Join regulatory expert representatives of the industry-recognized EIATRACK service on this one-hour briefing where speakers will share best practices in product stewardship as well as provide an update on key legal developments expected in 2011.
Original event date: 3-30-11
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Environmental Compliance, Risk and Product Stewardship
1. ENVIRONMENTAL COMPLIANCE,
RISK AND PRODUCT STEWARDSHIP
HOW TO STAY ON TOP OF CONFLICT MINERALS,
REACH, PRODUCT TAKE BACK, AND OTHER
EMERGING GLOBAL ISSUES
W e d n e s d a y, M a r c h 3 0 , 2 0 1 1
3. Meet the Speakers
Paul E. Hagen
Principle
Beveridge & Diamond, P.C.
Scott Wilson
Content Solution Strategist
IHS
4. Environmental Compliance, Risk
and Product Stewardship
March 30, 2011
Paul E. Hagen
Beveridge & Diamond, P.C.
(202) 789-6022
phagen@bdlaw.com
www.bdlaw.com
The purpose of this presentation is to provide you with current information on product law
policy and regulatory developments. It is not intended as, nor is it a substitute for, legal
advice. You should consult with legal counsel for advice specific to your circumstances.
5. Overview
• Product-Focused Environmental Requirements
and Trends
• Conflict Minerals and Sourcing
• Ensuring Compliance and Market Access
• Expanding Extended Producer Responsibility
(EPR) Mandates
• Tracking New Requirements
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6. Product-Focused Environmental
Regulations: Overview
• New generation of
environmental laws aimed at
products rather than ―end-of-
pipe‖ pollution
– New product design mandates
– Substance restrictions
– Energy efficiency
– Take-back mandates
• Emerging sourcing/CSR
legislation
• Keeping pace with new and
evolving requirements in
multiple jurisdictions
• Identifying and managing risks
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7. Expanding Regulation Throughout
Product Life-Cycle
Raw Market
Manufacture Distribution Access
Materials
and Design / Logistics
Sourcing
Conflict Material Dangerous RoHS, Energy Efficiency,
Minerals Restrictions, Goods Rules Safety Standards,
Energy Efficiency, Packaging / Chemical Notifications
Supply Chain Labeling
Collection,
Reuse, Recycling
Take-back Laws, Export
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Bans, Basel Convention
8. Key Drivers of Product-Focused
Environmental Requirements
• Governments
• RoHS, REACH, Material Bans, GHS, Green Chemistry
• NGOs
• Greenpeace ―Scorecard‖ and the ―SIN List‖
• Retailers
• TESCO - Carbon Labeling
• Customers
• Green Awareness and Preferences Increasing
• Environmentally Preferable Government Procurement
(e.g., EPEAT)
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9. Materials Sourcing Requirements
• New focus on materials sourcing
– Conflict minerals
– Timber and plant products
– Conservation concerns (e.g., Palm oil in Indonesia,
proposed Pebble Mine)
• New supply chain management challenges and
public expectations
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10. “Conflict Minerals” Law
• Dodd-Frank Act, section 1502
• SEC to promulgate regulations requiring annual
reporting for manufacturers if
– ―conflict minerals‖ (or metals derived from them)
– are necessary for functionality or production of product
• Not a prohibition, but disclosure and transparency in
supply chain
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11. U.S. Conflict Minerals Legislation
• Concern: Funds from mining of certain minerals providing
financial support to conflict in Democratic Republic of Congo
• Goal: Use market power of downstream users to limit financing
for conflict through supply chain transparency and disclosures
• New U.S. law: Section 1502 of the Dodd-Frank Act imposes
reporting requirements on SEC-reporting companies that make
products containing certain minerals, if they are necessary for
functionality or production of products
– Columbite-tantalite: Tantulum
– Cassiterite: Tin
– Wolframite: Tungsten
– Gold
• SEC to promulgate rules by April 15, 2011, although delay is
possible following an extended comment period
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12. Conflict Minerals - Requirements
1 2 If Yes or Cannot Tell, 3
Annual SEC Disclosure Report / Identify: Other Key Provisions:
• Description of measures
to exercise due diligence
on source and chain of
custody of minerals
• Reports audited by
Determine whether • Any products that are independent auditor
products contain not ―DRC conflict free‖
―conflict minerals‖ (i.e., products that • Audit must be
produced in DRC or contain minerals that certified
adjoining countries finance or benefit armed • Report posted on
groups) company website
Reasonable country of • Facilities used to • Option: label
origin inquiry process conflict minerals products ―DRC Conflict
(i.e., smelter) Free‖
• Country of origin
• Information on efforts to
determine mine of origin
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13. Supply Chain Example
Product production
Connector
production
PCB production
Gold bonding Gold plating
Solder paste solution
production wire production
production
Tin refining
Gold refining
Tin mining
Gold mining Gold recycling
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14. Implications
• Minimum due diligence standards still unclear, but:
– Will require assessment of products that contain conflict minerals, and
engagement with suppliers
– Will generally require traceability to ―approved‖ smelters that use
audited/certified supply chains
– Industry-wide efforts (EICC and ITRI) to adopt sectoral standards for
smelter validation
– OECD Due Diligence Guidance
• Labeling, marketing and competitive differentiation:
– Companies can label products ―DRC conflict free‖
– Customers likely to demand ―DRC conflict free‖ products
– Government procurement – California
• Companies must disclose/report on first fiscal year after
promulgation of rules
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15. RoHS and Substance Restrictions
• Concern among governments, NGOs, and
public re hazardous substances in products
• Proliferation of substance restriction
requirements for electronics, toys and other
products (e.g., mercury-containing products)
• Emerging Green Chemistry Initiatives
• Rapid, global expansion of requirements
presents market access and supply chain
challenges
• New international initiatives: SAICM and
Mercury Convention
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16. EU RoHS Directive
• Imposes concentration limits on 6 substances in
wide range of electronic products
– Mercury, 0.1%
– Lead, 0.1%
– Cadmium, 0.01%
– Hexavalent chromium, 0.1%
– Two types of Brominated Flame Retardants
(BFRs), 0.1%
• Very influential – directly incorporated into many
non-EU legal regimes, and clearly the model for
many others
• Exemptions by product application
• Exclusions based on scope, e.g.
– Batteries (but see EU Batteries Directive)
– Spare parts (for pre-July 1, 2006 equipment)
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17. EU RoHS II
• RoHS Recast agreed
– Approved by Parliament Nov. 2010
– Council expected to approve in 2011
– Binding when transposed by Member States, by late-2012
• Recast will not expand the list of restricted substances
• But will streamline process for future amendments
• Monitoring & control instruments, medical devices and cables
in scope
• New open scope covers all EEE unless specifically exempted
• New mandatory disclosure obligations will require ―immediate‖
reporting of non-compliant EEE
• New CE-marking requirements for manufacturers
• Not superseded by REACH: must be ―coherent‖
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19. US RoHS Laws
• RoHS in government procurement standards
– Federal EPEAT
– NYC Procurement Standards
• State RoHS Legislation
– California RoHS
– New Jersey RoHS
– Various RoHS reporting requirements
• State-level substance-specific restrictions
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25. DOT Rulemaking on Transport of
Lithium Batteries
• U.S. DOT engaged in rulemaking that is likely to impose
substantial new requirements on transport of lithium
batteries, especially by air (including if shipped in
products)
• Draft final rule now at OMB for review
– Final rule expected soon for part of proposal (bringing rule in line
with international standards)
– New proposed rule will re-propose controversial issues (e.g.,
dropping exemptions for small batteries)
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26. EU REACH Regulation
• Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals
• Not just chemicals: has implications for electronics importers:
– Registration of substances if >1 tpy and intended for release
– Notification of substances of very high concern (―SVHCs‖) in articles, if >1 tpy,
and >0.1% (6 months after SVHC listing, beginning June 1, 2011)
• Electronics ―suppliers‖ (includes retailers) must communicate to recipients (other
than consumers) regarding SVHCs in articles, if >0.1%, effective upon listing
– Must include name of substance and info on safe use when provide the article
– Must provide info to consumers within 45 days of request
• Authorization requirements for certain high-risk substances
• Effect is to broaden supply chain management requirements beyond RoHS,
because companies need content and concentration information for broad range
of substances
• Currently 46 SVHCs, 15 of which have been recommended for authorisation,
including several in electronics (4 phthalates, HBCD, diarsenic trioxide &
pentaoxide, short-chain chlorinated paraffins, and tributyltin oxide)
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28. Product Take-Back
• European Union
– EU Directive 2002/96/EC on Waste Electrical and Electronic
Equipment (WEEE) (recast currently underway)
• United States
– 24 distinct state laws
• Canada
– Provincial laws create take-back obligations
– No mandatory federal law
• Latin America
– Rapidly expanding federal, state, or municipal laws
• Asia / Pacific
– China (China WEEE)
– South Korea (Resource Recycling Act)
– India (Draft E-Waste (Management and Handling) Rules 2010)
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29. Product Take-Back
• Targeted Products
– Batteries
– Waste Electrical and Electronic Products (WEEE)
• Common Elements
– Condition for sale of new products
– Registration (manufacturers, collectors, recyclers)
– Administrative and/or implementation fees
– Labeling and consumer information
– Collection programs
– Performance requirements & reporting
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31. Key Elements of EPR in
Latin America
• E-Waste Focus, Increasing to WEEE
• Manufacturer/Importer Responsibility
• Limited Government/Distributor Role
• Management Plans (Permit)
• Consortia/Individual Entity
• Hazardous Waste Presumption
• Registration/Certification Requirements
• Free of Charge to Consumer
• Take-Back Quotas
• Waste Minimization/DfE
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32. EPR in Latin America, Enacted
• Brazil
– National Solid Waste Policy (Aug. 2010): framework law, establishes ―reverse
logistics‖ requirements
– National Solid Waste Policy Regulation (Dec. 2010): establishes rulemaking
process
– CONAMA Draft WEEE Resolution: status unclear
• Colombia
– 3 Producer Take-back Resolutions (July/Aug. 2010): Batteries, Computers &
Fluorescent Lamps: take-back quotas
• Costa Rica
– E-Waste Management Regulation (May 2010): comprehensive producer take-
back program
– National Solid Waste Law (July 2010): proposed hazardous waste regulation
potentially overlaps with e-waste regulation
• Mexico
– General Waste Law (2003) and Regulation (2006): framework for take-back of
special management wastes, including some e-wastes
– Pending regulations on management of hazardous and special management
wastes, expected in 2011
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33. EPR in Latin America, Pending
• Argentina
– Several proposed WEEE-RoHS bills on national & provincial
levels
• Chile
– National Waste Bill in draft from includes e-waste take-back
• Ecuador
– Hazardous waste regulation proposed in 2009 included some e-
wastes; little progress in 2010
• Peru
– E-waste regulation, with producer take-back, proposed Feb.
2011
• Venezuela
– National Solid Waste Management Law (Dec. 2010): framework
law, includes e-waste take-back; regulation due by Dec. 2011
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35. EPR in Latin America: Conclusions
• E-waste take-back here to stay
• Dynamic regulatory atmosphere
• Key final (or near final) initiatives
– Brazil, Colombia, Costa Rica, Mexico
• Key pending initiatives, possible advance this year
– Argentina, Chile, Ecuador, Peru, Venezuela
• Infrastructure key regulatory compliance barrier
• Export logistics can be challenging
• Allow significant lead time for compliance
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36. Compliance Challenges
• Challenges in Tracking & Managing Disparate Programs:
– Where are there laws?
– What products are covered?
• WEEE, Computers, Monitors (> 9‖ or > 4‖ in size), Televisions, Printers . . .
– How does the program work?
• Manufacturer-operated? Shared Responsibility? Advance Recovery?
• What level of collection is required?
– When are requirements ―due‖?
• Each law operates on its own timeline - effective date, registration, fees,
reporting, program year
– Who must the recovery program serve?
• Consumers, businesses, non-profits, school districts
– Additional Requirements?
• RoHS-like provisions
• Responsible Recycling Provisions
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37. Exports of Used and EOL Products
• Basel Convention parties moving to
classify more used/end-of-life products as
hazardous wastes
• Draft technical guidelines on electrical
and electronic waste to be considered at
COP-10
• Increased logistical challenges, trade
bans and compliance costs for managing
used and end-of-life electrical and
electronic equipment world-wide
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38. New E-Waste Guidelines
• Draft Technical Guidelines on Transboundary Movement
of Used Electronic and Electrical Equipment and E-
waste, in Particular Regarding the Distinction Between
Waste and Non-waste Under the Basel Convention
(comments due June 30, 2011)
• Draft PACE Overall Guidance Document on
Environmentally Sound Management of Used and End-
of-Life Computing Equipment (forthcoming)
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39. Refurbishment, Reuse,
Warranty Returns
• Parties to the Basel Convention are deciding whether
exports of used electrical and electronic equipment for
repair, refurbishment and reuse are products or wastes
– Wastes subject to control and trade bans?
– Used products outside Basel?
– Warranty returns, refurbishment, off-lease equipment?
• Risk of new export bans on shipments for legitimate repair
and refurbishment from the U.S. and EU to non-OECD
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40. Risk Mitigation: Regulatory Tracking
• EIATRACK http://www.eiatrack.org/
– Web-based regulatory tracking tool
– Directed by leading electronics manufacturers
– Product-related environmental measures in key
markets world-wide
• Facilitates communications and compliance:
– Internal teams (global, regional, country, product)
– Trade and business working groups
– Technical consultants and legal counsel
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41. Beveridge & Diamond, P.C.
• Largest firm focused primarily on environmental law and
litigation
• Longstanding product stewardship practice
• Counsel to leading IT companies and trade associations
• Global network of local environmental counsel
• More at www.bdlaw.com
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