RoHS enforcement rules still unclear
The deadline for RoHS compliance is July 1, but incredibly no enforcement guidelines have been issued by the European Union weeks before the law goes into effect.
By James Carbone -- Purchasing, 6/15/2006 2:00:00 AM
While the electronicsindustry has spent billions of dollars to comply with the European Union's Restriction of Hazardous Substances (RoHS) directive, it is unclear how the law will be enforced.
The European Commission (EC), which oversees the RoHS legislation, was supposed to release enforcement guidance for RoHS last year, but did not do so until late May. RoHS bans the use of lead, mercury, cadmium, chromium, polybrominated biphenyls and polybrominated diphenyl ethers from electronics sold in EU member states beginning July 1. Companies that violate RoHS can be fined and its executives could face criminal penalties, including jail time if their companies flagrantly violated the law. Despite the stiff penalties, the EC waited until almost a month before the RoHS deadline went into effect before issuing a guidance.
"It was a frustrating thing. Everyone was waiting for this enforcement guidance to come out," says Holly Evans, president of Strategic Counsel, an Alexandria, Va., a firm that advises companies on environmental regulations. "It should have been issued about a year ago so that companies can prepare." "It was negligent of the commission to not release an enforcement guidance," until May she says.
The guidance that was issued is not legally binding, and no EU member state is required to follow the enforcement recommendations, so exactly how RoHS will be enforced is still unclear. However, the guidance is useful because it promotes a due diligence approach to enforcement, says Evans.
The guidance says companies should have a Compliance Assurance System (CAS) which covers compliance within the company and with the company's suppliers. Companies should collect documentation that shows that their products and their supplier's products comply with the EU directive. Such documentation could be materials declarations that show products meet RoHS requirements and analysis reports from company tests on products.
If a company's product is called into question, the company would be asked to show documentation, according to the guidance. If the EU enforcement agency is not satisfied with the documentation, the product could be tested. The guidance suggests use of energy-dispersing x-ray fluorescence analysis for suspect products.
It the product is found not to be RoHS compliant, the manufacturer would be informed and the enforcement agency would decide whether to take legal action which would lead to fines. The enforcement agency could also work with the manufacturer to bring the product into conformance.
Evans says the law will be enforced and she expects there will be some "high profile cases so the commission can show it is serious about the law." In addition, there will be some environmental groups pushing the commission to enforce it.
She says there are some likely scenarios for enforcement. "For instance, if a product enters the Netherlands, Dutch custom officials would review it to determine if testing was necessary." They could do spot checks, randomly checking a computer, a television or other piece of electronics equipment to see if it complies, she says.
One thing that is known about enforcement is that no government agency will certify that a product is compliant. Rather, the product will have a presumption of compliance if a company ships products to an EU member state after the July 1 deadline. However, if there is reason to suspect noncompliance through a spot check or if an environmental group calls a product into question, the company will be asked to show documentation that proves it is compliant, says Evans. If officials are not satisfied with the documentation, the product would be tested for the hazardous materials covered by RoHS.
Timing is everything
While there has been confusion about enforcement there has also been confusion about the timing of products shipped into the EU and whether they will be covered by RoHS.
"Products that are put on the market prior to July 1, 2006 are outside the scope of RoHS even if they contain some of the restricted hazardous substances," says Evans. But there are questions about whether products that are placed in inventory in an EU member state are actually considered to be on the market and therefore not under the scope of RoHS.
EC officials are concerned about the shipment of large amounts of noncompliant products into the EU just prior to deadline. There are indications that the stockpiling of large amounts of noncompliant equipment prior to the deadline won't be allowed.
"The other issue is some member states have said the 'put-on-the-market' determination occurs when the products enter their own territory, but that goes against what the commission said," Evans asserts. "The commission said when the product enters the EU, it is considered to be on the market," she says. So if a shipment of computers enters France before the July 1 deadline, but then is shipped to Italy and sold after the deadline, it would not be within the scope of RoHS, according to the EC. The fact that the shipment was transported to another member state after the July 1 deadline shouldn't matter, but some EU countries are saying otherwise.
"It is a difference of opinion that needs to be worked out," says Evans.
Due diligence done
While the EC waited to release enforcement guidance, many procurement organizations have established a supply chain material declaration process and a database for the information that they have received from their suppliers concerning materials and compliance. Most companies have received material declarations and certificates of compliance from their suppliers.
Many companies have also formed a corporate-wide compliance team and developed a corporate RoHS statement and a RoHS compliance roadmap.
Evans says the more a company can document that it is using RoHS compliant parts and that its supplier "assessment and analysis appear to be reasonable," the better the company can argue that it has done everything possible to ensure RoHS compliance.
Most major OEMs and EMS providers are not worried about being compliant and being able to prove it even though the EC's guidelines are unclear.
In fact, some EMS providers have been working on lead-free manufacturing for years. Case in Point: Flextronics in San Jose, Calif. "We started our lead-free journey back in 1995," says Seb Nardecchia, director, environmental compliance for the EMS provider. "We invested a lot in research and development to understand what the lead-free alternatives are and what impact they have on manufacturing processes, energy use and reliability of the end product. It has been a costly and a worthy effort."
The problem Flextronics and other EMS providers face is that they have to maintain both RoHS-compliant and noncompliant lines as well as separate stockpiles of RoHS and noncompliant parts. That's because many EMS providers have networking equipment, medical equipment and defense contractors as customers. Those industries are exempt or excluded from RoHS and have no immediate plans to design RoHS-compliant products.
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Pamela Gordon, president of Technology Forecasters, an EMS industry researcher and consultant, says it is costly to maintain RoHS and non-RoHS lines and some EMS providers are charging OEMs more to build noncompliant assemblies. It’s more expensive in part because it is getting more difficult to find noncompliant components and prices are rising for such parts, she says.
“It is getting more expensive to round up a full complement of components in leaded versions,” says Gordon. “Component suppliers want to offer parts that sell well and are profitable. Leaded components are in the category of not being good markets anymore, not having attractive volumes and not having attractive profitability,” she says. Suppliers are either discontinuing the leaded version or, if they continue to make them, charging more. It is also costly to maintain separate inventories of compliant and noncompliant parts.
Fade to compliant
The issue of availability of noncompliant parts is one that buyers will have to deal with for awhile and it will get more serious after the RoHS deadline as many suppliers phase out noncompliant parts.
However, some suppliers say there is still strong demand for non-ROHS parts and they will continue to make them for awhile.
Earle Durham, director sales and marketing America for connector maker FCI’s communications, data and consumer division in Etters, Pa, says only about 20% of FCI’s business in America is for RoHS products. “The percentage may increase, but it won’t get to 85% anytime soon because we still have a lot of telecom customers who don’t plan on switching to RoHS- compliant products,” says Durham. “We’ll make the noncompliant products as long as demand is there.”
He says demand for noncompliant products is strong because about 35-40% of FCI’s North American business is with telecommunications industry which makes RoHS exempt equipment. As might be expected, 85-90% of the connectors FCI ships to Europe are RoHS compliant.
At the other end of the spectrum is Murata Electronics, which makes capacitors and other components. Virtually all of its parts are RoHS compliant.
“In fact, the majority of our products were compliant a year ago,” says John Denslinger, executive vice president sales and marketing for Murata in Smyrna, Ga. “At the end of 2005, we decided not to sell anymore noncompliant products into the market. Everything has switched over with a few exceptions for a few customers,” he says.
The phasing out of noncompliant products will result in an opportunity for many independent distributors because supply will be scarce and prices high.
“The European Union wants industry to define an ecological profile for products, which will be a metric,” says Michael Kirschner, president of Design Chain Associates.
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“I expect the demand/supply balance to be a big mess for the next six to nine months,” says Michael Kirschner, president of Design Chain Associates in San Francisco. “There will be an imbalance. It may vary by part and by manufacturer.”
Some suppliers and some franchised distributors may unload their noncompliant products on the open market. However, several executives at franchised distributors said they heard one component manufacturer planned to dispose of his non RoHS-compliant parts, many of which contain lead, by dumping them in a landfill.
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What’s exempt from RoHS While the Restriction of Hazardous Substances prohibits the use of lead, mercury chromium and other materials from being used in electronics equipment, there are a number of exemptions. In fact, exemptions have been added to the original 2003 legislation. Here is a complete list of exemptions. RoHS Exemptions * Mercury in many fluorescent lamps. * Lead in cathode ray tubes, electronic components fluorescent lamps. * Lead as an alloying element in steel containing up 0.35% lead by weight. * Lead as an alloying element in aluminum containing up to 0.4% lead by weight. * Lead as a copper alloy containing up to 0.4% lead by weight. * Lead in high melting temperature solder. * Lead in solder for servers, storage and storage array systems, networking infrastructure equipment for switching, signaling, transmission as well as network management for telecommunications. * Lead in electronic ceramic parts * Cadmium and its compounds in electrical contacts and cadmium plating. * Hexavalent chromium as an anticorrosive of the carbon steel cooling system in absorption refrigerators. * Deca-BDE in polymeric applications. * Lead in lead-bronze bearing shells and bushes * Lead in compliant pin connector systems. * Lead as a coating material for thermal conduction module C-ring. * Lead and cadmium in optical and filter glass. * Lead in solders consisting of more than two elements for the connection between the pins and the package of microprocessors with a lead content of more than 80% and less than 85% by weight. * Lead in solders to complete a viable electrical connection between semiconductor die and carrier within Flip-Chip packages. * Lead in linear incandescent lamps with silicate coated tubes. * Lead halide as radiant agent in high density discharge lamps for professional reprography applications. * Lead as activator in the fluorescent powder (1% lead by weight or less) of discharge lamps when used as sun tanning lamps containing phosphorus and when used as specialty lamps for diazo printing reprography, lithography, insect traps, photochemical and curling processes., * Lead with PbBiSn-Hg (lead bismuth tin mercury) in specific compositions as main amalgam and with PbSn-Hg as auxiliary amalgam in very compact energy savings lamps. * Lead oxide in glass used for bonding front and rear substrates of flat fluorescent lamps used for liquid crystal displays. |
Related RoHS information:
http://www.designchainassociates.com/hazmat.html
http://www.buyusa.gov/europeanunion/rohs_enforcement_info.html
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