“Apple released its 2017 Supplier Responsibility Report today, as concern mounts over the potential impact of a draft directive from the Trump administration that would suspend legislation requiring companies to disclose whether their products contain conflict minerals,” Caroline O’Donovan reports for BuzzFeed News.

“In an interview on Friday, Paula Pyers, Apple’s senior director of supply chain social responsibility, told BuzzFeed News that 2016 was the company’s best year on record in terms of improvements in the supply chain,” O’Donovan reports. “Apple conducted 705 assessments of its supply chain in 2016 and removed three suppliers for failing to meet its standards on labor and human rights, environmental standards, and health and safety. (Apple conducted 574 such assessments in 2015.) Separately, in 2016 Apple audited and booted from its supply chain 22 smelters of conflict minerals.”

“In February, news broke that the Trump administration was considering loosening regulations on businesses that buy conflict minerals; a leaked draft directive would put a Dodd–Frank rule requiring companies to report conflict mineral usage on hiatus for at least two years… Last month, Apple told the Washington Post that it doesn’t want to see conflict mineral regulation rolled back, a point Pyers reiterated to BuzzFeed News,” O’Donovan reports. “Pyers said Apple will file its conflict minerals report with the SEC by the required late May deadline. She noted that the company has had “quite a bit of dialogue” with the agency and members of the Trump administration over the possible suspension of the conflict minerals reporting requirement.”

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“The 2010 Dodd-Frank law explicitly gives the president authority to order the Securities and Exchange Commission to temporarily suspend or revise the rule for two years if it is in the national security interest of the United States,” The Express reports. “The conflict minerals rule was pushed by human rights groups who want companies to tell investors if their products contain tantalum, tin, gold or tungsten mined from the Democratic Republic of Congo, in the hopes it will help curb the funding of armed groups. But business groups have staunchly opposed the measure, saying it forces companies to furnish politically-charged information that is irrelevant to making investment decisions.”

“They have also complained it costs too much money for companies to trace the source of the minerals through the supply chain,” The Express reports. “In 2014, a U.S. appeals court struck down a part of the conflict minerals law after the Business Roundtable, the U.S. Chamber of Commerce and the National Association of Manufacturers sued the SEC over the rule. The rest of the rule, however, remained intact and companies are still required to carry out due diligence and report the details of those inquiries in public reports filed with the SEC.”

“The SEC cannot permanently repeal the rule without a law passed by Congress. However, it can use its broad exemptive powers to scale back some of the requirements or stop enforcing the rule entirely,” The Express reports. “Last week, Acting SEC chairman Michael Piwowar took steps toward doing just that, by announcing he has asked SEC staff to reconsider how companies should comply with it and whether “additional relief” is warranted. Piwowar did not explicitly ask President Trump to utilise his powers under Dodd-Frank to temporality suspend the rule; however, in his statement, he spoke about how he had traveled to Africa to study the rule’s impact and raised concerns about its effect on national security.”

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“In the leaked draft memo seen by Reuters, the Secretary of State and Secretary of the Treasury were asked to propose a plan for addressing human rights violations and the funding of armed groups in the Democratic Republic of Congo and report back within 180 days,” Sarah N. Lynch and Emily Stephenson report for Reuters. “The memo also lays out a justification for suspending the rule, saying that while it has helped discourage some American companies from purchasing materials in the region, it has also led to ‘some job loss.'”

Lynch and Emily report, “It also cited 2014 SEC estimates about the costs imposed on companies, which entailed upfront costs of $3 billion to $4 billion, and $200 million per year thereafter.”

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MacDailyNews Take: Apple’s 2017 Supplier Responsibility Report is here.