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Article

17 Dec 2011

Author:
[column] Jason Zweig, Wall Street Journal

Can Annual Reports Save Lives?

Buried...in the...[US] Dodd-Frank financial-overhaul law is a provision that has begun turning financial regulators into a human-rights police force...Alarmed by atrocities in the Democratic Republic of the Congo, Congress ordered the Securities and Exchange Commission to require companies to disclose whether [their] raw materials...include minerals from Congo or neighboring nations. The financial law thus puts a handful of harried securities lawyers at the SEC into an unprecedented and unlikely role: figuring out how publicly traded companies should demonstrate whether they have scrubbed their global supply chains of...human-rights violations in Central Africa. The minerals in question—cassiterite, columbite-tantalite, gold and wolframite—are widely used in consumer electronics and other products, although Congo supplies no more than 20% of global demand...For years, however, the revenues from Congolese mines have financed warring factions that engage in kidnapping, child labor, rape, mutilation and murder...The SEC reckons that 1,200 companies may have to file the new disclosures; other estimates range up to five times higher...So far this year, 42 U.S. companies...have mentioned the pending conflict-mineral rules in their financial statements...Their stock prices didn't seem to react to the disclosures...[Verifying information about minerals' sources] also is a concern for "socially responsible" funds...Bennett Freeman, [of]...Calvert Investments, says that it is "virtually impossible" at this point to prove that a company's products don't contain conflict minerals, but he is optimistic that the new rule will change that...Considering that interventions by other means have so often failed, financial disclosures—whether they work or not—may become the next weapon for combating crimes against humanity. [refers to Helen of Troy, RF Monolithics]