CONFLICT 

MINERALS

DISCLOSURE RULE

SEC’s Actions and 

StakeholderDeveloped Initiatives

Report to Congressional Committees

July 2012

GAO-12-763

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-763, a report to 

congressional committees 

July 2012 

CONFLICT MINERALS DISCLOSURE RULE

SEC’s Actions and Stakeholder-Developed 

Initiatives

Why GAO Did This Study

In eastern DRC, armed groups 

continue to commit severe human 

rights abuses and profit from 

exploitation of minerals and other 

trades. In 2010, Congress included a 

provision in the Dodd-Frank Wall 

Street Reform and Consumer 

Protection Act to address the trade of 

conflict minerals—tin, tantalum, 

tungsten, and gold. Section 1502(b) of 

the act requires SEC to issue a 

disclosure rule for companies using

these minerals in their products. The 

act also requires GAO to assess the 

rule’s effectiveness and the rate of 

sexual violence in war-torn areas of 

DRC and neighboring countries. 

Since a rule has not been issued, this 

report examines (1) steps SEC has 

taken toward issuing a conflict minerals 

disclosure rule; and (2) stakeholderdeveloped initiatives that may help 

covered companies comply with the

anticipated rule. This report also 

examines (3) any additional 

information available on the rate of 

sexual violence in eastern DRC and 

neighboring countries since GAO’s

2011 report on that subject. 

GAO reviewed and analyzed reports

and documents from SEC, other U.S. 

agencies, industry associations and 

other nongovernmental stakeholders; 

and interviewed representatives from 

those organizations. 

What GAO Recommends

GAO recommends that the Chairman 

of SEC identify remaining steps and 

associated time frames to issue a final 

rule. SEC neither agreed nor disagreed 

with the recommendation, but noted 

that it will expedite the completion of its 

rule making to provide certainty. 

What GAO Found

The Securities and Exchange Commission (SEC) has taken some steps toward

developing a conflict minerals disclosure rule, but it has not issued a final rule. 

For example, SEC published a proposed rule in December 2010 and has 

gathered and reviewed extensive input from external stakeholders through 

comment letters and meetings. SEC has also announced, on several occasions,

new target dates for the publication of a final rule, as shown in the table below. In 

July 2012, SEC announced that the Commission will hold an open meeting in

August 2012 to consider whether to adopt a final rule. According to SEC officials, 

various factors have caused delays in finalizing the rule beyond the April 2011 

deadline stipulated in the act, including the intensity of input from stakeholders 

and the public; the amount of time required to review this input; and the need to 

conduct a thorough economic analysis for rule making. 

SEC Announcements of Target Publication Dates for Final Conflict Minerals Disclosure Rule 

Date of announcement New target date for publication of final rule

April 2011 August 2011-December 2011 

November 2011 November 2011-December 2011 

Mid-December 2011 December 2011 

End of December 2011 January 2012-June 2012 

Source: SEC.

Various stakeholders have developed initiatives that may help covered

companies comply with the anticipated rule, but some initiatives have been 

hindered by SEC’s delay in issuing a final rule. Industry associations, multilateral 

organizations, and other stakeholders have developed global and in-region 

sourcing initiatives, which include the development of guidance documents, audit 

protocols, and in-region sourcing systems. These initiatives may support 

companies’ efforts to conduct due diligence and to identify and responsibly 

source conflict minerals. In the absence of SEC’s final rule, however, 

stakeholders note that uncertainty regarding SEC’s reporting and due diligence 

requirements has complicated their efforts to expand and harmonize their 

initiatives. For example, in the absence of a final rule, one initiative is facing 

difficulty engaging additional participants, while stakeholders’ efforts to 

harmonize two initiatives have been hindered.

Little additional information on the rate of sexual violence in eastern Democratic 

Republic of the Congo (DRC) and neighboring countries has become available 

since GAO’s 2011 report on that subject. For example, only one populationbased survey has been published on sexual violence in Rwanda, and it reports 

that 22 percent of women ages 15-49 have experienced sexual violence there in 

their lifetimes. No additional surveys have been conducted in eastern DRC;

however, one organization is currently conducting a survey and another is 

planning to conduct a survey there in 2012.

View GAO-12-763. For more information, 

contact Michael J. Courts at (202) 512-8980 or 

courtsm@gao.gov. 
Page i GAO-12-763 Conflict Minerals Disclosure Rule 

Letter 1 

Background 3

SEC Has Taken Some Steps toward Developing a Rule but Has 

Delayed Issuing a Final Rule 11

Stakeholder-Developed Initiatives May Facilitate Compliance with 

the Anticipated Rule, but Efforts to Improve Some Initiatives 

Have Been Hindered by the Absence of a Final Rule 16

Little Additional Information on the Rate of Sexual Violence in 

Eastern DRC and Neighboring Countries Has Become Available 

since GAO’s 2011 Report 24

Conclusions 28

Recommendation for Executive Action 28

Agency Comments and Our Evaluation 29

Appendix I Objectives, Scope, and Methodology 32

Appendix II Descriptions of Global and In-Region Sourcing Initiatives 35

Appendix III Comments from the Securities and Exchange Commission 49

Appendix IV GAO Contact and Staff Acknowledgments 51

Tables

Table 1: SEC Announcements of Target Publication Dates for Final 

Disclosure Rule 14

Table 2: Stakeholder-Developed Global and In-Region Sourcing 

Initiatives 17

Table 3: Population-Based Surveys That Estimate the Rate of 

Sexual Violence in Rwanda, Eastern DRC, and Uganda 25

Contents
Page ii GAO-12-763 Conflict Minerals Disclosure Rule 

Figures

Figure 1: The DRC, including Eastern DRC (North and South Kivu 

Provinces and the Ituri District of Orientale Province), 

and Adjoining Countries 4

Figure 2: Simplified Conflict Minerals Supply Chain 8

Figure 3: Artisanal Gold Mining Site in Eastern DRC 9

Figure 4: Timeline of Steps SEC Has Taken toward Developing a 

Rule 11

Figure 5: Segments of Conflict Minerals Supply Chains Supported 

by Stakeholder-Developed Initiatives 21

Figure 6: A Processing Machine in a Certified Conflict-Free 

Tantalum Smelting Facility 22

Figure 7: Gold Bars Produced by LBMA Accredited Refiners 41

Figure 8: Artisanal Miners Panning Tin Ore at a Rwandan Mine Site 45
Page iii GAO-12-763 Conflict Minerals Disclosure Rule 

Abbreviations

BGR German Federal Institute for Geosciences and Natural 

Resources 

DHS Demographic and Health Survey

DRC Democratic Republic of the Congo

EICC Electronic Industry Citizenship Coalition 

G-8 Group of 8

GeSI Global e-Sustainability Initiative 

ICGLR International Conference on the Great Lakes Region 

iTSCi ITRI Tin Supply Chain Initiative

LBMA London Bullion Market Association 

MONUSCO United Nations Organization Stabilization Mission in the 

Democratic Republic of the Congo 

NGO nongovernmental organization

OECD Organisation for Economic Co-operation and Development

PPA Public-Private Alliance for Responsible Minerals Trade 

RJC Responsible Jewellery Council 

SEC Securities and Exchange Commission

UNSC United Nations Security Council

UNGoE United Nations Group of Experts

USAID United States Agency for International Development

WGC World Gold Council 

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Page 1 GAO-12-763 Conflict Minerals Disclosure Rule 

United States Government Accountability Office 

Washington, DC 20548

July 16, 2012

Congressional Committees:

The eastern portion of the Democratic Republic of the Congo (DRC) has 

long been the site of one of the world’s worst humanitarian crises, and 

violence there continues. Large numbers of civilians in war-torn areas of 

the DRC have been the victims of horrific sexual violence, including rape, 

mutilation, and sexual slavery carried out by armed groups. In addition, as 

we previously reported,1 illegal armed groups, as well as some units of the 

Congolese national military, have continued to commit severe human rights 

abuses, including mass killings. The illegal armed groups and units of the 

Congolese national military committing these atrocities also profit from the 

illegal mining of minerals and the illicit taxation of other trades, such as 

charcoal and timber. Citing the continuing urgency of the human rights 

situation and the need to take action, in July 2010, Congress included in 

the Dodd-Frank Wall Street Reform and Consumer Protection Act 

(hereafter in this report referred to as the Dodd-Frank Act, or the Act) 

provisions pertaining to the trade of conflict minerals. The Act defines 

conflict minerals as columbite-tantalite (coltan), cassiterite, wolframite, and 

gold ores, or their derivatives.2 When these ores are processed they yield 

the following metals used in industrial and other applications: tantalum, tin, 

tungsten, and gold, respectively. Hereafter in this report, the term “conflict 

minerals” will refer to either these ores or these metals. Section 1502(b) of 

the Act requires the Securities and Exchange Commission (SEC) to issue a 

conflict minerals disclosure rule (hereafter referred to as a rule) for 

“persons”3

 

1

GAO, The Democratic Republic of the Congo: U.S. Agencies Should Take Further Actions 

to Contribute to the Effective Regulation and Control of the Minerals Trade in Eastern 

Democratic Republic of the Congo, 

(hereafter referred to as covered companies) that must file 

reports with SEC to disclose whether necessary conflict minerals used in 

their products originated in the DRC or in an adjoining country and, if they 

GAO-10-1030 (Washington, D.C.: Sept. 30, 2010).

2

The Act also allows the Secretary of State to name any other mineral or its derivatives as 

a conflict mineral. 

3

While SEC has not issued a final rule, in its proposed rule it has interpreted “persons” in 

section 1502(b) to apply only to issuers of securities that file reports with SEC under 

section 13(a) or section 15(d) of the Securities Exchange Act of 1934, including domestic 

companies, foreign private issuers, and smaller reporting companies. See 75 Federal 

Register at 80951 (Dec. 23, 2010). 

 
 

Page 2 GAO-12-763 Conflict Minerals Disclosure Rule 

did, to provide an additional report with certain disclosures.

4,5 The Act also 

requires us to report on the effectiveness of SEC’s rule and on the rate of 

sexual violence in war-torn areas of the DRC and adjoining countries. We 

issued our first report on sexual violence in these areas in July 2011.6

This report examines (1) steps SEC has taken toward issuing a conflict 

minerals disclosure rule; (2) stakeholder-developed initiatives that may 

help covered companies comply with the anticipated rule; and (3) any 

additional information available on the rate of sexual violence in eastern 

DRC and neighboring countries since our 2011 report. 7,8

To address the first two objectives, we reviewed and analyzed the 

provisions of the Securities Exchange Act of 1934 as added by section 

1502(b) of the Dodd-Frank Act; documents, comment letters, and 

memos—including SEC’s proposed rule—from SEC; documents and 

reports from the Department of State (State) and the United States 

Agency for International Development (USAID); as well as documents 

and reports from multilateral organizations such as the Organisation for 

Economic Co-operation and Development (OECD), nongovernmental

organizations (NGOs), and industry associations. We interviewed officials 

from relevant U.S. agencies, as well as representatives from multilateral 

 

4

The countries adjoining the DRC are Angola, Zambia, Tanzania, Burundi, Rwanda, 

Uganda, South Sudan, the Central African Republic, and the Republic of the Congo.

5

Section 1502(b) also requires that private sector audits of conflict minerals reports 

submitted by covered companies to SEC be conducted in accordance with standards 

established by the Comptroller General of the United States. Before we started work on 

this report, SEC officials contacted GAO to discuss GAO’s audit standards and we 

explained our audit standards to SEC. 

6

GAO, The Democratic Republic of the Congo: Information on the Rate of Sexual 

Violence in War-Torn Eastern DRC and Adjoining Countries, GAO-11-702 (Washington, 

D.C.: July 13, 2011).

7

In this report we are not reporting on the effectiveness of SEC’s conflict minerals 

disclosure rule, as required under the Act, because SEC had not yet issued its final rule at 

the time of our audit. In the interim, to meet our mandated reporting time frame of July 

2012 under the Act, we are reporting on steps SEC has taken toward issuing a rule and 

on industry and other stakeholders’ initiatives that may help covered companies comply 

with the anticipated disclosure rule. We will report on the effectiveness of SEC’s final 

conflict minerals disclosure rule after such a rule is issued and covered companies submit 

their conflict minerals disclosure reports.

8

As specified in our 2011 report, we will identify any additional information available from 

eastern DRC and the neighboring countries of Burundi, Rwanda, and Uganda. 
 

Page 3 GAO-12-763 Conflict Minerals Disclosure Rule 

organizations—including the International Conference on the Great Lakes 

Region (ICGLR), NGOs, consulting firms, industry associations, 

companies—including five smelters and one refiner encompassing all four 

minerals—and a gold industry expert. We traveled to the United Kingdom, 

France, Belgium, and Germany to interview representatives from the 

OECD Secretariat, foreign government officials, and representatives from 

foreign companies—including smelters, industry associations, and 

consulting firms. To address the third objective, we conducted interviews 

with representatives from State, USAID, the Department of Defense, 

relevant NGOs, and researchers, and gathered and analyzed relevant 

documents from these organizations, to determine if any new data on 

sexual violence were available. We also conducted Internet literature 

searches to identify new academic articles containing any additional data. 

See appendix I for a complete description of our scope and methodology.

We conducted this performance audit from August 2011 to July 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

The DRC is a vast, mineral-rich nation with an estimated population of 

approximately 72 million to 74 million people in an area that is roughly 

one-quarter the size of the United States.9

 

9

According to the 2012 State Department Background Notes, the estimated population for 

the DRC is 71.7 million, while the 2012 CIA World Factbook estimates DRC’s population 

at 73.6 million. 

It was colonized in 1885 as a 

personal possession of Belgian King Leopold II and administered by the 

Belgian government starting in 1907. It achieved independence from 

Belgium in 1960. For almost 30 years of the postindependence period, 

the DRC was known as Zaire and was ruled by an authoritarian regime 

under Mobutu Sese Seko. Following the 1994 genocide in Rwanda, some 

perpetrators of the genocide and refugees fled into eastern DRC. See 

figure 1 for a map of the DRC and adjoining countries.

Background

History of the DRC: War 

and Instability
 

Page 4 GAO-12-763 Conflict Minerals Disclosure Rule 

Figure 1: The DRC, including Eastern DRC (North and South Kivu Provinces and the Ituri District of Orientale Province), and 

Adjoining Countries
 

Page 5 GAO-12-763 Conflict Minerals Disclosure Rule 

The Mobutu regime was toppled in 1997 by Laurent Kabila, who led a 

rebel group from eastern DRC with the assistance of Rwanda and 

Uganda. Kabila was assassinated in 2001 and leadership shifted to his 

son, Joseph Kabila. During the period of the senior Kabila’s regime, the 

nation experienced a period of civil war during which numerous rebel 

groups, with the assistance of Rwanda, Uganda, and other neighboring 

countries, captured significant parts of the DRC. The war continued into 

the regime of Joseph Kabila, and resulted in the deaths of an estimated 

5.4 million people by 2007.10 As we reported in 2010, illegal armed 

groups and some Congolese national military units are consistently and 

directly involved in human rights abuses against the civilian population in 

eastern DRC and are involved in the exploitation of conflict minerals and 

other trades. We also reported that there is a culture of impunity in 

eastern DRC in which those who have committed human rights abuses 

do not face justice for the crimes they have committed. After decades of 

instability and war, the central government in the capital, Kinshasa, 

currently has little administrative capacity and control over remote 

regions, including eastern DRC. The long distances between the capital 

and eastern DRC and the rudimentary infrastructure, which make 

transportation and communication difficult, further limit the central 

government’s control in eastern DRC. 

In 2006, Congress passed the Democratic Republic of Congo Relief, 

Security, and Democracy Promotion Act of 2006.11

 

10This number is based on an estimate by the International Rescue Committee, which 

conducted a series of population-based surveys to determine the conflict-related mortality 

rate in the DRC. Although we did not evaluate these studies, it should be noted that the 

challenges and limitations that exist generally for population-based surveys are relevant to 

this series of surveys and resulting estimates. 

The act stated that it is 

the policy of the United States to engage with governments working for 

peace and security throughout the DRC and hold accountable individuals, 

entities, and countries working to destabilize the country. According to 

State officials, improving security in the eastern portion of the DRC is 

central to U.S. efforts. In August 2009, the Secretary of State traveled to 

the eastern portion of the DRC where, after seeing the consequences of 

the conflict firsthand, she called for action to assist victims of sexual 

violence. Recognizing that the exploitation and trade of conflict minerals 

originating in the DRC is helping to finance conflict, in July 2010 

11Pub. L. No. 109-456, sec.102(14). 

U.S. Government 

Response
 

Page 6 GAO-12-763 Conflict Minerals Disclosure Rule 

Congress included a provision in section 1502(b) of the Dodd-Frank Act 

that requires SEC to issue a rule for covered companies to disclose 

whether necessary conflict minerals used in their products originated in 

the DRC or in an adjoining country and, if they did, to provide an 

additional report with certain disclosures.

12 The United States is the 

largest donor to the United Nations Organization Stabilization Mission in 

the Democratic Republic of the Congo (MONUSCO),13 contributing 

almost one-third of MONUSCO’s $1 billion annual budget. Furthermore, 

in November 2011, State and USAID, in collaboration with NGOs, 

industry, and other governments, launched the Public-Private Alliance for 

Responsible Minerals Trade (PPA) to support supply chain solutions to 

conflict minerals challenges in the DRC and neighboring countries.14

The four conflict minerals covered by section 1502(b) of the Dodd-Frank 

Act are mined in various locations around the world; for example, tin is 

mined in China, Indonesia, Peru, Bolivia, as well as the DRC. Similarly, 

tantalum is reportedly mined in areas such as Australia, Brazil, Canada, 

and the DRC. While the majority of tungsten—reportedly 77 to 84 percent 

of global production from 2006 through 2009—is mined in China and a 

very small amount is mined in the DRC, gold is mined in many different 

countries, including the DRC. Our review of United States Geological 

Survey data on tantalum, tin, tungsten, and gold mined in the DRC 

showed that about 17 percent of the global tantalum supply, about 4 

percent of the global tin supply, less than 1 percent of the global tungsten 

supply, and less than 1 percent of the global gold supply, was mined in 

the DRC in 2009.15

 

12Section 1502(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 

Pub. L. No. 111-203, 124 stat. 1376 at 2213-2218, added section 13(p) to the Securities 

Exchange Act of 1934, 15 U.S.C. § 78m(p). 

However, according to a December 2011 report by 

13From its creation in 1999 to July 2010, the United Nations’ deployment was called the 

United Nations Organization Mission in the Democratic Republic of the Congo. On July 1, 

2010, the deployment’s name was changed to the United Nations Organization 

Stabilization Mission in the Democratic Republic of the Congo. 

14PPA intends to demonstrate that it is possible to secure conflict-free minerals from the 

DRC and neighboring countries. PPA issued its request for proposals on June 15, 2012 

and it expects to award up to $800,000 in two or more grants to support the goals of the 

alliance.

15To the extent that mined minerals are misreported and/or smuggled out of the DRC, 

these estimates could be incorrect. 

Minerals Covered by the 

Conflict Minerals 

Legislation: Origins, Uses, 

and Supply Chains
 

Page 7 GAO-12-763 Conflict Minerals Disclosure Rule 

the United Nations Group of Experts on the DRC (UNGoE),16 mineral 

production and exports from eastern DRC have recently fallen.17

Various industries, in particular manufacturing, use these minerals in a 

wide variety of products and in varying amounts. Tin is utilized by a 

multitude of industries in tin solder, which is used to join metal pieces

together.18 According to company representatives, tin is also found in 

food packaging, in steel coatings on automobile parts, and in some 

plastics. According to industry association and company representatives, 

the majority of tantalum is used to manufacture tantalum capacitors, 

which enable energy storage in electronics products such as cell phones 

and computers.19

Figure 2 below depicts a simplified conflict minerals supply chain for all 

four conflict minerals. For the purposes of this report, it provides a basic 

overview of how conflict minerals move from the mine of origin to the end 

consumer.

Tungsten is used in drill bits and cutting tools and other 

industrial manufacturing tools; it is also the primary component of 

filaments in light bulbs. In addition to its use as currency and in jewelry, 

gold is also used by other industries, such as the electronics industry.

20

 

16UNGoE, Letter dated 29 November 2011 from the Chair of the Security Council 

Committee established pursuant to resolution 1533 (2004) concerning the Democratic 

Republic of the Congo addressed to the President of the Security Council. S/2011 (S/738). 

Official Record. New York, 2011.

17According to an USAID official, as of late 2011 all exporters from the DRC must process 

their minerals to a 60 percent mineral content level, which increases the value added for 

the DRC.

18For example, tin solder is used to attach individual components on circuit boards.

19Tantalum is also used to produce alloy additives, which can be found in turbines in jet 

engines; mill and chemical products; thin films, which are used in semiconductors; and 

other products.

20We note, however, that the supply chain for each conflict mineral is distinct. In particular, 

according to gold industry representatives, the supply chain for gold is significantly 

different from the supply chains for tin, tantalum, and tungsten because of the following 

factors: (1) the role of bullion banks in the gold supply chain; (2) the role of gold in 

investment markets; (3) the high level of recycled gold utilized in the gold supply chain; (4) 

the portability and high value of small amounts of gold; (5) the role of gold as a currency 

and a store of value; and (6) the ease with which gold can be refined.
 

Page 8 GAO-12-763 Conflict Minerals Disclosure Rule 

Figure 2: Simplified Conflict Minerals Supply Chain

At mines throughout the world, mineral ores are extracted using 

mechanized industrial or artisanal mining techniques.21

 

21In contrast to mechanized industrial mining, artisanal mining is a form of mining that is 

characterized by a lack of mechanization or capital investment. 

While industrial 

mining occurs in some provinces in the DRC, such as the Katanga 

province, artisanal mining is the dominant type of mining used in eastern 
 

Page 9 GAO-12-763 Conflict Minerals Disclosure Rule 

DRC where conflict is most prevalent.22 See figure 3 for a picture of an 

artisanal mining site in eastern DRC. 

Figure 3: Artisanal Gold Mining Site in Eastern DRC 

For artisanal mining, the local processor or trader—an individual or 

company—purchases minerals directly from mine sites and typically 

processes or upgrades the material before selling it to the exporter, but 

the exporter may also purchase minerals directly from mine sites rather 

than going through a local processor or trader. Also, exporters may carry 

out further processing or upgrading before exporting the materials to a 

smelter or refiner. At the most basic level, smelting involves converting a 

mineral into a metal and refining involves purifying a metal into a higher-

 

22According to a December 2011 UNGoE report, Banro, a Canadian-based mining 

company, began operating the first industrial gold mine in South Kivu in October 2011. In 

addition, according to a gold industry representative, it is anticipated that other industrial 

gold mining companies will invest in industrial mining operations in DRC by 2015. 
 

Page 10 GAO-12-763 Conflict Minerals Disclosure Rule 

purity metal.23 Although some smelters of tin, tantalum, and tungsten sell 

high-purity metals through traders or exchanges, smelters primarily sell 

high-purity tin, tantalum, and tungsten directly to component parts 

manufacturers. Component parts manufacturers construct individual 

parts—such as capacitors, engine parts, clasps for necklaces, and other 

items—that they sell to original equipment manufacturers. Original 

equipment manufacturers complete the final assembly of a product and 

sell their products to consumers.24,25

The supply chain for industrially mined gold, which is the dominant form 

of mining conducted outside of eastern DRC, is different. Industrially 

mined gold is typically shipped from mine sites directly to refiners, 

bypassing local traders and exporters. Gold refiners typically sell highpurity gold to banks, for use as a store of value, or to international 

exchanges and traders, where gold is bought and sold. Banks and traders 

may sell gold to manufacturers, including jewelry or electronics 

component parts manufacturers and some gold refiners sell gold directly 

to manufacturers. 

According to industry association and company representatives, in 

practice, a company’s supply chain for products containing tin, tantalum, 

tungsten, and gold can be complex and can vary considerably. For 

example, a company’s conflict minerals supply chains may involve 

several different entities taking different actions to help develop products 

and move them through the supply chain. In addition, the supply chains 

for some companies’ products may contain a small number of component 

parts, whereas the supply chains for other companies’ products may 

contain thousands of component parts, which may be sourced from 

hundreds of different suppliers. 

 

23In this report, the term “smelter” refers to those facilities that process or refine columbitetantalite (coltan), cassiterite, or wolframite ores and/or recycled materials into high-purity 

tantalum, tin, and tungsten, respectively. The term “refiner” refers to those facilities that 

process mined and recycled gold into high-grade gold. 

24Original equipment manufacturers may also sell their products to retailers or distributers, 

who in turn sell the products to final end-user consumers. 

25Companies operating in the first four phases of the supply chain are typically referred to 

as “upstream companies,” while those companies operating in the remaining phases are 

referred to as “downstream companies.” Most U.S. companies that may be affected by 

section 1502(b) of the Dodd-Frank Act are generally downstream companies. 
 

Page 11 GAO-12-763 Conflict Minerals Disclosure Rule 

SEC has published a proposed conflict minerals disclosure rule and has 

taken steps to gather input from various stakeholders. However, it has 

delayed issuing a final rule due to a number of factors, such as 

addressing intense stakeholder input and dealing with a heavy rulemaking workload.

SEC did not meet the deadline in the Dodd-Frank Act to issue a final 

conflict minerals disclosure rule by April 2011, but it has taken some 

steps toward developing a rule, including publishing a proposed rule in 

December 2010 (see fig. 4). 

Figure 4: Timeline of Steps SEC Has Taken toward Developing a Rule

a

The proposed rule also extended the comment period to March 2, 2011 from the original comment 

due date of January 31, 2011. 

b

SEC’s notice on the October 2011 roundtable reopened the comment period until November 1, 2011. 

SEC Has Taken Some 

Steps toward 

Developing a Rule but 

Has Delayed Issuing a 

Final Rule

SEC Has Published a 

Proposed Rule and 

Gathered Stakeholder 

Input
 

Page 12 GAO-12-763 Conflict Minerals Disclosure Rule 

According to SEC officials, following the passage of the Dodd-Frank Act in 

July 2010, SEC announced that it would develop a rule and called for 

public comments on the upcoming rule. In September 2010, SEC posted 

on its website an estimated issuance date for the proposed disclosure rule 

of between October 2010 and December 2010; at this time SEC also 

posted on its website an estimated issuance date for the final rule of 

between January 2011 and March 2011. In October 2010, SEC revised its 

estimated issuance date for a final rule to between April and July 2011. On 

December 15, 2010, SEC issued a proposed rule that reflected the 

complicated and technical nature of the issues it covered. The proposed 

rule was over 100 pages and included over 70 questions in which SEC 

requested feedback from the public on specific technical issues, such as 

whether reporting standards should apply to all conflict minerals equally, 

whether certain companies should be exempt from reporting, and whether 

there should be a de minimis threshold for the amount of conflict minerals 

used in a product.26

According to agency officials, in developing a proposed rule, SEC 

consulted with its internal experts and State, and gathered extensive input 

from external stakeholders through comment letters and meetings.27 After 

SEC published a proposed rule in December 2010, it hosted a roundtable 

in October 2011 to obtain additional public input to help inform the 

development of a final rule. SEC officials also said that since July 2010—

when it announced it intended to develop a rule—SEC has received a 

large and steady volume of comment letters from individuals and groups 

of external stakeholders, including various types of companies; industry 

associations; international organizations; international NGOs and local 

NGOs working in Central Africa; U.S. and foreign officials; private 

individuals; and others, with over 400 distinct comment letters posted to 

its website.28

 

26Examples of other issues on which the proposed rule requests feedback from the public 

include whether the proposed rule would present undue costs to smaller companies; 

whether to prescribe the type of due diligence required; and how to handle existing 

stockpiles of conflict minerals or minerals from recycled or scrap sources.

According to SEC officials, SEC has reviewed these 

27As stated earlier in this report, before we started work on this report, SEC officials 

contacted GAO to discuss GAO’s audit standards and we explained our audit standards to 

SEC. 

28This number is as of April 20, 2012 and counts distinct comment letters posted to SEC's 

website. “Form” comment letters with identical content—but sent from different 

individuals—are counted as a single, distinct comment letter submitted to and posted by 

SEC.
 

Page 13 GAO-12-763 Conflict Minerals Disclosure Rule 

comment letters and is taking them into account as it develops a final 

rule.

SEC officials said that they have also received a large number of meeting 

requests from external stakeholders to further discuss issues and 

concerns about the proposed rule. Since July 2010, SEC Commissioners, 

officials, and staff have held and documented approximately 140 separate 

meetings with external stakeholders and posted brief memorandums of 

the meetings on SEC’s website.29

Partly in response to the volume of comments received and meetings 

requested, SEC held a public roundtable in October 2011 to discuss the 

proposed rule. The roundtable featured panelists from companies that will 

likely be affected by a final rule, such as reporting companies, investment 

companies, audit firms (which may support covered companies in their 

efforts to comply with a final rule), NGOs, and affected issuers. The SEC 

Chairman, three other SEC Commissioners, and relevant SEC officials 

hosted the roundtable with U.S. Senator Richard Durbin and U.S. 

Congressman James McDermott (via videotape) serving as guest speakers. 

SEC officials said that the SEC roundtable was a helpful tool for gathering 

more information as it continues its work toward developing a final rule.

According to SEC officials, 

approximately 60 of those meetings involved SEC Commissioners and/or 

their counsels engaging directly with external stakeholders. SEC officials 

said that they are considering information and input gained from their 

meetings with stakeholders as they continue to develop a final rule.

 

29This number is as of April 20, 2012 and counts individual memorandums on meetings 

held with SEC officials which were posted to SEC’s website. 
 

Page 14 GAO-12-763 Conflict Minerals Disclosure Rule 

Since SEC issued a proposed rule in December 2010, it has announced, 

on several occasions, new target dates for the publication of a final rule, 

as shown in table 1 below:

Table 1: SEC Announcements of Target Publication Dates for Final Disclosure Rule 

Date of announcement New target date for publication of final rule

April 2011 August 2011-December 2011

November 2011 November 2011-December 2011

Mid-December 2011 December 2011

End of December 2011 January 2012-June 2012

Source: SEC.

In its December 2011 announcement concerning the target publication 

date for a final rule, SEC estimated that it would issue a final rule by June 

2012; however, SEC did not issue a final rule by the end of June 2012.

On July 2, 2012, SEC announced that the Commission will hold an open 

meeting on August 22, 2012 to consider whether to adopt a final conflict 

minerals disclosure rule.30,31

• Significant learning curve. According to SEC officials, the process of 

developing a rule required their staff to become familiar with several 

areas that were relatively new to them. For example, they told us that 

their staff had to

SEC officials said that various factors have 

caused delays in developing, modifying, and finalizing a rule, as follows:

• develop contextual understanding about recent events in the DRC 

and adjoining countries (including learning about the relevant inregion political and economic actors, economic arrangements 

between these actors, and other evolving issues in these countries);

 

30The Commission consists of five presidentially-appointed Commissioners, with 

staggered five-year terms. One of them is designated by the President as Chairman of the 

Commission—the agency’s chief executive. It is the responsibility of the Commission to: 

(1) interpret federal securities law; (2) issue new rules and amend existing rules; (3) 

oversee the inspection of securities firms, brokers, investment advisors, and ratings 

agencies; (4) oversee private regulatory organizations in the securities, accounting, and 

auditing fields; and (5) coordinate U.S. securities regulation with federal, state, and foreign 

authorities.

31According to SEC, pursuant to the provisions of the Government in the Sunshine Act, 

Pub. L. No. 94-409, SEC will hold an open meeting in which the Commission will discuss 

this and other rules.

SEC’s Final Rule Delayed
 

Page 15 GAO-12-763 Conflict Minerals Disclosure Rule 

• learn about complex supply chains and sourcing for conflict 

minerals, which includes various U.S. and international companies 

that can range in size from very small-scale enterprises to major 

multinational corporations; 

• stay abreast of external stakeholder efforts to develop and 

implement their own responsible supply chain initiatives for conflict 

minerals; and

• understand the implications of using securities law to influence the 

behavior of covered companies in a way that would impact the 

situation in central African countries.

• Intense stakeholder interest and input. SEC officials said that 

responding to intense public and stakeholder interest and input on the 

rule has contributed to delays. According to agency officials, the original 

comment period on the proposed rule closed on January 31, 2011, but 

at the request of a wide range of external stakeholders the Commission 

extended the comment period to March 2, 2011. Officials also noted 

that, in response to requests from some external stakeholders, the SEC 

hosted a roundtable on the conflict minerals disclosure rule and the 

Commission re-opened the comment period until November 1, 2011. 

SEC officials further noted that the Commission continues to receive 

comment letters and cited the over 400 distinct comment letters that it 

has received. In addition, SEC officials said that the approximately 140 

meetings between the agency and external stakeholders, the 

complicated and technical nature of the issues in these letters and 

discussions, and the effort required to consider and address these 

issues in rule making, has also contributed to delays.

• Heavy rule-making workload. SEC officials noted that Commissioners 

have a heavy workload, given that they produce many rules in 

addition to the conflict minerals disclosure rule. In April 2012, the SEC 

Chairman testified that under the Dodd-Frank Act, SEC is mandated 

to write almost 100 rules, while on average the Commission might 

normally write about 20 rules in a given year.

• Rigorous economic analysis in rule-making process. To support their 

rule making, SEC officials said that they are working closely with SEC 

economists and legal experts to develop rigorous economic analysis, 

which is a complex and time-consuming process. In her April 2012 

testimony statement, the SEC Chairman noted that the agency 

considers economic analysis to be a critical element in the rulemaking process. SEC officials also noted that some of the delays in 

finalizing a disclosure rule have been necessary to make sure the final 

rule appropriately addresses significant cost concerns raised by 
 

Page 16 GAO-12-763 Conflict Minerals Disclosure Rule 

external stakeholders. In her testimony statement, the SEC Chairman 

also pointed out that recent court decisions and communications from 

members of Congress have raised concerns about certain aspects of 

SEC’s economic analysis in rule making, and that SEC staff recently 

developed specific guidance for staff engaged in rule making to 

further improve the economic analysis SEC employs in its rule

making.

Various stakeholders have developed and implemented initiatives that 

may help covered companies and their suppliers comply with the 

anticipated rule.32 However, due to the uncertainty regarding potential due 

diligence and disclosure requirements stemming from SEC’s delay in 

issuing a final rule, some stakeholders’ efforts to improve their initiatives 

through expansion and harmonization have been hindered.

33

 

32According to industry association and company representatives, the anticipated 

disclosure rule could impact any U.S. or foreign company that is a supplier to those 

covered companies that produce products containing conflict minerals, because covered 

companies required to disclose the use of conflict minerals in their products will need to 

obtain conflict minerals sourcing information from their suppliers. Consequently, U.S. and 

foreign companies across the conflict minerals supply chains may also need to conduct 

due diligence and trace their supply chains to provide sourcing information to covered 

companies. Hence, many of the initiatives may help both covered companies comply with 

the anticipated disclosure rule and may help U.S. and foreign suppliers meet the 

information needs of their customers, which may be covered companies. 

33According to State, other factors have also impacted the progress of eastern DRCcentered initiatives, including the DRC government’s September 2010-March 2011 mining 

ban in eastern DRC and on-going security challenges throughout the Kivu provinces. 

State also noted that, while the issuance of SEC’s final rule will have a significant impact 

in clarifying what is expected of covered companies, some challenges for implementing 

initiatives will still exist even after a final rule is issued; in particular, the development of 

initiatives to support the traceability of minerals along the supply chain will require 

continued progress once SEC’s final rule is issued.

StakeholderDeveloped Initiatives 

May Facilitate 

Compliance with the 

Anticipated Rule, but 

Efforts to Improve 

Some Initiatives Have 

Been Hindered by the 

Absence of a Final 

Rule
 

Page 17 GAO-12-763 Conflict Minerals Disclosure Rule 

Although SEC has not issued a final rule, industry associations, multilateral 

organizations, and other stakeholders have developed and implemented 

initiatives that may help covered companies and their suppliers comply with 

the anticipated rule. Stakeholders began work on most of these initiatives 

before the Dodd-Frank Act was passed, but according to agency officials, 

stakeholders’ interest in ensuring that initiatives will be compatible with 

SEC’s anticipated final rule appears to have provided a substantial impetus 

to further develop initiatives. Stakeholder-developed initiatives—which 

include the development of guidance documents, audit protocols, and inregion sourcing systems—support covered companies’ efforts to (1) 

conduct due diligence of their conflict minerals supply chains, (2) identify 

the source of conflict minerals within their supply chains, and (3) 

responsibly source conflict minerals. Table 2 summarizes global and inregion sourcing initiatives developed by various stakeholders (see app. II 

for more details about each of these initiatives). The global initiatives may 

support covered companies’ efforts to minimize the risk of conflict minerals 

entering their supply chains and to identify the source of their conflict 

minerals across conflict minerals supply chains and around the world, while 

the in-region sourcing initiatives may support responsible sourcing of 

conflict minerals from Central Africa and the identification of specific mines 

of origin for those minerals.

Table 2: Stakeholder-Developed Global and In-Region Sourcing Initiatives

Initiative

Primary organizations 

involved Purpose

Participation 

type

Independent 

audit required

Status of 

initiative

Global initiatives

OECD Due 

Diligence Guidance 

for Responsible 

Supply Chains of 

Minerals from 

Conflict-Affected and 

High-Risk Areas

Organisation for 

Economic Co-Operation 

and Development 

(OECD)

Establishes practical guidance 

to enable companies to 

responsibly operate in and 

source from conflict areas and 

promotes accountability and 

transparency in conflict minerals 

supply chains.

Voluntary Yes Implementation 

phase

UNGoE Due 

Diligence Guidelines

United Nations Group of 

Experts (UNGoE) on the 

DRC

Establishes practical guidance 

to enable companies to 

responsibly operate in and 

source from conflict areas and 

promotes accountability and 

transparency in conflict minerals 

supply chains.

Mandatory Yes Implementation 

phase

Stakeholders Have 

Developed Initiatives
 

Page 18 GAO-12-763 Conflict Minerals Disclosure Rule 

Initiative

Primary organizations 

involved Purpose

Participation 

type

Independent 

audit required

Status of 

initiative

Conflict-Free 

Smelter Program

Global e-Sustainability 

Initiative (GESI); 

Electronic Industry 

Citizenship Coalition 

(EICC)® 

Verifies that the sources of 

conflict minerals processed by 

smelters are conflict-free.

Enables downstream companies 

to identify and source from 

conflict-free smelters. 

Voluntary Yes Implementation 

phase

WGC Conflict-Free 

Gold Standard and 

Tools

World Gold Council 

(WGC)

Establishes a common approach 

for mining companies to 

responsibly mine gold and 

demonstrates that their mining 

operations do not fuel conflict or 

the abuse of human rights. 

Voluntary Yes Development 

phase

LBMA Responsible 

Gold Guidance

London Bullion Market 

Association (LBMA)

Ensures that all gold feed stock 

and all gold produced by refiners 

are conflict-free. 

Enables downstream companies 

to identify and source from 

conflict-free refiners.

Mandatory for 

LBMA 

accredited 

refiners 

Yes Development 

phase

RJC Chain-ofCustody Certification 

Program

Responsible Jewellery 

Council (RJC)

Supports the identification and 

tracking of conflict-free gold 

throughout gold supply chains 

with the transfer of chain-ofcustody documentation.

Voluntary Yes Implementation 

phase

In-region sourcing initiatives 

ITRI Tin Supply 

Chain Initiative 

(iTSCi)

ITRI; Tantalum Niobium 

International Study 

Center; Pact; Channel 

Research 

Supports responsible sourcing 

from Central Africa through the 

development of (1) a physical 

chain-of-custody system that 

tracks and monitors minerals 

from mine to smelter and (2) a 

due diligence system that 

includes independent audits and 

mine site and transportation 

route assessments. 

Voluntary Yes Implementation 

phase

Certified Trading 

Chains

German Federal Institute 

for Geosciences and 

Natural Resources 

(BGR) 

Supports responsible sourcing 

from Central Africa through the 

creation of a certification 

framework for artisanal mining 

sites. 

Voluntary Yes Implementation 

phase

ICGLR’s Regional 

Certification 

Mechanism

International Conference 

on the Great Lakes 

Region (ICGLR)

Establishes a certification 

mechanism for the mining and 

trading of conflict minerals from 

the Great Lakes Region.

Mandatory for 

member 

countries

Yes Development 

phase

Source: GAO analysis of information from various sources.
 

Page 19 GAO-12-763 Conflict Minerals Disclosure Rule 

To support companies’ efforts to conduct due diligence of their conflict 

minerals supply chains, which span the globe, OECD developed the 

OECD Due Diligence Guidance for Responsible Supply Chains of 

Minerals from Conflict-Affected and High-Risk Areas (hereafter referred to 

as OECD Due Diligence Guidance). The guidance establishes a five-step 

framework for detailed, risk-based due diligence,34

Other global initiatives may support covered companies’ efforts to identify 

the source of conflict minerals. For example, the Conflict-Free Smelter 

Program and the LBMA Responsible Gold Guidance are initiatives 

designed to ensure that no minerals in the smelter or refiner supply chains 

have contributed to conflict through an independent audit process, and 

ultimately, the aim of these programs is to enable downstream companies 

to source conflict-free minerals. According to company and industry 

association representatives, the smelter or refiner represents the “chokepoint” in the conflict minerals supply chain—meaning that after minerals are 

processed by the smelter or refiner, the origin of these minerals cannot be 

verified. According to GeSI, EICC, and LBMA representatives, companies 

that can trace their conflict minerals supply chains back to smelters or 

refiners certified through these programs can claim that the minerals in 

their products are conflict-free, which may help covered companies and 

their suppliers comply with the anticipated rule.

which is intended to 

promote accountability and transparency in the supply chain of minerals 

from conflict-affected and high-risk areas. Covered companies may use 

the OECD Due Diligence Guidance to identify appropriate due diligence 

actions necessary for obtaining and disclosing conflict mineral sourcing 

information in accordance with the anticipated SEC rule. The guidance 

may also help U.S. and foreign suppliers put due diligence processes in 

place, which may help them generate conflict mineral sourcing 

information for those of their customers that are covered companies.

Finally, in-region sourcing initiatives that rely on chain-of-custody systems 

may help covered companies responsibly source conflict minerals from 

 

34OECD furnishes the following definition of due diligence: “Due diligence is an on-going, 

proactive and reactive process through which companies can ensure that they respect 

human rights and do not contribute to conflict. Due diligence can also help companies 

ensure they observe international law and comply with domestic laws, including those 

governing the illicit trade in minerals and United Nations sanctions. Risk-based due 

diligence refers to the steps companies should take to identify and address actual or 

potential risks in order to prevent or mitigate adverse impacts associated with their 

activities or sourcing decisions.” 
 

Page 20 GAO-12-763 Conflict Minerals Disclosure Rule 

Central Africa.35 For example, to support the responsible sourcing of tin, 

tantalum, and tungsten from Central Africa, ITRI, a tin industry association, 

developed the ITRI Tin Supply Chain Initiative (iTSCi). The initiative is 

currently operating in Katanga—a province in southern DRC—and 

Rwanda, and through iTSCi ITRI and its partners created a physical chainof-custody system for tracking and monitoring minerals from the mine to the 

smelter. Figure 5 shows the particular segments of the conflict minerals 

supply chains that specific stakeholder-developed initiatives support to 

ensure that the minerals are conflict-free (see app. II for more details 

concerning each initiative). According to ITRI and NGO representatives, 

iTSCi is a traceability and due diligence program that creates auditable and 

verifiable chains of custody for tin, tantalum, and tungsten through the (1) 

tagging of bagged materials and the collection of tagging data and (2) 

regular incident reporting and the continuous monitoring of mines and 

companies participating in the program.

36 iTSCi’s traceability and due 

diligence program results in mineral chain-of-custody information that 

covered companies and their suppliers may use to meet due diligence 

requirements; smelters may also use the information in their efforts to 

comply with the Conflict-Free Smelter Program.37

 

35Chain of custody refers to the paper trail that documents the sequence of entities that 

have custody of minerals as they move through a supply chain.

36The initiative’s traceability and due diligence program uses uniquely numbered tags to 

trace mineral shipments from the mine of origin to the smelter, which allows companies to 

confirm the actual source and trading chain of the minerals they purchase.

37As previously noted, companies that can trace their supply chains to a smelter certified 

through the Conflict-Free Smelter Program can claim that the minerals in their products 

are conflict-free. 
 

Page 21 GAO-12-763 Conflict Minerals Disclosure Rule 

Figure 5: Segments of Conflict Minerals Supply Chains Supported by Stakeholder-Developed Initiatives
 

Page 22 GAO-12-763 Conflict Minerals Disclosure Rule 

Some stakeholders’ efforts to improve their initiatives through expansion 

and harmonization have been hindered by the uncertainty regarding 

potential due diligence and disclosure requirements stemming from 

SEC’s delay in issuing a final rule. For example, while 12 of the 

approximately 25 tantalum smelting companies world-wide have been 

certified as conflict-free through the Conflict-Free Smelter Program to 

date (see fig. 6),38

Figure 6: A Processing Machine in a Certified Conflict-Free Tantalum Smelting 

Facility

company representatives said GeSI and the EICC are 

facing challenges engaging tin and tungsten smelters in the absence of a 

final rule.

According to company representatives, GeSI and EICC representatives 

are finding it difficult to convince Asian—particularly Chinese—smelters to 

participate in the program because the electronics industry has limited 

 

38As of July 2012, 12 companies that represent 18 tantalum smelters had been certified 

as conflict-free through the Conflict-Free Smelter Program. A list of conflict-free smelters 

can be viewed on the CFS Program website, accessed July 5, 2012, at 

http://www.conflictfreesmelter.org/CFSindicators.htm

Efforts to Improve Some 

Initiatives Have Been 

Hindered
 

Page 23 GAO-12-763 Conflict Minerals Disclosure Rule 

leverage over Chinese smelters in the absence of a final SEC rule. In 

addition, according to one EICC member company representative, 

Chinese smelters and the Chinese government are not concerned with 

improving the transparency of supply chains in the absence of any

business incentives. The limited participation by Chinese smelters may 

affect the scalability of the Conflict-Free Smelter Program as Chinese 

smelters processed an estimated 43 to 48 percent of the global tin supply 

between 2006 and 2009, and Chinese companies mined and processed 

an estimated 77 to 84 percent of the global tungsten supply between 

2006 and 2009. To address this issue, GeSI and the EICC are working 

with representatives from other industries that use more tin and tungsten 

to expand GeSI and the EICC’s leverage over and outreach efforts to tin 

and tungsten smelters. In addition, according to company 

representatives, the issuance of SEC’s final rule may provide business 

incentives to Chinese smelters. Specifically, the issuance of a final SEC 

rule may result in covered companies’ widespread demand for conflict 

mineral sourcing information from their suppliers, and the leverage 

applied by all impacted covered companies may create the necessary 

business incentives for Chinese and other foreign companies to 

participate in initiatives such as the Conflict-Free Smelter Program.

Some stakeholders have discussed efforts to harmonize their initiatives to 

further improve them, but some of these efforts have been hindered by the 

absence of SEC’s final rule. For example, according to an industry 

association representative, iTSCi may experience difficulty attracting 

additional customers, such as smelters, and expanding the initiative until 

it is successfully harmonized with the Conflict-Free Smelter Program. 

Although GeSI, EICC, and ITRI representatives said their organizations 

are working together to harmonize the documentation and audit systems 

for the Conflict-Free Smelter Program and iTSCi, the absence of a final 

rule has hindered discussions to harmonize the two initiatives. As of June 

2012, only one smelter purchased tin through the program, four smelters

purchased tantalum, and no smelters purchased tungsten. While ITRI and 

its partners intend to expand iTSCi into eastern DRC, without additional 

customers and the resulting funding from customers, it may be 

challenging to implement this expansion. In addition, according to an 

industry association representative, the unstable security situation in 

eastern DRC contributes to ITRI and its partners’ delay in expanding 
 

Page 24 GAO-12-763 Conflict Minerals Disclosure Rule 

iTSCi to the region.39 Although smelters participating in the Conflict-Free 

Smelter Program are allowed to accept conflict-free minerals from the 

DRC, an ITRI representative said that some smelters have been unwilling 

to purchase minerals through iTSCi’s traceability and due diligence 

program, because the initiative has not been harmonized with the 

Conflict-Free Smelter Program. iTSCi is closely aligned with the OECD 

Due Diligence Guidance and supports continuous trading and the 

implementation of risk mitigation efforts when certain risks at a supplier’s 

mine site are identified through the program. However, the Conflict-Free 

Smelter Program may require smelters to disengage from that supplier if 

the same risks are identified at the mine site, because according to GeSI 

and EICC representatives, the program’s requirements were developed to 

be consistent with section 1502(b) of the Dodd-Frank Act. In particular, 

section 1502(b) of the Act does not discuss mitigation efforts, while the 

OECD Due Diligence Guidance endorses implementation of risk 

mitigation efforts for certain risks. In the absence of SEC’s final rule, it is 

unclear if the initiatives, which were developed to meet different 

requirements, can or will be successfully harmonized. 

Since our 2011 report, one population-based survey has been conducted 

in Rwanda, while none have been conducted in eastern DRC, Uganda, or 

Burundi. Also, we found some additional case file data available on 

sexual violence for these areas; however, as we reported in 2011, case 

file data on sexual violence are not suitable for estimating a rate of sexual 

violence.

 

39As we reported in 2010, U.S. and foreign officials and others said that lack of security, 

weak governance, and lack of infrastructure in eastern DRC are significant challenges that 

impede efforts to control the conflict minerals trade in eastern DRC. The most recent 

reports by UNGoE and Global Witness have confirmed that these challenges remain.

Little Additional 

Information on the 

Rate of Sexual 

Violence in Eastern 

DRC and Neighboring 

Countries Has 

Become Available 

since GAO’s 2011 

Report
 

Page 25 GAO-12-763 Conflict Minerals Disclosure Rule 

In our 2011 report on sexual violence, we found five population-based 

surveys that provided data on the rate of sexual violence in eastern DRC 

and Uganda. During our current review, we identified one new populationbased survey—a 2010 Demographic and Health Survey (DHS) conducted 

in Rwanda that estimates that 22 percent of women ages 15 to 49 have 

experienced sexual violence in that country in their lifetimes.40,41

Table 3: Population-Based Surveys That Estimate the Rate of Sexual Violence in Rwanda, Eastern DRC, and Uganda

Table 3 

provides further details on these six surveys.

Author/

publication date

Dates of data 

collection

Time period 

evaluated

Survey 

participants

Reported experience of sexual 

violence (time period)

New data since 

GAO’s 2011 

report?

DHS for Rwanda 2010 Lifetime of 

participant

Females ages 15-

49

• During lifetimes of participants, 

22 percent of females 

experienced sexual violence

Yes

McGill University 

(DRC) (August 2010)

March 2010 Prior 1 year; prior 

2 years; 1994-

2010

Males and females 

ages 18+

• During the prior 1 year, 9 

percent experienced sexual 

violence

• During the prior 2 years, 13 

percent experienced sexual 

violence

• For the time period 1994-

2010, 33 percent experienced 

sexual violence 

No

University of California 

Berkeley (DRC) 

(August 2008)

September to 

December 2007 

1993 through 

2007 

Males and females 

ages 18+

• 16 percent experienced sexual 

violence

No

DRC Ministry of 

Planning (August 

2008)

January to 

August 2007

In 1 year prior to 

data collected; 

lifetime of 

participant

Females ages 15-

49

• During 1 year prior to data 

collected, 8 percent of females 

in North Kivu experienced 

sexual violence and 6 percent 

of females in South Kivu

experienced sexual violence

• During lifetimes of participants, 

25 percent of females in North 

Kivu experienced sexual 

violence and 18 percent of 

females in South Kivu 

experienced sexual violence 

No

 

40The report, which was released in February 2012, shows that the main perpetrator of 

sexual violence is often a current or former partner of the victim. 

41DHS is largely supported by USAID and is conducted in over 90 countries. 

Since Our 2011 Report, 

One Population-Based 

Survey Has Been 

Conducted in Rwanda and 

None in Eastern DRC, 

Uganda, or Burundi
 

Page 26 GAO-12-763 Conflict Minerals Disclosure Rule 

Author/

publication date

Dates of data 

collection

Time period 

evaluated

Survey 

participants

Reported experience of sexual 

violence (time period)

New data since 

GAO’s 2011 

report?

University of California 

Berkeley (Uganda) 

(December 2010)

April to May 

2010

Prior 1 year; 

1987 to 2005

Males and females 

ages 18+

• During the prior 1 year, less 

than 0.5 percent experienced 

sexual violence

• For the time period 1987 to 

2005, 2 percent experienced 

sexual violence 

No

Uganda Bureau of 

Statistics (August 

2007)

May to October 

2006

Lifetime of 

participant

Females ages 15-

54; males ages 15-

49 

• During lifetimes of participants, 

39 percent of females 

experienced sexual violence

• During lifetimes of 

participants,11 percent of 

males experienced sexual 

violence

No

Source: GAO 2011 report on sexual violence (GAO-11-702) and GAO analysis of DHS study.

We found no new survey data on sexual violence in eastern DRC. The 

authors of the McGill study, a population-based survey conducted in 

eastern DRC that was highlighted in our 2011 report, have no plans to 

conduct a follow-up survey. McGill’s 2010 report was intended to serve as 

a baseline study, but a lack of funding has prevented another round of data 

collection.42

Other organizations have plans to conduct population-based surveys in 

eastern DRC. Researchers at ICF International told us that the next DHS 

survey in DRC is expected to launch in 2012 with preliminary findings 

expected at the end of the year; the researchers project that the final 

report will be issued sometime in 2013. In our 2011 report, we also 

discussed a population-based survey conducted in eastern DRC in 2008 

by researchers at the University of California, Berkeley; those researchers 

are now at the Harvard Humanitarian Initiative and are conducting a 

follow-up survey. The results from the follow-up survey, however, will not 

be available until November 2012.

 

42One of the researchers associated with the McGill study emphasized that, even if 

funding was currently available, a follow-up survey would not be scheduled to be 

conducted until 2013 (at the earliest) because yearly analysis on the rate of sexual 

violence in eastern DRC does not, by itself, provide much relevant data. According to this 

researcher, a follow-up survey timed to assess the impact of specific programming on the 

ground would provide more relevant data (in this case, conducting a follow-up survey after 

grants to NGOs to conduct sexual violence education and outreach activities in eastern 

DRC is scheduled to be completed in 2013). 
 

Page 27 GAO-12-763 Conflict Minerals Disclosure Rule 

Following up on our 2011 report, we asked the United Nations Population 

Fund, the International Rescue Committee, and other organizations if 

they had any updated case file data, but representatives from the United 

Nations Population Fund reported that no new case file data were 

available and we received no response from the International Rescue 

Committee. Our 2011 report also referenced case file data from the 2010 

Report of the Secretary-General on the implementation of Security 

Council resolutions 1820 and 1888, as well as State’s 2009 and 2010 

Human Rights Reports. In a 2012 Report of the Secretary-General that 

included an update on the implementation of Security Council resolutions 

1820 and 1888, it was reported that, between December 2010 and

November 2011, 625 sexual violence assaults committed by armed 

groups were documented in eastern DRC. Further, from October 2010 to 

August 2011, the report notes that 9,534 sexual violence victims in 

eastern DRC received medical and psychosocial assistance; however, as 

the report acknowledges, the number of assisted victims does not 

represent the number of new sexual violence cases during the reporting 

period. In addition, the 2011 Department of State Human Rights Reports

found the following:

• In DRC, between January 2010 and September 2011, the United 

Nations Children’s Fund reported that approximately 21,395 sexual 

violence victims received medical care, of which 12,829 were in 

eastern DRC.

• In Rwanda, 1,056 cases of adult rape were reported in 2010; the 

police reported that they investigated 287 cases. Of those 1,056 

cases, 433 were filed in courts, 201 were dropped and 422 were 

pending investigation.

• In Uganda, 709 cases of rape were reported in 2010 of which 252 

were tried. In November 2010, the United Nations Population Fund 

reported that 24 percent of women said their first sexual encounter 

was violent.

• In Burundi, 3,781 cases of gender-based violence were reported in 

2010. In addition, according to the United Nations Children’s Fund, 

approximately 60 percent of reported rapes were of children under age 

18 and 20 percent of reported rapes were of children under age 12.

Also, the International Medical Corps reported that in 2011 it provided 

medical and psychosocial counseling at 60 health clinics in North and 

South Kivu to 1,200 sexual violence victims. As we reported in 2011, case 

Some Additional Case File 

Data Has Become 

Available on Sexual 

Violence since GAO’s 2011 

Report
 

Page 28 GAO-12-763 Conflict Minerals Disclosure Rule 

file data on sexual violence are not suitable for estimating a rate of sexual 

violence.

As part of U.S. efforts to address sexual violence and other human rights 

abuses perpetrated by armed groups in the DRC, Congress enacted and 

the President signed into law legislation requiring that SEC issue a 

conflict minerals disclosure rule, which would require covered companies 

to disclose whether necessary conflict minerals used in their products 

originated in the DRC or an adjoining country and, if they did, to provide 

an additional report with certain disclosures. SEC has taken some 

important steps in its effort to issue a rule, including issuing a proposed 

rule that generated a large volume of public comments. However, SEC 

has not yet finalized and issued a rule as stipulated in the Act, largely due 

to the time and effort required for the Commission to understand the 

complexities of the four conflict minerals’ supply chains, review the large 

volume of comment letters, and hold the numerous meetings requested 

by stakeholders. 

The continued delay in issuing a final rule, however, has contributed to a 

lingering uncertainty among industry and other stakeholders who expect 

their actions to be guided by a final rule. Some of these industry and other 

stakeholders have engaged in the development of various initiatives that 

they hope may help covered companies comply with the anticipated rule, 

in part by helping foreign and domestic suppliers of those covered 

companies trace minerals in their supply chains. Without a final rule, it is 

unclear to what extent the initiatives currently being developed or 

implemented by industry and other stakeholders will achieve results 

consistent with those anticipated under the conflict minerals legislation. 

Moreover, in part because of the delay in the rule’s issuance, many 

companies across the tin, tantalum, tungsten, and gold supply chains are 

reluctant to participate in or support the global and in-region initiatives 

currently being developed or implemented because they are uncertain 

whether or not the initiatives will align with the anticipated rule.

To address the delay and uncertainty in finalizing a conflict minerals 

disclosure rule regarding what covered companies will be required to do, 

we recommend that the Chairman of SEC identify the remaining steps it 

needs to take and the associated time frames to finalize and issue such a 

conflict minerals disclosure rule.

Conclusions

Recommendation for 

Executive Action
 

Page 29 GAO-12-763 Conflict Minerals Disclosure Rule 

We provided a draft of this report to SEC, State, Department of Defense, 

and USAID, for their review and comment. We received written comments 

from SEC that are reprinted in appendix III. While SEC neither agreed nor 

disagreed with our recommendation, in its comment letter, SEC said that 

it would continue its endeavor to complete the rule making expeditiously 

to provide certainty. It noted that, having issued a proposed rule, the 

required steps for adopting a final rule are determined by the majority of 

the Commission’s five members, whose deliberations are subject to the 

requirements of the Government in the Sunshine Act. On July 2, 2012, 

SEC announced, on its website, that the conflict minerals disclosure rule 

would be on the agenda for consideration at the Commission’s “Sunshine 

Act meeting” scheduled for August 22, 2012. SEC and State also 

provided technical comments, which we incorporated in this report as 

appropriate. The Department of Defense and USAID had no comments 

on this report. We also provided relevant portions of the draft of this report 

to relevant external stakeholders for their technical comments. We 

received technical comments from these stakeholders, which we 

incorporated throughout this report as appropriate. In addition, based on 

the technical comments we received from agencies and external 

stakeholders, we revised the title of our draft report to better capture the 

most recent developments.

We are sending copies of this report to interested congressional 

committees. In addition, this report is available at no charge on GAO’s 

website at http://www.gao.gov. 

If you or your staffs have any questions about this report, please contact 

me at (202) 512-8980 or courtsm@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made key contributions to this report

are listed in appendix IV. 

Michael J. Courts

Acting Director

International Affairs and Trade

Agency Comments 

and Our Evaluation
 

Page 30 GAO-12-763 Conflict Minerals Disclosure Rule 

List of Congressional Committees

The Honorable Tim Johnson

Chairman

The Honorable Richard C. Shelby

Ranking Member

Committee on Banking, Housing, and Urban Affairs

United States Senate

The Honorable Max Baucus

Chairman

The Honorable Orrin G. Hatch

Ranking Member

Committee on Finance

United States Senate

The Honorable John F. Kerry

Chairman

The Honorable Richard G. Lugar

Ranking Member

Committee on Foreign Relations

United States Senate

The Honorable Spencer Bachus

Chairman

The Honorable Barney Frank

Ranking Member

Committee on Financial Services

House of Representatives

The Honorable Ileana Ros-Lehtinen

Chairman

The Honorable Howard L. Berman

Ranking Member

Committee on Foreign Affairs

House of Representatives

The Honorable Dave Camp

Chairman

The Honorable Sander Levin

Ranking Member

Committee on Ways and Means

House of Representatives
 

Page 31 GAO-12-763 Conflict Minerals Disclosure Rule 

The Honorable Patrick Leahy 

Chairman 

The Honorable Lindsey Graham 

Ranking Member 

Subcommittee on State, Foreign Operations, 

 and Related Programs 

Committee on Appropriations 

United States Senate 

The Honorable Kay Granger 

Chairman 

The Honorable Nita Lowey 

Ranking Member 

Subcommittee on State, Foreign Operations, 

 and Related Programs 

Committee on Appropriations 

House of Representatives
Appendix I: Objectives, Scope, and 

Methodology

Page 32 GAO-12-763 Conflict Minerals Disclosure Rule 

To examine the steps the Securities and Exchange Commission (SEC) 

has taken to issue a conflict minerals disclosure rule, we reviewed 

Section 1502(b) of the Dodd-Frank Wall Street Reform and Consumer 

Protection Act (Pub. L. No. 111-203), SEC’s proposed rule, comment 

letters regarding the rule submitted to and posted by SEC to its website, 

and other documents from SEC.1

To identify and examine initiatives developed by industry, multilateral 

organizations, and other stakeholders that may help covered companies 

comply with the anticipated SEC rule, we reviewed documents from State 

and the United States Agency for International Development (USAID), 

such as press releases and a presentation; reports issued by the United 

Nations Group of Experts on the Democratic Republic of the Congo 

(UNGoE); guidance documents and reports from the Organisation for 

Economic Co-operation and Development (OECD); and guidance 

documents, reports, and presentations from the International Conference 

on the Great Lakes Region (ICGLR). We also reviewed numerous 

documents and reports by industry associations, companies, 

nongovernmental agencies (NGOs), and consulting firms.

In addition, we interviewed officials from 

SEC working on the rule and attended a public roundtable in October 

2011, which was convened by SEC to discuss the proposed rule. To 

understand the role of the Department of State (State) in supporting 

SEC’s efforts to develop the rule, we interviewed officials from SEC and 

State.

Throughout the course of our review, we met and corresponded with over 

40 U.S. and foreign government officials and other representatives, 

including representatives from ICGLR and several NGOs, to discuss the 

actions relevant stakeholders have taken to develop and implement 

initiatives that may help covered companies comply with the anticipated 

rule. Specifically, we met with officials from State, USAID, the United 

Kingdom Foreign and Commonwealth Office, the European Union, and the 

German Federal Institute for Geosciences and Natural Resources (BGR). 

We also interviewed and corresponded with representatives from 4 

multilateral organizations; 11 industry associations, including 

 

1

In this report we are not reporting on the effectiveness of SEC’s conflict minerals 

disclosure rule, as required under the Act, because SEC had not yet issued its final rule at 

the time of our audit. In the interim, to meet our mandated reporting time frame of July 

2012 under the Act, we are reporting on steps SEC has taken toward issuing a rule and 

on industry and other stakeholders’ initiatives that may help covered companies comply 

with the anticipated disclosure rule. 

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology

Page 33 GAO-12-763 Conflict Minerals Disclosure Rule 

manufacturing, electronic, automotive, gold, and jewelry industry 

associations; 10 companies, including component parts manufacturers and 

original equipment manufacturers from various industries; 5 smelters, 

including companies processing tin, tantalum, and tungsten, and 1 gold

refiner; 4 NGOs; 3 consulting firms; and 1 gold industry expert. To help 

gather information for the review, we traveled to the United Kingdom, 

France, Belgium, and Germany to interview representatives from the 

OECD Secretariat, foreign government officials, and representatives from 

foreign companies—including smelters, industry associations, and 

consulting firms. Where company names were used in the report, we 

obtained permission from said companies.

In response to a requirement in the Dodd-Frank Wall Street Reform and 

Consumer Protection Act that GAO submit an annual report that assesses 

the rate of sexual violence in war-torn areas of the Democratic Republic of

the Congo (DRC) and adjoining countries, we identified and assessed any 

additional information available on sexual violence in war-torn eastern 

DRC, as well as three neighboring countries that border eastern DRC—

Rwanda, Uganda, and Burundi—since our 2011 report on sexual violence 

in these areas.2 During the course of our review, we interviewed officials 

from State, USAID, and the Department of Defense and interviewed NGO 

representatives and researchers to discuss the collection of sexual 

violence-related data—including population-based surveys and case file 

data—in the DRC and adjoining countries. Specifically, we followed up with 

researchers and representatives from those groups we interviewed for our

prior review on sexual violence rates in eastern DRC and neighboring 

countries, including a researcher from the Department of Defense (Office of 

the Assistant Secretary of Defense for Health Affairs), officials from the 

United Nations Population Fund, representatives from the International 

Rescue Committee and the Harvard Humanitarian Initiative, and others. In 

addition, we interviewed representatives from the International Medical 

Corps for this review, a group with which we had not previously met. We 

also conducted thorough Internet literature searches to identify new 

academic articles containing any additional data on sexual violence.

 

2

GAO-11-702. 
Appendix I: Objectives, Scope, and 

Methodology

Page 34 GAO-12-763 Conflict Minerals Disclosure Rule 

We conducted this performance audit from August 2011 to July 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 35 GAO-12-763 Conflict Minerals Disclosure Rule 

Various stakeholders have developed and implemented initiatives that 

may help covered companies and their suppliers comply with SEC’s 

anticipated conflict minerals disclosure rule. Some of these initiatives can 

be characterized as global because they may support covered 

companies’ efforts to identify the source of their conflict minerals across 

conflict minerals supply chains around the world. Other initiatives can be 

described as in-region sourcing initiatives because they may support 

responsible sourcing of conflict minerals from Central Africa and the 

identification of those minerals’ specific mines of origin.

In consultation with a multi-stakeholder workgroup, OECD developed the 

OECD Due Diligence Guidance for Responsible Supply Chains of 

Minerals from Conflict-Affected and High-Risk Areas (hereafter referred to 

as OECD Due Diligence Guidance) to promote accountability and 

transparency in conflict minerals supply chains. In July 2009, prior to the 

passage of the Dodd-Frank Act, Leaders of the Group of 8 (G-8)1

 

1

The G-8 nations include the United States, United Kingdom, France, Germany, Italy, 

Japan, Canada, and Russia.

reaffirmed their commitment to the implementation of initiatives that help 

reduce conflict that is fuelled by revenues from natural resources; 

supported the ICGLR’s efforts to address illegal exploitation of natural 

resources; and encouraged the OECD and other multilateral 

organizations to work with the ICGLR to further develop practical 

guidance for businesses operating in countries with weak governance. In 

response, OECD began consulting with various stakeholders in 

December 2009 to learn about conflict minerals supply chains, and in 

April 2010, OECD created a multi-stakeholder workgroup—consisting of 

representatives from the UNGoE, ICGLR, NGOs, companies, industry 

associations, and others—to develop due diligence guidance. The 

workgroup endorsed the draft OECD Due Diligence guidance in 

November 2010 and OECD formally adopted it as an OECD Council 

Recommendation in May 2011. Several organizations, including some 

industry associations and companies, and individuals have submitted 

letters to SEC recommending that SEC’s final rule suggest the use of the 

OECD Due Diligence Guidance. In addition, in December 2010 the heads 

of states from the 11 member countries of the ICGLR endorsed the 

Appendix II: Descriptions of Global and InRegion Sourcing Initiatives

Global Initiatives

OECD Due Diligence 

Guidance
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 36 GAO-12-763 Conflict Minerals Disclosure Rule 

OECD Due Diligence Guidance and called upon companies sourcing 

minerals from the Great Lakes Region to comply with the guidance; in 

July 2011 State endorsed the framework set forth in the guidance and 

encouraged companies within the conflict minerals supply chains to 

exercise due diligence in accordance with the framework; and an UNGoE 

report noted that in September 2011 the DRC Ministry of Mines issued a 

law requiring all mining operators in the country to comply with the 

guidance. Moreover, various stakeholders have shown their support for 

the OECD Due Diligence Guidance by aligning their own global and inregion sourcing initiatives with it. 

The OECD Due Diligence Guidance and the corresponding supplements 

provide detailed guidance for companies operating in and sourcing 

minerals from conflict areas. For example, steps two and three of OECD’s 

Five-Step Framework call for the implementation of a strategy to identify 

risks and support the development of risk mitigation efforts to respond to 

risk, when appropriate. The guidance allows a company to continue 

trading with suppliers during the implementation of risk mitigation efforts.2

In addition to the basic five-step framework, OECD developed two 

supplements—the Supplement on Tin, Tantalum and Tungsten and the 

Supplement on Gold—to provide companies with specific guidance 

relevant to the conflict minerals supply chains.3

To increase awareness of and to develop emerging practices for

implementing the OECD Due Diligence Guidance and the Supplement on 

 

2

The OECD Due Diligence Guidance recommends the immediate suspension of trade 

with suppliers linked to any party either committing serious human rights abuses or 

supporting non-state armed groups; in contrast, to continue to support sourcing from the 

conflict-affected country, the guidance recommends the adoption of a risk management 

plan, rather than suspension of trade, to prevent direct or indirect support to public or 

private security forces when those entities are present at mining sites.

3

According to representatives of the OECD Secretariat, OECD staff, in consultation with 

various stakeholders, identified similarities between the tin, tantalum, and tungsten supply 

chains, and identified significant differences between these supply chains and the supply 

chain for gold. In addition, they identified distinct challenges to conducting due diligence 

for the tin, tantalum, and tungsten supply chains versus the supply chain for gold. Hence, 

OECD developed one supplement for tin, tantalum, and tungsten and a separate 

supplement for gold. However, Annex I of the OECD Due Diligence Guidance applies to 

the tin, tantalum, tungsten and gold supply chains and both supplements maintain the 

same five-step framework. The Supplement for Tin, Tantalum, and Tungsten was adopted 

by the OECD Council in May 2011; the Supplement on Gold will be reviewed by the 

OECD Council in July 2012.
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 37 GAO-12-763 Conflict Minerals Disclosure Rule 

Tin, Tantalum, and Tungsten, OECD is conducting an implementation 

pilot project. The project began in May 2011 and includes companies 

spanning the entire supply chain from the mine site to the original 

equipment manufacturers that use some of the derivatives of conflict 

minerals in the products they sell. Approximately 100 companies—

including mining companies, traders, smelting companies, component 

manufacturers, product manufacturers, original equipment manufacturers, 

and industry associations—are voluntarily participating in the pilot project. 

Participating companies are completing surveys to report on their 

progress and any challenges faced while implementing the OECD Due 

Diligence Guidance. According to representatives from the OECD 

Secretariat and representatives from two consulting firms, at the end of 

the project emerging practices will be identified to assist companies in 

implementing the OECD Due Diligence Guidance. OECD launched a 

similar implementation pilot project for the Supplement on Gold in May 

2012.

The first two phases of the implementation pilot project have 

demonstrated positive developments in participants’ efforts to implement 

the OECD Due Diligence Guidance. For example, recently, mining 

cooperatives, local traders, and other groups involved in mining activities 

in the DRC have started collaborating with civil society to create SAVE 

ACT MINE/DRC, a non-profit organization that aims to increase 

understanding of the OECD Due Diligence Guidance by translating the 

guidance into local languages and by hosting workshops. One

representative from the OECD Secretariat opined that, although this is 

still a nascent effort, SAVE ACT MINE/DRC represents a significant 

development because the private sector in the DRC has begun to 

recognize that they are responsible for their supply chains and should 

take ownership over the implementation of international standards.4

 

4

According to a representative from the OECD Secretariat, the changing attitudes in the 

DRC can also be attributed to (1) the emerging demand for minerals from Central Africa 

that are conflict-free and (2) the steps the DRC government is taking to integrate the 

OECD Due Diligence Guidance into and to monitor implementation of the guidance. For 

example, in May 2012 the government of the DRC suspended two Chinese-owned trading 

companies’ export licenses for failing to carry out due diligence over their operations in 

North Kivu.

In 

addition, some original equipment manufacturers participating in the 

project are putting pressure on other companies within their own conflict 

minerals supply chains to implement due diligence standards through 
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 38 GAO-12-763 Conflict Minerals Disclosure Rule 

contractual clauses, which will support the companies’ efforts to collect 

sourcing information from suppliers.

United Nations Security Council (UNSC) resolution 1896 (2009) called on 

UNGoE to provide recommendations for due diligence guidelines for 

importers, processors, and consumers of minerals originating from the 

DRC. UNGoE participated in the OECD Due Diligence Guidance multistakeholder workgroup, and in a November 2010 report provided a 

recommendation to the UNSC that companies adopt the five-step 

framework for detailed due diligence that the OECD workgroup 

developed. UNSC resolution 1952 supported UNGoE’s due diligence 

guidance recommendations; UNGoE’s recommended due diligence 

guidelines are similar to and fully consistent with the OECD Due Diligence 

Guidance. Individuals and entities may be subject to UN sanctions for not 

applying the due diligence guidelines.

The Global e-Sustainability Initiative (GeSI) and the Electronic Industry 

Citizenship Coalition (EICC) have co-developed the Conflict-Free Smelter 

Program to verify the sources of conflict minerals processed by smelters 

and refiners.5,6

The Conflict-Free Smelter Program is a voluntary program in which 

smelters undergo an independent third party audit, in accordance with the 

OECD Due Diligence Guidance, to verify the origin of minerals processed 

at their facilities. GeSI and the EICC have also developed audit protocols 

The aim of this program is to enable companies—both 

covered companies and their suppliers—to source conflict-free minerals. 

Companies that can trace their conflict minerals supply chains back to a 

conflict-free smelter can claim the minerals in their products are 

conflict-free.

 

5

GeSI and EICC representatives began designing the concept for a smelter validation 

program in 2009. In April 2010, GeSI and EICC representatives presented the proposal for 

the Conflict-Free Smelter Program and the audit protocol for tantalum smelters.

6

GeSI and the EICC also released the Conflict Minerals Reporting Template to 

standardize the collection of information from suppliers. This tool may reduce the burden 

on suppliers that may receive numerous requests for information from different customers. 

The template may be used by covered companies to help (1) trace their conflict minerals 

supply chains and (2) collect sourcing information for conflict minerals used in their 

products. GeSI and the EICC developed another tool, the Dashboard, to aggregate the 

responses companies receive from suppliers. 

UNGoE Due Diligence 

Guidelines

Conflict-Free Smelter Program
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 39 GAO-12-763 Conflict Minerals Disclosure Rule 

for the program in consultation with a number of stakeholders—including

NGOs, smelters, component manufacturers, original equipment 

manufacturers, and industry associations within and outside the 

electronics industry—to ensure wide-spread support for the program.7 In 

December 2010, the first tantalum smelter was certified conflict-free 

through the program after successfully completing an audit, and as of July

2012, 12 of approximately 25 tantalum smelting companies had been 

certified as conflict-free. As of July 2012, two tin smelting companies had 

been certified as conflict-free, five tungsten smelting companies had

begun discussions with representatives of the program, and five gold 

refining companies had been certified as conflict-free through the 

program.

8

Representing top gold mining companies, the World Gold Council (WGC) 

is developing a global initiative to help support gold mining companies in 

their efforts to responsibly mine gold worldwide. For this initiative, WGC is 

creating the Conflict-Free Gold Standard, an assurance framework, and a 

toolkit, with the input from mining companies, refiners, and other relevant 

stakeholders. The Conflict-Free Gold Standard establishes a common 

approach for gold mining companies to demonstrate that the gold they 

extract does not fuel conflict or human rights abuses. The standard is 

aligned with the OECD Due Diligence Guidance,

9

 

7

To be compliant with the audit protocols, smelters must be able to demonstrate that they 

have (1) a conflict minerals policy, (2) a mechanism for tracing goods sold back to the 

purchased material source, and (3) documentation verifying that the conflict minerals are 

from non-conflict sources.

and covers the 

industrial mining supply chain from the mine to the refiner. However, the 

standard does not cover gold from recycled sources or gold mined by 

artisanal miners. WGC is also developing an assurance framework, which 

can be used by third-party auditors to monitor mining companies’ 

compliance with the standard, and tools to support mining companies

through the audit process. According to WGC representatives, WGC 

8

A list of conflict-free smelters can be viewed on the CFS Program website, accessed July 

5, 2012, at http://www.conflictfreesmelter.org/CFSindicators.htm. 

9

According to the OECD Due Diligence Guidance, the individual company must exercise 

judgment to determine if conflict exists in the country in which it conducts business. 

According to WGC representatives, WGC took steps to help mining companies avoid 

pressure from host governments that may be averse to being designated as “conflictaffected or high risk” by an individual mining company by including a requirement in the 

standard that a mining company rely on external sources—such as sanctions or reports 

from authoritative NGOs—to determine if conflict exists. 

World Gold Council’s ConflictFree Gold Standard and Tools
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 40 GAO-12-763 Conflict Minerals Disclosure Rule 

plans to release the final standard, the assurance framework, and other 

tools before the end of 2012. Although the standard only covers gold 

mining companies, it may support certification programs at the refiner 

level. For example, according to gold industry representatives, the 

standard was developed with input from the London Bullion Market 

Association (LBMA), and it will support the efforts of those refiners 

purchasing gold from mining companies in compliance with the WGC 

Conflict-Free Gold Standard to comply with the LBMA Responsible Gold 

Guidance.

Distinct from WGC, whose standard covers the gold supply chain from 

mine to refiner, the LBMA has developed its own Responsible Gold 

Guidance to ensure that the gold refiners it accredits only purchase 

conflict-free gold.10 In January 2012, LBMA finalized and published its 

guidance, which is based on the OECD Due Diligence Guidance,11

 

10LBMA is the overseer for the London Good Delivery List, a list of 63 accredited gold 

refiners that meet a specific standard for the quality of their refined gold and silver bars. 

According to LBMA representatives, most banks and exchanges will only contract with 

refiners on the Good Delivery List.

and 

plans to develop and finalize audit protocols and other tools for use with 

the standard by July 2012. According to an LBMA representative, by 

December 2013 LBMA gold refiners will need to comply with the LBMA 

guidance and pass a third-party audit verifying their compliance to 

maintain their accreditation. Similar to the Conflict-Free Smelter Program, 

the goal of the LBMA initiative is to enable companies to say that the gold 

in their products is conflict-free if they can trace their gold supply chains 

to an LBMA accredited gold refiner (see fig. 7). According to industry 

representatives, in May 2012 LBMA, GeSI, and the EICC began the 

process to harmonize the two smelter and refiner certification programs to 

avoid duplicative efforts and any unnecessary burden on refiners.

11The LBMA also incorporated existing anti-money laundering and “know your customer” 

due diligence practices into the Responsible Gold Guidance.

LBMA’s Responsible Gold 

Guidance
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 41 GAO-12-763 Conflict Minerals Disclosure Rule 

Figure 7: Gold Bars Produced by LBMA Accredited Refiners 

The Responsible Jewellery Council (RJC)—a diamond and precious 

metals industry association—created a chain-of-custody certification 

program in March 2012 to help its member companies identify and track 

conflict-free gold throughout their supply chains.12,13

 

12The program was also launched to help its member companies identify and track the 

supply chains of other precious metals, such as platinum, palladium, and rhodium.

RJC designed a 

certification standard and developed several tools for the program—

including a certification handbook, guidance, and an assessment toolkit—

in collaboration with industry associations, companies, NGOs, and 

independent experts. According to RJC representatives, RJC began 

developing the program in early 2010 to support responsible sourcing, 

and after the passage of the Dodd-Frank Act, RJC incorporated 

measures into the program to support covered companies’ compliance 

with section 1502(b) of the Dodd-Frank Act. Conflict-free mined, recycled, 

and grandfathered gold is tracked through the supply chain from mine to 

13As mentioned previously, chain of custody refers to the paper trail that documents the 

sequence of entities that have custody of minerals as they move through a supply chain.

Responsible Jewellery Council 

Chain-of-Custody Certification 

Program
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 42 GAO-12-763 Conflict Minerals Disclosure Rule 

end user with the use of RJC tracking records to ensure a proper chain of 

custody is maintained.14

Two factors may limit the efficacy of RJC’s chain-of-custody certification 

program. First, certification under RJC’s program is voluntary and 

companies may determine which parts of their business and which 

materials they want to certify. Second, companies certified under RJC’s 

program are not prevented from sourcing from mining entities outside the 

program; gold purchased from a mine outside the program simply has to 

be segregated from gold from certified suppliers. While some refiner 

representatives report that segregation of gold in their facilities is difficult, 

several gold refiners have been certified as conflict-free through the RJC 

chain-of-custody certification program. 

Participating RJC members must be 

independently audited to be certified, in accordance with the OECD Due 

Diligence Guidance, and RJC recognizes and accepts audits completed 

under the GeSI and EICC Conflict-Free Smelter Program, as well as 

WGC’s and LBMA’s initiatives.

ITRI, an international tin industry association, began developing the ITRI 

Tin Supply Chain Initiative (iTSCi) in 2008 to improve due diligence and 

traceability within the tin, tantalum, and tungsten supply chains. ITRI 

initially designed the initiative to support the responsible sourcing of tin 

from Central Africa, but in 2010 ITRI began working with the Tantalum 

Niobium International Study Center to include tantalum. At that time, the 

initiative was also expanded to include tungsten. iTSCi has three 

components: (1) a physical chain-of-custody system to track and monitor 

minerals from the mine to the smelter; (2) independent third-party risk 

assessments of mine sites, transport routes, and companies involved in 

mining and transport to identify and manage conflict-related risks; and (3) 

 

14RJC defines grandfathered gold as existing stocks of gold that existed before the chainof-custody standard came into effect, with a reliable record demonstrating its date of 

ownership, extraction and/or manufacture. Grandfathered gold may be in the form of bars, 

ingots, coins, or similar, or within a sealed container (e.g., grain, powder, or sponge), with 

the refining date either permanently shown with the mark of a refiner or government mint; 

or verified by the refiner in accordance with a serial number or other permanent physical 

mark or characteristic; or determined though bank depository or inventory records.

In-Region Sourcing 

Initiatives

ITRI Tin Supply Chain Initiative 

(iTSCi)
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 43 GAO-12-763 Conflict Minerals Disclosure Rule 

independent third-party audits of all participants in the initiative. iTSCi 

helps companies comply with the OECD Due Diligence Guidance through 

these three components. According to an industry association 

representative, as of June 2012, iTSCi was being implemented at tin, 

tantalum, and tungsten mine sites, including approximately 1500 mine 

areas in the Katanga Province in the DRC and at approximately 400 mine 

areas in Rwanda, and the programs in both countries support 

approximately 45,000 artisanal miners.15,16

Although iTSCi was started and overseen by ITRI, it was developed with 

input from local and national officials in the DRC and Rwanda and it is 

being implemented by local organizations and national officials in their 

countries, with support from Pact, a NGO, and Channel Research, an

independent auditor. Pact manages the initiative’s field operations and 

performs initial mine risk assessments; coordinates with DRC and 

Rwandan government officials and local NGOs to implement the initiative 

at mine sites; continuously monitors activities on the ground; and helps 

train government officials to build their capacity. Channel Research is in 

charge of conducting pre-audits, governance assessments, and company 

audits of the companies participating in iTSCi.

Through audits, assessments, and continuous monitoring of the initiative, 

ITRI and its partners identified a number of problems with current 

operations. For example, ITRI representatives reported a number of 

problems with the iTSCi system, including duplicate tags, tags appearing 

in the wrong places, and bag weights increasing between check points in 

the supply chain. ITRI began addressing these concerns in 2011 through 

the development of an incident reporting template that staff are using to 

record and report incidents. According to an iTSCi document, the new 

protocol will ensure a timely and consistent identification and response to 

incidents. According to an iTSCi report, incidents have been reported, but 

at a low frequency in comparison to the amount of material bagged and 

tagged.

 

15According to a NGO representative, in addition to improving due diligence and 

transparency within the tin, tantalum, and tungsten supply chains, the initiative is enabling 

the government of the DRC to legitimately collect taxes.

16Compared to eastern DRC, Katanga is relatively conflict-free. As of June 2012, ITRI and 

its partners had not extended the ITRI initiative to eastern DRC, where conflict and 

violence persist.
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 44 GAO-12-763 Conflict Minerals Disclosure Rule 

According to BGR representatives, since 2008 the German government’s 

Federal Institute for Geosciences and Natural Resources (BGR) and its

partners have helped build capacity within the DRC and Rwandan 

governments through several initiatives, including a certified trading 

chains program and the development of a national certification and 

traceability system. BGR and its partners have developed and piloted the

certified trading chains program in eastern DRC and Rwanda to help the 

governments formalize the artisanal mining sectors (see fig. 8). BGR and 

its partners work with the host government and other stakeholders to 

develop standards by which mines are independently assessed, and the 

organization provides technical support for the host government to 

implement the program.17 According to BGR representatives, BGR and its 

partners are currently conducting a pilot program for the certification of

four mine sites in South Kivu, in eastern DRC. In Rwanda, three of the 

five mine sites audited between November 2008 and June 2011 have 

been certified through the program.18

 

17The standards are aligned with the OECD Due Diligence Guidance. In addition, 

according to a BGR representative, the DRC government incorporated the standards in 

national legislation and the Rwandan government included the standards in a national 

guidance document; the standards are obligatory in DRC and voluntary in Rwanda.

BGR representatives noted that 

they are planning to implement the certified trading changes program at 

additional mine sites in North and South Kivu in 2012. However, they also 

noted that the security situation in eastern DRC remains a challenge to 

the implementation of initiatives in the region.

18According to a BGR representative, BGR supports the process while the partner actually 

certifies the mine sites.

Certified Trading Chains 

Program and the 

Implementation of a National 

Certification and Traceability 

System in DRC
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 45 GAO-12-763 Conflict Minerals Disclosure Rule 

Figure 8: Artisanal Miners Panning Tin Ore at a Rwandan Mine Site
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 46 GAO-12-763 Conflict Minerals Disclosure Rule 

BGR and its partners have also been helping the DRC government 

develop a national certification and traceability system for tin, tantalum, 

tungsten, and gold since 2009;19 the certification system is based on the 

certified trading chains project. As part of the governments’ efforts to 

develop the system, BGR and its partners are working with 

representatives from the DRC government and others to inspect mine 

sites in eastern DRC. Specifically, the mine site validation missions are 

joint missions supported by BGR and include representatives from the 

local and national governments, civil society, industry, the United Nations 

Organization Stabilization Mission in the Democratic Republic of the 

Congo (MONUSCO), and ITRI. According to BGR officials, the goal is to 

regularly monitor the security situation at the mine sites, as part of the 

government’s efforts to map mining sites and armed group locations.20 In 

June 2011 and August 2011, the mine site validation teams conducted 

some mine site qualification reviews; however, the DRC government 

published the results of the mine site qualification reviews over 8 months 

after the mine site validation missions occurred, limiting the public’s 

access to timely information concerning the security situation at the 

mines.21

According to BGR officials, BGR and its partners’ in-region sourcing 

initiatives provide companies that purchase minerals through the program 

with assurances that artisanal miners participating in the initiative produce 

and trade minerals in accordance with accepted standards. BGR and its 

partners provide these assurances by certifying mine sites and helping to 

build the capacity of Congolese and Rwandan government officials. In 

 

19The DRC’s national certification system, the Certification Nationale, will enable the 

government to implement ICGRL’s regional certification mechanism. 

20Cadastre Minier—an office within the DRC Ministry of Mines—and the International 

Peace Information Service will conduct a comprehensive mine site qualification and 

cartography initiative throughout eastern DRC. In addition, MONUSCO is working with the 

DRC government on the Centres de Négoce initiative, an effort to establish five mineral 

trading centers in North and South Kivu. The project was launched in 2009 with the goal of 

creating choke-points where traceability procedures could be properly applied and where 

tin, tantalum, tungsten, and gold could be sold, bought, analyzed, and taxed. As of 

November 2011, MONUSCO completed construction of four of the centers and 

established a validation process to ensure that only conflict-free minerals will be traded at 

the centers. 

21According to BGR representatives, the mine site validation teams will visit and conduct 

qualification reviews at additional mines in North and South Kivu in the coming months 

and the validation of mine sites in Maniema and Katanga will being in July 2012.
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 47 GAO-12-763 Conflict Minerals Disclosure Rule 

addition, the maps being developed by the DRC government, in 

conjunction with BGR and other groups, may serve as a tool for 

companies to determine the conflict status of a mine site when conducting 

due diligence.

With technical support from several NGO partners, ICGLR designed a 

regional chain-of-custody tracking system and standards to ensure that 

conflict minerals are fully traceable from the mine site to the point of 

export; however, the implementation of the system is only in the nascent 

stages and is dependent on the actions of the participating national 

governments. In December 2006, the heads of the 11 African states that 

form the ICGLR signed the Pact on Security, Stability and Development in 

the Great Lakes Region, which included the Protocol Against the Illegal 

Exploitation of Natural Resources. In accordance with the protocol, 

ICGLR member states agreed to put in place regional rules and 

monitoring mechanisms for combating the illegal exploitation of natural 

resources. To curb the financing of rebel groups through the illegal 

exploitation of natural resources, ICGLR developed and approved six 

tools for implementation in the Great Lakes Region.22

Several partners support ICGLR and member countries’ efforts to 

implement the mechanism. For example, one NGO is helping the ICGLR 

develop a regional database, which would house data collected at the 

mine site and at the point of export, to track mineral flows through the 

region. At this time, the development of the databases and collection of 

data is an ongoing process. In addition, the German International 

Cooperation is consulting with ICGLR as it begins to set up a regional 

audit committee, which will be responsible for accrediting third-party 

ICGLR worked with 

Partnership Africa Canada to develop one of the tools, a regional 

certification mechanism, which was approved by the ICGLR member 

states in December 2010. ICGLR’s regional certification mechanism may 

enable member countries and their mining companies to demonstrate 

where and under what conditions minerals were produced; through the 

regional certification mechanism, individual member governments are to 

issue ICGLR regional certificates for those mineral shipments that are in 

compliance with the standards of the mechanism.

 

22The ICGLR developed the following six tools: regional certification mechanism, 

harmonization of national legislation, regional database on mineral flows, formalization of 

the artisanal mining sector, promotion of the Extractive Industry Transparency Initiative, 

and a whistle-blowing mechanism. 

ICGLR’s Regional Certification 

Mechanism 
Appendix II: Descriptions of Global and InRegion Sourcing Initiatives 

Page 48 GAO-12-763 Conflict Minerals Disclosure Rule 

auditors and overseeing the mechanism’s audit system. Partnership 

Africa Canada and BGR are also supporting the national authorities in 

Burundi with implementation of the regional certification mechanism.

According to a report by GeSI and the EICC and an ICGLR 

representative, ICGLR member countries are expected to harmonize their 

national legislation with the regional certification mechanism and develop 

a national certification and traceability system prior to issuing ICGLR 

regional certificates. According to an ICGLR representative, a report by 

GeSI and the EICC, and a report by the International Peace Information 

Service, the DRC government incorporated the ICGLR Regional 

Certification Manual into the national legal framework in February 2012, 

and Rwanda is expected to adopt similar legislation shortly.23 BGR’s and 

ITRI’s initiatives support the implementation of the regional certification 

mechanism at the national level, because all activities undertaken through 

these initiatives are incorporated into the DRC and Rwandan national 

efforts to develop national certification and traceability systems. As of 

April 2012, none of the ICGLR member states had issued an ICGLR 

regional certificate.

 

23According to the International Peace Information Service, a ministerial decree has been 

finalized that would integrate the regional certification mechanism into Rwanda’s mining 

code, and it is now pending approval by the Rwandan Ministry of Mines. Certification of 

mines will begin after the Rwandan Ministry of Mines approves the decree. 
Appendix III: Comments from the Securities 

and Exchange Commission 

Page 49 GAO-12-763 Conflict Minerals Disclosure Rule 

Appendix III: Comments from the Securities 

and Exchange Commission
Appendix III: Comments from the Securities 

and Exchange Commission 

Page 50 GAO-12-763 Conflict Minerals Disclosure Rule 
Appendix IV: GAO Contact and 

Staff Acknowledgments

Page 51 GAO-12-763 Conflict Minerals Disclosure Rule 

Michael J. Courts, (202) 512-8980 or courtsm@gao.gov

In addition to the individual named above, Godwin Agbara, Assistant 

Director; Ian Ferguson; Amanda Bartine; Justin Fisher; Ernie Jackson; 

Debbie Chung; Debra Johnson; Fang He; Etana Finkler; and Jeremy 

Sebest made key contributions to this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments

(320866)
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