SEC to clamp down on extractives payments, mine safety and conflict minerals

New proposals under Dodd-Frank Act

The Securities and Exchange Commission, the US financial regulator, is to clamp down on payments by extractives companies, mine safety and conflict minerals. The proposals are among a raft of measures put forward by the SEC under the Dodd-Frank Act.
The Commission has voted to propose rules to require resource extraction companies to disclose payments made to the US or foreign governments. Both domestic and foreign oil, natural gas and minerals firms would have to disclose payments including taxes, royalties, fees, production entitlements and bonuses. The SEC used the Extractive Industries Transparency Initiative for reference.
The SEC is also proposing forcing new disclosures by companies on conflict minerals from the Democratic Republic of the Congo or its neighbours. The minerals in question are cassiterite, columbite-tantalite, gold, wolframite –essential in products such as mobile phones and jet engines.
Mining firms would have to include information aboutmine safety and health standards in their annual and quarterly SEC filings.
“Congress has determined that investors will benefit from disclosure of the health and safety records of mining companies,” said SEC Chairman Mary Schapiro. “We look forward to hearing from commenters as to whether these rules address the informational needs of investors.”
The deadline for submitting comments on the proposed rules is January 31 2011.
Meanwhile, the $9trn Investor Network on Climate Risk has called for new guidance from the SEC on deepwater drilling.
The INCR has written to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, the investigation set up in the wake of the Gulf of Mexico spill earlier this year, asking that its final report recommend that the SEC develop rules or guidance ensuring consistent disclosure of material offshore drilling risks. Link to SEC