April 2010 SMTA Nutmeg Chapter

© 2010 Botsford EcoTech Partners LLCAll Rights Reserved


China RoHS Update & Tips for Product Eco‐Compliance

Presenter: Krista Botsford, Founder & CCOBotsford EcoTech Partners LLC

Nutmeg ChapterSMTA

20 April 2010


Keeping markets open

… and CEOs out of Jail

For over 5 years, Botsford has been in the business of keeping CEOs out of jail. We help them understand environmental laws impacting the goods they manufacturer. Non-compliance to these laws puts revenue streams at risk which directly impacts shareholder value.

Botsford EcoTech Partners provides a leading-edge web-based tool to assist in product environmental compliance . Through ELM, companies are enabled and empowered to quickly bring their companies and products into compliance with the product environmental compliance laws.


General Trends for Product Eco‐Tech

• Increased product environmental regulation– Design: labeling for hazardous materials, restriction of materials

– Use: energy, safety, life‐cycle

– Packaging: included in most regulations

– Recycling: increasing producer responsibility, growing pressure to classify electrical and electronic equipment as “hazardous”


China RoHS HistoryFebruary 28, 2006

China RoHS Regulation promulgatedMarch 16, 2006

Electronic Information Product (EIP) List issued (scope of EIP within purview of Art. 3(1) of the China RoHS regulation)

June 22, 2006Framework measures issued to establish testing and certification program aimed at establishing conformity with EU RoHS concentration limits for Chinese products exported to the EU.

November 6, 2006Labeling, Concentration Limit, and Test Method standards issued to facilitate implementation of key aspects of the China RoHS regulation.

December 2006 and February 2007Frequently Asked Questions (FAQ) Documents issued, then amended, to address questions related to the China RoHS regulation and associated implementing standards.

March 1, 2007China RoHS regulation effective date (representing implementation date for labeling and information disclosure aspects).

October 9, 2008China RoHS Catalogue Procedures document issued, laying out procedures and criteria for selection of EIP for inclusion in the Catalogue. EIP in the Catalogue subject to materials restriction and associated pre‐market certification Requirements.

October 9, 2009China RoHS draft Catalogue, first batch, issued for comment (deadline for public comment – Nov. 9, 2009).

November 9, 2009Public comment period ended. MIIT comment review period begins.

November 17, 2009China RoHS EPUP Guidelines and Lead‐free Standards (technical/voluntary measures) Promulgated.

January 2010Proposed Voluntary RoHS component certification program finalized (not yet launched/promulgated)


Products not labeled with Disclosure Information for

Restricted Hazardous Substances

China RoHSPassed: 2006 Phase 1: March 2007

OR

ANDNO DISCLOSURE TABLE

“Management Methods for Controlling Pollution Caused by Electronic Information Products Regulation”


Products with Marking and Disclosure Information

allowed for sale into and within China

China RoHSPassed: 2006 Phase 1: March 2007

OR

ANDDISCLOSURE TABLE

“Management Methods for Controlling Pollution Caused by Electronic Information Products Regulation”


• Radar Equipment and Products

• Communications Equipment and Products

• Broadcast and Television Equipment Industry Products

• Computer Industry Products

• Household Electronics Products

• Electronic Measuring Instrument Products

• Electronic Industry Dedicated Equipment and Products

• Electronic Element Products

• Electronic Device Industry

• Electronic Application Products

• Electronic Dedicated Material Products

China RoHSCategories


• Radar Systems

• Medical Products

• Large or Medium‐scale computer work stations (servers)

• Networking infrastructure products

• Consumable materials associated with EIP– Floppy disks, CDs, ink cartridges, video tapes, etc

• Electronic components and its parts sold in direct markets– Capacitor: foil paper, dielectric, ceramic, etc.

• Upgrades, spare parts sold directly to consumer

China RoHSProduct Differences from EU RoHS


• Logo 1 implies no hazardous materials at or above maximum concentration levels as listed in SJ/T 11363‐2006

– Recommended color: Green

• Logo 2 implies hazardous materials over the maximum concentration levels as listed in SJ/T 11363‐2006

– Contrasting color with product– Orange is only a recommended color

• Number in Logo 2 is the Environmental Protection Use Period (E‐PUP)

• Must be placed on product

China RoHSSample E‐PUP Logos

Logo 1

Logo 2


• Abbreviated: E‐PUP

• The term during which toxic or hazardous substances or elements contained in electronic information products will not leak out or mutate

• No technical or application exemptions– Exemptions handled by items published in the Product Catalog

• Two methods of determining E‐PUP:– Technical Methodology

• Practical• Experimental

– Conceptual Methodology• Safe Use Period• Technology Life Method

China RoHSEnvironmental Protection Use Period


• Simplified Chinese• X – substance is presence• O – substance is not present• Part – company decision:

– examples: part level; sub‐assembly; • Required for parts with concentration levels above restricted levels (e.g.

must also have environmentally‐friendly use period mark)

China RoHSDisclosure Table


China RoHSEiP Table

Small components or materials that cannot be furtherdisassembled under existing conditions in EIP. Generally partswhich are equal to or less than 4 mm3 in size.

EIP‐C

Metallic Coating of each part in EIPEIP‐B

Each homogeneous material composing EIPEIP‐A

DefinitionEIP Category

Shall not exceed 0.1% for Pb, Hg, Cr6, PBB, PBDE; 0.01% for Cd.

EIP‐C

Pb, Hg, Cd, Cr‐6 cannot be intentionally addedEIP‐B

Shall not exceed 0.1% for Pb, Hg, Cr6, PBB, PBDE; 0.01% for Cd.

EIP‐A

DefinitionEIP Category


• Only products within published catalogue– Catalogue yet to be published

• draft available Dec 2009– No estimated date for publication

• Testing and certification by an authorized Chinese laboratory– This is being heavily worked on by lobbying groups and industry groups

China RoHSPhase 2 Promulgation: TBD


Key agencies: (Ministry of Industry and Information Technology (“MIIT”) and the Certification and Accreditation Administration (“CNCA”, under Administration for Quality Supervision, Inspection and Quarantine)– Delays in finalizing the program continue as key agencies undertook

internal “consultations” relating to overall approach and details concerning China RoHS Catalogue and associated certification program.

– Certification program compulsory (per Article 19 of China RoHS regulation). Model for CNCA China RoHS certification are the existing China Compulsory Certification (“CCC” or “3C”) safety licensing certification programs, with “some modifications possible”.

– Current list of restricted substances (same as EU): Lead, Mercury, Cadmium, Hexavalent chromium, Polybrominated biphenyl (PBB), and Polybrominated diphenyl ether (PBDE),

– Testing methods: “Testing Methods for Regulated Substances in Electronic Information Products” must be used, also a Chinese government approved/certified Lab must be used for testing.

China RoHS ‐ Materials restriction and associated, compulsory pre‐market certification under “Phase II”

From TechAmerica presentation by Heather Bowman


• Finalization of First Batch of China RoHS Catalogue– Necessity of adding in missing exemptions for the proposed product

categories, importance of using language/exemption listings that are consistent (in wording and numbering) with those used in the EU RoHS program, to minimize company compliance clarity and system changes. (example: repair parts.)

– China’s willingness to consider “positive” (i.e., listed) exemptions, as opposed to an earlier approach of indicating “if it is not specifically listed it is not covered” (i.e., “negative exemption” approach), represents months of industry exchanges with MIIT and MIIT technical advisors on these issues.

– MIIT’s reluctance to move toward a “positive” exemption approach also reflects the political difficulties associated with Chinese agencies taking up what may be perceived as “following another legal program” (in this case, the EU program). This reluctance may again manifest as industry attempts to make the exemptions consistent with the EU exemptions as they currently exist.

China RoHS ‐ Industry Concerns



• WTO TBT Committee notification of draft Catalogue, first batch. Possible any day, as MIIT has met other authorities and reached agreement to notify WTO.

• Comment period, based on China past notifications, is typically 60 days from notification to the TBT Committee.

– So, for instance, if the Catalogue is notified on July 15, WTO members would have until mid September 2010 for comment.

– China typically finalizes notified laws very promptly after the WTO comment period ends.• If finalized (promulgated) by, end of September 2010, you would count 10

months until the effective date, if the timing indicated in the current draft Catalogue does not change (so, summer 2011).

• The “upgrading” of the China RoHS framework regulation to a State Council regulation (from an MIIT regulation) and possibly also the upgrading of the three key China RoHS standards (i.e., labeling, concentration limit, and testing) to national (GB) standards, presents a very significant future challenge for our industry.

• Current estimates are that this will not occur for 2‐3 years. This presents a possible 1‐2 year gap (or breather) between finalization of the substance restriction/certification “phase 2” of the China RoHS program and “opening up” the entire program (phases 1 and 2) to further changes, including possible massive scope changes.

China RoHS ‐ Next Steps



China RoHS Update/Outlook

• Waiting to for publication of catalogue– No known date

• When published, expect a 9‐month implementation period


Background ‐ Government

• RoHS Enforcement Audits ongoing since 2006– Some audits are objective, others subjective

• Nearly 50% of audits fail.

• Mistakes are common – Largest areas of non‐compliance was use of non‐compliance parts and processes.

• Product removals happen

• Member states expanding information sharing.


Background ‐ Corporate

• Audits pre‐date government– Requirements exceed legal mandates

• Nearly 100% of audits fail• Impact varies

– Revenue recognition– Inability to process RFP– Hold on purchasing of products– Inability to ship products

• Mistakes are common across industries and companies.


Common Mis‐Steps• Information delivered generates more questions than answers

• Responsiveness– Not in a timely manner

– Incomplete materials/ information

• Reliant only on documents– Provide only CoC or disclosures statements

– Missing:• 3rd party audits

• risk assessments

• policies and procedures

• Assumption of “too small to be of concern”– “No‐Name” brands or re‐branded items considered very high concern


Implementing a “Auditable” Program

• Instrumentation of the program– Cross functional

• Risk evaluation– Supplier, manufacturers,

• Metrics gathering– Internal/external auditing, supplier audits

• Evaluation of tools– Software, news & data, audits

• Self‐evaluation criteria– Who is in charge?

– Will TCF stand alone – or is interpertation needed?


Tips on Surviving an Audit

• Assume nothing– Auditor will not familiar with your company or products

• Be responsive– Provide information in a timely manner

– Provide complete technical compliance file; not just materials information

• Prepare for/Anticipate questions


Conclusions

• Eco‐compliance is a product feature– It should be tested

– Avoid having your customer find this bug

• Understand corporate risk– Independent assessments are key

• Develop a process‐based approach


How Botsford EcoTech Can Help

• Complementary Risk assessments

• In‐depth Supplier/supply chain audits

• RoHS‐CE unit creation – 3rd party info verification for CE mark

• Total solutions for product environmental compliance – Managed services

– Cost‐effective, customer/self‐driven solutions


Krista Botsford

Founder, Chief Compliance Officer

Mobile Office: 781.552.9585

E-mail: [email protected]

Skype: kbotsford

Questions?

April 2010 SMTA Nutmeg Chapter

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