Friday, October 5, 2012

Dodd-Frank Wording Creates Unfairness Amongst Competitors

General Motors must comply with section 1502 of the
Dodd-Frank Act, but competitors like Volkswagen AG
and Daimler AG do not, creating unfairness in the market.
NEW YORK (WSJ) -- The Security Exchange Commission (SEC) recently adopted section 1502 of the Dodd-Frank Act, which requires companies that meet certain criteria to publish if conflict minerals are used in any part of the supply chain for the company. These minerals come from the Congo and surrounding areas, and the proceeds are used to fuel wars and other conflict in the region. Industries impacted by section 1502 include automobile, jewelry, electronics, aerospace, and others. These industries stated that the section will add to costs and is difficult to comply with, as their whole supply chain will have to be audited and new minerals will have to be sourced if it is found that conflict minerals are used. However, even if a company does not have to comply with section 1502, there is a growing movement of corporate responsibility, in which many businesses are removing conflict minerals from their supply chains in order to maintain a favorable reputation. Source: Nuances in Conflict Minerals Rules Creates Uneven Playing Field. (Reliability: High)

Comment: Section 1502 was created to cut off funding to warlords in and around the Congo. It will be years before an assessment can be made to determine if the rule had the desired outcome.

No comments:

Post a Comment