Can Bad Law Do Good? A Retrospective on Conflict Minerals Regulation

Abstract

Section 1502 of the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) requires public companies to disclose the presence of conflict minerals in their products. Dodd-Frank as a whole has faced a barrage of criticism since its passage, and Section 1502 was not immune from intense critical backlash. As I have argued in prior scholarship and Congressional testimony, Section 1502 was ill-conceived in substance and form. Its application resulted in the improper use of securities laws to the detriment of its laudable public international law goals. This Article addresses whether, despite the structural and consequential shortcomings of the provision, it nevertheless has had positive normative effects related to consumer awareness and behavior, as well as corporate awareness and behavior. In other words, this Article considers whether the functional effects of the law have “moved the needle” in the direction of its intent, despite the provision’s potentially fatal flaws. This phenomenon begs the question of whether there is a function and purpose of “bad law.” Given that the fate of Section 1502 hangs largely in the balance, and the current administration has indicated that it will not provide funds for the implementation of Section 1502, the time is ripe for an analysis of the effectiveness of Section 1502 to date. This Article uses a retrospective lens to analyze the effect of Section 1502 on transparency within corporate supply chains, consumer behavior and awareness, and corporate social responsibility. In doing so, this Article will consider the effects that “bad law” can have in society.