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It’s been 16 years since Congress passed the Dodd-Frank Act, directing the SEC to issue rules requiring certain companies to disclose their use of conflict minerals if those minerals are “necessary to the functionality or production of a product” manufactured by those companies. Under the Act, those minerals include tantalum, tin, gold or tungsten.
Congress enacted Section 1502 of the Act to address concerns that the exploitation and trade of conflict minerals by armed groups was helping to finance conflict in the Democratic Republic of Congo (DRC region) and contributing to an “emergency humanitarian crisis.” The final rule applies to a company that uses minerals including tantalum, tin, gold or tungsten if:
- The company files reports with the SEC under the Exchange Act.
- The minerals are “necessary to the functionality or production” of a product manufactured or contracted to be manufactured by the company.
Companies using any of the designated minerals were required to conduct a reasonable “country of origin” in good faith. Using that process, organizations would be able to learn whether any of its minerals originated in (or, if were scrapped or recycled from) the covered countries.
Organizations that source minerals from covered countries and aren’t using scrap or recycled materials must trace where those minerals came from and how they moved through the supply chain. Then, they have to file a Conflict Minerals Report, post it on their website and include the link in the filing. The due diligence has to follow a recognized standard (e.g., the framework developed by the Organisation for Economic Co-operation and Development).
Still Figuring Out if it Works
The verdict is still out on Section 1502’s effectiveness and impacts. Its detractors question whether the disclosure rules have driven any real-world change, especially in conflict zones like the DRC. In a 2025 Viewpoint, Ropes & Gray LLC says the ruling has been “controversial since its adoption in 2012.”
The law firm says the U.S. Government Accountability Office (GAO) reported in 2024 that peace and security in the DRC hadn’t improved as a result of the SEC disclosure rule. “The GAO concluded that the SEC rules had “not reduced violence in the DRC and has likely had no effect in adjoining countries,” it adds. “In fact, the GAO found that the rule was associated with a spread of violence.”
On the other side of the argument, groups like the Enough Project say Dodd-Frank 1502 and related reforms have led to “significant improvements in the transparency of corporate supply chains and to a major reduction in the number of conflict mines for the 3T minerals in the eastern Congo.”
“More than 75% of the world’s smelters and refiners for the four minerals have now passed third-party audits,” the organization states. “Before Dodd-Frank 1502, there was no certification mechanism for distinguishing conflict mines (i.e. mines controlled by armed groups or the Congolese army) from conflict-free mines, and there were no federal transparency requirements for companies on conflict minerals.”
NAM Speaks Up
The National Association of Manufacturers (NAM) is the latest group to speak out against Dodd-Frank Section 1502. In early April it called on the U.S. Department of State to end the mandate completely, stating that it’s “failed to stem violence in the DRC and discouraged American private-sector investment in the region and should be phased out.”
Along with the 2024 GAO report, NAM pointed to high compliance costs that companies have to bear in order to stay compliant with the ruling. “The provision has also added staggering compliance costs for U.S. industry,” says NAM, which in 2011 estimated it would cost U.S. industry between $9.4 billion and $16 billion initially to comply with this mandate (plus ongoing due diligence and reporting costs).
“After 15 years of failing to end violence in the DRC, forcing U.S. companies to incur billions of dollars in compliance costs and reducing U.S. supply chain resilience,” NAM says, “it is time to end this mandate and try a different approach, including greater U.S. investment and continued diplomatic pressure.”
