We have all heard of the Leonardo DiCaprio film Blood Diamond, a story that revolves around a rare gem coming from a conflict-plagued nation.  The SEC is poised to require U.S. public companies to make disclosures about their use of blood minerals (my term, not theirs).  A CFO article reports that “the Dodd-Frank financial reform law requires publicly traded companies to scour their supply chains for so-called conflict minerals mined in the Democratic Republic of Congo (DRC) and surrounding countries. If a company finds that minerals used in its products or components come from the area, it will need to dig even deeper to determine whether its purchases indirectly help fund ongoing violence in the region.”

According to the article, the regulation is expected by the end of this year.  If the current version is adopted, “public companies that make products containing tin, tantalum, tungsten, and gold will be subject to the rule, no matter how much, or how little, of these metals they use.”  The rule will likely require annual disclosures.

This seems to be related to Lisa’s prior post on say on pay.  By forcing more disclosures, someone on Capitol Hill hopes to change some social outcome.  The CFO article mentions an ironic twist.  The intent of the law was to stop people from using illegitimate minerals from the Congo.  However, in an effort to minimize financial reporting risk, companies might stop using legitimate Congo exports as well, which in turn could actually hurt the people the law was intended to help.

On a different note, who the heck stuck this little tidbit into a financial reform bill?