Yesterday the Securities and Exchange Commission proposed a series of new rules to implement provisions of the Dodd-Frank Act addressing:
- mine safety; and
- payments made to governments in connection with resource extraction.
The proposed rules on mine safety require that companies operating coal or other mines (as defined in the Federal Mine Safety and Health Act of 1977) disclose information regarding specific health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities in their quarterly and annual reports. The proposed rules also require companies to file a Form 8-K whenever they receive certain shut-down orders and notices of patterns or potential patterns of violations from the Mine Safety and Health Administration.
But these disclosure requirements aren’t entirely new, they really went into effect on August 20, 2010 pursuant to a self-executing provision of the Dodd-Frank Act. The proposed rules issued by the Commission yesterday simply codify the changes and add some additional disclosure requirements that are “designed to provide context”. For example, yesterday the James River Coal Company filed this Form 8-K disclosing, under Item 8.01, its receipt of an imminent danger order from the Mine Safety and Health Administration related to a miner having an open pack of cigarettes and a lighter in an underground mine. If the Commission’s rules are adopted as proposed future disclosures of this nature would appear under a new Form 8-K Item 1.04.
Notably, the rules only apply to mines located within the United States, so a company that operates mines in both the U.S. and Canada, for example, would only be required to make the disclosures mandated by the new rules with respect to its U.S. mines.
The Commission’s release provides a greater level of detail on the proposed disclosure requirements and comments are due by January 31, 2011.
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