In the previous installment of this column, I described the three basic steps to chemical-related environmental compliance:
In the first installment of this column, I described the three basic steps to chemical-related environmental compliance:
First, identify and understand the substances in the products you are placing on markets around the world.
Second, understand the regulatory (and market/customer) requirements regarding the substances in the products you placing on those markets.
Third, make sure that the products placed into and sold in those markets meet or exceed the requirements.
In the next installment I addressed the first item, knowing what’s in your products. In this column I will address the second item, understanding market and customer requirements.
2. Understand Market and Customer Requirements
As I said previously, knowing what statutory and regulatory market requirements, as well as customer requirements, are is a pre-requisite to knowing what it is that your products actually must comply with. Just complying with EU RoHS and thinking that you’re done, while significant in terms of challenge, is inadequate. The European Union alone has quite a few environmental requirements that impact electronics, including the battery directive, packaging directive, RoHS directive, WEEE directive and REACH. Not all are harmonized across the EU Member States, in particular the WEEE directive. Furthermore, there are “copycat” versions of the RoHS directive (and other battery, packaging and e-waste requirements) in markets around the world. What may be considered “similar” regulations are almost never harmonized between markets in terms of scope, restricted or disclosable substances, maximum concentration limits, etc. so each requirement should be evaluated for impact on your products.
The first issue is to really understand your markets – where are you selling your products and to whom?
- Where you’re selling is, of course, important. Understanding the market however, particularly in terms of the regulatory environment, is not always straightforward. While the United Kingdom, for instance, has its own regulatory implementation of EU directives , it is also covered by EU-wide regulations like REACH. A country like Norway is a bit more complicated; while not part of the EU, it is part of the European Economic Area, or EEA so is subject to EU market requirements. “All relevant EU legislation in the field of the Single Market is integrated into the EEA Agreement so that it applies throughout the whole of the EEA, ensuring uniform application of laws relating to the Single Market.” Canadian provinces like British Columbia, likewise, have their own regulatory requirements while also being covered by national regulations (just like U.S. states). We’re seeing increased regulatory activity in Central and South America so reviewing state-, and even city-, specific requirements throughout Brazil, for instance, can be important. And don’t forget that Hong Kong is operating under its own legal system and is not subject to People’s Republic of China regulations like “China RoHS”. Make sure you understand what requirements apply based on the markets you sell your products in.
- Who you’re selling to can also be important, not only to determining market requirements but also to determining responsibility. In many cases, manufacturers will be selling products in markets but have no legal presence themselves. The product may be going through importers and distributors. There are two potential issues here:
- Making sure you understand the final destination of your products in order to ensure they comply with local requirements that only the manufacturer can control. This includes substance restrictions or disclosure, energy use, product labeling and other similar requirements.
- Knowing who the responsible entity is for ensuring compliance with regulations that could impact brand owners if they’re not being complied with. This includes requirements that include registration with government entities, such as producer responsibility regulations. Most locales require the importer of record to be responsible; if that is not your company, this becomes an obligation you must identify and address in your contracts with importers.
- In other cases your products could be sold to other manufacturers and incorporated into their products. You may not have direct visibility to the end market, but you should expect your customer to summarize the market requirements your products must meet in order to enable their products to comply. Their purchasing contract could make you responsible for compliance with market requirements and if they do not provide you with a list of those requirements, the onus for knowing them falls on you.
- If your company has a legal presence in a market, consider – even if it is just a sales or field service operation – using that location to legally comply with producer responsibility requirements where possible.
The next challenge is to get a handle on all the regulatory and statutory requirements that apply to your products in these markets.
- Identifying the environmental and, increasingly, the social regulations that could potentially impact your products in the first place is challenging and, in my experience, really requires a formal mechanism for monitoring these activities across your markets. There are a number of services, with various scopes, depth, and capabilities that will provide you with the firehose-like feed of regulations, legislation, bills, proposals, and other mechanisms of control.
- Compliance & Risks indicates that the number of pending and issued new regulations they have identified this year around the world is over 2,100; that is nearly twice as many as last year (under 1,100). While that may seem like – and in fact is – a lot, the number of new requirements that actually impact a given manufacturer and their products will be much lower. Wading through the regulations to identify those that could, or do, have an impact takes time and effort.
Having a formal mechanism to get the information is one thing; having another formal mechanism to manage and maintain the relevant information as well as incorporate it in an ongoing manner into the product lifecycle process is another! That will be the topic of the next installment of this series. Until then, happy holidays!