Global Electronics Legislation: What You Need to Know Now

It’s more challenging than ever for distributors, manufacturers, and suppliers of electrical and electronic equipment to assure compliance.

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The sheer number of regulations that limit harmful substances in electronics grew in 2011. Consequently, it’s more challenging than ever for distributors, manufacturers, and suppliers of electrical and electronic equipment to assure compliance.

We now have RoHS laws in the European Union (EU), Japan, China, Korea, and California; REACH in the EU; Proposition 65 and Green Chemistry laws in California; formaldehyde limits on wood products imported into the U.S.; and BPA, DEHP, and latex restrictions on medical products sold in the U.S. and Canada.

In the past year RoHS and WEEE recasts were unveiled in the EU, conflict minerals hit the headlines in the U.S., the elusive China RoHS made an appearance, India enacted RoHS and WEEE legislation, and the U.S. Senate approved rules requiring defense contractors to take steps to detect and avoid counterfeit parts.

Let’s look at some of these changes, and what’s expected going forward.

European Union

EU RoHS Recast

The EU RoHS recast is perhaps the biggest legislation news story of 2011. This goliath of a directive aims to drastically reduce the use of six hazardous substances (Mercury, Lead, Cadmium, Hexavalent Chromium, PBDE, and PBB) in electrical and electronic equipment.

The most wide-reaching change within RoHS was the introduction of an open scope, which is due eight years after the recast was published in the Official Journal of the EU (July 2011) and is expected by 2019. This new Category 11 will include all products not captured in current Categories 1 to 10, unless specifically excluded. With this extended scope comes further testing and certification costs. The decision to include an open scope was not the choice of all member states, but was adopted as part of significant compromises to guarantee a first reading approval.

One change that will have a large impact on the electronics industry is the definition of research and development (R&D) equipment within RoHS. Previous enforcement guidelines specified that R&D equipment would be in scope if it transfers data to the chip on the board (falling into category 3). However, after prolonged protest from manufacturers, the recast now states that equipment will be excluded if used solely for R&D purposes. It is worth considering though, that there is a chance that R&D will fall into the open scope of 2019.

The RoHS recast was passed with no additional restricted substances to the original six. This was an area of significant compromise in order to get it approved as quickly as possible. However, four substances (HBCDD, BBP, DBP, and DEHP) have been highlighted for priority assessment within three years. This comes with a move towards a REACH-style approach to substance restriction, which provides suitable alternatives for restricted substances.

EU WEEE Recast

Following years of disagreements over its implementation, the European Commission submitted a WEEE recast for consideration by the European Parliament and the European Council. As with any piece of wide-reaching legislation, the WEEE recast is producing some interesting debate between the various parties involved. It has been suggested that it will be published in the Official Journal by summer 2012, but there is still much to be done if this time frame is to be achieved.

EU REACH

REACH, unlike RoHS, is not simply a case of providing a certificate of compliance, but instead drives the flow of safety information down through the entire supply chain. This includes automatically providing a Safety Data Sheet (SDS) both at the point of first order, as well as when the SDS is revised. It is likely that the list of Substances of Very High Concer (SVHCs) will be in the hundreds before the end of 2012.

Most small and medium sized enterprises (SMEs) should have processes in place to collect REACH information, but the burden of having to collect data every six months still remains large. Calls have been made to reduce batches to just one a year, incorporating a larger number of substances. Such a change would drastically ease the effort in sending repeated requests to manufacturers and the burden of managing safety information. However, this is unlikely to happen and, while the Competent Authorities never intended REACH to become a so-called paper chase that is exactly what has happened.

Asia

China RoHS

It was only a fleeting visit, but China RoHS at last made some headway in 2011, and brings with it general similarities to EU RoHS. The Certification and Accreditation Administration of China has published implementation rules on the Voluntary Certification on the Pollution Control of Electronic Information Products.

The implementation rules entered force on November 1, 2011 and cover product scope, types of certification, certification procedures and requirements, RoHS certificates, a voluntary product certification mark, as well as details on certification fees. The first batch of electronic information products requiring certification was also published, and these include electronic information products, peripherals, components, and electronic materials.

The Chinese authorities continue to work on several new standards and it is still the intention that “electronic information products” be extended to “electrical and electronic products,” and so greater alignment to EU RoHS. While finished goods still require China Compulsory Certification (CCC), the Voluntary Certificate applies to materials, parts, and components.

Manufacturers can expect to wait 45 to 60 days to obtain the voluntary certificate, although it will remain valid for five years. So, while the China RoHS restriction phase is running some four years late, there does appear to be some positive progress.

India

RoHS and WEEE

The Indian Government in 2011 published legislation on the disposal of waste electrical and electronic equipment, and what is referred to as “reduction in the use of hazardous substances.”

The India legislation treats WEEE and RoHS identically in terms of scope and exclusions. There is some similarity with the EU WEEE and RoHS legislation, although WEEE and RoHS are treated as separate legislation in the EU.

The India “e-waste (Management and Handling) Rules 2011” will come into effect on May 1, 2012.

USA/Canada

Conflict Minerals

The Dodd-Frank Wall-Street (Financial) Reform and Consumer Protection Act was passed in 2010. The aim of Section 1502 is to stop companies from sourcing minerals from areas in the Democratic Republic of Congo (DRC) and surrounding region, where armed conflict and human rights abuses are occurring. The Securities & Exchange Commission (SEC) was required to issue a rule requiring companies to annually disclose if their products contain “conflict minerals” (tin, tantalum, gold, or tungsten), and if the minerals came from a conflict-free source.

The SEC is expected to issue their final rule in early 2012. SEC registered companies will be required to include a conflict minerals disclosure in their annual SEC report.

Companies will be required to audit their supply chains to verify the source of any tin, tantalum, tungsten, or gold (and their derivatives) in their products.

Key details remain to be finalized. What documents will be required to prove compliance? Will the SEC mandate independent audits? What time frame will companies be given to respond?

Data collection and verification will be difficult. Mineral ores are usually mined, sent to a smelter, and then the smelted material is shipped to a refinery. Manufacturers typically buy refined material from local refiners. They rarely buy from mines or smelters directly. On top of that, auditor access to conflict regions is limited, and third party audit schemes are not yet readily available for companies to use.

Businesses will be expected to move quickly once the final rule is issued. Although it is unclear exactly what the SEC rule will require, a couple of industry trade groups are creating guidance materials for industry. The most notable is the EICC-GeSI reporting framework. A prominent industry trade group (IPC) is working on a reporting standard that builds on the EICC-GeSI work. Reporting will begin in earnest once the SEC issues its’ final rule.

California: Proposition 65 and Green Chemistry Update

Proposition 65 is a law that requires businesses to notify consumers about chemicals known to cause cancer or birth defects or other reproductive harm that are present in products sold in California. The list of Proposition 65 toxic chemicals requiring special warning labels expanded to approximately 800 in 2011.

The California Green Chemistry law is scheduled to take effect in 2012. It is an EU REACH type law that enables California to study and restrict hazardous substances in consumer products. The Green Chemistry law is putting pressure on the federal government to amend the U.S. Toxic Substances Control Act, and provide uniform state rules governing chemicals in commerce (preventing differing state laws). A proposed Toxic Substances Control Act (TSCA) reform bill has already been introduced in the U.S. Congress and will be considered in 2012.

Formaldehyde

The U.S. EPA is required to promulgate regulations by January 1, 2013, which will limit allowable emissions from formaldehyde composite wood products sold in the U.S. Electronic equipment containing formaldehyde treated wood (i.e. audio speakers) is subject to this rule. Formaldehyde is a carcinogen and is already regulated as a toxic air pollutant in California. The federal rule was enacted to replace the California rule and prevent differing state laws.

Medical products

There are new requirements regarding DEHP (bis ethylhexyl phthalate) and BPA (bisphenol A) in medical products sold in the U.S. and Canada. Canada’s Bill C-307 required Health Canada to produce a list identifying all medical devices sold in Canada containing ≥ 0.1% w/w of DEHP or any BPA in any concentration. The information is currently being collected before issuing any content restrictions. The U.S. Food & Drug Administration (FDA) has agreed to make a decision on banning BPA in food items (plastic bottles and can liners) by March 31, 2012. Both DEHP and BPA are EU REACH SVHCs.

Counterfeit Parts

Counterfeit electronic parts are appearing at an alarming rate. Counterfeiters are taking scrap components (like semiconductors and transistors), and sanding off part numbers and any other identifying marks. Then in a process known as “black topping,” they are recoating the parts to hide the sanding marks. Black topped (scrap) parts are being relabeled and sold as new parts.

The U.S. defense industry is particularly vulnerable as they often rely on military and commercial-grade “obsolete parts” to maintain long-life military equipment. A military part may be manufactured for only a couple years, while the defense system that it is used in may remain in service for more than two decades.

Defense contractors often must purchase “obsolete parts” from independent distributors. While some independent distributors operate legitimately, others may be set up for the sole purpose of selling illegal counterfeit parts.

An amendment to the 2012 National Defense Authorization Act addresses the problem. Starting in 2012, defense contractors will be required to establish systems for detecting and avoiding counterfeit parts. Contractors who fail to do so will be required to absorb the costs of fixing problems caused by counterfeit parts. In addition, the Department of Defense will be required to adopt policies and procedures for detecting/avoiding counterfeit parts.

So What’s Next?

In the EU, we expect the scope of both EU RoHS and REACH to expand, exemptions to be revised, and more REACH SVHCs to be added. This will result in more data requests up and down the supply chain. We also expect the WEEE recast to be approved.

In Asia, we expect more progress with China RoHS, India RoHS, and e-Waste legislation.

In the U.S., we expect Conflict Minerals regulations to be issued and that complying will be a time consuming exercise. We also expect more REACH like activity in the U.S. We expect the California “Green Chemistry” Initiative will result in California hazardous substance restrictions. This will put added pressure on the U.S. Congress to reform the federal Toxic Substances Control Act. Finally, we expect the FDA to take action in 2011 to restrict the use of BPA in food items.

In Canada, we expect more REACH like activity under Schedule 1 of the Canadian Environmental Protection Act (CEPA). DEHP and BPA content restrictions in medical products are likely.

Legislative Assistance

Staying current on legislation is a challenge that we have addressed on our comprehensive legislative microsite, which offers first-to-market, accessible information, and guidance through our network of specialists and our own in-house expertise at no charge.

This article originally appeared in the January issue of PD&D’s iPurchase.

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