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While very few of our members are publicly traded companies, many do provide components and other goods to public companies who are under the gun to comply with Securities and Exchange Commission (SEC) rules regarding the source of any “conflict minerals” contained in their products, including components and parts purchased from smaller manufactures.

The rule requires companies to scour their supply chains for metals and minerals — such as tin, tantalum, tungsten and gold — that are tied to armed conflicts in and around the Democratic Republic of the Congo. Companies must conduct a “reasonable” country-of-origin inquiry to determine if the minerals originated from the covered countries; track and document the source and chain of custody; and include findings in a public report.

Companies have said the requirements are unduly expensive and violate their First Amendment rights by compelling them to criticize their own products if they contain the minerals. They also mark a departure from the SEC’s traditional role of requiring disclosures related to a company’s financial health.

Disclosures for the first year of the rule are due by May 1. The second reporting year, which began on Jan. 1, no longer allows companies to enjoy the reprieve of an “indeterminable” status that was allowed in 2013.

Industry groups appealed a federal court decision from last July upholding the Section 1502 provisions of the Dodd-Frank Act. The business organizations maintain the SEC took arbitrary and capricious actions when adopting the rule, and say the rule violates their First Amendment free-speech rights.

The Wall Street Journal reported that two judges on a three-member federal appeals court recently voiced skepticism about a controversial rule requiring publicly traded U.S. companies to disclose whether their goods contain certain minerals whose sales result in profits that fund violent armed groups in central Africa.

The hour-long oral argument before the U.S. Court of Appeals for the District of Columbia Circuit, cast uncertainty over the future of the 2012 Securities and Exchange Commission rule, after two conservative judges on a three-member panel expressed repeated concerns about the measure.

Judge A. Raymond Randolph, asked questions about the objective of the rule, and whether it was intended to fuel boycotts of products, convince investors not to buy stock in certain companies or “stigmatize the companies.”

“There seems to be a slippery slope problem here,” Randolph said. “Under your First Amendment theory… could Congress say that all companies now have to report the conditions under which their products are manufactured overseas, what the pay rate is, whether they are using child labor? Is that the next step here?”

The SEC estimates the rule will cost companies a total of $3 billion to $4 billion up-front, plus more than $200 million a year.

The judges did not indicate a timeline for when they may rule. Despite the pending litigation, the SEC is still planning to require companies to submit their first conflict minerals report for the year 2013 by the end of May. Tuesday’s case marks the second time that the SEC defended the conflict minerals rule in federal court.

In July, a lower U.S. court upheld the rule, marking a rare victory for the SEC, which over the last decade has lost multiple legal challenges to its rules.