New UK Bribery Act 2010 Give Conflict Minerals Legislation Teeth

Online, March 31, 2011 (Newswire.com) - The armed gangs that kill, rape and pillage in the Democratic Republic of the Congo ('DRC') are often funded by the sale of minerals, minerals that a UK consumer might buy in a mobile phone or TV. The consumer therefore unwittingly funding such oppression.

In an attempt to stop this the US incorporated Section 1502 into the Dodd-Frank Act, signed into law on the 21st July last year and which becomes effective on the 17th April 2011. This Act applies to all companies that report to the US Securities and Exchange Commission i.e. which have assets greater than US$10 million and whose securities are owned by more than 500 entities.

Section 1502 of the Act deals with 'Conflict Minerals" - these currently include gold, columbite-tantalite, cassiterite, wolframite and their derivatives which were mined in the DRC or any of its 9 adjoining countries - (the 'Conflict Area'). The Act also gives the US Secretary of State the power to designate other minerals as 'Conflict Minerals'
The existing conflict minerals are therefore essentially gold, tantalum, tin and tungsten. These are used in a myriad of everyday products - from mobile phones to light bulbs. (For a fuller list please refer to www.conflictminerals.co.uk.
Any quoted company that uses any of these four minerals in its products must thoroughly investigate its supply chain to determine whether or not it is using any minerals originating in the Conflict Area - and have that investigation audited by an independent third party. Such investigation and audit to be published in the Annual Report of the company concerned.

Moreover, if any mineral used does come from the Conflict Area, the company must fully determine whether or not it would have benefited, directly or indirectly any of the armed groups in the DRC - such determination again to be independently audited and published in the company's Annual Report.

More importantly, products, which can be stamped as 'Conflict Mineral Free', will be preferred by most consumers in most market places. The market will speak and producers will have to come into line. No doubt for this reason the Act presently includes no sanctions against companies which do use Conflict Minerals.

Several major UK companies are listed on an American Exchange. The Act will therefore apply directly to them. Even more UK companies supply the US companies covered by the Act and so the Act will effectively also apply to them. They too therefore will have to conduct the necessary investigations and audits on their own supply chains for the products concerned. Most probably in a few years time even to sell such products into the US market place will require the brand differentiation of 'Conflict Mineral Free' in order for most US consumers to consider purchase.

The Act in itself is a powerful weapon against conflict trading. In the UK it may be made doubly so by the Bribery Act 2010. This comes into effect on 1st July 2011, the guidance notes having been published on 30th March 2011.
Amongst many other safeguards the Bribery Act provides that a company is culpable for bribes given, directly or through intermediaries, to a third party for obtaining or retaining an advantage to the conduct of the business. This whether by their employees or associated persons and even if the company had no knowledge of those actions. The Act is extra-territorial so where the crime was committed is irrelevant. It is a moot point whether a payment made to an armed gang in the DRC for cheap minerals constitutes a 'bribe' within the meaning of the Act. It certainly does in the plain meaning of the word ('something offered to corrupt the conduct of business').

As with the US Act the UK requires supply chain investigation and verification. Unlike the US Act the UK Act does have teeth - up to 10 years imprisonment with an unlimited fine.

The UK Act apples to any company doing business in the UK. Any US Company which has to disclose a use of Conflict Minerals under the requirements of the Dodd-Frank Act which sells its products in the UK, can therefore be held liable in a UK court. Such an offender would not just suffer as in the US a loss of face but in the UK a loss of liberty.

ENDS

Notes for Editors
Guidance Notes to The Bribery Act 2010 http://www.justice.gov.uk/guidance/docs/bribery-act-2010-guidance.pdf
Ministry of Justice Guidance http://www.justice.gov.uk/guidance/bribery.htm
Foreign and Commonwealth Office launch of Conflict Minerals information for Business on 29/3/2011 http://www.fco.gov.uk/en/news/latest-news/?id=575312582&view=News
The Bribery Act 2010 Legislation http://www.legislation.gov.uk/ukpga/2010/23/contents
Dodd-Frank Wall Street Reform and Consumer Protection Act http://www.gpo.gov/fdsys/pkg/PLAW-111publ203/content-detail.html

Company History
Conflict Minerals UK is a division of International Quarrying Consultants Limited (IQC).
IQC was incorporated in 1967 in England and since that time it has undertaken consultancy assignments across the world for the mining and quarrying industries and for various government organisation.
IQC's company number is 922649