© U.S. Air Force / Staff Sgt. Levi Riendeau Electronics Production | May 14, 2012

Conflict Minerals: IPC Chairman testifies before Congress

Steve Pudles, Chairman of the Board of IPC Association, has testified before Congress to urge changes to the U.S. Securities and Exchange Commission (SEC) proposed rule on conflict minerals.
IPC is advocating changes to the draft SEC rule implementing Section 1502 of the Dodd-Frank Act. According to a release by the IPC, the changes “would lessen the burden on small manufacturing companies and make it easier for companies to more efficiently and effectively comply with the regulations”.

"IPC supports the underlying goal of Section 1502 of the Dodd-Frank Act, which is to address the grave human rights situation in the Democratic Republic of the Congo (DRC)," testified Pudles on Thursday. "However, I am concerned that the SEC's draft regulations [that implement Section 1502] place a great burden on the private sector with too little regard for the challenges they place on small businesses and the benefits they offer the people of the DR

Pudles is CEO of Spectral Response LLC, an electronics manufacturing services company located in Lawrenceville, Georgia.

"I encourage the SEC to implement the requirements of Section 1502 in a manner that supports the goals of the statute without unduly burdening U.S. manufacturing industries or causing unnecessary disruptions of the legitimate minerals trade, which is vital to the livelihood of the people of the DRC," said Pudles. "Sensible changes or additions to the proposed rule could dramatically mitigate the costs while maintaining the spirit of Section 1502."

IPC argues that compliance costs associated with the proposed SEC rule would heavily impact small businesses already struggling in a competitive market. “An IPC survey of its members indicated average compliance costs could exceed $230,000 per year. An independent analysis of the costs, conducted by Tulane University, puts total compliance costs at $7.9 billion, which is more than 100 times the SEC's estimate,” a release by IPC stated.

Pudles recommended a reasonable phase-in provision, a single reporting date and the inclusion of an alternative approach for recycled or scrap sources in order to reduce the amount of virgin materials used in the manufacturing process.

Other IPC recommendations include reporting exemptions for products outside of the supply chain's control; provision of a de minimis level to focus on significant uses of conflict minerals; provision of non-binding examples of due diligence; and a transitional category of conflict minerals of indeterminate source.


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