As June 2nd approaches, people at companies whose products depend on tantalum, tin or tungsten (3 Ts) as well as gold—which are used in products ranging from coffee can lids to high-tech electronics and even jewelry—are watching events in Washington, D.C. closely.


These minerals often are mined in conditions of armed conflict and human rights abuses in Africa. What’s more, the profit from the sale of these minerals is used to finance continued fighting in the Democratic Republic of the Congo (DRC) and adjacent countries.


In a requirement that is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was supposed to take effect on June 2, 2014, the U.S. Securities and Exchange Commission sought to compel publicly traded companies to track the source of all relevant raw materials in their products, then file annual reports stating whether those goods were DRC conflict-free, conflict “undeterminable” or “not found” to be conflict-free. The National Association of Manufacturers and the U.S. Chamber of Commerce, along with other business interests, promptly sued when the law was passed, arguing that it was overly burdensome and costly—especially for companies which only use small amounts of the minerals in their products.


In a ruling two weeks ago, the U.S. Court of Appeals for the District of Columbia held that forcing companies to publicly declare which products aren’t “DRC conflict free” violates the First Amendment. The label “requires an issuer to tell consumers that its products are ethically tainted, even if they only indirectly finance armed groups,” the appeals court majority wrote. “By compelling an issuer to confess blood on its hands, the statute interferes with that exercise of the freedom of speech.” At the same time, the court upheld the rest of the rule, including provisions that require companies to conduct due diligence on their supply chains to determine the minerals’ origins, among other measures.


Consequently, the SEC will implement large portions of the rule, SEC Chair Mary Jo White said Tuesday, Reuters reports. In testimony before a U.S. House of Representatives committee, White said the recent appeals court ruling that struck down a provision of the conflict minerals rule doesn’t justify delaying the rest of the regulation’s requirements. The court “went out of its way” to uphold the vast majority of the rule, White told lawmakers, Reuters notes.


Later Tuesday evening, the SEC’s Director, Division of Corporation Finance, Keith Higgins issued a statement that explained in more detail how compliance will work when the deadline kicks in. He wrote that SEC will waive compliance with some of the rule’s disclosure and auditing requirements, but still require certain other disclosures to be made. So, companies which aren’t required under the rules to file a “conflict minerals report” should proceed with disclosing some details about inquiries they undertook to determine the origin of the minerals, Higgins wrote. Those who must file a conflict minerals report, he wrote, should still proceed and provide in the document a description of the due diligence they undertook to determine the mineral’s origin. However, companies at this time won’t have to declare publicly whether or not their products are in fact “DRC conflict free” or “not found to be DRC conflict free,” Higgins wrote.


It’s unclear how the SEC will address the part of the rule that was struck down by the appeals court. The finding could, for instance, be remanded to a lower court for further proceedings.


Notwithstanding, companies face increasing pressure from socially-responsible investors, non-governmental organizations, commercial customers and consumers, so complying with this rule—or even becoming conflict-free—may generate a competitive advantage for companies seeking to explain their position to socially aware consumers. Furthermore, greater supply chain transparency can help companies develop a more resilient and efficient supply chain.


Whether or not your company makes use of conflict minerals, what do you think of the Court of Appeals’ findings?