On September 10, the European Court of Justice (ECJ) handed down a "Reference for a preliminary ruling" on the topic of Regulation (EC) No 1907/2006 (REACH Regulation). The judgment addressed the duties to notify and provide information (as required by Articles 7(2) and 33, respectively) on Substances of very high concern (SVHCs) present in articles. Specifically, the ruling addressed how manufacturers and importers ("economic operators") are to calculate the threshold of 0.1% weight-by-weight of SVHCs in articles.
If you will recall, the European Chemicals Agency produced version 2 of a guidance document on REACH requirements for article manufacturers in 2011. This well-written, and very clear (in my opinion), guidance said that the duty to notify and provide information was based on the presence of SVHCs above the 0.1% weight-by-weight level in the article as it came off the production line. So, for example, a notebook computer as packaged for sale would consist of the following "articles":
- The computer itself
- The external power supply
- The separate power cable, if it exists
- Any other separate cable (e.g. USB-to-10Base-T, etc.)
- Each piece of packaging
- Each piece of documentation
The Court, however, ruled that each of the articles incorporated as a component of a complex product (like the notebook computer) is covered by the relevant duties to notify and provide information when they contain a substance of very high concern in a concentration above 0.1% of their weight. This is what the "dissenting Member States" termed "Once An Article, Always An Article", or OAAAAA.
(In the discussion below, I will address the ramifications for Article 33 disclosure; this is far more relevant to the vast majority of the electronics industry than the Article 7(2) notification requirements simply because most manufacturers do not have to notify based on Article 7(6). This says you do not have to notify unless your use is not registered with ECHA for that substance.).
With the ECJ’s judgment, the calculus therefore changes. For instance, rather than calculate the presence of SVHCs as an aggregated percentage of weight of the notebook computer itself, one must consider each individual component’s SVHC content against the weight of that individual component. So each PVC wire or cable that contains a phthalate above 0.1% weight by weight of the individual wire or cable now must be disclosed to the downstream customer (e.g. distributor, importer, retailer, per REACH Article 33, paragraph 1; and to "consumers" upon request per paragraph 2).
Whereas the weight of the computer itself would often be adequate to swamp out the weight of any SVHCs used in any of the internal components, now that changes. That little bit of phthalate used in die attach for a semiconductor device or in the PVC wiring for that little cable attaching the keyboard to the motherboard may now be well above the 0.1% weight threshold when compared against the weight of the integrated circuit or cable (respectively) alone.
What This Means for System Manufacturers
While some systems manufacturers today require and try to collect "full material disclosure" from their component and materials suppliers (which I have been a vocal advocate for – see, for instance, my previous 4-part series on "Substance Data Collection, Use, and Management for Manufacturers"), many manufacturers – if not most – take a "risk-based" approach:
Which components and materials are most likely to contain an SVHC substance that could, if I sum the SVHC’s mass across every instance of it in my finished good, be over 0.1% weight-by-weight of my product?
This resulted, primarily, in electronics OEMs focusing on their wire and cable suppliers for the presence of phthalates (which can be present up to 30% or more by weight of the wire or cable!). In the vast majority of electronic products, no other SVHC could possibly be present in a disclosable amount (due to the very high percentage by weight of various metals like copper, iron and aluminum as well as basic plastics like ABS, epoxies and polycarbonates), so they never bothered to inquire about SVHCs to those suppliers. This reduced effort, time and costs for both suppliers and their customers.
This changes now. Suddenly the presence and amount of UV stabilizers in individual external plastic items (and internal ones where the designer wasn’t particularly mindful of whether or not the item actually needed to be UV stabilized!) must be understood and possibly disclosed. And so on.
Manufacturers that have not been collecting full material disclosure will now have to learn where these substances are likely to be found if they are going to expand their risk-based approach while those that have can readily compare their database against the current list of 163 substances on the candidate SVHC list and determine what their disclosure needs to be.
What This Means for Component and Material Manufacturers
Quite clearly, this means that your customers will be demanding more information about the composition of your products to enable them to comply with this more granular definition of the requirement. It also means you will probably be subject to increased pressure to redesign your product(s) to eliminate the presence of the SVHCs that did not previously concern your customers.
And it just gets more challenging: as I described in my previous post, ECHA is presently reviewing over 400 substances so they can complete the SVHC list by 2020. Understanding the criteria used and identifying whether your products contain any of these substances will help you identify and prioritize any proactive actions you should be considering to reformulate ahead of the hammer of regulation.
One issue I have seen that places component and material manufacturers at risk is the disclosure of process substances as present in their products as opposed to what actually comprises the product. Determining how to disclose finished product content versus input formulation for reactive substances (e.g. ingredients for epoxies or glass) will be important for calming the raging waters of compliance demands.
The meaning of "Preliminary Ruling"
The French government had said they would enforce the 0.1% weight-by-weight aspects of articles 7(2) and 33 at the "simple article" level (their example was the buckle on a belt, as opposed to the entire finished good consisting of the assembly of the buckle, belt, and rivets for instance). At that point the Conseil d’État (France) brought the case to the ECJ when it was challenged by the Fédération des entreprises du commerce et de la distribution (FCD) and the Fédération des magasins de bricolage et de l’aménagement de la maison (FMB) for its ruling that the ECHA/European Commission determination on the meaning of "article" was incorrect.
The Ruling itself is not "preliminary" in the sense that the ECJ will produce a "final" ruling. The court describes the process as follows:
A reference for a preliminary ruling allows the courts and tribunals of the Member States, in disputes which have been brought before them, to refer questions to the Court of Justice about the interpretation of European Union law or the validity of a European Union act. The Court of Justice does not decide the dispute itself. It is for the national court or tribunal to dispose of the case in accordance with the Court’s decision, which is similarly binding on other national courts or tribunals before which a similar issue is raised.
Since each EU Member State (MS) is responsible for enforcement, it is now up to each MS to update its enforcement regulation to reflect this determination. In particular, the French court will decide the dispute now in favor of the Conseil d’État. ECHA has also prepended a page to the above-mentioned guidance document indicating that they will be updating it to reflect this change.
Contact
As always, please feel free to visit DCA at www.DesignChainAssociates.com or email me with any questions or comments on this post.
