The Implication of the ROHS Directive - Case Study Example

The implication of the ROHS Directive Introduction The implementation of the ROHS and WEEE had created a great impact on the manufacturers of electric and electronic components in the European Union and to its suppliers in other countries. This directive requires technological process change in the product design and its compliance necessitates added cost and inconvenience to the manufacturers and to its supply chain. But environmental issues cannot be relegated to the background as hazardous elements pose danger to health and to the environment. RoHS has been enforced for two years already, and this study attempts to review the implications of the directive to the electronic industry as to substantial compliance and to the implications in the product quality, reliability and expense. 1. Details. The Restriction on use of Hazardous Substances was initiated by the European Union in answer to the growing concerns of environmental and health issues that endangers mankind and its environment. The European Union issued directives that were enacted to a legislation on July, 2007 restricting the use of hazardous substances in electrical and electronic equipments. ROHS directive complements the Waste in Electrical and Electronic Equipment (WEE) that controls disposal of the electrical and electronic equipment (EEE). This regulation is directed “to manufacturers or assemblers of electrical or electric equipment in the UK, importers of electrical or electronic equipment from outside Europe, and those who re-badge electronic products as their own.” An exemption from this directive is those individuals who make purchases from abroad, and retailers who purchase their products from within UK. (RoHS home) RoHS has confined the restricted hazardous elements to the use of lead, mercury, hexavalent chromium, cadmium, and a large range of flame retardants such as polybrominated bipheryls and polybfominated diphenyl ethers. RoHS has exempted the use of hazardous elements for a certain number of products wherein substitutes does not exist and has allowed certain permissible levels of these substances to be used. In this directive, manufacturers are obliged to conform to the policy that their products placed in the market must be free from the hazardous elements above the prescribed level. Documentation to attest to this compliance must also be held for each product and must be submitted to the DOE and must be maintained for a period of 4 years even if the product is out on the market shelves. (RoHS Home) 2. Impact of the law a. Legal Allen & Overy LLP, a London-based legal firm, warned electric and electronic manufactures that non compliance would mean “serious market risks including civil and criminal penalties, product recall, lost of profits, and market exclusion if they ship products into the European Union “ ( ESB) b. Reliability. This directive has brought about significant changes in the design of manufactured electric and electronic products not only for the European market but for the US market as well. A report has noted that not all US states has adopted the RoHS and some companies in the US face the difficulty of making products applicable only to the U.S. Pullitz and Galyon mentioned in their report, that despite manufacturing concerns on hazardous elements, today major electronics company in the US has adapted to this change in technology. Two of these known electronic makers, Dell and Hewlett Packards have already removed the PBBs and PBEs from their product line which includes personal computers, servers and printers to meet deadline. (Pullitz. K & Galyon, G.) The change on technology and design has shown impact on the manufacturing. Specifically RoHs Information Resource cited manufacturers feel great pressure on several issues as in legal responsibility, costs on resources and quality of its products. The long process of testing and documentation required from manufacturers to comply is said to be time consuming. Documentation requires process of information and testing from manufacturers, suppliers and all of the supply chain are quite difficult to comply. 2. Economic effect Several other issues have to be addressed as RoHs directive show an effect on resources and quality of the product RoHS directive implies that producers will have to spend additional expenses in complying with the rule. The testing expenses for analysis of samples of the product for hazardous elements involve costs and time element for employees. In addition to this, are the voluminous documentations needed by the manufacturers and its suppliers to fill up to support the report to the government. Impact on resources. Time and resources are needed in complying with RoHS. According to Pullitz & Galyon, companies spend a lot time in organizing filing, and maintaining product records. Companies also spend for testing analysis of the product samples. Some even maintain their own laboratories while others rely on third parties for testing. Source pointed on the difficulty of maintaining inventory and replacements of non-compliant products. Experimentation and testing have been the reply of Benchmark Electronics, who together with University of Massachusetts’ Toxic Use Restriction Institute (TURI) formed a consortium of 15 New England Companies, called the New England Lead-Free Consortium. It is comprised of government; academia and industry experts ho conducted experiments on small to large boards with up to 1,800 components. With experimentation, large companies have started compliance while the small companies have experienced difficulty because of lack of resources. (Mazur, S.). Impact on quality. Some of the hazardous elements are essential components of the product and reworking them may affect the effectiveness of the product. Companies have cited technological and logical issues to be the greater potential risk in the reliability of the high performance system. For example, the servers, storage, network infrastructure/ telecommunication systems which are highly sensitive products. (Puttlitz K. & Galyon G. 2008 ) The manufactures also feel that the quality of their product may be affected with the change or substitute of a component product. An example is applied to the military and aerospace application wherein an overall change is needed, and would have a greater impact on the limit of 1,000 ppm. applied lead content in the electronic PCB presses and materials Lead content is one of the classified hazardous material by RoHs. (SMT) What is the responsibility of the engineer in this context? The engineer referred to in this context is the company who has the sole responsibility of complying with the RoHS. Company responsibility NCU White papers stated that compliance should be the responsibility of the original equipment manufacturers and should take care of the successful transition of the products as well as for the mitigation of risks in the supply chain risks that can lead to revenue shortfall, attributable to either a non-compliance event.” (Organline) This assessment is joined in by Motorola who takes the responsibility of ensuring that all their products meet the specific standards. Motorola has enjoined all its suppliers to follow RoHS process to maintain the safety quality standards of the product. (Motorola) Companies keep the matter seriously as it gives them a competitive edge on the market if their products are certified free from hazardous elements. HazzMat reports on the QC08000 and CAS which provides company a certification that they have passed strict requirements of quality of RoHs standards. CAS is a Compliance Assurance Certificate issued by the NASAI. Qc0800 is one of “the fastest growing international programs and was established as a certification process for companies to manage, minimize and eliminate hazardous substances. HazzMatt said many companies have already signed up with this arrangement to comply with their responsibility to the RoHS program. Dr. Overbeek, in an article, observed that companies are not willing to face the risk of damage to their business, and even those falling under exempt have started with the process of change. Some companies he said have invested in expensive test instruments and have contracted with third party to come up with certificate of assurance Today many companies have adopted environmental programs as the company’s social responsibility and shows to be an implied compliance of the RoHS directive. For example, the Cray Supercomputer made it the company’s social responsibility to “conduct business in an environmentally responsible way”. This company has enacted a company policy to “reduce, reuse, recycle” in the development of their products and in the manufacturing process. Cray Supercomputer had expressed this policy to their employees and its suppliers. Along with the line of social responsibility, Toshiba’s corporate policy is to maintain programs that involve environmental issues among others and have made progress in its implementation.(Toshiba) Freescale, a company in semi-conductor business describes its social responsibility not only in terms of financial aspects to its stakeholders, but also towards the environmental programs among others. How should the company act of respond? Waste Electrical and Electronic Equipment (WEEE) Returns is subject to regulation designed “to prevent the disposal of such waste and to encourage prior treatment and measures to minimize the amount of waste ultimately disposed. The directive pertaining to WEE requires that producers of electronic equipment be responsible for the collection, reuse and recycling and treatment of the WEEE products placed in the EU market after August 13, 2005.” (Sun) In compliance to this directive, the Sun (Sun Microsystems, Inc.) has initiated their “Take-Back Policy” which covered all products sold by Sun on and after August 13, 2005. TDK, another electronic company, has announced its company conformity policy, and said that TDK had successfully completed at the end of 2004, the process of making general purpose electric components conform to RoHS. TDK has made assurance that the company will apply product environmental management in the future to assure customers that their products are environmentally safe. (TDK) In Brussels, the Green Peace and NGO environmentalist group said that in spite of claims that many companies have already complied with RoHS directive, there are still “widespread contamination of hazardous substances and materials are still widely used in electronics equipment”. This environmentalist and NGO group during the review of RoHS on February, 2008 that this is due to the very limited scope of the legislation and called on the EU to strengthen RoHs during to ensure that manufacturers of electronic goods take responsibility for their products throughout their life cycle.” In this briefing, this group had rejected many proposals for exemption of product substances. What guidelines are available for resolving any conflict between the engineers social responsibility and responsibility to the employer? The Commission has provided the guidelines in the implementation of the RoHS Directive. It has expressly written all hazardous materials and substances banned from usage of electrical and electronic manufacturers. The directive has quantified allowable limits and anything above specified limits is not allowed. The restricted materials covered by the RoHs are herein stated: Lead (Pb) 0,1% by weight Mercury (hg) 0.15 by weight Cadmium (Cd) 0.01 by weight Hexavalent Chromium (Cr-VI) 0.1% by weight Polybrominated elipherryls (PBB) 0.1% BY WEIGHT Polybrominated Diphenyl (PBDE) 0.1% BY WEIGH (Toxicological Profiles from the US Department of Health and Human Services Agency for Toxic Substances and Disease Registry, as cited in IDES Plastic) Who is affected by this directive? RoHs directive is not solely for the European manufacturers alone, as the directive intertwines with other suppliers from other courtiers doing business in EU. For instance, this includes cables made in China, parts molded in the US and PCBs coming from Japan. This directive has moved these countries to make their own RoHS to be able to sell their products to EU. California has enforced the California Waste Recycling Act of 2003 (SB 20, Chapter 526S) effective January 1, 2007, while Japan, China and Korea have started to follow the EU example. (RoHS home) In China, companies complain about enforcement of ROHs. They find that China’s RoHs and EUS ROHS vary greatly on several issues particularly on product markings. China exports their products to US and EU and sells it to the internal market. Having two ROHS compliance puts pressure on the manufacturers. China’s ROHS followed EU initiative but have added provisions on the markings It was implemented March 1, however, report said companies felt not ready for it. US and EI are both big markets for China’s products, and compliance is inevitable (Deffrey S. 2007) Affected products under the RoHS covers a wide variety of electronic appliances and products and a significant number of manufacturers and suppliers are required to comply. 1. Large household appliances 2. Small household appliances 3. IT and telecommunications equipment 4. Consumer equipment 5. Lighting equipment 6. Electrical and electronic tools (with the exception of large-scale stationary industrial tool 7. Toys, leisure and sports equipment 8. Medical devices 9. Monitoring and control instruments 10. Automatic dispensers Source: IDES Electronic manufacturers have the social responsibility to comply with the law; otherwise they will suffer the consequences of penalties and banned products in the market. Some companies have adopted policies and programs to address this concern, and have incorporated it in the overall corporate plan of the company. As the ROHS and WEEE came to its implementation, an organization, Organlin, representing the European engineering industry and other industries affected by the RoHS and WEEE said it has worked hard in obtaining a workable solution for the manufacturers during the difficult adoption procedure. The organization has helped the industry in facilitating the implementation and had come out with practical guides and overviews for easy understanding of manufacturers. Organlin noted delays in the compliance due to the complex issues in the Directive that impose divergent requirements Manufacturers face multiple requirements within the internal markets such as marking, reporting or registering. To solve complex issues, Orgaline suggests that the Commission should ensure that directives are correctly transposed by member EU states and should include the following issues in their review of the directives: Introducing a dual legal base of Article 175 and 95 of the EC Treaty Clarifying the scope of the Directive Ensuring consistency and coherence of WEEE with other legislation and concepts applicable to EEE, the EuP and IPPC Directives, the REACH Regulation and the New Approach Not duplicating waste management systems for EEE by parallel material specific targets or systems Re-evaluating the necessity of Annex II, recycling/recovery as well as collection targets against alternative approaches (ie setting environmental outcome parameters and objectives instead) Developing a "divert from landfill" policy for highly calorific waste Removing design related provisions of the WEEE Directive, since they will be integral with the final adoption of the EU Directive. Who are the interested parties? Experimentation and testing have been the reply of Benchmark Electronics, who together with University of Massachusetts’ Toxic Use Restriction Institute (TURI_ formed a consortium of 15 New England Companies, called the New England Lead-Free Consortium. It is comprised of government, academia and industry experts who conducted experiments on small to large boards with up to 1,800 components. With experimentation, large companies have started compliance while the small companies have experienced difficulty because of lack of resources. (Mazur. S.) RoHS has been issued for environmental reasons, and interested parties are those who will be benefited by this directive which is the people and its environment. Other interested parties come from electric and electronic component manufacturers and related industries whose manufacturing process and businesses are directly affected by the transformation and change. Some companies composed of the IPC – Association of Connecting Electronics Industries had lobbied in Brussels to make their recommendations heard during the Committee review of RoHs. Other interested parties who attended this meeting of review included members of the European Commission and the RoHS Technical Advisory Committee from Brussels and the U.K.; and representatives from European Space Agency; EU Commission consultant ERA Technology Ltd.; Rockwell Collins; Henkel Ltd.; BAE Systems Platform Solutions; Lockheed Martin; Aerospace Industries Association of America; Avantec; Isola GmbH; EADS; and others. For the part of the electronic industry, a “white paper” is being prepared by the ILC in response to the developing restrictions. This move is acknowledged by the committee member who said that “a technical response across a large section of the supply chain would be an effective methods in communicating industry issues. All concerned in this directive are necessarily interested on the outcome of the review. Discussions and conclusion Health and environmental concerns are primary issues that prompted the European Union to issue RoHS and WEEE directives. In the two years of its implementation, companies Reviewed showed signs of compliance. In complying with these directives manufacturers experienced technological and cost problems. However, these companies have no other alternative; otherwise they will be edged out in the competitive market. Other countries have started to follow the example of EU and have begun to adopt their own RoHS. This leaves manufacturers no choice as the market for their a product is getting small. Technical problems as to reliability, quality and availability of immediate replacements were seen to be the basic issues of manufacturers. The reporting and documentation process have also been mentioned as cause of delay. Associations representing the industry help its member companies solve the intricate process of compliance. It has also represented manufacturers in the deliberations for matters concerning the industry. To lighten up the load of manufacturers in the tedious process, certified companies assist manufacturers in the testing and issuance of certifications that the company has complied with RoHS requirement. In an underlying statement that when the intention of a policy or program is good, everything that goes with it goes well, but when the intention is bad, no amount of good guidelines will make it right. A company should not work for his own good alone, but should see others as well We feel the climate change everyday and its effect to the environment. If someone does not take charge who else will in the future. References cited Cray Supercomputer co. 25 Nov. 2008. http.//www.cray.com/About/CorporateResponsibility.asps.> Deffree S. 27 Feb. 2007. Electronic News, EDN 24 Nov. 2008. http://www.edn.com/article/CA6419801.html ESB. 22 Mar. 2006. 25 Nov 2008. Freescale. Semi-Conductor. Ethics & Social Responsibility. 23 Nov. 2008. Read More