September 10, 2014

Conflict Minerals: Commerce Department Publishes List (A Year Late)

The excerpts from the two blogs below best describe this year-late list of “all known conflict mineral processing facilities worldwide” from the Commerce Department. The list is required by Dodd-Frank’s Section 1502(d)(3)(C) – but it does “not indicate whether a specific facility processes minerals that are used to finance conflict in the Democratic Republic of the Congo or an adjoining country. We do not have the ability to distinguish such facilities.”

From Stinson Leonard Street’s Steve Quinlivan blog:

But the provision of the Dodd-Frank Act that requires this list is entitled “Report on Private Sector Auditing” and it looks like Commerce hasn’t begun to tackle that responsibility. Annually, beginning 30 months after passage of the Dodd-Frank Act, Commerce is required to submit a report to Congressional subcommittees that includes: “An assessment of the accuracy of the independent private sector audits and other due diligence processes described under the conflict minerals provisions. Recommendations for the processes used to carry out such audits, including ways to (i) improve the accuracy of such audits and (ii) establish standards of best practices.”

I know only one or two or a very few issuers submitted private sector audits with the first round of required conflict minerals filing. Perhaps Commerce has concluded it’s not worth the effort to make the evaluations or maybe the evaluation is underway. Since the standards for the audits have been published, Commerce certainty could provide recommendations as to the processes used to carry out the audits and establish standards of best practices.

From Cooley’s Cydney Posner blog:

The disclosure by Commerce may be helpful for issuers in a couple of ways. The list of smelters and refiners produced by Commerce may actually be useful for issuers in their conflict minerals compliance efforts because it compares and reconciles information about smelters and refiners from a number of sources. Moreover, the admission of the challenges faced by Commerce (with all of its resources) highlights and legitimizes the difficulty that issuers have faced in trying to comply with the conflict minerals rules. We can only hope that the acknowledgement by Commerce of its inability to distinguish which facilities are used to finance conflict in the DRC will encourage the SEC to be a bit indulgent in the conduct of whatever type of review-and-comment process it may undertake for conflict minerals reporting and perhaps lead to some constructive and practical guidance or even revisions of the rules, where necessary.

Also check out this piece by Elm Consulting entitled “Conflict Minerals Math: When 1/11 Equals 100%“…

XBRL: Errors Not Caught By Software

This blog from FEI Daily provides some cautionary tales about XBRL and software used to find errors…

Last Chance — Our Pair of Popular Executive Pay Conferences

With just two weeks to go, folks are rushing to join their 2000 other colleagues to be part of our “Annual Proxy Disclosure Conference” on September 29th-30th. Registrations for our popular pair of conferences (combined for one price)—in Las Vegas and via video webcast — are strong and for good reason. Act now!

The full agendas for the Conferences are posted — but the panels include:

– Keith Higgins Speaks: The Latest from the SEC
– Top Compensation Consultants: Survivor Edition
– Preparing for Pay Ratio Disclosures: How to Gather the Data
– Pay Ratio: What the Compensation Committee Needs to Do Now
– Case Studies: How to Draft Pay Ratio Disclosures
– Pay Ratio: Pointers from In-House
– Navigating ISS & Glass Lewis
– How to Improve Pay-for-Performance Disclosure
– Peer Group Disclosures: The In-House Perspective
– Creating Effective Clawbacks (and Disclosures)
– Pledging & Hedging Disclosures
– The Executive Summary
– Dealing with the Complexities of Perks
– The Art of Communication
– The Big Kahuna: Your Burning Questions Answered
– The SEC All-Stars
– Hot Topics: 50 Practical Nuggets in 75 Minutes

– Broc Romanek