In a blog post republished on Gamasutra, Barbara Jones (a shareholder in Greenberg Traurig’s Corporate and Securities practice group, a member of the Global practice group and the Emerging Technologies Team, and co-coordinator of the firm’s Conflict Minerals Compliance Initiative) discusses the video game industry's compliance with the Securities and Exchange Commission's new conflict minerals rules.
Minerals like tin, tantalum, tungsten, and gold (3TGs) are commonly used in electronic devices and peripherals like video game consoles. These minerals are called "conflict minerals" because they are mined and cheaply sold by warring factions in Democratic Republic of the Congo (DRC). By buying and using these components from the DRC, corporations are knowingly or unwittingly funding war.
In 2010 the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed and it included a provision in Section 1502 that ordered the SEC to develop rules that force companies to disclose the origin of their minerals.
In her blog post Jones details the progress made by the industry in the face of a looming deadline for compliance that kicks off in 2014. She notes that "some game console manufacturers have made a great deal of progress on the issue, and electronics giants such as Microsoft, Intel, Motorola, and HP engaged early on by developing compliance policies and procedures." She adds that Nintendo, who has had a fair share of bad press for using conflict minerals in the past, recently said that "all production partners have taken steps to comply with Nintendo's guidelines, and that Nintendo [has] 'obtained individual confirmation from each production partner that they agree not to use conflict minerals.'"
She goes on to say that companies who fail to comply with the new rules can lose "S-3 eligibility," can be the subject to "SEC enforcement proceedings and/or shareholder litigation," and suffer from the obvious bad publicity.
Jones closes by saying that video game companies that use minerals for electronic devices "must push forward with their diligence and compliance efforts, using this as an opportunity to rethink certain aspects of their operations and derive efficiencies where possible."
You can read the whole post here.
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