the court of public opinion.
Stay tuned.
*Fun fact: ‘tabled’ means the complete opposite in British versus American English. In British English it means to bring to the table, to take it up immediately. In American English it means to set aside for later.
