IEC 62474 – Material Declaration for Products of and for the Electrotechnical Industry
Industry Regulations like RoHS, WEEE, REACH, Prop 65 and Conflict Minerals have sprouted from product chemical composition management. Collecting material declaration has thus become the foundation of compliance management in the electrical and electronics industry. Multiple compliance regulations across the globe today, drive manufacturers in tracking and managing this information on a continuous basis. The electro-technical industry and various companies associated with it make use of material declarations for tracking and declaring specific information regarding the material composition of the various final products. The new international standard of IEC 62474 aims to harmonize the requirements of various members within the supply chain and also improve economic efficiencies. The role of new standard IEC 62474 To synchronize the requirements across the industry and to reduce the cost of data management, IEC has come up with a new standard called IEC 62474. This standard can act as the basis of data exchange for material composition data and provide material declarations. IEC 62474 specifies: Material declaration content, including terms of substances, substance class and material groups. It also provides data standards for software developers to create applications to manage this data. Information offered in the IEC 62474 database There are four types of information provided in the IEC 62474 database Declarable substance groups and declarable substances: This section contains substances and substance groups with information like “reportable applications”, “reporting threshold” and “reporting requirement” Reference Substances: This section contains an indicative list of specific substances that are included with in the substance group. This list is an informative list and not an exhaustive one. Material classes: This list includes designated material classes that need to be included in material declarations, if contained in the product. XML schema for materials declaration: In this category an XML schema and developer table is available for download. Getting material declarations for the entire product Bill of Material is an important activity in the compliance effort of most companies. IEC 62474 is a step forward to support the mammoth task undertaken by companies every year to conform to the Environmental Compliances. What are the substances that should be declared? The substances that form a part of the products manufactured in the electrical and electronics industry should be mentioned or declared in this material declaration file as set according to the IEC 62474 standard. The manufacturing chemicals or substances that react and form other chemicals and/or otherwise do not continue to remain within the product are not needed to be reported. Nevertheless, in certain cases, a chemical reaction once started may not reach completion and traces of some unreacted quantities of any intermediate chemical substance may continue to remain within the finished product. Such chemicals must be reported at all circumstances. If the intermediate chemicals are presented in the declarable substances list of IEC 62474 and quantity of this component remains above reporting threshold in final product, then that needs to be included in the report. If that is not done, then the material declaration is not going to be in compliance with the requirements of IEC 62474. A user may simply state that their firm within the electrotechnical industry is compliance with the norms as presented by the IEC 62474 provided they have included in the list all the reportable substances and the varied substance groups which are present within the final product in quantities above the final reporting threshold.
The path ahead in Conflict Mineral Compliance
In May, 2014 (deadline for submitting the Conflict mineral compliance report to SEC for the year 2013), we saw many listed companies submitting their form SD and conflict mineral reports to SEC to complete their reporting obligations. During the same period most of the associated frameworks were also undergoing changes. This caused amplified challenges for the electronic industry and its supply chain, to manage the compliance effort comprehensively. However the efforts undertaken by EICC, GeSI, CFSP, OECD and IPC to give clarity and direction to the industry in a short time frame were noteworthy. We reviewed the SD form submissions of several publicly listed companies to understand the nature of research done that led to the ‘conflict mineral declaration of 2014’. We observed, towards the end of 2013 and beginning of 2014 all companies frantically sent out CMRTs and started collecting responses from their supply base. Also most of the companies gave out their CMRT forms at a company level without effectively identifying the smelters in their supply chain. Additionally the effort done on implementing the due diligence process was very limited. This resulted in responses that were similar across the supply base and comprised very limited mineral traceability information. The final outcome was, most companies provided their compliance status as ‘Unknown’. We understand that the conflict mineral compliance and reporting process is expected to evolve further in the coming years, hence in this article we are sharing a few areas of primary concern for the companies: The upcoming challenge in conflict mineral compliance will be to show incremental progress in the efforts on a year-on-year basis. Most companies will have to invest effort in identifying smelters in their supply chain. Identifying the product chemical composition and driving product level CMRT declarations from the suppliers will be a crucial step for companies to channelize their efforts towards high impact suppliers, who account for the major percentage of conflict minerals in their products. The due diligence process implementation will have to be performed in alliance with expert consulting companies. Because of the already existing regulations in compliance (including ROHS, REACH, WEEE and Prop 65), most electronic companies will have to reach out to their supply base to collect diverse information. Due to the vast depth of efforts and the evolving nature of conflict minerals compliance, most companies might resort to end-to-end conflict mineral solution providers rather than running this as a special project within their finance or compliance department. Most software solution providers in the environmental compliance area have already extended their solution to include conflict mineral modules which will make this consolidation more easy and achievable. The ideal strategy for the industry will be to consolidate these activities with the conflict mineral RCOI.
Impact of the ROHS2 directive on Medical Device Manufacturers
While Medical Device manufacturers have had complex rules governing the manufacture and sale of their products, they have been exempted from most environmental regulations regarding hazardous substances. However, with the extension in scope of European Union’s (EU) ‘Directive 2011/65/EU’ in July 2014, RoHS compliance became mandatory for Medical Device manufacturers. ‘Directive 2011/65/EU’ (RoHS2 recast) focuses on the restriction of the use of certain hazardous substances in electrical and electronic equipment, thereby requiring every manufacturer selling to the EU market to re-evaluate their inventory and ensure compliance with the recast RoHS and WEEE directives. Medical Device manufacturers are obligated to ensure and demonstrate compliance with the directive. The implications of Non-Compliance to the RoHS2 directive are grave and will prevent the product from carrying a ‘CE’ mark and eventual removal of the product from the market. In order to demonstrate compliance to the RoHS2 recast, Medical Device Manufacturers are required to Define their product and identify the directives applicable to it Source RoHS compliant material from suppliers & analyse and identify material changes needed to comply with the RoHS2 directive Show proof of compliance to RoHS2 recast by drawing up required technical documentation surrounding their product including conformity risk assessment report, test reports for each part Cite relevant harmonized standards applicable to the device Maintain a register of non-conforming products Provide explanations as to why certain parts do not include test reports Analyze their internal production and implement an appropriate internal production control procedure in line with the recast Draw up an EC declaration of Conformity and affix the ‘CE’ mark on the finished product Be wary of new materials introduced to the medical equipment and ensure that the equipment is tested & re-certified Include a complete evaluation of the product against the list of Restricted Substances by 2014 Medical Device Manufacturers now facing the daunting task of understanding the RoHS2 directive, identifying the rules and regulations impacting their products and providing relevant documentation to demonstrate full compliance. Medical Device Manufacturers have to get comfortable with requirements of RoHS2 directive as fast as they can in order to maintain their competence in EU market.
How the US Court stay going to affect your Conflict Mineral efforts.
Introduction to Conflict mineral law : The United States Dodd Frank Act, Section 1502 requires manufacturing companies to identify and disclose to the U.S. Securities and Exchange Commission (SEC), the source of 3TG minerals- tin, tantalum, tungsten and gold used in their products when those minerals originate from or around the the Democratic Republic of the Congo (DRC). Obligation of Conflict Mineral manufacturers : The SEC law transpired in to an induistry compliance process as below. 1 Determine Applicability – Does the issuer fall under the regulation? Do products and parts contain 3TG minerals? 2 Perform RCOI – Identify if the country of origin of the 3TG minerals is in the DRC region. 3 Due Diligence – For 3TG minerals sourced from the DRC region, conduct due diligence over the chain of custody 4 Determine Status – Assess supplier, part and product level conflict mineral status 5 Report – Fulfill SEC and customer reporting requirements. Challenge to the three-judge panel of the U.S. Court : U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers — had argued that the SEC conducted a flawed rulemaking and failed to weigh the costs of new regulations. The challenge by these association is that, the conflict minerals rule and Section 1502 of Dodd-Frank represent, government compelled speech in breach of the First amendment. The Manufacturers asserted that the conflict minerals regime is unlawful and compels companies to make an ideologically driven, rather than fact based, statement about their own products, namely, that the products have not been found to be conflict-free. They argued that, this type of speech forces companies to denounce their own products based on information that is speculative, rather than fact based. The Manufacturers also objected to the requirement that companies post conflict minerals reports and information on their corporate websites, arguing that those websites are “Our space”. During argument the Manufacturers clarified that they do not challenge the requirement to report factual information about conflict minerals in their products to the SEC. Their First Amendment challenge does not extend to the SEC’s ability to take that factual information and make its own judgments about whether a company’s products are conflict free. Rather the objection is to the requirement that companies apply that ideological label to their own products and post conflict minerals information on their own corporate websites. Stay by US court : On April 14, 2014, the U.S. Court of plea for the District of Columbia Circuit ruled that the U.S. Securities and Exchange Commission (the “SEC“) rule requiring issuers to disclose whether they use “conflict minerals” in their products was unconstitutional because it would compel speech in violation of the First Amendment.The circuit court remanded the matter to the district court, from where this case was appealed, for further consideration The circuit court found the label conflict free to be a “metaphor that conveys moral responsibility for the Congo war and that forcing a company to use that language interferes with First Amendment protections. The SEC argued that rational basis review is appropriate because the conflict free label discloses purely non- ideological information. The circuit court disagreed, finding that rational basis review is the exception, not the rule in First Amendment cases. While the U.S. Supreme Court has stated that rational basis review applies to certain disclosures of purely factual and uncontroversial information, the circuit court relied on a previous ruling to hold that this is limited to cases in which disclosure requirements are reasonably related to the State’s interest in preventing deception of consumers. No party in the case had suggested that the conflict minerals rule was related to preventing consumer deception, and in the district court the SEC admitted that it was not. The circuit court found that the SEC failed to present any evidence that a less restrictive approach would not achieve the rule’s intended purpose. The circuit court considered alternatives to regulating speech for example issuers could use their own language to describe their products or the government could compile its own list of products that it believes are affiliated with the Congo war based on information issuers submit to the SEC. Without any evidence that alternatives would be less effective, the circuit court dismissed the SEC’s claim that the restriction to speech as enforce by the disclosure requirement is to achieve the rule’s purpose. As a result, the circuit court found the SEC’s conflict minerals disclosure rule violates the First Amendment, to the extent the SEC rule and the underlying statute require issuers to report to the SEC and to state on their websites that certain of their products have not been found to be DRC conflict free. SEC Partial Stay : The Securities and Exchange Commission (SEC) issued a partial stay of its conflict minerals rule. The SEC’s order stayed the effectiveness of only those portions of Rule 13p-1 under the Securities Exchange Act of 1934, as amended and Form SD that would require issuers to make statements in conflict minerals reports that the U.S. Court plea’s for the District of Columbia Circuit held would violate the First Amendment. Thus, only the requirement that issuers report in a conflict minerals report to be filed with the SEC and posted on the issuer’s publicly available website that any of their products have not been found to be DRC conflict free is stayed. The stay will remain in place pending conclusion of the litigation involving the rule. In addition, the order denied the motion for stay filed with the SEC by the appellants in the case before the DC Circuit Court of Appeals, who had petitioned the SEC to stay the effectiveness of the entire rule. The SEC’s order is consistent with the recent statement published by the Director of the SEC’s Division of Corporation Finance (CorpFin) in response to the court’s ruling (Statement) that indicated June 2, 2014 remains the deadline for issuers to file any required Form SDs and conflict minerals reports and indicated that the CorpFin
Your Responsibility in EU REACH Compliance
Posted Under: REACH Compliance Services About REACH Compliance Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) is the system for controlling chemicals in the EU/EEA. REACH entered into force in 1 June 2007. REACH addresses most of the chemical substances that are manufactured in, or imported into, the EU. This can be A substance on its own A substance in a mixture A substance that makes up an ‘Article’ REACH is the strictest law to date regulating chemical substances and will affect industries throughout the world. REACH entered into force in 1 June 2007, with a phased implementation over the next decade. How REACH Compliance helps Companies? Information on the properties and hazards of substances are needneeded to be collected and assessed as per this regulation. REACH establishes procedures for it. Companies need to register their substances and to do this they need to work together with other companies who are registering the same substance. The substances manufactured or imported into the EU in quantities of 1 tonne per year or more need to be registered. In principle, REACH applies to all chemical substances; those used in industrial processes, day-to-day lives, cleaning products, paints , articles such as clothes, and furniture etc. Therefore, the regulation has an impact on most companies across the EU. What is important Before starting the procedures for becoming REACH compliant, it is important to identify who you are and what is your role under REACH. And you need to understand the ways it might affect you. First you have to ask yourself what you do in your business and where chemicals might be used. REACH impacts on a wide range of companies across many sectors, even those who may not think of themselves as being involved with chemicals. Almost every company in the European Union will be bounded by a new responsibility under REACH. There are different types of REACH duty holder, which are explained below to see how you fit in. Duty holders If you make chemicals, either to use yourself or to supply to other people (even if it is for export), You are called Manufacturer under REACH and you will probably have some important responsibilities under REACH. If you buy anything from outside the EU/EEA, It may be individual chemicals, mixtures for onwards sale or finished products, like clothes, furniture or plastic goods;you are called Importer and you likely to have some responsibilities under REACH. Most companies use chemicals, sometimes even without realizing it, any business using chemicals can be categorized under Downstream users, which probably includes most businesses in some way .Therefore you need to check your obligations if you handle any chemicals in your industrial or professional activity. You might have some responsibilities under REACH. Other actors in the supply chain such as distributors also can be a part of this category. If you are a company established outside the EU, your category is Companies established outside the EU, and you are not bound by the obligations of REACH, even if you export their products into the customs territory of the European Union. The responsibility for fulfilling the requirements of REACH, such as preregistration or registration lies with the importers established in the European Union, or with the Only Representative of a non-EU manufacturer established in the European Union. Obligations Manufacturer Manufacturer: A manufacturer is somebody based in the EU/EEA that produces or extracts a substance. This could be by chemical synthesis, by smelting or by extracting them from another sources. Companies that simply blend substances together not generally manufacturers; however,they should check this, especially when mixing acids and bases. Duty: If you want to continue to manufacture chemicals covered by REACH you will need to register them with the European Chemicals Agency (ECHA) in Helsinki. Registration means providing a package of technical information on the chemical and its hazards. Registration is phased over a period of years based on tonnage levels and in some cases the hazards of the chemical. EU manufactures shall ask for or prepare the latest Safety Data Sheets according to REACH and CLP regulation if the substances or preparations meet the criteria for classification as hazardous. They shall communicate information about the safe use of chemicals (risk management measures) along the supply chain in the format of SDS/exposure scenario Importer Importer: If you directly import anything from outside the EU/EEA, be it chemical substances (including metals), mixtures, articles, or articles that substances intended for release, then its quite possible that you may have some responsibilities under REACH. Duty: If you want to continue to import chemicals covered by REACH you will need to register them with the European Chemicals Agency (ECHA) in Helsinki. Companies outside the EU cannot register chemicals themselves but can appoint an EU-based agent called ‘Only Representative’ to act on behalf of their EU-based importer. EU importers will be exempt from REACH registration if their non-EU suppliers have registered by appointing REACH Only Representative(OR); however, importers need to confirm with their suppliers’ OR that they are on the inventory of importers and their tonnage and uses are covered by the registrations of OR. This can be done by asking for REACH Certificate of Compliance from the only representative. Rest of your obligations are very same as that of manufacturers which described already. Downstream user Downstream user: They are companies or individuals who use a chemical substance,either on its own or in a mixture, in the course of their industrial or professional activities. Downstream users have a key role to play in advancing the safe use of chemicals by implementing safe use at their own site and communicating relevant information both to their suppliers and their customers. They can be Distributors. Distributors are anyone who only stores and places on the market a substance (on its own or in a mixture) for third parties. Placing on the market may be supply or simply making a substance available, and may be in return for payment or free of charge. A retailer is a