[Federal Register Volume 76, Number 249 (Wednesday, December 28, 2011)]
[Rules and Regulations]
[Pages 81762-81785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-33148]
[[Page 81761]]
Vol. 76
Wednesday,
No. 249
December 28, 2011
Part V
Securities and Exchange Commission
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17 CFR Parts 229, 239 and 249
Mine Safety Disclosure; Final Rule
Federal Register / Vol. 76, No. 249 / Wednesday, December 28, 2011 /
Rules and Regulations
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 229, 239 and 249
[Release Nos. 33-9286; 34-66019; File No. S7-41-10]
RIN 3235-AK83
Mine Safety Disclosure
AGENCY: Securities and Exchange Commission.
ACTION: Final rule.
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SUMMARY: We are adopting amendments to our rules to implement Section
1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Section 1503(a) of the Act requires issuers that are operators, or that
have a subsidiary that is an operator, of a coal or other mine to
disclose in their periodic reports filed with the Commission
information regarding specified health and safety violations, orders
and citations, related assessments and legal actions, and mining-
related fatalities. Section 1503(b) of the Act mandates the filing of a
Form 8-K disclosing the receipt of certain orders and notices from the
Mine Safety and Health Administration.
DATES: Effective Date: January 27, 2012.
FOR FURTHER INFORMATION CONTACT: Jennifer Zepralka, Senior Special
Counsel, or Jennifer Riegel, Special Counsel, Division of Corporation
Finance at (202) 551-3300, at the Securities and Exchange Commission,
100 F Street NE., Washington, DC 20549.
SUPPLEMENTARY INFORMATION: We are adding new Item 104 to Regulation S-
K,\1\ amending Item 601 of Regulation S-K,\2\ and amending Forms 8-
K,\3\ 10-Q,\4\ 10-K,\5\ 20-F\6\ and 40-F\7\ under the Securities
Exchange Act of 1934 (``Exchange Act'').\8\ In addition, we are
amending General Instruction I.A.3(b) of Form S-3\9\ under the
Securities Act of 1933 (``Securities Act'').\10\
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\1\ 17 CFR 229.10 et seq.
\2\ 17 CFR 229.601.
\3\ 17 CFR 249.308.
\4\ 17 CFR 249.308a.
\5\ 17 CFR 249.310.
\6\ 17 CFR 249.220f.
\7\ 17 CFR 249.240f.
\8\ 15 U.S.C. 78a et seq.
\9\ 17 CFR 239.13.
\10\ 15 U.S.C. 77a et seq.
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I. Background and Summary
On December 15, 2010, we proposed amendments to our rules and forms
relating to mine safety disclosure.\11\ We proposed these rules to
implement Section 1503 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the ``Act'').\12\ Section 1503(a) of the Act
requires issuers that are required to file reports with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act and that are
operators, or that have a subsidiary that is an operator, of a coal or
other mine to disclose specified information about mine health and
safety in their periodic reports filed with the Commission.\13\ Section
1503(b) of the Act requires each issuer that is an operator, or that
has a subsidiary that is an operator, of a coal or other mine to file a
current report on Form 8-K with the Commission reporting receipt of
certain shutdown orders and notices of patterns or potential patterns
of violations.\14\
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\11\ See Release No. 33-9164, 34-63548 (December 15, 2010) [75
FR 80374] (the ``Proposing Release'').
\12\ Public Law 111-203 (July 21, 2010).
\13\ Section 1503(a) of the Act.
\14\ Section 1503(b) of the Act.
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As discussed in the Proposing Release, the disclosure requirements
set forth in Section 1503 of the Act refer to and are based on the
safety and health requirements applicable to mines under the Federal
Mine Safety and Health Act of 1977 (the ``Mine Act''),\15\ which is
administered by the U.S. Department of Labor's Mine Safety and Health
Administration (``MSHA''). Under the Mine Act, MSHA is required to
inspect surface mines at least twice a year and underground mines at
least four times a year \16\ to determine whether there is compliance
with health and safety standards or with any citation, order or
decision issued under the Mine Act and whether an imminent danger
exists. MSHA also conducts spot inspections \17\ and inspections
pursuant to miners' complaints.\18\ If violations of safety or health
standards are found, MSHA inspectors will issue citations or orders to
the mine operators. Among other activities under the Mine Act, MSHA
also assesses and collects civil monetary penalties for violations of
mine safety and health standards.\19\ MSHA maintains a data retrieval
system on its Web site that allows users to examine, on a mine-by-mine
basis, data on inspections, violations, and accidents, as well as
information about dust samplings, at all mines in the United
States.\20\
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\15\ 30 U.S.C. 801 et seq.
\16\ 30 U.S.C. 813(a). Seasonal or intermittent operations are
inspected less frequently. See Mine Safety and Health
Administration, Program Policy Manual, Volume I, Section 103,
available at http://www.msha.gov/REGS/COMPLIAN/PPM/PMMAINTC.HTM.
\17\ 30 U.S.C. 813(i).
\18\ 30 U.S.C. 813(g).
\19\ 30 U.S.C. 820. See also ``MSHA's Statutory Functions''
available at http://www.msha.gov/MSHAINFO/MSHAINF1.HTM.
\20\ See http://www.msha.gov/DRS/DRSHOME.HTM.
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In addition, an independent adjudicative agency, the Federal Mine
Safety and Health Review Commission (the ``FMSHRC''), provides
administrative trial and appellate review of legal disputes arising
under the Mine Act.\21\ Most cases deal with civil penalties proposed
by MSHA to be assessed against mine operators and address whether the
alleged safety and health violations occurred, as well as the
appropriateness of proposed penalties. Other types of cases include
miners' complaints of safety- or health-related discrimination and
miners' applications for compensation after a mine has been idled by a
closure order.\22\ The FMSHRC's administrative law judges decide cases
at the trial level and the five-member FMSHRC provides appellate
review. Appeals from the FMSHRC's decisions are to the U.S. courts of
appeals.\23\
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\21\ 30 U.S.C. 815(d).
\22\ See ``About FMSHRC'' on http://www.fmshrc.gov/fmshrc.html.
\23\ 30 U.S.C. 816.
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The disclosure requirements set forth in Section 1503 of the Act
are currently in effect.\24\ Issuers have been providing disclosure in
their periodic and current reports filed with the Commission since the
effective date of Section 1503. However, the Act states that the
Commission is ``authorized to issue such rules or regulations as are
necessary or appropriate for the protection of investors and to carry
out the purposes of [Section 1503].'' \25\ In order to facilitate
consistent compliance with the Act's requirements by reporting
companies, we proposed rule amendments that would implement the Act's
requirements by codifying them into our disclosure rules and specifying
their scope and application. We also proposed to require a limited
amount of additional disclosure to provide context for certain items
required by the Act.
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\24\ See Section 1503(f) of the Act.
\25\ Section 1503(d)(2) of the Act.
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We received over 30 comment letters in response to the proposed
amendments, and one letter, received prior to our proposal, relating to
Section 1503 of the Act.\26\ These letters came
[[Page 81763]]
from investors and issuers, as well as professional and trade
associations, trade unions, law firms and other interested parties. In
general, the commentators supported the proposed amendments, although
several commentators opposed some of the proposed amendments that would
require additional disclosure to provide context to the information
required by the Act. Many commentators suggested modifications or
alternatives to the proposals.\27\ As discussed in detail below, we
have taken into consideration the comments received on the proposed
amendments, as well as the staff's experience with the disclosure
already being provided under Section 1503, and are adopting several
amendments to our rules. In general, we have decided not to adopt the
proposals that would have expanded the required disclosure beyond that
required by Section 1503 since we are persuaded by comments asserting
that the added burden of these proposed requirements likely would have
outweighed the potential incremental benefits of the additional
disclosure. The final rules we adopt today adhere closely to Section
1503 of the Act, and reflect changes made from the proposals in
response to comments.
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\26\ The public comments we received on the Proposing Release
are available on our Web site at http://www.sec.gov/comments/s7-41-10/s74110.shtml. In addition, to facilitate public input on the Act,
the Commission provided a series of email links, organized by topic,
on its Web site at http://www.sec.gov/spotlight/regreformcomments.shtml. The letter we received prior to publication
of the Proposing Release on Section 1503 of the Act is available on
our Web site at http://www.sec.gov/comments/df-title-xv/specialized-disclosures/specialized-disclosures.shtml.
\27\ We received three comment letters noting Executive Order
No. 13563 (Jan. 18, 2011), which instructs federal agencies to,
among other things, minimize burdens on the private sector and
simplify and harmonize their regulations. See letters from
Industrial Minerals Association--North America (``IMA-NA''),
National Stone, Sand, Gravel Association (``NSSGA'') and Wyoming
Mining Association (``WMA''). As these commentators acknowledge, the
Executive Order does not apply to the Commission. (We note that,
subsequent to the submission of these comment letters, the President
issued a comparable Executive Order, No. 13579 (July 11, 2011),
directed to independent regulatory agencies.) However, these
commentators assert that it would be within the spirit of the
Executive Order if the final rules implemented Section 1503 by
simply reiterating the statutory provision in the regulatory text of
17 CFR Parts 229, 239 and 249. While we are not adopting in its
entirety the approach recommended by these commentators, as
discussed in more detail in this release, we are modifying some of
the disclosure requirements from the proposals so that the final
rules adhere closely to the statutory text.
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We are adopting amendments to Form 10-K, Form 10-Q, Form 20-F and
Form 40-F to require the disclosure required by Section 1503(a) of the
Act. We are adopting new Item 104 of Regulation S-K, which sets forth
the disclosure requirements for Forms 10-Q and 10-K, and amending Item
601 of Regulation S-K to add a new exhibit to Form 10-K and Form 10-Q
for provision of this information. We are also adopting amendments to
Forms 20-F and 40-F to include the same disclosure requirements as
those adopted for issuers that are not foreign private issuers. In
addition, we are adding a new item to Form 8-K to implement the
requirement imposed by Section 1503(b) of the Act, and amending Form S-
3 to add the new Form 8-K item to the list of Form 8-K items the
untimely filing of which will not result in loss of Form S-3
eligibility.
II. Discussion Of The Amendments
A. Required Disclosure in Periodic Reports
1. Scope
a. Proposed Amendments
Section 1503(a) of the Act mandates that specified disclosure be
provided in each periodic report filed with the Commission by every
issuer that is required to file reports with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act and that is ``an operator,
or that has a subsidiary that is an operator, of a coal or other
mine.'' The Act specifies that the term ``operator'' has the meaning
given such term in Section 3 of the Mine Act.\28\ The Act also
specifies that the term ``coal or other mine'' means a coal or other
mine as defined in Section 3 of the Mine Act,\29\ that is subject to
the provisions of the Mine Act.\30\
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\28\ Section 1503(e)(3) of the Act. Section 3(d) of the Mine Act
provides that an ``operator'' means any owner, lessee, or other
person who operates, controls, or supervises a coal or other mine or
any independent contractor performing services or construction at
such mine. 30 U.S.C. 802.
\29\ Section 3(h) of the Mine Act states that ``coal or other
mine'' means an area of land from which minerals are extracted in
nonliquid form or, if in liquid form, are extracted with workers
underground, private ways and roads appurtenant to such area, and
lands, excavations, underground passageways, shafts, slopes, tunnels
and workings, structures, facilities, equipment, machines, tools, or
other property including impoundments, retention dams, and tailings
ponds, on the surface or underground, used in, or to be used in, or
resulting from, the work of extracting such minerals from their
natural deposits in nonliquid form, or if in liquid form, with
workers underground, or used in, or to be used in, the milling of
such minerals, or the work of preparing coal or other minerals, and
includes custom coal preparation facilities. In making a
determination of what constitutes mineral milling for purposes of
this Act, the Secretary shall give due consideration to the
convenience of administration resulting from the delegation to one
Assistant Secretary of all authority with respect to the health and
safety of miners employed at one physical establishment; for
purposes of titles II, III, and IV, ``coal mine'' means an area of
land and all structures, facilities, machinery tools, equipment,
shafts, slopes, tunnels, excavations, and other property, real or
personal, placed upon, under, or above the surface of such land by
any person, used in, or to be used in, or resulting from, the work
of extracting in such area bituminous coal, lignite, or anthracite
from its natural deposits in the earth by any means or method, and
the work of preparing the coal so extracted, and includes custom
coal preparation facilities.
\30\ Section 1503(e)(2) of the Act.
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We proposed to include references to these definitions in new items
of Regulation S-K, the instructions to a new item of Form 20-F and the
notes to a new paragraph of General Instruction B of Form 40-F. The
proposed rules did not provide for any other defined terms, but the
Proposing Release noted our view that the definition of ``subsidiary''
in Item 1-02(x) of Regulation S-X \31\ would apply to this disclosure
in the absence of another definition.
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\31\ Under Item 1-02(x) of Regulation S-X, a ``subsidiary'' of a
specified person is ``an affiliate controlled by such person
directly, or indirectly through one or more intermediaries.'' This
definition is identical to the definition of ``subsidiary'' in Rule
12b-2 under the Exchange Act and Rule 405 under the Securities Act.
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The Proposing Release also explained that, because the Act's
definition of ``coal or other mine'' is limited to those mines that are
subject to the provisions of the Mine Act, and the Mine Act applies
only to mines located in the United States,\32\ the proposed mine
safety disclosure would be required only for coal or other mines (as
defined in the Mine Act) located in the United States. Under the
proposed rules, this disclosure would be made for each distinct mine
covered by the Mine Act, and issuers would not be permitted to group
mines by project or geographic region.
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\32\ The Mine Act covers each ``coal or other mine, the products
of which enter commerce, or the operations or products of which
affect commerce, and each operator of such mine, and every miner in
such mine * * *'' 30 U.S.C. 803. ```Commerce' means trade, traffic,
commerce, transportation, or communication among the several States,
or between a place in a State and any place outside thereof, or
within the District of Columbia or a possession of the United
States, or between points in the same State but through a point
outside thereof.'' 30 U.S.C. 802(b). ```State' includes a State of
the United States, the District of Columbia, the Commonwealth of
Puerto Rico, the Virgin Islands, American Samoa, Guam, and the Trust
Territory of the Pacific Islands.'' 30 U.S.C. 802(c).
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The proposed rules would include smaller reporting companies and
foreign private issuers \33\ within the scope of the rules implementing
Section 1503(a) of the Act.
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\33\ See the definition of ``smaller reporting company'' in 17
CFR 240.12b-2 and the definition of ``foreign private issuer'' in 17
CFR 240.3b-4.
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The Proposing Release requested comment on whether the special
provisions of Form 10-K and Form 10-Q permitting the omission of
certain information by wholly owned subsidiaries and asset-backed
issuers should apply to the proposed mine safety disclosure.
b. Comments on the Proposed Amendments
Many commentators supported the proposal to apply the disclosure
requirements of Section 1503 only to
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mines that are subject to the Mine Act, and not to mines located
outside the United States.\34\ These commentators generally agreed with
our view that references to the Mine Act in Section 1503 indicate that
the statutory disclosures are required only for coal or other mines
covered by the Mine Act. One commentator noted its belief that it would
be impractical to apply the disclosure provisions to mines in
jurisdictions other than the United States because there is no common
mine safety regulatory approach across jurisdictions, and warned that
an attempt to do so would yield inconsistent and confusing standards in
terms of the application of the standard both between companies and
between operating locations.\35\ Another commentator noted that, to the
extent that mine safety information relating to an issuer's non-U.S.
mines is material, disclosure would be required under the Commission's
existing disclosure requirements.\36\
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\34\ See letters from AngloGold Ashanti Limited (``AngloGold''),
Barrick Gold Corporation (``Barrick Gold''), Cleary Gottlieb Steen &
Hamilton LLP (``Cleary''), Davis Graham & Stubbs LLP (``DGS Law''),
National Mining Association (``NMA''), New York State Bar
Association (``NYSBA'') and Rio Tinto plc (``Rio Tinto'').
\35\ See letter from Rio Tinto.
\36\ See letter from AngloGold.
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Other commentators, however, supported expanding the disclosure
requirement to cover mines in all jurisdictions, noting their belief
that the health and safety risks related to mines in all jurisdictions
are as material to investors as health and safety concerns for U.S.
mines,\37\ and asserting that the data required to be disclosed under
the Mine Act and Section 1503(a) is as readily available for an
issuer's non-U.S. mines as it is for U.S. mines.\38\
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\37\ See e.g, letters from California Public Employees'
Retirement System (``CalPERS''), EARTHWORKS' No Dirty Gold Campaign
(``EARTHWORKS''), Social Investment Forum (``SIF'') and Trillium
Asset Management Corporation (``Trillium'').
\38\ See letters from SIF and Trillium.
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Several commentators supported the proposed rule that would require
disclosure to be provided for each mine for which the issuer or a
subsidiary of the issuer is an operator, on a mine-by-mine basis.\39\
One commentator stated its view that the statutory language should be
interpreted to be consistent with a group of operations considered a
``mine'' for purposes of Mine Act reporting.\40\ Other commentators
similarly noted that this is how operators report information to MSHA,
so issuers would be able to prepare the required disclosure on a mine-
by-mine basis without a significant administrative burden.\41\
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\39\ See letters from American Federal of Labor and Congress of
Industrial Organizations (``AFL-CIO''), Barrick Gold, EARTHWORKS,
John H. Estess (``Estess'') and United Mine Workers of America
(``UMWA'').
\40\ See letter from Barrick Gold.
\41\ See letters from AFL-CIO, Barrick Gold and UMWA.
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Conversely, three commentators requested that the final rules
specify that issuers may group all integrated facilities of a mine site
when complying with the disclosure requirements of the Act,
notwithstanding the fact that some of those facilities may have been
issued separate mine identification numbers by MSHA.\42\ These
commentators claimed that doing so could help promote investor
understanding because the health and safety information would then be
reported in a manner consistent with the company's reporting of
operating and financial data in their periodic reports.\43\
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\42\ See letters from Freeport-McMoRan Copper and Gold Inc.
(``Freeport-McMoRan''), NMA and Rio Tinto.
\43\ See letters from Freeport-McMoRan and NMA.
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We received a comment requesting that we clarify that only those
orders and citations issued to mines with an MSHA identification number
are to be included in the disclosure.\44\ Similarly, a few commentators
requested clarification that the final rules require disclosure only of
orders and citations issued directly to mine operator issuers and their
subsidiaries, and not to contractors or other entities operating at the
mining site, who would have their own MSHA identification numbers.\45\
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\44\ See letter from NMA.
\45\ See letters from Barrick Gold and DGS Law.
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Several commentators agreed that it is appropriate for the
definition of the term ``subsidiary'' for purposes of Section 1503 to
be consistent with the meaning of the term as defined under Item 1-
02(x) of Regulation S-X, and supported our proposal not to adopt a
different definition of ``subsidiary.'' \46\ One of these commentators
suggested that this definition should be specified in the new
rules.\47\ However, one commentator stated that the definition of
subsidiary and entity under the control of the corporation must be
comprehensive and should include unconsolidated equity investees and
joint ventures.\48\
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\46\ See letters from AngloGold, Cleary, Estess, NMA, Rio Tinto,
SIF and Trillium.
\47\ See letter from Estess.
\48\ See letter from EARTHWORKS.
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Commentators generally concurred with our proposal that smaller
reporting companies should not be exempted from the disclosure
requirements, generally noting that Section 1503 of the Act does not
contemplate an exception from disclosure for smaller reporting
companies.\49\ Similarly, commentators generally agreed with the
proposal that foreign private issuers should not be exempted from the
disclosure requirement.\50\ Many commentators expressed the view that
Section 1503 of the Act does not contemplate any exception from
disclosure for foreign private issuers,\51\ while others asserted that
foreign private issuers are as likely to have risks associated with
worker safety issues as domestic reporting companies and therefore
should be required to report the same information.\52\
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\49\ See e.g, letters from AFL-CIO, CalPERS, California State
Teachers' Retirement System (``CalSTRS''), EARTHWORKS, NMA, Rio
Tinto, SIF, Trillium and UMWA. One commentator agreed that smaller
reporting companies should be required to provide the disclosure,
but noted concerns about the costs of compliance for smaller
reporting companies and suggested the Commission consider a simpler
disclosure system for such companies. See letter from Estess.
\50\ See letters from CalPERS, CalSTRS, DGS Law, EARTHWORKS,
NMA, Rio Tinto, SIF and Trillium.
\51\ See letters from DGS Law, NMA and Rio Tinto.
\52\ See letters from SIF and Trillium.
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Commentators had differing views on whether either wholly owned
subsidiaries or asset-backed issuers should be permitted to omit the
proposed mine safety disclosure in accordance with the special
provisions in General Instruction I to Form 10-K and General
Instruction H to Form 10-Q. Two commentators argued that wholly owned
subsidiaries should be permitted to omit the disclosure if the
information is disclosed by the wholly owned subsidiary's parent
entity.\53\ Other commentators stated their view that the special
provisions should not apply.\54\
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\53\ See letters from NMA and NYSBA.
\54\ See letters from Estess and EARTHWORKS (neither wholly
owned subsidiaries nor asset-backed issuers should be permitted to
omit the information); SIF and Trillium (no reason for exemptions
for asset-backed issuers); and AFL-CIO and UMWA (information of
wholly owned subsidiaries should not be excluded).
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c. Final Rule
We are adopting the final rules as proposed, with a clarifying
change to the instructions regarding the definition of the term
``subsidiary.'' The final rules apply only to mines in the United
States. Although we have considered the views of commentators that
request application of the disclosure requirement to non-U.S. mines, we
continue to believe that the statutory language referencing the Mine
Act clearly indicates that the Section 1503 disclosures are required
only for coal or other mines covered by the Mine Act. We also agree
with commentators who
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expressed concerns that application of the Act's disclosure requirement
to non-U.S. mines would be difficult to implement and could result in
different disclosure from jurisdiction to jurisdiction, which would not
be directly comparable. Although the final rules are limited to
implementing the requirements of the Act and, therefore, do not extend
to foreign mines, we reiterate, as noted in the Proposing Release, that
to the extent mine safety issues are material, under our current rules
disclosure could be required pursuant to the following items of
Regulation S-K: Item 303 (Management's Discussion and Analysis of
Financial Condition and Results of Operations), Item 503(c) (Risk
Factors), Item 101 (Description of Business) or Item 103 (Legal
Proceedings).
The final rules require disclosure on a mine-by-mine basis. We
continue to believe that the disclosure of the information on a mine-
by-mine basis accords with the plain language of the Act. We understand
the concern raised by commentators about groupings of mines that may
more logically be reported together but for having separate MSHA mine
identification numbers. However, we note that MSHA's data retrieval
system provides information on a mine-by-mine basis using the MSHA mine
identification number assigned to each mine or facility. MSHA has a
detailed process for assigning identification numbers.\55\ We believe
it is more appropriate to require disclosure for each specific
identified mine, consistent with MSHA reporting, as well as with
Section 1503.
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\55\ See MSHA Program Policy Manual Volume III. 41-1. For
example, for coal mines, preparation plants that receive coal from
only one underground or surface mine, and are located on the same
property as that mine, share the mine's identification number, but
preparation plants that share mine property with a surface or
underground mine, but process coal from other mines, are to be given
separate identification numbers.
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We note that orders and citations issued to independent contractors
(who are not subsidiaries of the issuer) who are working at the
issuer's mine site would not need to be reported by the issuer. This is
consistent with the approach discussed above, under which the reporting
will be for each mine that has an MSHA identification number, and is
consistent with the Act's use of terms defined in the Mine Act. The
definition of ``operator'' in the Mine Act includes independent
contractors. Therefore, we note that independent contractors that are
required to file reports with the Commission pursuant to Section 13(a)
or 15(d) of the Exchange Act and are operators, or have a subsidiary
that is an operator, of a coal or other mine would need to include the
disclosure required by Section 1503 and our new rules in their reports.
We recognize that the result of this approach could be some orders or
citations will go unreported if the independent contractor is not a
reporting company, but believe this approach is consistent with the way
MSHA reports orders and citations, as well as with Section 1503. We
note that if individual orders or citations, or a pattern of
violations, at mines owned by an issuer but operated by an independent
contractor are material to the issuer, disclosure could be required
under our existing rules pursuant to the applicable items of Regulation
S-K.
The final rules will include an instruction noting that
``subsidiary'' is as defined in Exchange Act Rule 12b-2. This
definition is identical to the definition of ``subsidiary'' found in
Securities Act Rule 405 and Regulation S-X Item 1-02(x), which apply to
other elements of issuers' periodic disclosure. As stated in Rule 12b-
2, a subsidiary of a specified person is ``an affiliate controlled by
such person directly, or indirectly through one or more
intermediaries.'' Issuers are accustomed to applying this definition in
connection with their periodic reporting and we do not see a benefit to
adding to issuers' compliance burden by specifying a different
definition of ``subsidiary'' in the context of mine safety disclosure.
We considered the suggestion raised by a commentator that
``subsidiary'' should be defined to specifically encompass
unconsolidated equity investees and joint ventures. However, we believe
that such an approach is inconsistent with the plain meaning of the
term ``subsidiary.''
The final rules do not provide special treatment to smaller
reporting companies or foreign private issuers. We continue to believe
their inclusion is consistent with the plain language of Section
1503(a), which applies broadly to issuers that are required to file
reports under Section 13(a) or 15(d) of the Exchange Act. In addition,
we note that these issuers have been complying with the Section 1503
disclosure requirements since the effective date of that provision.
The final rules do not extend the special provisions of Form 10-K
and Form 10-Q that permit the omission of certain information by
wholly-owned subsidiaries and asset-backed issuers. Many commentators
stated, and we agree, that such treatment is not necessary for the mine
safety disclosure requirement. Section 1503 of the Act applies broadly
to ``each issuer that is required to file reports pursuant to'' the
Exchange Act, and does not appear to contemplate special treatment for
particular types of issuers. We are making technical amendments to
General Instructions I and J to Form 10-K and General Instruction H to
Form 10-Q to delete the references to ``Item 4, Submission of Matters
to a Vote of Security Holders.''
2. Location of Disclosure
The Act states that companies must include the disclosure in their
periodic reports required pursuant to Section 13(a) or 15(d) of the
Exchange Act.
a. Proposed Amendments
In order to implement the disclosure requirement set forth in
Section 1503(a) of the Act, we proposed to add new Item 4 to Part II of
Form 10-Q and new Item 4(b) to Part I of Form 10-K, which would require
the information required by new Items 106 and 601(b)(95) of Regulation
S-K; new Item 16J to Form 20-F; and new Paragraph (18) of General
Instruction B of Form 40-F. As proposed, these items would be identical
in substance and entitled, ``Mine Safety Disclosure.'' The proposed
items would require issuers to provide in their periodic reports and in
exhibits to their periodic reports the information listed in Section
1503(a) of the Act and certain additional disclosure designed to
provide context for such information.
The proposed rules would require issuers that have matters to
report in accordance with Section 1503(a) to include brief disclosure
in the body of the periodic report noting that they have mine safety
violations or other regulatory matters to report in accordance with
Section 1503(a), and that the required information is included in an
exhibit to the filing. The exhibit would include the detailed
disclosure about specific violations and regulatory matters required by
Section 1503(a) as implemented in the proposed rules. The Proposing
Release noted our view that this approach would facilitate access to
the information about detailed mine safety matters without
overburdening the traditional Exchange Act reports with extensive new
disclosures.
We did not propose any particular presentation requirements for the
new disclosure, although the Proposing Release encouraged issuers to
use tabular presentations whenever possible, if to do so would
facilitate investor understanding.
[[Page 81766]]
b. Comments on the Proposed Amendments
A broad spectrum of commentators supported the Commission's
proposal to require the information to be presented in an exhibit to
the periodic report, with brief disclosure in the body of the report
noting that the issuer has mine safety matters to report and referring
to the required exhibit.\56\ We did not receive any comments opposing
this approach, although two commentators requested that certain
information, such as all fatal accidents or receipt of notice that a
mine has a pattern of violations, be required to be included in the
body of the periodic report so that investors would be made aware of
significant events without looking to the exhibit.\57\
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\56\ See letters from AFL-CIO, AngloGold, Chevron Corporation
(``Chevron''), Cleary, Freeport-McMoRan, Estess, NMA, NYSBA, Rio
Tinto and UMWA.
\57\ See letters from AFL-CIO and UMWA.
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The Proposing Release requested comment on whether it would be
preferable, and consistent with Section 1503, to provide for annual
reporting only, instead of requiring the disclosure in every periodic
report. Although a few commentators stated a belief that annual
reporting would be preferable to quarterly reporting,\58\ generally the
commentators agreed that Section 1503(a) requires the mine safety
disclosures to be included in each periodic report filed with the
Commission.\59\
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\58\ See, e.g., letters from Chevron and NSSGA. One commentator
suggested that the Form 10-Q reporting requirement could be met by
allowing issuers to incorporate by reference the required
information from MSHA's data retrieval system and provide specific
instructions as to how to access the information. See letter from
Freeport-McMoRan.
\59\ See, e.g., letters from Chevron, Estess and NMA.
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We requested comment on whether the information required by Section
1503 should be included in registration statements, in addition to the
periodic reporting requirement. Many commentators stated that the
disclosure should not be included in registration statements, noting
that Section 1503 specifies only that the disclosure is required in
periodic reports.\60\ However, two commentators stated their view that
the disclosure should be required in registration statements.\61\ On a
related note, although we did not specifically request comment on the
topic, we received a small number of comments expressing a view on
whether the disclosure required under Section 1503(a) and the new rules
should be filed with the Commission or instead deemed to be furnished,
not filed.\62\ Commentators who argued for the information to be
``furnished'' asserted that, because in their view the Section 1503
disclosure requirements are not aimed at providing investors with
information material to investment decisions, Exchange Act Section 18
should not apply, the Section 1503 information should not be
incorporated into any Securities Act filing, and the officer
certifications required by Exchange Act Rules 13a-14 and 15d-14 should
not extend to the Section 1503 disclosures.\63\ However, other
commentators expressed their view that information about health and
safety risks related to mines operated by issuers is material to
investors.\64\
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\60\ See letters from AngloGold, Cleary, DGS Law, NMA, NYSBA and
Rio Tinto.
\61\ See letters from EARTHWORKS and Estess.
\62\ See letters from EARTHWORKS, SIF and Trillium (filed); and
Cleary, NYSBA (furnished).
\63\ See, e.g., letter from NYSBA.
\64\ See letters from SIF and Trillium.
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Some commentators approved of the flexibility of the proposed
rules, which did not specify any particular presentation requirements
for the new disclosure and permitted each issuer the flexibility to
adopt a presentation it believes is appropriate for its disclosure.\65\
An equal number of commentators, however, expressed a preference for
requiring a specific tabular presentation.\66\ One commentator stated
that a specific tabular presentation would more readily allow an
investor to compare results from different owners or operators and
individual mines.\67\ Another commentator requested that we provide an
example of an acceptable presentation or format, stating that a
specific tabular presentation format would be helpful to ensure the
required information is presented in the correct form.\68\
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\65\ See letters from AngloGold, Cleary, IMA-NA, NMA and WMA.
\66\ See letters from Estess, NSSGA, Rio Tinto, SIF and
Trillium.
\67\ See letter from Rio Tinto.
\68\ See letter from Chevron.
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Commentators generally were of the view that the Commission should
not require the information to be provided in an interactive data
format.\69\ Among the reasons cited for this view was that requiring
interactive data could make the reporting more complex and add costs to
the system.\70\ Another commentator noted its view that the purpose of
the Commission's existing XBRL rules is to facilitate financial
analysis by investors, and therefore asserted that requiring the
Section 1503 information, which is non-financial in nature, to be
submitted in interactive data format would not be consistent with this
purpose.\71\ A few commentators, however, expressed a preference that
the disclosure be tagged in XBRL.\72\
---------------------------------------------------------------------------
\69\ See letters from AngloGold, Chevron, Cleary, DGS Law,
Estess, NMA, NSSGA and Rio Tinto.
\70\ See letter from Estess.
\71\ See letter from AngloGold.
\72\ See letters from AFL-CIO, SIF, Trillium and UMWA.
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c. Final Rule
After considering comments received, we are adopting the final
rules substantially as proposed, with minor technical changes. We are
amending Form 10-Q to add new Item 4 to Part II and Form 10-K to add
new Item 4 to Part I, which would require the information required by
new Items 104 and 601(b)(95) of Regulation S-K; Form 20-F to add new
Item 16H; and Form 40-F to add new Paragraph (16) of General
Instruction B. As discussed in more detail below, the disclosure is
required to be provided in each periodic report.\73\
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\73\ See Section II.A.3 below for a discussion of time periods
covered.
---------------------------------------------------------------------------
As proposed, the amendments will require issuers that have matters
to report in accordance with Section 1503(a) to include brief
disclosure in Part II of Form 10-Q, Part I of Form 10-K and Forms 20-F
and 40-F noting that they have mine safety violations or other
regulatory matters to report in accordance with Section 1503(a), and
that the required information is included in an exhibit to the filing.
The exhibit would include the detailed disclosure about specific
violations and regulatory matters required by Section 1503(a) as
implemented in our new rules. Many issuers have already implemented
this approach in their periodic reports that contain the disclosure
required under Section 1503(a). Consistent with the proposal, the final
rule does not require disclosure in the body of the periodic report of
certain information, such as all fatal accidents or receipt of notice
that a mine has a pattern of violations.\74\ We do not believe it is
necessary to require this additional disclosure in order to implement
Section 1503; and we reiterate, as noted in the Proposing Release, that
in the event that mine safety matters raise concerns that should be
addressed in other parts of a periodic report, such as risk factors,
the business description, legal proceedings or management's discussion
and analysis, inclusion of this new disclosure would
[[Page 81767]]
not obviate the need to discuss mine safety matters in accordance with
other rules as appropriate.
---------------------------------------------------------------------------
\74\ We note that under Section 1503(b), receipt of a notice
from MSHA that a mine has a pattern of violations is a triggering
event that would require disclosure on Form 8-K within four business
days of receipt of the notice, as reflected in the new Form 8-K item
we are adopting today.
---------------------------------------------------------------------------
The amended rules, as proposed, do not specify any particular
presentation requirements for the new disclosure, but we continue to
encourage issuers to use tabular presentations whenever possible if to
do so would facilitate investor understanding. Many issuers are
currently providing the disclosure required by Section 1503(a) in
tabular format in their periodic reports. We agree with commentators
who suggested that the Commission's provision of an example of a
possible tabular presentation may encourage uniformity and
comparability of disclosures. After considering the comments received
and examining current disclosure practices, we are including the below
example of a potential tabular presentation. However, we note that
issuers are free to present the required information in any
presentation they believe is appropriate for the disclosure.
[GRAPHIC] [TIFF OMITTED] TR28DE11.008
The use of footnotes, accompanying narrative disclosure or
additional tables may also help to clarify information provided, as
appropriate. For example, issuers choosing to use a tabular
presentation similar to the one above may provide the additional detail
described below that our final rules require about types of legal
actions \75\ in footnotes, accompanying narrative disclosure or an
additional table.
---------------------------------------------------------------------------
\75\ See new Item 104(a)(3) of Regulation S-K; Item 16H(c) of
Form 20-F; Paragraph 16(c) of General Instruction B of Form 40-F;
and the discussion in Section II.A.4.d(3) below.
---------------------------------------------------------------------------
We are not adopting a requirement to provide this information in
interactive data format. Section 1503 does not require the disclosure
to be submitted in interactive format. After considering the comments
received, we believe that the added costs of imposing such a
requirement would likely not be justified by the potential benefits to
investors of having access to the information in interactive format.
The final rules require the disclosure in each periodic report
filed with the Commission, and such disclosure will be considered
``filed,'' not ``furnished.'' We believe that this approach is
consistent with the statutory language of Section 1503--which provides
that an issuer must ``include, [the required disclosure] in each
periodic report filed with the Commission.'' Therefore, as is the case
with other disclosure filed as part of a periodic report, Section 18 of
the Exchange Act will apply and the disclosure is encompassed by the
Exchange Act Rule 13a-14 and 15d-14 certifications. In addition, if the
issuer files a Securities Act registration statement (such as Form S-3)
that incorporates by reference its periodic reports, the disclosure
included in Exchange Act reports in accordance with the new rules will
be incorporated by reference.
3. Time Periods Covered
Section 1503(a) of the Act states that each periodic report must
include disclosure ``for the time period covered by such report.''
a. Proposed Amendments
We proposed that each Form 10-Q would be required to include the
required disclosure for any orders or citations received, penalties
assessed, legal actions initiated or mining-related fatalities that
occurred during the quarter covered by the report.\76\ We also proposed
that each Form 10-K would be required to include disclosure covering
both the fourth quarter of the issuer's fiscal year and cumulative
information for the entire fiscal year. For each of Forms 20-F and 40-
F, the disclosure would be required for the issuer's fiscal year.
---------------------------------------------------------------------------
\76\ As noted in Sections II.A.4.b(1) and II.A.4.d(1) below, we
also proposed to require disclosure of the total amounts of
assessments of penalties outstanding as of the last day of the
quarter and of any developments material to previously reported
legal actions that occur during the quarter.
---------------------------------------------------------------------------
In addition, the Proposing Release noted that, based on the
language of Section 1503(a) of the Act, the proposed rule would not
allow issuers to exclude information about orders or citations that
were received during the time period covered by the report but
subsequently were dismissed or reduced. The proposed rules did not
prohibit the inclusion of additional information, such as an
explanation that certain orders or citations were dismissed or reduced.
b. Comments on the Proposed Amendments
There was support from commentators for the proposal to require an
annual report on Form 10-K to include disclosures for orders,
citations, assessments, legal actions and fatalities for the fourth
quarter and also on an aggregate basis for the whole year.\77\ Some of
these commentators stated that it is important for investors to learn
of trends in order to understand material changes in a mine's health
and safety record, and that requiring the information for both the
fourth quarter and the whole year would help reveal such trends.\78\
However, other commentators expressed concerns about this aspect of the
proposed rule.\79\ These commentators argued that requiring issuers to
include both fourth quarter and annual information would be unnecessary
because to do so would not provide investors with additional
significant information.\80\ Some of these commentators asserted that
the disclosure in the Form 10-K should cover only the fiscal year.\81\
Others preferred that the disclosure cover only the fourth quarter,
which would provide the information disclosed on Form 10-K in a
comparable period to the quarterly report on Form 10-Q.\82\
---------------------------------------------------------------------------
\77\ See letters from AFL-CIO, EARTHWORKS, Estess, SIF, Trillium
and UMWA.
\78\ See letters from AFL-CIO and UMWA.
\79\ See letters from Chevron, Cleary, DGS Law, Freeport-
McMoRan, and NMA. NYSBA and Rio Tinto.
\80\ See, e.g., letter from Freeport-McMoRan.
\81\ See letters from Chevron, Freeport-McMoRan and Rio Tinto.
\82\ See letters from Cleary, DGS Law, NMA and NYSBA.
---------------------------------------------------------------------------
With respect to the disclosure of orders or citations that are
dismissed or
[[Page 81768]]
reduced in severity below the level that triggers disclosure under
Section 1503(a), the comments were mixed. Many of the commentators
supported the Commission's proposal that issuers should not be allowed
to exclude such orders or citations from the disclosure.\83\ One
commentator stated that it would be simpler for the issuer to report
all orders and citations received, rather than taking on the burden of
reviewing the information at a later date to remove those that were
reduced or dismissed. This commentator also noted that MSHA's summary
data does not account for dismissals, and raised a concern that
allowing issuers to omit dismissed orders and citations could result in
confusion for those who refer to MSHA's site to compare the
information.\84\
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\83\ See letters from AFL-CIO, AngloGold, CalPERS, CalSTRS,
Chevron, EARTHWORKS, J. Estess, SIF, Trillium and UMWA.
\84\ See letter from Chevron.
---------------------------------------------------------------------------
On the other hand, other commentators requested that the final
rules allow issuers to exclude from disclosure orders or citations that
have been subsequently dismissed or reduced below a reportable level
prior to filing the periodic report.\85\ One commentator asserted that
such an approach would be consistent with the purposes of Section 1503,
which the commentator characterized as providing accurate disclosure of
violations that continue to be asserted or have been adjudicated,
rather than requiring disclosure of matters that the FMSHRC has
dismissed or reduced below a reportable level.\86\ Another commentator
noted that vacated citations are removed entirely from MSHA's data
retrieval system.\87\
---------------------------------------------------------------------------
\85\ See letters from Barrick Gold, DGS Law, Freeport-McMoRan,
NMA, NSSGA and Rio Tinto.
\86\ See letter from Freeport-McMoRan.
\87\ See letter from DGS Law.
---------------------------------------------------------------------------
Although comments were mixed on the disclosure of dismissed or
reduced orders or citations, most of the commentators supported the
Commission's approach of permitting issuers to include additional
information and disclosures, such as disclosure of orders or citations
that the issuer is contesting or annotated disclosure providing
information about the status of such orders or citations.\88\
---------------------------------------------------------------------------
\88\ See letters from AngloGold, Barrick Gold, CalPERS, CalSTRS,
Chris Barnard (``Barnard''), Estess, NYSBA, Portland Cement
Association (``PCA''), SIF, Trillium and UMWA.
---------------------------------------------------------------------------
c. Final Rule
We are adopting the final rule with some modifications from the
proposal. Consistent with the proposal, the final rule requires each
Form 10-Q to include the required disclosure for the quarter covered by
the report. For each of Forms 20-F and 40-F, the disclosure is required
for the issuer's fiscal year. Similarly, in a change from the proposal,
the final rule requires each Form 10-K to include disclosure of the
information for the fiscal year only, not also for the fourth quarter.
We are persuaded by commentators that requiring information about
both the fourth quarter and the entire year in the Form 10-K would add
incrementally to the burden of the rule, is not required by the Act,
and may not add significant useful information to the report. We
believe the approach we are adopting is consistent with the Act, which
requires disclosure in each periodic report ``for the time period
covered by the report,'' because the Form 10-K covers the fiscal year.
While requiring both full year and fourth quarter data might provide
some incremental additional useful information, we do not believe it is
necessary to implement Section 1503 or that the benefits of the
additional disclosure would clearly justify the burden of preparing it.
Among issuers that have provided disclosure under the Act in their most
recent annual report on Form 10-K, practices were mixed, with some
providing the information for both the fourth quarter and the complete
fiscal year, some providing the information for the complete fiscal
year, and a minority providing the information for only the fourth
quarter. Although we acknowledge that certain limited information is
currently reported for the fourth quarter only in Form 10-K, we believe
that the requirement to provide full-year information in the Form 10-K
is more appropriate because it is consistent with the general Form 10-K
requirement to report results as of the issuer's fiscal year-end.\89\
We note that although the final rule requires disclosure covering the
fiscal year, issuers are permitted, but not required, to also
separately present the information for the fourth quarter.
---------------------------------------------------------------------------
\89\ See Articles 3 and 8 of Regulation S-X (17 CFR 210.3 and
210.8).
---------------------------------------------------------------------------
The final rule does not allow issuers to exclude information about
orders or citations that were received during the time period covered
by the report but subsequently dismissed, reduced or vacated.\90\
Although we understand that, because mine operators have the right to
contest orders or citations they receive through the administrative
process,\91\ there is a possibility an operator's challenge would
result in dismissal of the order or citation or in a reduction in the
severity of the order or citation below the level that triggers
disclosure under Section 1503(a), we believe the language of Section
1503(a) of the Act dictates that all orders or citations received from
MSHA be disclosed. However, as supported by most commentators, the rule
does not prohibit the inclusion of additional disclosure with regard to
the status of orders or citations received. As noted in the Proposing
Release, we would expect that issuers will include disclosure that
complies with our existing disclosure requirements when providing any
such information.
---------------------------------------------------------------------------
\90\ The final rule also does not allow issuers to exclude
information about orders or citations that it is contesting. See the
detailed discussion of this topic under Section II.A.4.b below.
\91\ See 30 U.S.C. 815(d).
---------------------------------------------------------------------------
4. Required Disclosure Items
Section 1503(a) of the Act includes a list of items required to be
disclosed in periodic reports. We proposed that those items be
reiterated in proposed Item 106 of Regulation S-K.\92\ As discussed in
more detail below, we also proposed instructions to certain of the
disclosure items specified in Section 1503(a) to clarify the scope of
the disclosure we would expect issuers to provide in order to comply
with the statute's requirements and proposed one additional disclosure
item not required by the Act. We discuss each proposed disclosure item
below. Those disclosure items on which we received little or no comment
are discussed at the end of this section.
---------------------------------------------------------------------------
\92\ In this release, we reference proposed Item 106 of
Regulation S-K when discussing the proposed disclosure requirements,
but note that the same analyses apply to the corresponding
provisions in proposed Item 16J of Form 20-F and proposed Paragraph
(18) of General Instruction B of Form 40-F, which are identical in
all respects. The same approach applies to the references in this
release to the final rules we are adopting as Item 104 of Regulation
S-K, Item 16H of Form 20-F and Paragraph (16) of General Instruction
B of Form 40-F.
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a. The total number of violations of mandatory health or safety
standards that could significantly and substantially contribute to the
cause and effect of a coal or other mine safety or health hazard under
Section 104 of the Mine Act for which the operator received a citation
from MSHA.
(1) Proposed Amendments
Section 1503(a)(1)(A) of the Act references violations that could
``significantly and substantially contribute to the cause and effect of
a coal or other mine safety or health hazard under section 104'' of the
Mine Act. Section 104 of the Mine Act requires MSHA inspectors to issue
various citations and orders for violations of health and safety
[[Page 81769]]
standards.\93\ A violation of a mandatory safety standard that is
reasonably likely to result in a reasonably serious injury or illness
under the unique circumstance contributed to by the violation is
referred to by MSHA as a ``significant and substantial'' violation
(commonly called an ``S&S'' violation).\94\ In writing each citation or
order, the MSHA inspector determines whether the violation is ``S&S''
or not.\95\ The MSHA data retrieval system currently provides
information about all citations and orders issued, and notes which of
those citations or orders are ``S&S.'' \96\
---------------------------------------------------------------------------
\93\ 30 U.S.C. 814.
\94\ Secretary of Labor v. Mathies Coal Company, 6 FMSHRC 1
(January 1984). See also MSHA Program Policy Manual February 2003
(Release I-13) Vol. 1, p.21, located at http://www.msha.gov/regs/complian/ppm/PDFVersion/PPM%20Vol%20I.pdf (``MSHA Program Policy
Manual Vol. 1'') which provides guidelines for interpreting Section
104(d)(1) and (e)(1) of the Mine Act [30 U.S.C. 814(d)(1) and
(e)(1)]. In determining whether conditions created by a violation
could significantly and substantially contribute to the cause and
effect of a mine safety or health hazard, inspectors must determine
whether there is an underlying violation of a mandatory health or
safety standard, whether there is a discrete safety or health hazard
contributed to by the violation, whether there is a reasonable
likelihood that the hazard contributed to will result in an injury
or illness, and whether there is a reasonable likelihood that the
injury or illness in question will be of a reasonably serious
nature. Id.
\95\ MSHA Program Policy Manual Vol. 1, p. 23.
\96\ The MSHA data retrieval system can be accessed at http://
www.msha.gov/drs/drshome.HTM. Vacated citations and orders are
removed from the data retrieval system.
---------------------------------------------------------------------------
The proposed rules would require disclosure under this item of all
citations received under Section 104 of the Mine Act that note an S&S
violation. We requested comment on whether the final rules should
instead require disclosure of all citations received under Section 104.
(2) Comments on the Proposed Amendments
Most commentators supported the proposal to limit the required
disclosure to S&S violations.\97\ Commentators stated that such an
approach is consistent with the explicit language of the Act, and
asserted that expanding the requirement to all violations under Section
104 of the Mine Act would not be useful to investors and could detract
from the information required by the Act.\98\ However, a few
commentators expressed the view that all Section 104 violations should
be disclosed in order to provide full disclosure to investors.\99\
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\97\ See letters from AFL-CIO, AngloGold, Chevron, Cleary, NMA,
NYSBA, PCA, Rio Tinto and UMWA.
\98\ See letters from NMA and Rio Tinto.
\99\ See letters from Estess, SIF and Trillium.
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(3) Final Rule
We are adopting the provision as proposed. We continue to believe
that the language of Section 1503(a)(1)(A) referencing violations that
could ``significantly and substantially contribute to the cause and
effect of a coal or other mine safety or health hazard under section
104'' was intended to elicit disclosure only of citations received
under Section 104 of the Mine Act that note an S&S violation. We agree
with commentators that expanding the disclosure requirement to include
non-S&S violations under Section 104 of the Mine Act would expand the
scope of the disclosure beyond that called for by Section 1503 of the
Act and likely would not result in additional useful information being
provided to investors that would justify the increased burdens on
issuers.
b. The total dollar value of proposed assessments from MSHA under
the Mine Act.
(1) Proposed Amendments
Section 1503(a)(1)(F) requires issuers to disclose, for each mine,
the ``total dollar value of proposed assessments from [MSHA] under the
[Mine] Act.'' The issuance of a citation or order by MSHA typically
results in the assessment of a civil penalty against the mine operator.
Penalties are assessed according to a formula that considers several
factors, including a history of previous violations, size of operator's
business, negligence by the operator, gravity of the violation,
operator's good faith in trying to correct the violation promptly and
the effect of the penalty on the operator's ability to stay in
business.\100\ When any civil penalty is proposed to be assessed by
MSHA, the mine operator has 30 days following receipt of the notice of
proposed penalty to pay the penalty or file a contest and request a
hearing before an FMSHRC administrative law judge.\101\
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\100\ 30 U.S.C. 815(b)(1)(B).
\101\ See 30 CFR 100.7. If the proposed penalty is not paid or
contested within 30 days of receipt, the proposed penalty becomes a
final order of the FMSHRC and is not subject to review by any court
or agency.
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The proposed rules would require that issuers disclose the total
dollar amount of assessments of penalties proposed by MSHA during the
time period covered by the report. Under the proposals, the disclosure
would also include the cumulative total of all proposed assessments of
penalties outstanding as of the last day of the period covered by the
report. As proposed, this disclosure would include any dollar amounts
of penalty assessments proposed during the time period that the issuer
is contesting with the FMSHRC, although issuers would not be prohibited
from including additional information noting that certain proposed
assessments of penalties are being contested.
(2) Comments on the Proposed Amendments
Some commentators approved of the proposal to require the total
dollar amount of proposed penalties assessed by MSHA during the time
period covered by the report as well as the cumulative total of all
proposed assessments of penalties outstanding as of the date of the
report.\102\ However, several other commentators expressed concerns
about the proposal, in particular about the proposed requirement to
disclose cumulative amounts of penalties outstanding as of the date of
the report.\103\ Commentators noted that such disclosure is not
required by Section 1503 and asserted that such a requirement would go
beyond the scope of the Act.\104\ Some commentators expressed concern
that the requirement could lead to inquiries to reconcile period-to-
period changes,\105\ and asserted that the disclosure would not
necessarily be indicative of an issuer's safety record during the
reporting period, but rather the issuer's decisions to pay or contest
assessments.\106\
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\102\ See letters from AFL-CIO, EARTHWORKS, SIF, Trillium and
UMWA.
\103\ See letters from Chevron, Cleary, DGS Law, Freeport-
McMoRan, NMA and NYSBA.
\104\ See, e.g., letters from Cleary, Freeport-McMoRan, NMA and
Rio Tinto.
\105\ See letters from Chevron and DGS Law.
\106\ See letters from Chevron and Cleary.
---------------------------------------------------------------------------
Several commentators agreed with the proposal that issuers should
be required to include in the total dollar amount reported any proposed
assessments of penalties that are being contested.\107\ Some
commentators expressed a concern that allowing issuers to omit
contested matters until they are deemed final could provide an
incentive for operators to contest MSHA enforcement actions, which they
believe would be contrary to public policy and could increase MSHA's
backlog of pending cases.\108\ Other commentators expressed concerns
about this proposed requirement, and requested that the final rules
permit issuers to exclude proposed assessments of penalties that
[[Page 81770]]
are being contested.\109\ Among the reasons asserted in support of such
an approach is the commentators' view that requiring issuers to include
proposed assessments of penalties that are being contested in the total
dollar amount reported could, in essence, amount to denial of due
process for the issuer because reporting such information has the
potential to cause reputational harm for the issuer before resolution
of the matter has been reached.\110\
---------------------------------------------------------------------------
\107\ See letters from AFL-CIO, AngloGold, CalPERS, CalSTRS,
Chevron, EARTHWORKS, Estess, SIF, Trillium and UMWA.
\108\ See letters from AFL-CIO and UMWA.
\109\ See letters from Barrick Gold, NMA and Rio Tinto.
\110\ See letters from Barrick Gold and NMA.
---------------------------------------------------------------------------
Commentators generally agreed that if contested amounts are
required to be reported, issuers should be permitted to note the
contested amounts.\111\ Some of these commentators asserted that
contested amounts should be permitted to be reported separately.\112\
Others agreed with the Commission's proposal to require disclosure of
one total dollar amount that encompasses both contested and uncontested
amounts, but were of the view that issuers should be permitted to
provide additional disclosure to explain contested amounts if they
choose.\113\
---------------------------------------------------------------------------
\111\ See letters from AFL-CIO, AngloGold, Chevron, NMA, Rio
Tinto and UMWA.
\112\ See letters from AngloGold and NMA.
\113\ See letters from AFL-CIO, Chevron, Rio Tinto and UMWA.
---------------------------------------------------------------------------
We received two comment letters suggesting that the disclosure
required by this item should be limited to those penalties proposed for
the type of violations required to be disclosed under Section 1503(a),
rather than for all penalties proposed during the time period.\114\
These commentators stated their view that requiring disclosure of all
penalties--not only those that relate to actions that have to be
reported under Section 1503--would go beyond the requirements of the
Act and increase the burdens on issuers in preparing this disclosure.
---------------------------------------------------------------------------
\114\ See letters from Oxford Resources Partners LP and Rio
Tinto.
---------------------------------------------------------------------------
(3) Final Rule
We are adopting a final rule that provides that disclosure is
required in each periodic report of the total dollar amount of
assessments proposed by MSHA during the period covered by the report.
Therefore, each Form 10-Q is required to include the dollar amount of
assessments proposed by MSHA during the quarter, while the Form 10-K,
Form 20-F and Form 40-F must include the dollar amount of assessments
proposed by MSHA during the fiscal year.
We are not adopting the proposed requirement to also disclose the
cumulative total of all assessments outstanding as of the last day of
the reporting period. After considering the comments received, we are
persuaded that expanding the disclosure requirement in this manner
beyond the scope of the Act is not necessary and likely would not
result in additional useful information being provided to investors
that would justify the increased burden on issuers. We note that the
cumulative total of all outstanding assessments as of the last day of
the reporting period is not mandated by Section 1503 of the Act, which
requires, ``for the time period covered by the report * * * the total
dollar value of proposed assessments from the Mine Safety and Health
Administration under [the Mine Act].'' In addition, we believe the
final rule is consistent with the information many issuers are
currently providing in their periodic reports to comply with the Act.
The final rule requires disclosure of the amount of all assessments
of penalties proposed by MSHA during the reporting period relating to
any type of violation, and regardless of whether such proposed
assessments are being contested or were dismissed or reduced prior to
the date of filing of the periodic report. We acknowledge commentators'
concerns about the potential for reputational harm from disclosing
proposed assessments before they are final, but we believe that the
language of Section 1503 requires disclosure of all such proposed
assessments. In addition, we note that information about proposed
assessments that are being contested is already available on MSHA's Web
site. We note that issuers may include additional disclosure explaining
the status of these orders, citations and assessments. The final rule
adds an instruction clarifying that contested amounts may neither be
omitted from the disclosure nor reported separately, but that issuers
are permitted to note the contested amounts and provide additional
disclosure.
c. The total number of mining-related fatalities.
(1) Proposed Amendments
Section 1503(a)(1)(G) of the Act requires issuers to disclose, for
each mine, ``the total number of mining-related fatalities.'' Under the
proposed rules, the requirement to disclose mining-related fatalities
would apply to fatalities at mines that are subject to the Mine Act and
not to mining-related fatalities in other jurisdictions. As proposed,
issuers would report all such fatalities that are required to be
disclosed under MSHA regulations, unless the fatality is determined to
be ``non-chargeable'' to the mining industry.\115\
---------------------------------------------------------------------------
\115\ See Section II.A.4.f of the Proposing Release [75 FR 80374
at 80379] for a discussion of MSHA's process for determining whether
a fatality is ``non-chargeable'' to the mining industry.
---------------------------------------------------------------------------
Comments on the Proposed Amendments
Several commentators supported the proposal to require disclosure
of mining-related fatalities only at mines that are subject to the Mine
Act.\116\ Many of these commentators noted that this interpretation is
consistent with the scope of Section 1503(a), which by its terms
applies to mines that are subject to the Mine Act.\117\ Commentators
also raised concerns that if the disclosure requirement were to be
expanded to cover mining-related fatalities outside of the United
States, it would be difficult to apply a standard for what constitutes
a ``mining-related'' fatality in non-U.S. jurisdictions.\118\
---------------------------------------------------------------------------
\116\ See letters from AngloGold, Barrick Gold, Cleary, Estess,
NMA, NYSBA and Rio Tinto.
\117\ See letters from AngloGold, Cleary, NMA, NYSBA and Rio
Tinto.
\118\ See letters from AngloGold, Estess, NMA and Rio Tinto.
---------------------------------------------------------------------------
Other commentators stated that reporting on mining-related
fatalities should apply to all mines operated by an issuer (or a
subsidiary of the issuer) that files periodic reports with the
Commission, regardless of the location of the issuer's mines
worldwide.\119\ Two of these commentators asserted that such
information is material to investors and to the issuer.\120\ The
majority of the commentators who recommended applying the disclosure
requirement to all mining-related fatalities regardless of the location
of the mine also recommended that the MSHA framework should be applied
to non-U.S. mining-related fatalities for reporting purposes.\121\
---------------------------------------------------------------------------
\119\ See letters from AFL-CIO, EARTHWORKS, SIF, Trillium and
UMWA.
\120\ See letters from SIF and Trillium.
\121\ See letters from AFL-CIO, Estess, SIF, Trillium and UMWA.
---------------------------------------------------------------------------
Several commentators concurred with the Commission's proposal to
require disclosure of all fatalities required to be reported pursuant
to MSHA regulations, unless the fatality has been determined to be
``non-chargeable'' to the mining industry.\122\ Two commentators stated
that an instruction should be added to the rule specifying this
interpretation of the disclosure requirement.\123\ Two commentators
also recommended that we add an instruction to the rule clarifying that
fatalities are not required
[[Page 81771]]
to be disclosed while under review by MSHA's Fatality Review Committee
if the issuer has a good faith belief that the fatality is non-
chargeable, and that if the fatality is ultimately determined to be
chargeable, the issuer would include it in its next periodic
report.\124\ Similarly, other commentators asserted that it would be
appropriate to require disclosure only of fatalities that, as of the
last day of the reporting period, have been determined to be
``chargeable'' by MSHA's Fatality Review Committee.\125\
---------------------------------------------------------------------------
\122\ See letters from AFL-CIO, Barrick Gold, Cleary, DGS Law,
Estess, NYSBA, PCA, Rio Tinto and UMWA.
\123\ See letters from Cleary and Estess.
\124\ See letters from Cleary and DGS Law.
\125\ See letters from AngloGold, Chevron, MNA, NSSGA and Rio
Tinto.
---------------------------------------------------------------------------
Other commentators stated that all fatalities should be required to
be disclosed, whether chargeable or non-chargeable,\126\ but noted that
issuers should be permitted to explain non-chargeable incidents in
their reports.\127\
---------------------------------------------------------------------------
\126\ See letters from EARTHWORKS, SIF and Trillium.
\127\ See letters from SIF and Trillium.
---------------------------------------------------------------------------
(3) Final Rule
After consideration of the comments received, we are adopting the
final rule as proposed, with an added instruction specifying that
fatalities determined by MSHA not to be mining-related may be excluded.
The final rule requires disclosure of mining-related fatalities at
mines that are subject to the Mine Act. Although we considered the
views of those commentators who believe the disclosure requirement
should encompass mines in all jurisdictions, we continue to believe
that this disclosure requirement encompasses mining-related fatalities
only at mines that are subject to the Mine Act. As we noted in the
Proposing Release, Section 1503(a)(1)(G) is the only provision of the
Act that does not specifically reference the Mine Act, a specific
notice, order or citation from MSHA, or the FMSHRC, but we are of the
view that interpreting Section 1503 as limited to mines that are
subject to the provisions of the Mine Act is appropriate because it
will result in consistency among reporting obligations.
MSHA regulations require mine operators to report to MSHA all
fatalities that occur at a mine.\128\ MSHA has also established
policies and procedures for determining whether a fatality is unrelated
to mining activity (commonly referred to as ``non-chargeable'' to the
mining industry).\129\ Since the MSHA regulations provide a
comprehensive scheme of regulation, reporting and assessment for
mining-related fatalities, we believe the disclosure required by this
section is intended to include all fatalities that are required to be
disclosed under MSHA regulations, unless the fatality is determined to
be ``non-chargeable'' to the mining industry. The final rules specify
that disclosure is required of all fatalities, unless the fatality is
determined to be ``non-chargeable.'' We appreciate the objection raised
by some commentators about requiring reporting of fatalities that are
under review by MSHA's Fatality Review Committee if the issuer has a
good faith belief that the fatality is non-chargeable, but we believe
it would be more consistent with Section 1503, our treatment of other
disclosure items under Section 1503 (such as the reporting of contested
matters under the final rules discussed above) and MSHA's reporting of
fatalities \130\ to require reporting of all fatalities, other than
those that have been determined by MSHA to be non-chargeable. Issuers
that wish to provide additional information about fatalities, such as
whether a fatality is under review by MSHA, are not prohibited from
doing so under the final rules.
---------------------------------------------------------------------------
\128\ See 30 CFR 50.10 and 50.20.
\129\ See MSHA Accident/Illness Investigation Procedures
Handbook, Chapter 2 Release 1 (June 2011) p. 21 located at http://www.msha.gov/READROOM/HANDBOOK/PH11-I-1.pdf (``MSHA Accident/Illness
Handbook'').
\130\ We note that MSHA makes publicly available its reports of
non-chargeable mining deaths, which include the date of the
incident, the mine name and the name of the operating company on its
Web site. See http://www.msha.gov/Fatals/NonChargeables/NonChargeableFatalshome.asp.
---------------------------------------------------------------------------
d. Any pending legal action before the Federal Mine Safety and
Health Review Commission involving such coal or other mine.
(1) Proposed Amendments
Section 1503(a)(3) requires disclosure of ``[a]ny pending legal
action before the Federal Mine Safety and Health Review Commission
involving such coal or other mine.'' Under the proposed rules, any
legal actions before the FMSHRC involving a coal or other mine for
which the issuer or a subsidiary of the issuer is the operator would be
disclosed in the periodic report covering the time period during which
the legal action was initiated. As proposed, the rules would require
the information about pending legal actions to be updated in subsequent
periodic reports if there are developments material to the legal action
that occur during the time period covered by such report. As proposed,
the disclosure required by this item would include the date the pending
legal action was instituted and by whom (e.g., MSHA or the mine
operator), the name and location of the mine involved, and a brief
description of the category of order or citation underlying the
proceeding.
(2) Comments on the Proposed Amendments
We received comment letters supporting the proposal to require
disclosure about pending legal actions in the periodic report covering
the period in which the action was initiated, with updates in
subsequent reports for developments material to the pending
action.\131\ Certain commentators also stated that it was appropriate
to require contextual information for each pending legal action.\132\
---------------------------------------------------------------------------
\131\ See, e.g., letters from AFL-CIO, CalPERS, CalSTRS,
EARTHWORKS, Estess, SIF, Trillium and UMWA.
\132\ See letters from AFL-CIO, Estess, and UMWA.
---------------------------------------------------------------------------
However, other commentators raised concerns about the proposed
approach to this disclosure item.\133\ Commentators found both the
proposed updating requirement and the proposed requirement to include
contextual information about each pending legal action to be
problematic, noting that the language of Section 1503 does not require
such information.\134\ With respect to this disclosure, some
commentators supported a requirement to report the number of pending
legal actions,\135\ while others supported an alternative approach that
would require issuers to report the number of pending legal actions
initiated during the time period covered by the periodic report.\136\
One commentator expressed the view that it would be appropriate to
allow issuers to disclose the number of matters pending before the
FMSHRC, along with the number instituted and resolved in the reporting
period, with a general description of the types of matters.\137\
---------------------------------------------------------------------------
\133\ See letters from Chevron, Cleary, DGS Law, Freeport-
McMoRan, NMA, NSSGA and NYSBA.
\134\ See letters from Cleary, DGS Law, NMA and NYSBA.
\135\ See letters from Cleary and NMA.
\136\ See letters from Chevron and NSSGA.
\137\ See letter from Freeport-McMoRan.
---------------------------------------------------------------------------
Some commentators expressed concerns that a requirement to provide
updating information would result in voluminous disclosure, be overly
burdensome for issuers and potentially be complicated for users of the
information, because legal actions would likely overlap multiple
periods prior to resolution.\138\ Many
[[Page 81772]]
commentators also stated that the proposed requirement for disclosure
of contextual information for each pending legal action would be
voluminous and unhelpful, unnecessarily burdening both the issuer and
the user of the information.\139\ Commentators also noted that, due to
the strict statutory language, no materiality standard can be applied
to limit the number of legal actions that must be reported, and
therefore determining what constitutes a ``material'' development in a
case that may not be material to investors under our traditional
materiality analysis may be problematic for issuers.\140\
---------------------------------------------------------------------------
\138\ See, e.g., letters from Chevron (noting its preference
that disclosure be limited to pending legal actions initiated during
the reporting period, but suggesting that if updates are required,
they should be limited to aggregate information on final resolutions
reached during the reporting period), Cleary, DGS Law and NMA.
\139\ See letters from Chevron, Cleary, Freeport-McMoRan, NMA
and NSSGA.
\140\ See letters from DGS Law, Freeport-McMoRan and NMA.
---------------------------------------------------------------------------
(3) Final Rule
After considering the comments received on the proposed disclosure
requirement, we are adopting a final rule that requires issuers to
disclose, for each coal or other mine subject to the Mine Act, the
identity of the mine and the number of legal actions involving such
mine that were pending before the FMSHRC \141\ as of the last day of
the period covered by the periodic report, as well as the aggregate
number of legal actions instituted and the aggregate number of legal
actions resolved during the reporting period. Instead of the proposal
to require a brief description of the category of order or citation
underlying each proceeding, the final rule requires that the total
number of legal actions pending before the FMSHRC as of the last day of
the time period covered by the report be categorized according to the
type of proceeding, in accordance with the categories established in
the Procedural Rules of the FMSHRC.\142\ These categories are:
---------------------------------------------------------------------------
\141\ Other types of enforcement-related legal actions under the
Mine Act may occur in federal district court or courts of appeal
that do not involve FMSHRC at any stage. Although these legal
actions are not within the scope of the disclosure requirement, we
remind issuers of their obligation to report material legal
proceedings under other provisions of our rules.
\142\ See the Federal Mine Safety and Health Review Commission's
Procedural Rules, 29 CFR Part 2700 (``FMSHRC Procedural Rules'').
---------------------------------------------------------------------------
Contests of citations and orders, which typically are
filed prior to an operator's receipt of a proposed penalty assessment
from MSHA or relate to orders for which penalties are not assessed
(such as imminent danger orders under Section 107 of the Mine Act).
This category includes:
[cir] Contests of citations or orders issued under section 104 of
the Mine Act,
[cir] contests of imminent danger withdrawal orders under section
107 of the Mine Act, and
[cir] emergency response plan dispute proceedings (as required
under the Mine Improvement and New Emergency Response Act of 2006, Pub.
L. 109-236, 120 Stat. 493); \143\
---------------------------------------------------------------------------
\143\ See Subpart B of the FMSHRC Procedural Rules.
---------------------------------------------------------------------------
contests of proposed penalties, which are administrative
proceedings before the FMSHRC challenging a civil penalty that MSHA has
proposed for the violation contained in a citation or order; \144\
---------------------------------------------------------------------------
\144\ See Subpart C of the FMSHRC Procedural Rules.
---------------------------------------------------------------------------
complaints for compensation, which are cases under section
111 of the Mine Act that may be filed with the FMSHRC by miners idled
by a closure order issued by MSHA who are entitled to compensation;
\145\
---------------------------------------------------------------------------
\145\ See Subpart D of the FMSHRC Procedural Rules.
---------------------------------------------------------------------------
Complaints of discharge, discrimination or interference
under section 105 of the Mine Act, which cover:
[cir] Discrimination proceedings involving a miner's allegation
that he or she has suffered adverse employment action because he or she
engaged in activity protected under the Mine Act, such as making a
safety complaint, and
[cir] Temporary reinstatement proceedings involving cases in which
a miner has filed a complaint with MSHA stating that he or she has
suffered such discrimination and has lost his or her position; \146\
---------------------------------------------------------------------------
\146\ See Subpart E of the FMSHRC Procedural Rules. See also
``Guide to Commission Proceedings,'' available at http://www.fmshrc.gov/guides/englishguide.htm, Sections II.C and II.D.
---------------------------------------------------------------------------
Applications for temporary relief, which are applications
under section 105(b)(2) of the Mine Act for temporary relief from any
modification or termination of any order or from any order issued under
section 104 of the Mine Act (other than citations issued under section
104(a) or (f) of the Mine Act): \147\ and
---------------------------------------------------------------------------
\147\ See Subpart F of the FMSHRC Procedural Rules.
---------------------------------------------------------------------------
Appeals of judges' decisions or orders to the FMSHRC,
including petitions for discretionary review and review by the FMSHRC
on its own motion.\148\
---------------------------------------------------------------------------
\148\ See Subpart H of the FMSHRC Procedural Rules.
---------------------------------------------------------------------------
We are not adopting the proposal to require certain additional
information about the legal actions, such as the date the action was
instituted and by whom, the location of the mine, or the proposal that
would have required the information about legal actions to be updated
for material developments in subsequent periodic reports. We recognize
that this is a departure from the proposed requirement, but we agree
with commentators who pointed out that the rule as proposed required
information not necessary to implement Section 1503 and could result in
voluminous disclosure of limited informational value. We note that
Section 1503 calls for disclosure of ``[a]ny pending legal action
before the Federal Mine Safety and Health Review Commission involving
such coal or other mine'' but does not specify what information is
required to be disclosed in accordance with this disclosure item.
We believe the final rule satisfies the statutory language and will
provide users of this information with a clear picture of the extent
and nature of mine operators' involvement in legal actions. Further, we
believe that the requirement to provide the number of legal actions in
specified categories will provide consistency in the disclosure, and
provide users of this information with a general sense of the types of
legal actions involving mine operators. Because all documents filed
with the FMSHRC in these legal actions are served on all the involved
parties, we believe that this information about legal actions is
readily available to issuers. We do not believe that these requirements
impose significant additional burdens on issuers.
Issuers who wish to provide additional information about pending
legal actions are not prohibited from doing so under the final rules.
In addition, we note that Item 103 of Regulation S-K (Legal
Proceedings) continues to apply, so that to the extent a legal
proceeding is required to be disclosed under that item, disclosure and
updates for material developments would be required.
e. A brief description of each category of violations, orders and
citations reported.
(1) Proposed Amendments
Although not required by Section 1503 of the Act, the proposed
rules would require issuers to provide a brief description of each
category of violations, orders and citations reported so that investors
can understand the basis for the violations, orders or citations
referenced.
(2) Comments on the Proposed Amendments
Some commentators expressed the view that the information otherwise
provided as required by the Act would be sufficient without requiring
the brief
[[Page 81773]]
description of each category of violations, orders and citations
reported.\149\ Commentators particularly noted concerns about the
expansion of the disclosure requirement beyond what is set forth in
Section 1503.\150\ One commentator raised a concern that the
requirement would result in boilerplate language.\151\ Others noted
that investors who are interested in finding more detail and
descriptions of the information reported can find the information on
MSHA's Web site \152\ or in the Mine Act.\153\
---------------------------------------------------------------------------
\149\ See letters from NMA, Chevron, Cleary, IMA-NA and WMA.
\150\ See letters from Cleary, IMA-NA and WMA.
\151\ See letter from Cleary.
\152\ See letter from Chevron.
\153\ See letter from Cleary.
---------------------------------------------------------------------------
Several other commentators supported the proposal to require the
additional disclosure.\154\ Some commentators expressed the view that
this information would be useful to investors beyond the statistics
provided under Section 1503 because it would provide context that would
allow investors to weigh the significance of the reported
information.\155\ Three commentators suggested that clarification of
the requirement was needed, such as a generic description or glossary
developed by the Commission that could be used in each periodic
report.\156\ One commentator suggested that the basic descriptions
should be provided once a year with the Form 10-K, and not be required
to be included in every periodic report.\157\
---------------------------------------------------------------------------
\154\ See letters from AFL-CIO, DGS Law, EARTHWORKS, Estess,
NYSBA, SIF, Trillium and UMWA.
\155\ See letters from SIF and Trillium.
\156\ See letters from NMA and PCA. See also letter from Chevron
(stating its opposition to inclusion of the requirement, but
suggesting this approach as a potential alternative).
\157\ See letter from DGS Law.
---------------------------------------------------------------------------
(3) Final Rule
The final rules do not require a brief description of each category
of violations, orders and citations reported. After considering the
comments received, we believe that the disclosure that would be
elicited by the proposed requirement would not be useful enough to
investors to justify the expansion of the disclosure requirement beyond
the scope of Section 1503. We note that the information is not required
by Section 1503, and issuers, who have been providing the required
disclosure since the effective date of Section 1503, have generally not
been providing this information. However, issuers may provide
additional information in their periodic reports to the extent they
believe it would be useful to investors. In addition, we note that if
particular mine safety issues are material and required to be disclosed
under our other rules, then information about the nature of the
violation likely would be necessary to satisfy our other disclosure
requirements.
f. Other disclosure items specified in Section 1503(a).
In addition to the disclosure items discussed above, proposed Item
106 of Regulation S-K reiterated the language of Section 1503(a) with
respect to several other items required to be disclosed under the Act.
The Proposing Release did not request comment specifically on these
items. We did, however, receive two supporting comments on some of
these items, as discussed below. We are adopting these items as
proposed.
(1) Proposed Amendments
i. The total number of orders issued under Section 104(b) of the
Mine Act.
Section 1503(a)(1)(B) of the Act requires disclosure of ``the total
number of orders issued under section 104(b) of [the Mine Act].'' Under
our proposal, each issuer that is required under Section 1503(a) to
provide mine safety disclosure would be required to provide the total
number of orders issued under Section 104(b) of the Mine Act for each
coal or other mine for the time period covered by the report. Section
104(b) of the Mine Act covers violations that had previously been cited
under Section 104(a) that, upon follow-up inspection by MSHA, are found
not to have been totally abated within the prescribed time period,
which results in the issuance of an order requiring the mine operator
to immediately withdraw all persons (except certain authorized persons)
from the mine.
ii. The total number of citations and orders for unwarrantable
failure of the mine operator to comply with mandatory health and safety
standards under Section 104(d) of the Mine Act.
Under Section 104(d) of the Mine Act, an inspector issues a
citation if the inspector finds a violation of a mandatory health or
safety standard, and also finds that, while the conditions do not cause
imminent danger, the violation could significantly and substantially
contribute to the cause and effect of a safety or health hazard, and
that the violation is caused by an unwarrantable failure of the
operator to comply with the health and safety standards. If, in the
same inspection or an inspection within 90 days, an inspector finds
another violation of a mandatory health or safety standard and finds
such violation to also be caused by an unwarrantable failure of the
operator to comply with the health and safety standards, the inspector
issues an order requiring the mine operator to immediately withdraw all
persons (except certain authorized persons) from the mine. The proposed
rule would implement the Act's requirement to disclose these citations
and orders issued during the reporting period.
iii. The total number of flagrant violations under Section
110(b)(2) of the Mine Act.
Section 110(b)(2) of the Mine Act is a penalty provision that
provides that violations that are deemed to be ``flagrant'' may be
assessed a maximum civil penalty. The term ``flagrant'' with respect to
a violation means ``a reckless or repeated failure to make reasonable
efforts to eliminate a known violation of a mandatory health or safety
standard that substantially and proximately caused, or reasonably could
have been expected to cause, death or serious bodily injury.'' \158\
The proposed rule would implement the Act's requirement to disclose the
total number of flagrant violations under Section 110(b)(2) of the Mine
Act for the reporting period.
---------------------------------------------------------------------------
\158\ 30 U.S.C. 820(b)(2).
---------------------------------------------------------------------------
iv. The total number of imminent danger orders issued under Section
107(a) of the Mine Act.
An imminent danger order is issued under Section 107(a) of the Mine
Act if the MSHA inspector determines there is an imminent danger in the
mine. The order requires the operator of the mine to cause all persons
(except certain authorized persons) to be withdrawn from the mine until
the imminent danger and the conditions that caused such imminent danger
cease to exist. This type of order does not preclude the issuance of a
citation under Section 104 or a penalty under Section 110. The proposed
rule would implement the Act's requirement to disclose the total number
of imminent danger orders issued under Section 107(a) of the Mine Act
during the reporting period.
v. A list of mines for which the issuer or a subsidiary received
written notice from MSHA of a pattern of violations of mandatory health
or safety standards that are of such nature as could have significantly
and substantially contributed to the cause and effect of coal or other
mine health or safety hazards under Section 104(e) of the Mine Act.
If MSHA determines that a mine has a ``pattern'' of violations of
mandatory health or safety standards that are of such nature as could
have significantly and substantially contributed to the cause and
effect of coal or other mine health or safety hazards, under Section
[[Page 81774]]
104(e) of the Mine Act and MSHA regulations the agency is required to
notify the operator of the existence of such pattern. The proposed rule
would implement the Act's requirement to disclose the receipt of such
notices during the reporting period.
vi. A list of mines for which the issuer or a subsidiary received
written notice from MSHA of the potential to have such a pattern.
MSHA regulations state that MSHA will give the operator written
notice of the potential to have a pattern of violations of mandatory
health or safety standards that are of such nature as could have
significantly and substantially contributed to the cause and effect of
coal or other mine health or safety hazards under Section 104(e) of the
Mine Act.\159\ The proposed rule would implement the Act's requirement
to disclose the receipt of such notices during the reporting period.
---------------------------------------------------------------------------
\159\ See 30 CFR 104.4.
---------------------------------------------------------------------------
(1) Comments on the Proposed Amendments
We received two comments supporting the proposed requirements that
the total number of 104(b) orders, citations and orders for
unwarrantable failures, flagrant violations and imminent danger orders
be reported.\160\ We did not receive any comments on the proposed
requirements to disclose a list of mines that receive notice of a
pattern or potential pattern of violations.
---------------------------------------------------------------------------
\160\ See letters from AFL-CIO and UMWA.
---------------------------------------------------------------------------
(2) Final Rule
Consistent with the proposal, we are adopting final rules requiring
each issuer that is required under Section 1503(a) to provide mine
safety disclosure to provide, for each coal or other mine for the time
period covered by the report:
The total number of orders issued under Section 104(b) of
the Mine Act;
The total number of citations and orders for unwarrantable
failure of the mine operator to comply with mandatory health and safety
standards under Section 104(d) of the Mine Act;
The total number of flagrant violations under Section
110(b)(2) of the Mine Act;
The total number of imminent danger orders issued under
Section 107(a) of the Mine Act;
A list of mines for which the issuer or a subsidiary
received written notice from MSHA of a pattern of violations of
mandatory health or safety standards that are of such nature as could
have significantly and substantially contributed to the cause and
effect of coal or other mine health or safety hazards under Section
104(e) of the Mine Act; and
A list of mines for which the issuer or a subsidiary
received written notice from MSHA of a potential to have such a pattern
of violations of mandatory health or safety standards.
B. Form 8-K Filing Requirement
Section 1503(b) of the Act requires each issuer that is an
operator, or has a subsidiary that is an operator, of a coal or other
mine to report on Form 8-K the receipt of certain notices from
MSHA.\161\ We are adopting revisions to Form 8-K to add new Item 1.04
to implement this requirement.
---------------------------------------------------------------------------
\161\ Section 1503(b) of the Act.
---------------------------------------------------------------------------
2. Disclosure Requirements and Deadline
a. Proposed Amendments
We proposed to amend Form 8-K to add new Item 1.04, which would
require filing of Form 8-K within four business days of the receipt by
an issuer (or a subsidiary of the issuer) of:
An imminent danger order under Section 107(a) of the Mine
Act; \162\
---------------------------------------------------------------------------
\162\ See Section II.A.4.f.(1)iv. above for a description of an
imminent danger order issued under Section 107(a) of the Mine Act
[30 U.S.C. 817(a)].
---------------------------------------------------------------------------
Written notice from MSHA of a pattern of violations of
mandatory health or safety standards that are of such nature as could
have significantly and substantially contributed to the cause and
effect of coal or other mine health or safety hazards under Section
104(e) of the Mine Act; \163\ or
---------------------------------------------------------------------------
\163\ See Section II.A.4.f.(1)v. above for a description of the
written notice from MSHA regarding a pattern of violations under
Section 104(e) of the Mine Act [30 U.S.C. 814(e)].
---------------------------------------------------------------------------
Written notice from MSHA of the potential to have a
pattern of such violations.\164\
---------------------------------------------------------------------------
\164\ See Section II.A.4.f(1)vi. above for a description of the
written notice from MSHA of the potential to have a pattern of
violations under Section 104(e) of the Mine Act [30 U.S.C. 814(e)].
---------------------------------------------------------------------------
For each such triggering event, we proposed that new Item 1.04 of
Form 8-K require disclosure of the date of receipt of the order or
notice, the category of order or notice, and the name and location of
the mine involved.
b. Comments on the Proposed Amendments
The Proposing Release noted that the events that would trigger
filing under proposed Item 1.04 are also events that are required to be
disclosed in periodic reports under Section 1503(a) of the Act and our
proposed Item 106 of Regulation S-K. We received comment letters
supporting adoption of the rule as proposed, under which the orders and
notices that trigger the Form 8-K filing requirement would also be
disclosed in issuers' periodic reports.\165\ Commentators noted that
the events that would trigger the Form 8-K filing are significant, and
expressed their view that because the events are already monitored by
the issuer, there would not be an extra burden in reporting them
twice.\166\ However, other commentators indicated that the proposed
rule should be revised to minimize duplicative disclosure.\167\ One
commentator stated that, because these orders and notices are required
to be reported in the issuer's periodic reports, the proposed Form 8-K
requirement is needlessly duplicative and burdensome.\168\ Another
commentator suggested eliminating duplicative reporting by removing the
Form 8-K filing requirement and allowing the information to be reported
only in the issuer's periodic reports.\169\
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\165\ See letters from AFL-CIO, SIF, Trillium and UMWA.
\166\ See letters from SIF and Trillium.
\167\ See letters from Chevron, Estess, NMA and NSSGA.
\168\ See letter from NSSGA.
\169\ See letter from Chevron.
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Commentators that expressed a view were generally supportive of the
information proposed to be required in Item 1.04 of Form 8-K.\170\
Commentators also indicated that no additional information beyond what
was proposed should be required to be disclosed.\171\
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\170\ See letters from Estess, SIF and Trillium.
\171\ See letters from Chevron, Cleary and Estess.
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Some commentators supported the proposed four business day filing
period for a Form 8-K under proposed Item 1.04.\172\ Others suggested
different filing deadlines for the Form 8-K. Three commentators
supported longer filing deadlines, such as seven or ten business days,
in order to allow issuers to conduct analysis and provide more detail
or complete information about the event.\173\ One commentator, drawing
a distinction between the type of information required to be disclosed
under Section 1503 and other material items covered by Form 8-K,
recommended that the Form 8-K be required once a year, allowing issuers
to provide aggregate information about any such orders or notices
received during the year.\174\ In addition, one commentator requested
clarification of
[[Page 81775]]
the filing requirement for an order or notice vacated by MSHA prior to
the filing deadline for the Form 8-K,\175\ and another commentator
recommended that the final rule provide that if the order triggering
the Form 8-K filing is vacated, dismissed or reduced below a reportable
level during the reporting period, the Form 8-K filing is not
required.\176\
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\172\ See letters from Estess, SIF and Trillium.
\173\ See letters from NMA (suggesting seven business day
deadline), Chevron (suggesting ten business day deadline) and PCA
(suggesting ten calendar day deadline).
\174\ See letter from NSSGA.
\175\ See letter from DGS Law (noting that vacated citations are
removed entirely from the MSHA data retrieval system).
\176\ See letter from NMA.
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c. Final Rule
After considering the comments, we are adopting new Item 1.04 to
Form 8-K as proposed. Under the final rule, issuers are required to
file a Form 8-K under new Item 1.04 no later than four business days
after the receipt by the issuer (or a subsidiary of the issuer) of an
imminent danger order under Section 107(a) of the Mine Act, written
notice from MSHA of a pattern of violations of mandatory health or
safety standards that are of such nature as could have significantly
and substantially contributed to the cause and effect of coal or other
mine health or safety hazards under Section 104(e) of the Mine Act or
written notice from MSHA of the potential to have a pattern of such
violations. Item 1.04 of Form 8-K requires disclosure of the date of
receipt of the order or notice, the category of order or notice, and
the name and location of the mine involved.
As discussed above, these orders and notices are also required to
be disclosed under Section 1503(a) of the Act in issuers' periodic
reports. Although we have considered the views of commentators that the
disclosure is duplicative, we believe the plain language of Section
1503 of the Act requires such orders and notices to be reported in both
issuers' Forms 8-K and their periodic reports, and note that issuers
generally seem to have been complying with these requirements since
Section 1503(b) became effective. We have also considered commentators'
views with respect to the filing deadline for the required Form 8-K.
Although Section 1503(b) of the Act does not specify a filing deadline,
we continue to believe that, because the triggering events are clear
and do not require management to make rapid materiality judgments, the
customary Form 8-K four business day deadline provides adequate time
for issuers to prepare accurate and complete information.
We understand there is a possibility that an order or notice could
be issued and subsequently vacated by MSHA within the four business day
time period for filing the Form 8-K. However, as discussed above with
respect to reporting of dismissed, reduced or contested matters,\177\
we believe the language of Section 1503(b) of the Act dictates that the
``receipt'' of the specified orders or notices must be disclosed. We
note that issuers may include additional disclosure explaining the
status of these orders and notices if they choose to do so.\178\
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\177\ See Sections II.A.3 and II.A.4.b above.
\178\ We note that between the effective date of Section 1503(b)
and November 30, 2011, there have been 116 Form 8-Ks filed to comply
with this provision, and only five of them report that the order was
vacated within four business days of issuance of the order.
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3. Treatment of Foreign Private Issuers
a. Proposed Amendments
Our proposed rule would not extend the requirement to file current
reports on Form 8-K to foreign private issuers. The Proposing Release
noted that foreign private issuers are not required to file current
reports on Form 8-K.\179\ Instead, a foreign private issuer is required
to furnish under the cover of Form 6-K \180\ copies of all information
that it makes, or is required to make, public under the laws of its
jurisdiction of incorporation, files, or is required to file, under the
rules of any stock exchange, or otherwise distributes to its security
holders.\181\
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\179\ See Exchange Act Rules 13a-11 and 15d-11 [17 CFR 240.13a-
11 and 15d-11].
\180\ Referenced in 17 CFR 249.306.
\181\ See Exchange Act Rule 13a-6 [17 CFR 240.13a-16].
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b. Comments on the Proposed Amendments
Several commentators agreed with our proposed approach not to apply
the current reporting requirements of Section 1503(b) of the Act to
foreign private issuers. These commentators noted that this approach is
consistent with the statutory text of Section 1503(b), which refers
only to Form 8-K, and with the Commission's current framework of
reporting for foreign private issuers.\182\ Other commentators
indicated that foreign private issuers should be required to file a
Form 8-K to disclose information about the receipt of the specified
orders and notices.\183\ One of these commentators expressed the view
that the reporting requirements should be as equal as possible for all
issuers so that U.S. issuers are not placed at a disadvantage.\184\
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\182\ See letters from AngloGold, Cleary, NMA, NYSBA, and Rio
Tinto. See also advance comment letter from Rio Tinto.
\183\ See letters from Estess, SIF and Trillium.
\184\ See letter from Estess.
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c. Final Rule
After considering the comments, we have determined not to apply the
new Form 8-K reporting requirement to foreign private issuers and are
adopting the requirement as proposed. Although we are mindful of
concerns that the disclosure requirement should be as equal as possible
in order to avoid disadvantaging U.S. issuers in comparison to foreign
private issuers, we continue to believe that this approach is
consistent with Section 1503(b) of the Act, which references Form 8-K,
a form applicable only to domestic issuers, not to foreign private
issuers, and the Commission's current framework of reporting for
foreign private issuers.\185\
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\185\ This approach is consistent with the manner in which the
Commission implemented Sections 306 and 406 of the Sarbanes-Oxley
Act of 2002. See Insider Trades During Pension Fund Blackout
Periods, SEC Release No. 34-47225 (Jan. 22, 2003) [68 FR 4338], and
Disclosure Required by Sections 406 and 407 of the Sarbanes-Oxley
Act of 2002, SEC Release No. 33-8177 (Jan. 23, 2003) [68 FR 5110].
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Although they will not be subject to the Form 8-K requirement,
foreign private issuers will not be able to avoid disclosure of the
orders and notices specified in Item 1.04 of Form 8-K. As described
above, we are adopting amendments to Forms 20-F and 40-F that require a
foreign private issuer to disclose in each annual report the items
described in Section 1503(a) of the Act. This is the same information
that is required of domestic issuers, including disclosure of the
receipt during the foreign private issuer's past fiscal year of any
imminent danger order issued under Section 107(a) of the Mine Act,
written notice from MSHA of a pattern of violations of mandatory health
or safety standards that are of such a nature as could have
significantly and substantially contributed to the cause and effect of
coal or other mine health or safety hazards under Section 104(e) of the
Mine Act, and written notice from MSHA of the potential to have a
pattern of such violations.
C. Amendment to General Instruction I.A.3.(b) of Form S-3
a. Proposed Amendments
Under our existing rules, the untimely filing on Form 8-K of
certain items does not result in loss of Form S-3 eligibility, so long
as Form 8-K reporting is current at the time the Form S-3 is filed. Our
existing rules also provide a limited safe harbor from liability under
Section 10(b) or Rule 10b-5 under the Exchange Act for certain Form 8-K
items.\186\ We
[[Page 81776]]
proposed to amend General Instruction I.A.3.(b) of Form S-3 to provide
that an untimely filing on Form 8-K regarding new Item 1.04 would not
result in loss of Form S-3 eligibility. We did not propose to include
new Item 1.04 in the list in Rules 13a-11(c) and 15d-11(c) under the
Exchange Act of Form 8-K items eligible for the limited safe harbor
from liability.
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\186\ Rules 13a-11(c) and 15d-11(c) each provides that ``[n]o
failure to file a report on Form 8-K that is required solely
pursuant to Item 1.01, 1.02, 2.03, 2.04, 2.05, 2.06, 4.02(a),
5.02(e) or 6.03 of Form 8-K shall be deemed a violation of'' Section
10(b) of the Exchange Act or Rule 10b-5 thereunder.
---------------------------------------------------------------------------
b. Comments on the Proposed Amendments
Commentators generally supported our proposal to amend General
Instruction I.A.3(b) of Form S-3 to add proposed Item 1.04 to the list
of items on Form 8-K with respect to which an issuer's failure timely
to file the Form 8-K will not result in the loss of Form S-3
eligibility.\187\ One commentator indicated that proposed Item 1.04 is
similar to the existing exceptions provided in Form S-3, and expressed
its view that, but for the statutory requirement to file current
reports, for a diversified company engaging in mining operations, an
individual shutdown or notice would not be material to the company and
shareholders.\188\ Similarly, another commentator noted that when
compared to other items that have been specified as not affecting Form
S-3 eligibility, Item 1.04 would be no more significant than the other
items, particularly in light of the absence of a materiality threshold
for the reporting obligation under the proposed item and the range of
issues, particularly under 107(a) of the Mine Act, that can trigger the
disclosure requirement.\189\ One noted that a delay in reporting
information that is typically not material to the issuer should not
affect the issuer's Form S-3 eligibility.\190\
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\187\ See, e.g., letters from Chevron, Cleary, DGS Law, NMA,
NYSBA, SIF and Trillium. One commentator noted with approval that,
as a consequence, failure to file a Form 8-K with Section 1503(b)
disclosure would not result in status as an ``ineligible issuer''
pursuant to Rule 405 under the Securities Act. See letter from
Cleary.
\188\ See letter from Chevron.
\189\ See letter from DGS Law.
\190\ See letter from NMA.
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We received some support for our proposal not to include Item 1.04
in the list of items in Rules 13a-11(c) and 15d-11(c) with respect to
which the failure to file a report on Form 8-K will not be deemed to be
a violation of Section 10(b) or Rule 10b-5.\191\ However, other
commentators indicated that the Commission should add Item 1.04 to the
safe harbors.\192\ One commentator noted that such information will be
made public by the MSHA data retrieval system.\193\ Others noted that
disclosures regarding mine safety are typically immaterial events and
the failure to timely report them on Form 8-K should not be considered
a violation of Section 10(b) or Rule 10b-5.\194\
---------------------------------------------------------------------------
\191\ See, e.g. letters from SIF and Trillium.
\192\ See letters from AngloGold, Chevron, Cleary, NMA and
NYSBA.
\193\ See letter from AngloGold.
\194\ See letters from Chevron and NMA.
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c. Final Rule
The final rule adds Item 1.04 to the list of Form 8-K items in
General Instruction I.A.3.(b) of Form S-3 to provide that untimely
filing of the new item will not result in the loss of Form S-3
eligibility. Commentators were supportive of this approach, which we
continue to believe is appropriate. Section 1503(b) of the Act does not
address the Securities Act implications of a failure to timely file a
Form 8-K. In addition, as noted in the Proposing Release, in the past
when we have adopted new disclosure requirements that differed from the
traditional periodic reporting obligations of companies, we have
acknowledged concerns about the potentially harsh consequences of the
loss of Form S-3 eligibility, and addressed such concerns by specifying
that untimely filing of Forms 8-K relating to certain topics would not
result in the loss of Form S-3 eligibility.\195\
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\195\ See Selective Disclosure and Insider Trading, SEC Release
No. 33-7881 (Aug. 15, 2000) [65 FR 51715]; Additional Form 8-K
Disclosure Requirements and Acceleration of Filing Date, SEC Release
No. 33-8400 (March 16, 2004) [69 FR 15594] (the ``Additional Form 8-
K Disclosure Release'').
---------------------------------------------------------------------------
Although we are mindful of commentators' concerns, we are not
including Item 1.04 in the list of items in Rules 13a-11(c) and 15d-
11(c) with respect to which the failure to file a report on Form 8-K
will not be deemed to be a violation of Section 10(b) or Rule 10b-5. We
continue to believe, as we expressed when we adopted the limited safe
harbor from liability under Section 10(b) or Rule 10b-5 under the
Exchange Act for certain Form 8-K items, that the safe harbor is
appropriate if the triggering event for the Form 8-K requires
management to make a rapid materiality determination.\196\ The filing
of an Item 1.04 Form 8-K is triggered by an event that does not require
management to make a rapid materiality determination, and we continue
to believe that it is not necessary to extend the safe harbor to this
new item.
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\196\ See Additional Form 8-K Disclosure Release at 69 FR 15607.
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III. Paperwork Reduction Act
A. Background
Certain provisions of the final amendments contain ``collection of
information'' requirements within the meaning of the Paperwork
Reduction Act of 1995 (``PRA'').\197\ We published a notice requesting
comment on the collection of information requirements in the Proposing
Release for the rule amendments and we submitted these requirements to
the Office of Management and Budget (``OMB'') for review in accordance
with the PRA.\198\ The titles for the collection of information are:
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\197\ 44 U.S.C. 3501 et seq.
\198\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
---------------------------------------------------------------------------
(A) ``Regulation S-K'' (OMB Control No. 3235-0071);
(B) ``Form 10-K'' (OMB Control No. 3235-0063);
(C) ``Form 10-Q'' (OMB Control No. 3235-0070);
(D) ``Form 8-K'' (OMB Control No. 3235-0060);
(E) ``Form 20-F'' (OMB Control No. 3235-0288); and
(F) ``Form 40-F'' (OMB Control No. 3235-0381).
These regulations and forms were adopted under the Securities Act
and the Exchange Act. They set forth the disclosure requirements for
periodic and current reports filed by companies to inform
investors.\199\ The hours and costs associated with preparing
disclosure, filing forms and retaining records constitute reporting and
cost burdens imposed by each collection of information. An agency may
not conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a currently valid OMB
control number.
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\199\ Forms 20-F and 40-F may also be used by foreign private
issuers to register a class of securities under the Exchange Act. In
addition, Form 20-F sets forth many of the disclosure requirements
for registration statements filed by foreign private issuers under
the Securities Act.
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B. Summary of the Final Rules
As discussed in more detail above, we are adopting new rule and
form amendments to implement Section 1503 of the Act. Section 1503(a)
requires issuers that are operators, or that have a subsidiary that is
an operator, of a coal or other mine to disclose in their periodic
reports filed with the Commission information regarding specified
health and safety violations, orders and citations, related assessments
and legal actions, and mining-related fatalities. Section 1503(b) of
the Act
[[Page 81777]]
mandates the filing of a Form 8-K disclosing the receipt of certain
orders and notices from MSHA.
We are adopting new Items 104 and 601(b)(95) of Regulation S-K and
amending Forms 10-Q, 10-K, 20-F and 40-F under the Exchange Act to
implement the disclosure requirement set forth in Section 1503(a) of
the Act. We are adopting new Item 1.04 of Form 8-K to implement the
requirement of Section 1503(b) of the Act. In addition, we are amending
General Instruction I.A.3(b) of Securities Act Form S-3.
Issuers are currently required to comply with the provisions of
Section 1503 of the Act; therefore, the Act has already increased the
burdens and costs for issuers by requiring the disclosure set forth in
Sections 1503(a) and (b) of the Act. We note that Section 1503 of the
Act imposed the disclosure requirements set forth in Sections 1503(a)
and (b) of the Act, regardless of whether the Commission adopts rules
to implement those provisions. Our amendments incorporate the Act's
requirements into Regulation S-K and related forms.
The disclosure requirement of Section 1503(a)(1)(G) of the Act,
which requires disclosure of mining-related fatalities, overlaps to
some extent with a disclosure requirement under MSHA rules. MSHA
requires mine operators to report immediately any death of an
individual at a mine,\200\ which MSHA then makes available to the
public through its data retrieval system on its Web site, http://www.msha.gov. MSHA's disclosure requirement applies to all mine
operators under MSHA's jurisdiction, while the disclosure requirement
of Section 1503(a)(1)(G) of the Act requires reporting by a subset of
that group, specifically, issuers that are required to file reports
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange
Act and that are operators (or have a subsidiary that is an operator)
of a coal or other mine. We note that, while there is some overlap, the
disclosure requirement of Section 1503(a)(1)(G) of the Act is currently
in effect by operation of the statute, and the amendments we are
adopting simply incorporate the Act's requirements into our rules and
forms. We believe our rules must incorporate this provision of the Act
in order to be consistent with the Act.
---------------------------------------------------------------------------
\200\ See 30 CFR 50.10.
---------------------------------------------------------------------------
Most of the information called for by the new disclosure
requirements is publicly disclosed by MSHA and readily available to
issuers, who receive notices, orders and citations directly from MSHA
and can also access the information via MSHA's data retrieval system.
Information regarding pending legal actions is known to issuers, and
certain information about orders and citations that are in contest
before the FMSHRC is also available via MSHA's data retrieval system.
Further, as noted above, the disclosure item for periodic reports
requiring disclosure of mining-related fatalities is already subject to
a collection of information under MSHA regulations,\201\ and fatality
information also is made public via MSHA's data retrieval system. Our
amendments incorporate the Act's requirements into Regulation S-K and
related forms.
---------------------------------------------------------------------------
\201\ 30 CFR 50.10 and 50.20.
---------------------------------------------------------------------------
We anticipate that new Items 104 and 601(b)(95) of Regulation S-K
will increase the disclosure burdens for annual reports on Form 10-K
and quarterly reports on Form 10-Q that existed prior to enactment of
the Act. Because Regulation S-K does not apply directly to Forms 20-F
and 40-F,\202\ we are amending those forms to include the same
disclosure requirements as those applicable to issuers that are not
foreign private issuers, and therefore we anticipate that the
disclosure burdens that existed prior to the enactment of the Act for
annual reports on Forms 20-F and 40-F will increase.\203\ We anticipate
that new Item 1.04 of Form 8-K will increase the disclosure burden that
existed prior to enactment of the Act for current reports on Form 8-K
by requiring issuers to file a Form 8-K upon receipt of three types of
notices or orders from MSHA relating to mine health and safety concerns
and specifying the information required about the orders or notices
required to be disclosed.
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\202\ While Form 20-F may be used by any foreign private issuer,
Form 40-F is only available to a Canadian issuer that is eligible to
participate in the U.S.-Canadian Multijurisdictional Disclosure
System.
\203\ See new Item 16H under Part II of Form 20-F and paragraph
(16) to General Instruction B of Form 40-F.
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Compliance with the amendments by affected issuers will be
mandatory. Responses to the information collections will not be kept
confidential, and there will be no mandatory retention period for the
information disclosed.
C. Summary of Comment Letters and Revisions to Proposals
In the Proposing Release, we requested comment on the PRA analysis.
We received one comment letter that addressed our overall burden
estimates for the proposed amendments.\204\ The commentator stated its
belief that the estimates included in the Proposing Release were on the
low end of the scale. The commentator noted its view that, due to the
number and variety of operations that must be included in the reports
and the corporate structure and segregation of responsibilities that
are required in a multinational organization with a number of
individual operating subsidiaries, the estimate of burden hours to
manage, assemble, track, verify and prepare the reports should be
higher. In the commentator's experience, the necessary internal
procedures and controls to accurately assemble, track and report the
Section 1503 mine safety information and the actual hourly burden alone
would be 10 to 15 times the estimate made by the Commission, and the
outside professional burden would likewise be several orders of
magnitude greater than the estimate.
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\204\ See letter from Rio Tinto.
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After consideration of the comment received, we have increased the
hours and costs from the proposal, although we have not increased such
estimates by the magnitude suggested by the commentator, taking into
account several substantive modifications we have made to the proposed
amendments. We are adopting final rules that in some respects are less
burdensome than the proposals. We have simplified the reporting of
information with respect to proposed assessments of penalties and
pending legal actions, and we are not adopting the proposed additional
disclosure item. We also have changed the time period requirement for
periodic reporting in a manner that will lessen the burden for issuers
by requiring disclosure only for the period covered by the report.
Therefore, we have adjusted our estimates to reflect a decrease in
hours and costs from the proposal, but also reflecting an increase in
hours and costs based on the comment received.
D. Revisions to PRA Reporting and Cost Burden Estimates
We anticipate that the rule and form amendments will increase the
burdens and costs for issuers subject to the amendments. For purposes
of the PRA, in the Proposing Release we estimated the total annual
increase in paperwork burden for all affected companies to comply with
the proposed collection of information requirements to be approximately
1,677 hours of company personnel time and approximately $263,500 for
the services of outside professionals. These estimates included the
time and the cost of implementing disclosure controls and procedures,
preparing and reviewing disclosure, filing documents and retaining
records.
[[Page 81778]]
As discussed above, as a result of the changes we have made from the
proposals, and taking into consideration the comment received, we are
increasing the total PRA burden and cost estimates that we originally
submitted to OMB in connection with the proposed amendments. We
estimate the annual incremental paperwork burden for all companies to
prepare the disclosure required under our rule amendments to be
approximately 5,775 hours of company personnel time and approximately
$1,090,000 for the services of outside professionals.
In deriving our new estimates, we assume that:
For Forms 10-K, 10-Q and 8-K, an issuer incurs 75% of the
annual burden required to produce each form, and outside firms,
including legal counsel, accountants and other advisors retained by the
issuer, incur 25% of the annual burden required to produce the form at
an average cost of $400 per hour; and
For Forms 20-F and 40-F, a foreign private issuer incurs
25% of the annual burden required to produce each form, and outside
firms retained by the issuer incur 75% of the burden require to produce
each form at an average cost of $400 per hour.
The portion of the burden carried by outside professionals is reflected
as a cost, while the portion of the burden carried by the company
internally is reflected in hours.
We have based our new burden hour and cost estimates of the effect
that the adopted rule and form amendments would have on those
collections of information primarily on our understanding that the
information required to be disclosed is readily available to issuers,
and that therefore the burden imposed by the disclosure requirements is
mainly in formatting the information in order to comply with our
disclosure requirements and ensuring that appropriate disclosure
controls and procedures are in place to facilitate reporting of the
information. In this regard, we note that mine operators receive the
relevant notices, citations and similar information directly from MSHA,
and that issuers could also access such information via MSHA's publicly
available data retrieval system. Information regarding pending legal
actions is known to issuers, and certain information about orders and
citations that are in contest before the FMSHRC is also available via
MSHA's data retrieval system. Further, mine operators are required by
MSHA regulations to report all fatalities to MSHA immediately, and
information about mining-related fatalities also is made public via
MSHA's data retrieval system. In preparing the burden hour and cost
estimates, we took into consideration the number of issuers that filed
reports with the Commission including information required under
Section 1503 since its effective date.
1. Regulation S-K
While the rule and form amendments make revisions to Regulation S-
K, the collection of information requirements for that regulation are
reflected in the burden hours estimated for Forms 10-K and 10-Q. The
rules in Regulation S-K do not impose any separate burden. Consistent
with historical practice, we are retaining an estimate of one burden
hour to Regulation S-K for administrative convenience.
2. Form 10-K
Based on a review of companies filing under certain SICs, as well
as a review of companies that are currently providing disclosure of
mine safety matters in Commission filings in accordance with Section
1503 of the Act, we estimate that, of the 13,545 Form 10-Ks filed
annually, approximately 100 are filed by companies that operate, or
have a subsidiary that operates, a mine subject to the Mine Act, and
that therefore will be affected by the rule and form amendments. For
purposes of the PRA, we assume that each such filer would have
disclosures about mine safety matters to include in its Form 10-K, and
that preparation of the Form 10-K disclosure would involve gathering
the information for the fourth quarter of the fiscal year,
consolidating it with information reported in the prior quarters of the
fiscal year, and formatting the information for inclusion in the annual
report. We estimate that the rule and form amendments would add 20
burden hours to the total burden hours required to produce each Form
10-K.
3. Form 20-F
Based on a review of companies filing under certain SICs, as well
as a review of companies that are currently providing disclosure of
mine safety matters in Commission filings in accordance with Section
1503 of the Act, we currently estimate that of the 942 Form 20-F annual
reports filed annually by foreign private issuers, approximately 15 are
filed by companies that operate, or have a subsidiary that operates, a
mine subject to the Mine Act, and that therefore would be affected by
the rule and form amendments. For purposes of the PRA, we assume that
each such filer would have disclosures about mine safety matters to
include in its Form 20-F. We estimate that the rule and form amendments
would add 40 burden hours to the total burden hours required to produce
each Form 20-F.
4. Form 40-F
Based on a review of companies filing under certain SICs, as well
as a review of companies that are currently providing disclosure of
mine safety matters in Commission filings in accordance with Section
1503 of the Act, we currently estimate that of the 205 Form 40-F annual
reports filed annually by foreign private issuers, approximately 15 are
filed by companies that operate, or have a subsidiary that operates, a
mine subject to the Mine Act, and that therefore would be affected by
the rule and form amendments. For purposes of the PRA, we assume that
each such filer would have disclosures about mine safety matters to
include in its Form 40-F. As with Form 20-F, we estimate that the rule
and form amendments would add 40 burden hours to the total burden hours
required to produce each Form 40-F annual report.
5. Form 10-Q
Based on a review of companies filing under certain SICs, as well
as a review of companies that are currently providing disclosure of
mine safety matters in Commission filings in accordance with Section
1503 of the Act, we estimate that, of the 32,462 Form 10-Qs filed
annually, approximately 300 are filed by companies that operate, or
have a subsidiary that operates, a mine subject to the Mine Act, and
that therefore would be affected by the rule and form amendments.\205\
For purposes of the PRA, we assume that each such filer would have
disclosures about mine safety matters to include in each Form 10-Q. We
further estimate that the rule and form amendments would add 15 burden
hours to the total burden hours required to produce each Form 10-Q.
---------------------------------------------------------------------------
\205\ We estimate that approximately 100 companies with a Form
10-Q filing obligation would be affected by the proposed rule and
form amendments. Each such company would file three quarterly
reports on Form 10-Q per year. 100 companies x 3 Forms 10-Q per
year=300 Forms 10-Q.
---------------------------------------------------------------------------
6. Form 8-K
We estimate that companies annually file 116,860 Form 8-Ks. Only
companies that are not foreign private issuers and are operators, or
have subsidiaries that are operators, of mines subject to the Mine Act
are required to comply with the new Form 8-K
[[Page 81779]]
requirement. For purposes of the PRA, we estimate that there will be
approximately 100 Form 8-K filers under new Item 1.04, which is based
on our estimate of the number of Form 10-K filers that operate, or have
a subsidiary that operates, a mine subject to the Mine Act, and that
therefore would be affected by the rule and form amendments. In
addition, we understand that the triggering events for Form 8-K filing
set forth in Section 1503(b)(2)--the receipt of written notice from
MSHA that the coal or other mine has a pattern of violations or the
potential to have such a pattern--are relatively rare, while the
triggering event set forth in Section 1503(b)(1)--the receipt of an
imminent danger order--is more common.\206\ For purposes of this
calculation, we assume that each potential filer under Item 1.04 of
Form 8-K would file four Forms 8-K per year under new Item 1.04 and we
estimate that the amendments to Form 8-K would add 2 burden hours to
the total burden hours required to produce each Form 8-K.
---------------------------------------------------------------------------
\206\ See U.S. Department of Labor, Office of Inspector General,
In 32 Years MSHA Has Never Successfully Exercised Its Pattern of
Violations Authority, Report Number 05-10-005-06-001 (Sept. 29,
2010). According to data available on MSHA's Web site, 549, 630 and
562 imminent danger orders under Section 107(a) were issued during
fiscal 2011, 2010 and 2009, respectively. See Violations Data Set
(as of December 9, 2011), available at http://www.msha.gov/OpenGovernmentData/OGIMSHA.asp (on file with the Division of
Corporation Finance). Note that this number includes all imminent
danger orders issued to all companies subject to MSHA's
jurisdiction, not only to reporting companies that are subject to
the disclosure requirements of Section 1503 of the Act.
---------------------------------------------------------------------------
E. Summary of Changes to Annual Compliance Burden in Collection of
Information
The table below illustrates the total incremental annual compliance
burden of the collection of information in hours and in cost under the
amendments for annual reports, quarterly reports and current reports on
Form 8-K under the Exchange Act (Table 1). There is no change to the
estimated burden of the collection of information under Regulation S-K
because the burdens that Regulation S-K imposes are reflected in our
revised estimates for the forms. The burden estimates were calculated
by multiplying the estimated number of annual responses by the
estimated average number of hours it would take a company to prepare
and review the new disclosure requirements.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current Current Increase in Proposed
Form annual Current burden Increase in Proposed professional professional professional
response hours burden hours burden hours costs ($) costs ($) costs ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
10-K................................... 13,545 21,361,898 1,500 21,363,398 2,848,253,000 200,000 2,848,453,000
20-F................................... 942 622,871 150 623,021 743,047,230 180,000 743,227,230
40-F................................... 205 21,884 150 22,034 26,260,500 180,000 26,440,500
10-Q................................... 32,462 4,559,793 3,375 4,563,168 607,972,400 450,000 608,422,400
8-K.................................... 116,860 502,839 600 503,439 67,045,200 80,000 67,125,200
--------------------------------------------------------------------------------------------------------------------------------------------------------
IV. Cost-Benefit Analysis
A. Introduction
We are adopting the rule and form amendments discussed in this
release to implement the disclosure requirements set forth in Section
1503 of the Act. Section 1503(a) of the Act requires issuers that are
operators, or that have a subsidiary that is an operator, of a coal or
other mine to disclose in their periodic reports filed with the
Commission information regarding specified health and safety
violations, orders and citations, related assessments and legal
actions, and mining-related fatalities. Section 1503(b) of the Act
mandates the filing of a Form 8-K disclosing the receipt of certain
orders and notices from the Mine Safety and Health Administration.
As discussed in detail above, the disclosure requirements set forth
in Section 1503 of the Act refer to and are based on the safety and
health requirements applicable to mines under the Mine Act and
administered by MSHA. MSHA inspectors issue citations, orders and
decisions directly to mine operators during the course of inspections
and MSHA assesses and collects civil monetary penalties for violations.
Mine operators receive the relevant notices, citations and similar
information directly from MSHA, and this information is publicly
available on MSHA's data retrieval system on its Web site on a mine-by-
mine basis.\207\ Information regarding pending legal actions is known
to issuers, and certain information about orders and citations that are
in contest before the FMSHRC is also available via MSHA's data
retrieval system. Further, mine operators are required by MSHA
regulations to report all fatalities to MSHA immediately, and
information about mining-related fatalities also is made public via
MSHA's data retrieval system. Therefore, we believe most of the
information required to be disclosed under Section 1503 of the Act and
our final rules is readily available to issuers. Further, because the
disclosure requirements set forth in Section 1503 are currently in
effect, we assume that issuers have already developed the necessary
controls and procedures to review and prepare the information required
by Section 1503 of the Act for filing with the Commission.
---------------------------------------------------------------------------
\207\ See http://www.msha.gov/DRS/DRSHOME.HTM.
---------------------------------------------------------------------------
We are adopting amendments to Form 10-K, Form 10-Q, Form 20-F and
Form 40-F to provide for the disclosure required by Section 1503(a) of
the Act. New Item 104 of Regulation S-K, new Item 16H of Form 20-F and
new Paragraph (16) of General Instruction B of Form 40-F detail the
information to be disclosed in accordance with Section 1503(a) of the
Act, and the amendment to Item 601 of Regulation S-K sets forth the
exhibit requirement for Form 10-K and Form 10-Q for the information
required to be disclosed under Item 104 of Regulation S-K. We are also
adopting amendments to Form 8-K to add new Item 1.04 to implement the
requirement imposed by Section 1503(b) of the Act. Finally, we are
amending General Instruction I.A.3.(b) of Form S-3 to add new Form 8-K
Item 1.04 to the list of Form 8-K items the untimely filing of which
will not result in loss of Form S-3 eligibility.
We did not receive any comment letters addressing the cost-benefit
analysis included in the Proposing Release. The Commission is sensitive
to the costs and benefits that will be imposed by the rule and form
amendments. The discussion below focuses on the costs and benefits of
the decisions made by the Commission to fulfill the mandates of the
Act, rather than the costs and benefits of the mandates of the Act
itself. However, to the extent that the Commission helps achieve the
benefits intended by the
[[Page 81780]]
Act, the two types of benefits are not entirely separable.
The final rule adheres closely to the statutory mandate, which is
already in effect. We have determined not to adopt the proposed
requirements to provide additional disclosure in periodic reports
addressing the categories of violations, orders or citations disclosed
in response to the Section 1503(a) disclosure requirement, or total
dollar values of proposed penalty assessments from MSHA outstanding as
of the end of a reporting period. We are adopting a requirement to
disclose the total number of legal actions involving each mine that
were pending before the FMSHRC as of the last day of the reporting
period, the aggregate number of legal actions instituted and the number
resolved during the reporting period, and the numbers of such legal
actions in specified categories, rather than the more burdensome
proposed requirement to provide more detailed descriptions of legal
actions pending before the FMSHRC and developments material to
previously reported pending legal actions. As a consequence, we believe
that the vast majority of the costs and benefits of our final rules are
attributable to the provisions of Section 1503.
B. Benefits
The amended rules we are adopting today are intended to implement
the requirements of Section 1503 of the Act. Our Regulation S-K and
form amendments implement the requirements of the Act by reiterating
the disclosure items listed in Section 1503, which are currently in
effect. Our rule and form amendments specify for issuers how, in what
form, and when to report the mine safety information required by the
Act. These rules are designed to facilitate compliance with the new
statutory requirements. We believe this should simplify the disclosure
obligation, promote comparability and consistency of disclosure across
issuers and time periods, and make the information more accessible for
users, which will benefit investors in their consideration of
information about issuers' mine health and safety matters.
We believe that the requirement to disclose the total number of
legal actions involving each mine that were pending before the FMSHRC
as of the last day of the reporting period, the aggregate number of
legal actions instituted, the number resolved during the reporting
period and the numbers of legal actions in specified categories will
provide useful information to users about overall developments in legal
actions and the extent of the mine operators' involvement in legal
actions.
Our amendment to Form 8-K requires additional disclosure beyond
that specifically designated by Section 1503(b) of the Act by
specifying the information required about the orders or notices
required to be disclosed, and specifying a four business day filing
deadline for Forms 8-K filed under new Item 1.04. Our amendment to Form
8-K specifying that the form is to be filed within four business days
of receipt of the order or notice designated under Section 1503(b) of
the Act will provide issuers and investors with certainty about the
timing of that disclosure requirement.
C. Costs
The vast majority of the costs resulting from the disclosures
required by Section 1503 of the Act arise whether or not we adopt rules
to implement the Section. Moreover, the information required to be
disclosed under Section 1503 is already subject to an extensive
recordkeeping regime under MSHA and, for the most part, is readily
available to issuers via MSHA's data retrieval system. Certain
information, such as information regarding pending legal actions and
mining-related fatalities, is known to issuers, although they may have
had to adopt new procedures to capture and report the information in
order to comply with Section 1503. The primary costs to result from
this rulemaking are costs associated with the formatting and filing of
the information. We believe that there are no significant incremental
costs imposed as a result of our codification of the Section 1503
requirements.\208\
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\208\ For purposes of the PRA, we estimate the total cost of the
disclosure to be approximately 5,775 hours of company personnel time
and approximately $1,090,000 for the services of outside
professionals. However, this amount reflects the costs associated
with the disclosure requirement set forth in Section 1503 of the
Act. We do not believe our rules, which implement Section 1503,
impose any additional costs beyond those imposed by the statute.
---------------------------------------------------------------------------
V. Consideration of Impact on the Economy, Burden on Competition and
Promotion of Efficiency, Competition and Capital Formation
Section 23(a)(2) of the Exchange Act \209\ requires us, when
adopting rules under the Exchange Act, to consider the impact that any
new rule would have on competition. In addition, Section 23(a)(2)
prohibits us from adopting any rule that would impose a burden on
competition not necessary or appropriate in furtherance of the purposes
of the Exchange Act.
---------------------------------------------------------------------------
\209\ 15 U.S.C. 78w(a).
---------------------------------------------------------------------------
Section 2(b) \210\ of the Securities Act and Section 3(f) \211\ of
the Exchange Act require us, when engaging in rulemaking where we are
required to consider or determine whether an action is necessary or
appropriate in the public interest, to consider, in addition to the
protection of investors, whether the action will promote efficiency,
competition, and capital formation.
---------------------------------------------------------------------------
\210\ 15 U.S.C. 77b(b).
\211\ 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
We did not receive any comment letters addressing the discussion of
these issues included in the Proposing Release. The amendments we are
adopting will implement the requirements of Section 1503 of the Act,
which imposed the substance of the disclosure requirements set forth in
our new rules. We are not imposing any additional requirements in our
rulemaking that will impose a burden on competition or have a
significant impact on capital formation.
We believe that the rule and form amendments we are adopting will
provide direction and consistency as to how, in what form, and when to
report the relevant information. We believe that the specifications in
the rulemaking will improve the efficiency of the reporting process for
issuers and provide for a more efficient and effective review of the
information by investors.
The loss of eligibility by an issuer to use Form S-3 could restrict
the ability of the company to raise capital or increase an issuer's
costs relating to capital raising, and may be a disproportionately
large negative consequence of an untimely filing of a Form 8-K. To
address this potential burden, we are revising the eligibility rules
under Form S-3 so that an untimely filing of a report under new Item
1.04 of Form 8-K would not result in a loss of eligibility to use that
form.
VI. Final Regulatory Flexibility Act Analysis
This Final Regulatory Flexibility Analysis has been prepared in
accordance with the Regulatory Flexibility Act.\212\ It relates to
revisions to Regulation S-K and forms under the Securities Act and the
Exchange Act regarding disclosure about mine safety.
---------------------------------------------------------------------------
\212\ 5 U.S.C. 601.
---------------------------------------------------------------------------
A. Reasons for, and Objectives of, the Proposed Action
We are adopting rule amendments to implement the disclosure
requirements set forth in Section 1503 of the Act.
[[Page 81781]]
Section 1503(a) of the Act requires issuers that are operators, or that
have a subsidiary that is an operator, of a coal or other mine to
disclose in their periodic reports filed with the Commission
information regarding specified health and safety violations, orders
and citations, related assessments and legal actions, and mining-
related fatalities. Section 1503(b) of the Act mandates the filing of a
Form 8-K disclosing the receipt of certain orders and notices from
MSHA.
B. Significant Issues Raised by Public Comments
In the Proposing Release, we requested comment on any aspect of the
Initial Regulatory Flexibility Analysis (``IRFA''), including how the
proposed amendments could achieve their objective while lowering the
burden on small entities, the number of small entities that would be
affected by the proposed amendments, the nature of the potential impact
of the proposed amendments on small entities discussed in the analysis,
and how to quantify the impact of the proposed amendments. We did not
receive comments specifically addressing the IRFA. However, several
commentators addressed aspects of the proposed rule amendments that
could potentially affect small entities. In particular, several
commentators stated their belief that smaller companies should not be
exempted from all or part of the amendments,\213\ while only one
commentator urged that we adopt a modified reporting system for smaller
companies.\214\
---------------------------------------------------------------------------
\213\ See letters from AFL-CIO, CalPERS, CalSTRS, EARTHWORKS,
NMA, Rio Tinto, SIF, Trillium and UMWA.
\214\ See letter from Estess.
---------------------------------------------------------------------------
C. Small Entities Subject to the Final Amendments
The amendments will affect some companies that are small entities.
The Regulatory Flexibility Act defines ``small entity'' to mean ``small
business,'' ``small organization,'' or ``small governmental
jurisdiction.'' \215\ The Commission's rules define ``small business''
and ``small organization'' for purposes of the Regulatory Flexibility
Act for each of the types of entities regulated by the Commission.
Securities Act Rule 157 \216\ and Exchange Act Rule 0-10(a) \217\
define a company, other than an investment company, to be a ``small
business'' or ``small organization'' if it had total assets of $5
million or less on the last day of its most recent fiscal year. The new
rules will affect small entities that (i) are required to file reports
under Section 13(a) or 15(d) of the Exchange Act and (ii) operate, or
have a subsidiary that operates, a coal or other mine that is subject
to the Mine Act, and therefore are required to provide mine safety
disclosure under Section 1503 of the Act. We estimate that there are
approximately 25 companies that would currently be required to provide
the Section 1503 disclosure and that may be considered small entities.
We note that there are a significant number of small entities that are
exploration stage mining companies that would be required to provide
the Section 1503 disclosure if such companies were to become operators,
or have subsidiaries that become operators, of coal or other mines
subject to the Mine Act.
---------------------------------------------------------------------------
\215\ 5 U.S.C. 601(6).
\216\ 17 CFR 230.157.
\217\ 17 CFR 240.0-10(a).
---------------------------------------------------------------------------
D. Reporting, Recordkeeping, and Other Compliance Requirements
The disclosure requirements are intended to implement the
disclosure requirements set forth in Section 1503 of the Act. These
amendments require small entities that are required to file reports
under Section 13(a) or 15(d) of the Exchange Act and operate, or have a
subsidiary that operates, a coal or other mine to provide mine safety
disclosure under applicable rules and forms.
Small entities will be required to include the disclosure in their
annual report on Form 10-K, Form 20-F or Form 40-F and, if applicable,
quarterly report on Form 10-Q and current report on Form 8-K. We are
amending Form 10-K, Form 10-Q, Form 20-F and Form 40-F to require the
disclosure required by Section 1503(a) of the Act. New Item 104 of
Regulation S-K, new Item 16H of Form 20-F and new Paragraph (16) of
General Instruction B of Form 40-F detail the information to be
disclosed in accordance with Section 1503(a) of the Act, and the
amendment to Item 601 of Regulation S-K sets forth the exhibit
requirement for Form 10-K and Form 10-Q for the information required to
be disclosed under new Item 104 of Regulation S-K. We are also adopting
amendments to Form 8-K to add new Item 1.04 to implement the
requirement imposed by Section 1503(b) of the Act. Finally, we are
amending General Instruction I.A.3.(b) of Form S-3 to add new Form 8-K
Item 1.04 to the list of Form 8-K items the untimely filing of which
will not result in loss of Form S-3 eligibility.
E. Agency Action To Minimize Effect on Small Entities
The Regulatory Flexibility Act directs us to consider alternatives
that would accomplish our stated objectives, while minimizing any
significant adverse impact on small entities. In connection with the
disclosure amendments, we considered the following alternatives:
(1) Establishing differing compliance or reporting requirements or
timetables which take into account the resources available to smaller
entities;
(2) Exempting smaller entities from coverage of the disclosure
requirements, or any part thereof;
(3) The clarification, consolidation, or simplification of
disclosure for small entities; and
(4) Use of performance standards rather than design standards.
Section 1503 of the Act requires all entities, including small
entities, that are required to file reports under Section 13(a) or
15(d) of the Exchange Act and operate, or have a subsidiary that
operates, a coal or other mine to provide mine safety disclosure under
applicable rules and forms. These requirements apply without regard to
whether we adopt rules to implement them. The amendments implement the
disclosure requirements set forth in Section 1503 of the Act. Given the
statutory disclosure requirements in Section 1503 of the Act, the Act
does not appear to contemplate separate compliance or reporting
requirements for smaller entities.
Our amendments would require clear and straightforward disclosure
of the information required by Section 1503 of the Act. We generally
have used design rather than performance standards in connection with
the amendments. By specifying in the Act the disclosure required,
Congress appears to have contemplated that consistent, comparable
disclosure would be provided. We believe that the specific disclosure
requirements in the amendments will promote consistent and comparable
disclosure among all companies that operate, or have a subsidiary that
operates, a coal or other mine. Further, based on our past experience,
we believe that specific disclosure requirements for this information
would be more useful to investors than would a performance standard.
However, we note that, although we encourage tabular presentation, we
are not adopting a particular presentation requirement for the
disclosure, so that each issuer has flexibility to adopt a presentation
it believes is appropriate for its disclosure. We proposed additional
disclosure requirements that would have given greater context to the
information required to be disclosed by Section 1503. After further
consideration, we are not requiring such additional
[[Page 81782]]
disclosure, but issuers are permitted to include additional disclosure
if they choose to do so.
Currently, small entities are subject to some different compliance
or reporting requirements under Regulation S-K and the amendments would
not affect these requirements. The disclosure requirements will apply
to small entities to the same extent as larger issuers. We do not
believe these disclosures will create a significant new burden, and we
believe this approach is consistent with the requirements of the Act.
VII. Statutory Authority and Text of The Amendments
The amendments contained in this release are being adopted under
the authority set forth in Sections 7, 10, and 19(a) of the Securities
Act; Sections 12, 13, 15 and 23 of the Exchange Act and Section 1503 of
the Dodd-Frank Wall Street Reform and Consumer Protection Act.
List of Subjects in 17 CFR Parts 229, 239 and 249
Reporting and recordkeeping requirements, Securities.
Text of The Amendments
For the reasons set out in the preamble, the Commission amends
title 17, chapter II, of the Code of Federal Regulations as follows:
PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND
CONSERVATION ACT OF 1975--REGULATION S-K
0
1. The authority citation for part 229 continues to read in part as
follows:
Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2,
77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 777iii,
77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 78n, 78o, 78u-5, 78w,
78ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c), 80a-37,
80a-38(a), 80a-39, 80b-11, and 7201 et seq.; and 18 U.S.C. 1350,
unless otherwise noted.
* * * * *
0
2. Section 229.104 is added to read as follows:
Sec. 229.104 (Item 104) Mine safety disclosure.
(a) A registrant that is the operator, or that has a subsidiary
that is an operator, of a coal or other mine shall provide the
information specified below for the time period covered by the report:
(1) For each coal or other mine of which the registrant or a
subsidiary of the registrant is an operator, identify the mine and
disclose:
(i) The total number of violations of mandatory health or safety
standards that could significantly and substantially contribute to the
cause and effect of a coal or other mine safety or health hazard under
section 104 of the Federal Mine Safety and Health Act of 1977 (30
U.S.C. 814) for which the operator received a citation from the Mine
Safety and Health Administration.
(ii) The total number of orders issued under section 104(b) of such
Act (30 U.S.C. 814(b)).
(iii) The total number of citations and orders for unwarrantable
failure of the mine operator to comply with mandatory health or safety
standards under section 104(d) of such Act (30 U.S.C. 814(d)).
(iv) The total number of flagrant violations under section
110(b)(2) of such Act (30 U.S.C. 820(b)(2)).
(v) The total number of imminent danger orders issued under section
107(a) of such Act (30 U.S.C. 817(a)).
(vi) The total dollar value of proposed assessments from the Mine
Safety and Health Administration under such Act (30 U.S.C. 801 et
seq.).
Instruction to Item 104(a)(1)(vi): Registrants must provide the
total dollar value of assessments proposed by MSHA relating to any type
of violation during the period covered by the report, regardless of
whether the registrant has challenged or appealed the assessment.
(vii) The total number of mining-related fatalities.
Instruction to Item 104(a)(1)(vii): Registrants must report all
fatalities occurring at a coal or other mine during the period covered
by the report unless the fatality has been determined by MSHA to be
unrelated to mining activity.
(2) A list of coal or other mines, of which the registrant or a
subsidiary of the registrant is an operator, that receive written
notice from the Mine Safety and Health Administration of:
(i) A pattern of violations of mandatory health or safety standards
that are of such nature as could have significantly and substantially
contributed to the cause and effect of coal or other mine health or
safety hazards under section 104(e) of such Act (30 U.S.C. 814(e)); or
(ii) The potential to have such a pattern.
(3) Any pending legal action before the Federal Mine Safety and
Health Review Commission involving such coal or other mine.
Instruction to Item 104(a)(3): The registrant must report the total
number of legal actions that were pending before the Federal Mine
Safety and Health Review Commission as of the last day of the time
period covered by the report, as well as the aggregate number of legal
actions instituted and the aggregate number of legal actions resolved
during the reporting period. With respect to the total number of legal
actions that were pending before the Federal Mine Safety and Health
Review Commission as of the last day of the time period covered by the
report, the registrant must also report the number of such legal
actions that are:
1. Contests of citations and orders referenced in Subpart B of 29
CFR part 2700;
2. Contests of proposed penalties referenced in Subpart C of 29 CFR
part 2700;
3. Complaints for compensation referenced in Subpart D of 29 CFR
part 2700;
4. Complaints of discharge, discrimination or interference
referenced in Subpart E of 29 CFR part 2700;
5. Applications for temporary relief referenced in Subpart F of 29
CFR part 2700; and
6. Appeals of judges' decisions or orders to the Federal Mine
Safety and Health Review Commission referenced in Subpart H of 29 CFR
part 2700.
(b) Definitions. For purposes of this Item:
(1) The term coal or other mine means a coal or other mine, as
defined in section 3 of the Federal Mine Safety and Health Act of 1977
(30 U.S.C. 802), that is subject to the provisions of such Act (30
U.S.C. 801 et seq.).
(2) The term operator has the meaning given the term in section 3
of the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 802).
(3) The term subsidiary has the meaning given the term in Exchange
Act Rule 12b-2 (17 CFR 240.12b-2).
Instructions to Item 104:
1. The registrant must provide the information required by this
Item as specified by Sec. 229.601(b)(95) of this chapter. In addition,
the registrant must provide a statement, in an appropriately captioned
section of the periodic report, that the information concerning mine
safety violations or other regulatory matters required by Section
1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection
Act and this Item is included in exhibit 95 to the periodic report.
0
2. When the disclosure required by this item is included in an exhibit
to an annual report on Form 10-K, the information is to be provided for
the registrant's fiscal year.
[[Page 81783]]
0
3. Amend Sec. 229.601 by revising paragraphs (a)(36) through (a)(98)
in the exhibit table in paragraph (a), and adding paragraph (b)(95), to
read as follows:
Sec. 229.601 (Item 601) Exhibits.
(a) * * *
Exhibit Table
* * * * *
Exhibit Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
Securities Act Forms Exchange Act Forms
-------------------------------------------------------------------------------------------------------
S-4 F-4 8-K
S-1 S-3 \1\ S-8 S-11 F-1 F-3 \1\ 10 \2\ 10-D 10-Q 10-K
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
(36) through (94) [Reserved].................... N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
(95) Mine Safety Disclosure Exhibit............ ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... X X
(96) through (98) [Reserved].................... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ An exhibit need not be provided about a company if: (1) With respect to such company an election has been made under Form S-4 or F-4 to provide
information about such company at a level prescribed by Form S-3 or F-3; and (2) the form, the level of which has been elected under Form S-4 or F-4,
would not require such company to provide such exhibit if it were registering a primary offering.
\2\ A Form 8-K exhibit is required only if relevant to the subject matter reported on the Form 8-K report. For example, if the Form 8-K pertains to the
departure of a director, only the exhibit described in paragraph (b)(17) of this section need be filed. A required exhibit may be incorporated by
reference from a previous filing.
* * * * *
(b) * * *
(95) Mine Safety Disclosure Exhibit. A registrant that is an
operator, or that has a subsidiary that is an operator, of a coal or
other mine must provide the information required by Item 104 of
Regulation S-K (Sec. 229.104 of this chapter) in an exhibit to its
Exchange Act annual or quarterly report. For purposes of this Item:
(1) The term coal or other mine means a coal or other mine, as
defined in section 3 of the Federal Mine Safety and Health Act of 1977
(30 U.S.C. 802), that is subject to the provisions of such Act (30
U.S.C. 801 et seq).
(2) The term operator has the meaning given the term in section 3
of the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 802).
(3) The term subsidiary has the meaning given the term in Exchange
Act Rule 12b-2 (17 CFR 240.12b-2).
* * * * *
PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933
0
4. The authority citation for part 239 continues to read in part as
follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3,
77sss, 78c, 78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll(d), 77mm,
79e, 79f, 79g, 79j, 79l, 79m, 79n, 79q, 79t, 404 80a-2(a), 80a-3,
80a-8, 80a-9, 80a-10, 80a-13, 80a-24, 80a-26, 80a-29, 80a-30, and
80a-37, unless otherwise noted.
* * * * *
0
5. Amend Form S-3 (referenced in Sec. 239.13) by revising General
Instruction I.A.3.(b) to read as follows:
Note: The text of Form S-3 does not, and this amendment will
not, appear in the Code of Federal Regulations.
FORM S-3--REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
* * * * *
GENERAL INSTRUCTIONS
I. Eligibility Requirements for Use of Form S-3 * * *
A. Registrant Requirements. * * *
3. * * *
(b) has filed in a timely manner all reports required to be filed
during the twelve calendar months and any portion of a month
immediately preceding the filing of the registration statement, other
than a report that is required solely pursuant to Item 1.01, 1.02,
1.04, 2.03, 2.04, 2.05, 2.06, 4.02(a), or 5.02(e) of Form 8-K (Sec.
249.308 of this chapter). If the registrant has used (during the twelve
calendar months and any portion of a month immediately preceding the
filing of the registration statement) Rule 12b-25(b) (Sec. 240.12b-
25(b) of this chapter) under the Exchange Act with respect to a report
or a portion of a report, that report or portion thereof has actually
been filed within the time period prescribed by that rule.
* * * * *
PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934
0
6. The authority citation for part 249 continues to read in part as
follows:
Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; and 18 U.S.C.
1350, unless otherwise noted.
* * * * *
0
7. Amend Form 20-F (referenced in Sec. 249.220f) by adding Item 16H,
and adding Instruction 16 to the Instructions as to Exhibits, of Form
20-F, to read as follows:
Note: The text of Form 20-F does not, and this amendment will
not, appear in the Code of Federal Regulations.
FORM 20-F
* * * * *
Item 16H. Mine Safety Disclosure
If the registrant is the operator, or has a subsidiary that is an
operator, of a coal or other mine, include the information set forth
below for the time period covered by the annual report. In an
appropriately captioned section of the annual report, provide a
statement that the information concerning mine safety violations or
other regulatory matters required by Section 1503(a) of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and this Item is
included in a specified exhibit to the annual report. Include the
following information in an exhibit to the annual report.
(a) For each coal or other mine of which the registrant or a
subsidiary of the registrant is an operator, identify the mine and
disclose:
(i) The total number of violations of mandatory health or safety
standards that could significantly and substantially contribute to the
cause and effect of a coal or other mine safety or health hazard under
section 104 of the Federal Mine Safety and Health Act of 1977 (30
U.S.C. 814) for which the operator received a citation from the Mine
Safety and Health Administration.
[[Page 81784]]
(ii) The total number of orders issued under section 104(b) of such
Act (30 U.S.C. 814(b)).
(iii) The total number of citations and orders for unwarrantable
failure of the mine operator to comply with mandatory health or safety
standards under section 104(d) of such Act (30 U.S.C. 814(d)).
(iv) The total number of flagrant violations under section
110(b)(2) of such Act (30 U.S.C. 820(b)(2)).
(v) The total number of imminent danger orders issued under section
107(a) of such Act (30 U.S.C. 817(a)).
(vi) The total dollar value of proposed assessments from the Mine
Safety and Health Administration under such Act (30 U.S.C. 801 et
seq.).
Instruction to Item 16H(a)(vi): Registrants must provide the total
dollar value of assessments proposed by MSHA relating to any type of
violation during the period covered by the report, regardless of
whether the registrant has challenged or appealed the assessment.
(vii) The total number of mining-related fatalities.
Instruction to Item 16H(a)(vii): Registrants must report all
fatalities occurring at a coal or other mine during the period covered
by the report unless the fatality has been determined by MSHA to be
unrelated to mining activity.
(b) A list of coal or other mines, of which the registrant or a
subsidiary of the registrant is an operator, that receive written
notice from the Mine Safety and Health Administration of:
(i) A pattern of violations of mandatory health or safety standards
that are of such nature as could have significantly and substantially
contributed to the cause and effect of coal or other mine health or
safety hazards under section 104(e) of such Act (30 U.S.C. 814(e)); or
(ii) the potential to have such a pattern.
(c) Any pending legal action before the Federal Mine Safety and
Health Review Commission involving such coal or other mine.
Instructions to Item 16H(c): The registrant must report the total
number of legal actions that were pending before the Federal Mine
Safety and Health Review Commission as of the last day of the time
period covered by the report, as well as the aggregate number of legal
actions instituted and the aggregate number of legal actions resolved
during the reporting period. With respect to the total number of legal
actions that were pending before the Federal Mine Safety and Health
Review Commission as of the last day of the time period covered by the
report, the registrant must also report the number of such legal
actions that are (a) contests of citations and orders referenced in
Subpart B of 29 CFR Part 2700; (b) contests of proposed penalties
referenced in Subpart C of 29 CFR Part 2700; (c) complaints for
compensation referenced in Subpart D of 29 CFR Part 2700; (d)
complaints of discharge, discrimination or interference referenced in
Subpart E of 29 CFR Part 2700; (e) applications for temporary relief
referenced in Subpart F of 29 CFR Part 2700; and (f) appeals of judges'
decisions or orders to the Federal Mine Safety and Health Review
Commission referenced in Subpart H of 29 CFR Part 2700.
* * * * *
Instructions to Item 16H
1. Item 16H only applies to annual reports, and not to registration
statements on Form 20-F.
2. The exhibit described in this Item must meet the requirements
under Instruction 19 as to Exhibits of this Form.
3. For purposes of this Item:
a. The term coal or other mine means a coal or other mine, as
defined in section 3 of the Federal Mine Safety and Health Act of 1977
(30 U.S.C. 802), that is subject to the provisions of such Act (30
U.S.C. 801 et seq.).
b. The term operator has the meaning given the term in section 3 of
the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 802).
c. The term subsidiary has the meaning given the term in Exchange
Act Rule 12b-2 (17 CFR 240.12b-2).
* * * * *
INSTRUCTIONS AS TO EXHIBITS
* * * * *
16. The mine safety disclosure required by Item 16H.
A registrant that is the operator, or that has a subsidiary that is
an operator, of a coal or other mine must provide the information
specified in Item 16H in an exhibit to its annual report on Form 20-F.
17 through 99 [Reserved]
* * * * *
0
8. Amend Form 40-F (referenced in Sec. 249.240f) by adding Paragraph
(16) to General Instruction B to read as follows:
* * * * *
(16) Mine safety disclosure. If the registrant is the operator, or
has a subsidiary that is an operator, of a coal or other mine, include
the information set forth below for the time period covered by the
annual report. In an appropriately captioned section of the annual
report, provide a statement that the information concerning mine safety
violations or other regulatory matters required by Section 1503(a) of
the Dodd-Frank Wall Street Reform and Consumer Protection Act and this
Item is included in a specified exhibit to the annual report. Include
the following information in an exhibit to the annual report.
(a) For each coal or other mine of which the registrant or a
subsidiary of the registrant is an operator, identify the mine and
disclose:
(i) The total number of violations of mandatory health or safety
standards that could significantly and substantially contribute to the
cause and effect of a coal or other mine safety or health hazard under
section 104 of the Federal Mine Safety and Health Act of 1977 (30
U.S.C. 814) for which the operator received a citation from the Mine
Safety and Health Administration.
(ii) The total number of orders issued under section 104(b) of such
Act (30 U.S.C. 814(b)).
(iii) The total number of citations and orders for unwarrantable
failure of the mine operator to comply with mandatory health or safety
standards under section 104(d) of such Act (30 U.S.C. 814(d)).
(iv) The total number of flagrant violations under section
110(b)(2) of such Act (30 U.S.C. 820(b)(2)).
(v) The total number of imminent danger orders issued under section
107(a) of such Act (30 U.S.C. 817(a)).
(vi) The total dollar value of proposed assessments from the Mine
Safety and Health Administration under such Act (30 U.S.C. 801 et
seq.).
Instruction to paragraph (16)(a)(vi): Registrants must provide the
total dollar value of assessments proposed by MSHA relating to any type
of violation during the period covered by the report, regardless of
whether the registrant has challenged or appealed the assessment.
(vii) The total number of mining-related fatalities.
Instruction to paragraph (16)(a)(vii): Registrants must report all
fatalities occurring at a coal or other mine during the period covered
by the report unless the fatality has been determined by MSHA to be
unrelated to mining activity.
(b) A list of coal or other mines, of which the registrant or a
subsidiary of the registrant is an operator, that receive written
notice from the Mine Safety and Health Administration of:
(i) A pattern of violations of mandatory health or safety standards
that are of such nature as could have significantly and substantially
contributed to the cause and effect of coal or other mine health or
safety
[[Page 81785]]
hazards under section 104(e) of such Act (30 U.S.C. 814(e)); or
(ii) the potential to have such a pattern.
(c) Any pending legal action before the Federal Mine Safety and
Health Review Commission involving such coal or other mine.
Instruction to paragraph (16)(c): The registrant must report the
total number of legal actions that were pending before the Federal Mine
Safety and Health Review Commission as of the last day of the time
period covered by the report, as well as the aggregate number of legal
actions instituted and the aggregate number of legal actions resolved
during the reporting period. With respect to the total number of legal
actions that were pending before the Federal Mine Safety and Health
Review Commission as of the last day of the time period covered by the
report, the registrant must also report the number of such legal
actions that are (a) contests of citations and orders referenced in
Subpart B of 29 CFR part 2700; (b) contests of proposed penalties
referenced in Subpart C of 29 CFR part 2700; (c) complaints for
compensation referenced in Subpart D of 29 CFR part 2700; (d)
complaints of discharge, discrimination or interference referenced in
Subpart E of 29 CFR part 2700; (e) applications for temporary relief
referenced in Subpart F of 29 CFR part 2700; and (f) appeals of judges'
decisions or orders to the Federal Mine Safety and Health Review
Commission referenced in Subpart H of 29 CFR part 2700.
* * * * *
Notes to Paragraph (16) of General Instruction B:
For purposes of this Item:
1. The term coal or other mine means a coal or other mine, as
defined in section 3 of the Federal Mine Safety and Health Act of 1977
(30 U.S.C. 802), that is subject to the provisions of such Act (30
U.S.C. 801 et seq.).
2. The term operator has the meaning given the term in section 3 of
the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 802).
3. The term subsidiary has the meaning given the term in Exchange
Act Rule 12b-2 (17 CFR 240.12b-2).
4. Instruction B(16) only applies to annual reports, and not to
registration statements on Form 40-F.
* * * * *
0
9. Amend Form 8-K (referenced in Sec. 249.308) by adding Item 1.04
under the caption ``Information to Be Included in the Report'' after
the General Instructions to read as follows:
Note: The text of Form 8-K does not, and this amendment will
not, appear in the Code of Federal Regulations.
Form 8-K
* * * * *
General Instructions
* * * * *
Information To Be Included in the Report
* * * * *
Item 1.04 Mine Safety--Reporting of Shutdowns and Patterns of
Violations.
(a) If the registrant or a subsidiary of the registrant has
received, with respect to a coal or other mine of which the registrant
or a subsidiary of the registrant is an operator
an imminent danger order issued under section 107(a) of
the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 817(a));
a written notice from the Mine Safety and Health
Administration that the coal or other mine has a pattern of violations
of mandatory health or safety standards that are of such nature as
could have significantly and substantially contributed to the cause and
effect of coal or other mine health or safety hazards under section
104(e) of such Act (30 U.S.C. 814(e)); or
a written notice from the Mine Safety and Health
Administration that the coal or other mine has the potential to have
such a pattern,
disclose the following information:
(1) The date of receipt by the issuer or a subsidiary of such order
or notice.
(2) The category of the order or notice.
(3) The name and location of the mine involved.
Instructions to Item 1.04.
1. The term ``coal or other mine'' means a coal or other mine, as
defined in section 3 of the Federal Mine Safety and Health Act of 1977
(30 U.S.C. 802), that is subject to the provisions of such Act (30
U.S.C. 801 et seq.).
2. The term ``operator'' has the meaning given the term in section
3 of the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 802).
* * * * *
0
10. Amend Form 10-Q (referenced in Sec. 249.308a) by revising General
Instruction H.2.b to delete the reference to Item 4, Submission of
Matters to a Vote of Security Holders, and adding Item 4 in Part II to
read as follows:
Note: The text of Form 10-Q does not, and this amendment will
not, appear in the Code of Federal Regulations.
FORM 10-Q
* * * * *
PART II
* * * * *
Item 4. Mine Safety Disclosures * * *
If applicable, provide a statement that the information concerning
mine safety violations or other regulatory matters required by Section
1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection
Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in
exhibit 95 to the quarterly report.
* * * * *
0
11. Amend Form 10-K (referenced in Sec. 249.310) by revising General
Instructions I(2)(c) and J(1)(e) to delete the references to Item 4,
Submission of Matters to a Vote of Security Holders, and adding Item 4
in Part I to read as follows:
Note: The text of Form 10-K does not, and this amendment will
not, appear in the Code of Federal Regulations.
FORM 10-K
* * * * *
PART I
* * * * *
Item 4. Mine Safety Disclosures * * *
If applicable, provide a statement that the information concerning
mine safety violations or other regulatory matters required by Section
1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection
Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in
exhibit 95 to the annual report.
* * * * *
By the Commission.
Dated: December 21, 2011.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-33148 Filed 12-27-11; 8:45 am]
BILLING CODE 8011-01-P