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Information about CHINA ROHS SEMI CONWEST redick

Published on May 7, 2008

Author: Donato


Slide1:  CHINA ROHS & SEMI Members’ Suppliers A Supply Chain Perspective on Compliance Thomas P. Redick, Esq. Global Environmental Ethics Counsel Road Map of China RoHS:  Road Map of China RoHS Legal Context, Content of China RoHS Suppliers’ Awareness, Positions Beyond Compliance – RoHS-plus Catalog Listing Avoidance 101 WTO and Trade Barriers China Enforcement Prospects Welcome to China RoHS “Administrative Measures on the Control of Pollution Caused by Electronic Information Products” “Management Methods for the Control of Pollution by Electronic Information Products” :  Welcome to China RoHS “Administrative Measures on the Control of Pollution Caused by Electronic Information Products” “Management Methods for the Control of Pollution by Electronic Information Products” China has strict e-waste controls under Basel Convention on Hazardous Waste Scope of China RoHS:  Scope of China RoHS Broader Scope than EU Large Stationary Ind Tools (LSIT)! Labeling required since March 1, 2007 Substance restrictions coming soon “Priority Products Catalog” Mandatory Certification, Inspect/Test/Ban? Sufficient time to avoid CCC Certification list Determine how much time your suppliers will need to design around China RoHS China Snapshots:  China Snapshots “Table 1” -- Xs and Os in manual (not just online) Labels -- compliance via warning labels. “Env. protection use period” (EPUP) life-span Maximum Concentration Values – like the EU, set some low limits of testing (tolerances) Test Methods - Testing Methods for Hazardous Substances in Electronic Information Products Lead-free Solders – Chemical Compositions China RoHS Legal Context:  China RoHS Legal Context China is a new member of World Trade Organization (“WTO”) subject to its rules China “notifies” WTO on RoHS – trade issue? Adequate notice of regulations– 6 mos. Minimum Opp’ty for comment (2001 WTO Declaration) Will China list only “mature, economically feasible replacement” substances in Catalog? Pushback via WTO on Catalog Listing? “Precautionary Principle” challenging global industries to change formulations (e.g., REACH, China RoHS). Regulatory Radar Across the Chain of Commerce:  Regulatory Radar Across the Chain of Commerce SEMI has excellent regulatory tracking Advance notice to members of China RoHS Intervention effort to modify final rules Supplier Compliance, labeling options All “Electronic” Associations on Board re: China RoHS (AEA, NEDA…) Nat’l Elec. Mfrs Ass’n (NEMA) Electrical, wire, lamps etc is tracking RoHS generally China RoHS FAQ link buried on website. Working groups (e.g., mercury lamps) Webcasts to come. American Chem. Council Big bulk suppliers (e.g., Dupont) wary of changing just for China given vague, evolving scope. Told USTR China requiring Chinese labs for ecotoxity tests EPA “Green Chemistry” Suppliers Realize High Cost of Non-Compliance:  Suppliers Realize High Cost of Non-Compliance NEMA (elec. Products) on EU RoHS Each EU nation enforces non-compliance Penalty up to $10 mil. (Euros) Loss of market access ($100 mil +) Threat of jail time gets CEOs’ attention. Global Suppliers contractually agree to regulatory compliance in target market Warranty “trace-back” – legal slam dunk Complete barrier to use of component? Disruption of delivery, retooling, etc. Suppliers Wary of Change Just for Vague China rules:  Suppliers Wary of Change Just for Vague China rules Communicate probable regulatory future to suppliers Every company in the supply chain may be subject to penalties China’s detailed marking and material disclosure (not just Certificates of Compliance) may surprise a few suppliers California Prop. 65 labeling history Federal law preempted (US OSHA,Transportation law) NEMA suppliers settled penalty case with consent decree Wire: $200,000 per toxin test on OUR narrow margins? Traces of background toxics falling (Hg, etc) from the sky? Small amounts of fire-preventing compounds in hi-volt lasers? Dialogue with supply chain to build long-range perspective on “design for compliance” and “design for environment” without sacrificing “design for safety” “Beyond Compliance” Buyer Mandates:  “Beyond Compliance” Buyer Mandates RoHS-plus goals may presume no toxics allowed unless proven necessary to safety/reliability: Contractual mandate Companies seek “zero chemical pollution” via substitution Safety/Cost pushback from supply chain Negotiated outcomes McWalMart Mandates Growing Consumer demand Product uniformity Green Procurement --Online sources (not “transparent”?) Dialogue and Databases WalMart “Sustainable wild seafood”! Impressive move!! Buy this stock! (Next: “Sustainable Electronics”) ROHS & Anticipatory Design for Environment:  ROHS & Anticipatory Design for Environment Support supplier designers with green procurement database? Thorough tests for safety, reliability etc. at customer sites Nikon excimer steppers - 2005 “some” to “80% lead-free” in 2006 Circuit Board suppliers may need uniform production model Nikon/Canon make both consumer goods AND steppers Uniform corporate response to RoHS Design changes occurring without a direct regulatory mandate Catalog Avoidance 101:  Catalog Avoidance 101 Future Listing in Catalog of substances necessary to safety/reliability? LSITs: Label it, estimate useful life using known data, avoid landfills via recycling. Demonstrate LSIT recycling “OECD loop” that reduces disposal risk (no Chinese landfill) SEMI De-Commissioning Task Force Meets RoHS Document retention for China’s RoHS compliance Retain safety-economic impact data relevant to substance listed in China RoHS Catalog Retain IPC-1752 and other product ID documents indefinitely as “compliance documents” Ask suppliers to maintain documents too? Will WTO say No to “Precautionary Principle”?:  Will WTO say No to “Precautionary Principle”? US won WTO dispute against EU precaution – it’s not good law against non-parties (e.g., US companies) US also won the first WTO dispute vs. China for semiconductor industry ($2. B export 2004 VAT case) “Technical Barriers to Trade” might be invoked for disproportional, unjustified Catalog listing Will WTO dispute threat limit Catalog listing? China Enforcement:  China Enforcement SEMI survey members – China IP piracy risks 82% “serious” and 74% “adverse” IP infringement 36% knew of customer patent/copyright theft Some phones copied complete with serial numbers 2007 – US puts China on IP priority watch - “free-for-all haven” Contrast patent laxity with environmental enforcement History of Basel Convention enforcement initiatives Self-interested trade barriers based on environment/safety 30% annual Increase of Chinese citizen environmental petitions Court ordered China’s EPA to hear more petitions (Dec. 2006) WARNING: Penalties can accrue without enforcement action and grow to threaten your company’s existence Plan for Catalog Crisis:  Plan for Catalog Crisis SEMI participation is key to keeping informed about listing and options Establish methods for notifying suppliers Trade association network “web-tree” Green chemistry meets green procurement China open to future amendment of list? Make the case for the irreplaceable inputs Build the closed loop for LSIT where feasible Next Steps :  Next Steps Prepare now to defend necessary substances from Catalog listing (including feasibility studies of closed-loop decommissioning-recycling): EHS+Quality staff – consider EHS VP at SME Document retention for buyer mandates at the level of compliance (do not toss) Systematic outreach to supply chain at both supplier trade association and company levels Continuing SEMI outreach to Gov’t of China Government affairs outreach to Congress, USTR (trade rep.) on possible use of WTO China RoHS Assoc. Links:  China RoHS Assoc. Links SEMI Industry Translations, click China RoHS American Electronics Association Nat’l Elec. Manufacturers Assoc. American Chemistry Council “Green Chemistry” Int’l Assoc. of Electronics Recyclers Many Thanks 谢谢:  Many Thanks 谢谢

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