The U.S. Securities and Exchange Commission (SEC) adopted long-awaited rules on two controversial provisions of the Dodd-Frank financial reform package that target energy firms and companies that use so-called conflict minerals.

The two provisions, sections 1502 and 1504, are intended to curb corruption and promote transparency among companies involved in resource extraction as well as prevent violence in the Democratic Republic of Congo. But they have generated a combative debate between the business community and good governance groups over the scope and nature of the rules, The Wall Street Journal reported.

Section 1502 was approved with a 3-2 vote. The so-called “conflict minerals provision,” requires companies to examine their supply chains to determine and disclose if their products contain minerals from the DRC or surrounding countries. Section 1504, which passed 2-1, requires companies to disclose to the SEC all payments made to either the U.S. or a foreign government for the extraction of oil and minerals.
The statutory deadline for rules was April 17, 2011, and the delay generated widespread criticism.

SEC staffers estimated section 1502 would cost companies $3 billion to$4 billion initially to meet compliance with the new rules and would cost $206 to $609 million for annual compliance. The SEC previously said it would cost companies $71 million to comply with the rule.

The rules also did not contain any exemptions for issuers, including small to medium sized companies, a provision the business community pushed for.

The rules for section 1504 set a $100,000 threshold, below which companies would not have to report payments. The rules do not contain exemptions for reporting “confidential or competitively sensitive information” or exemptions for instances in which reporting the payments might violate foreign laws.

SEC staffers estimated the cost of initial compliance with the rules would range from $44 million to $1 billion and said it would probably be closer to the top end. For continuing compliance with the provision, the cost would range from $200 million to $400 million, the staffers said.