In a ruling that rests on what one rights group described as “a warped interpretation of the First Amendment,” a three-judge panel has said that corporations have a constitutional right to conceal information about whether minerals in their supply chains may have funded conflict.
The U.S. Court of Appeals for the D.C. Circuit on Tuesday ruled that the Securities and Exchange Commission (SEC) cannot force public companies to declare whether their products may contain “conflict minerals” from the war-torn Democratic Republic of Congo (DRC) because it violates their right to free speech. Such disclosure rules only apply to advertisements, the three-judge panel ruled, 2-1.
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The National Association of Manufacturers and other business groups have worked to overturn the disclosure rule since its inception.
And they are sure to be emboldened by Tuesday’s decision, which the pro-democracy group Move to Amend said “sets a dangerous precedent” on corporate personhood.
“Rulings such as this one send the message that so-called corporate ‘rights’ actually trump ‘We the People’s’ rights,” stated Kaitlin Sopoci-Belknap, national director of Move to Amend. “In this case a corporation is hiding behind the First Amendment to avoid accountability for their actions, and the Court has ruled their right to secrecy is more important than the public’s right to know.”
The SEC’s conflict minerals rule—strongly backed by human rights groups—is a provision mandated by the 2010 Dodd-Frank Wall Street reform law, requiring manufacturers to conduct due diligence on their supply chains to try and track the origins of minerals including tantalum, tin, gold, and tungsten to determine if they may have come from the DRC.
“Today’s decision affects not only the conflict minerals rule but could also be exploited by companies to bring legal challenges to other corporate transparency laws.”
—Zorka Milin, Global Witness
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