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After the August 18th DC Circuit court ruling, many companies right now wouldn’t mind a SEC Conflict Minerals “Grey” book sequel: what does the SEC really mean?

To sum it up, the U.S. Court of Appeals for the D.C. Circuit reaffirmed its April 2014 decision regarding the U.S. Securities and Exchange Commission (SEC) Conflict Minerals Rule: the requirement to describe products as having “not been found to be DRC conflict Free” violates the First Amendment.

While some media interpreted this as the Conflict Minerals Rule being shot down or voted out, this is not the case. The August D.C. Circuit court ruling applies to what a company discloses and does not negate the entire rule. In a recent blog post, Lawrence Heim of Elm Sustainability Partners, reminds companies subject to the SEC conflict minerals rule, that the DC Circuit court ruling only refers to the use of specific words and “the rest of the disclosure requirement and associated efforts are still in effect.”

An area of uncertainty that makes the Conflict Minerals Rule feel even more like a chapter of Grey’s unexplainable life is the questionable Independent Private Sector Audit requirement.

Both Michael Littenberg of Schulte Roth & Zabel and Lawrence Heim of Elm Sustainability Partners agree that the IPSA will likely be required at some point, but differ in their opinion on when to engage an auditor. Although, Heim highlights that despite uncertainty of the IPSA requirement, many companies are seeking auditors right now.

The SEC, however, will not be the only entity judging whether a company conducts a conflict minerals audit (IPSA). Beyond compliance, NGOs want to see that companies investigating their supply chains for conflict minerals have continuous improvement. An IPSA will likely demonstrate progress. Heim suggests, “if your company is sensitive to the views/concerns of the NGO community, then an IPSA provides some value in that regard even if it isn’t mandated, which may also be a consideration.”

If you are seeking more clarity about Conflict Minerals IPSAs, a brief released by Source Intelligence, with contributions from Jennifer Kraus, PHD, Michael Littenberg and Lawrence Heim, will provide guidance: To Audit or Not to Audit? Learn if a Conflict Minerals IPSA is right for your company. An IPSA Brief.

Jennifer Kraus, Michael Littenberg and Lawrence Heim also contributed to a corresponding webinar that goes over preparing for an IPSA and specifically how the recent D.C. Circuit ruling will impact IPSAs.