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The Conflict Minerals Act: Good Start Or Bad Law?

In the end, Persico believes that companies' due diligence will all come down to consumers and PR. Public companies that need to abide by the Conflict Minerals Act will aim to state that their products are “DRC Conflict Free” in their annual filings. To achieve this aim, some companies may go so far as to refuse any materials sourced by conflict areas.

Worst law of the year?

Some, however, remain unconvinced that the law has succeeded in achieving its goals.

In December, Forbes contributor Tim Worstall cast his vote for Dodd-Frank as the worst law of the year. Worstall's reasoning is that the law “simply doesn't achieve the outcome that its proposers were hoping for.”

Worstall sees the Conflict Minerals Act as more complex than necessary, but worse than that, the act pressures electronics companies to avoid conflict minerals and then exempts the companies because they don't have to disclose conflict-mineral use — because “they are not manufacturers according to the definitions of the law.”

It is true that the Conflict Minerals Act does not require companies to go the whole nine yards to obtain information and is broad in its push for companies to adhere to ethical practices when sourcing materials from potential conflict zones. And certainly, depending on where a company sits in its supply chain, obtaining this information could be a hassle.

However, the Conflict Minerals Act is still at an early stage of its life. Persico sees the act as taking measures to ensure that 80 percent of companies are adhering to regulations before focusing on figuring out how to make the subsequent 20 percent follow suit. He said that there are opportunities for the act to be strengthened and revised moving forward should the need for reassessment be required. With so many variables in the manufacturing process, it seems that a few loopholes are necessary in the regulation's infancy in order to ensure it is strengthened in the end.

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