Conflict Minerals, Meet US Sanctions

Here comes another layer of “conflict minerals” restrictions.

President Obama last week set the stage for expanded sanctions against the Democratic Republic of the Congo and vicinity’s militia-ravaged region. A new Executive Order specifies that sanctions are called for against “individuals and groups tied to militias involved in the illicit trade of natural resources from the region” of the Democratic Republic of the Congo or DRC. If that criteria doesn’t include conflict minerals, what does?

Penalties to companies and individuals that fail to adhere to the expanding sanctions can include:

  1. Fines of at least $250,000
  2. Fines twice the amount of the underlying transaction
  3. Criminal penalties of up to $1,000,000
  4. Imprisonment for up to 20 years

Other conduct that will trigger future US sanctions:

  1. Actions or policies that threaten the peace, security, or stability of the DRC
  2. Actions or policies that undermine democratic processes or institutions in the region (DRC)
  3. The targeting of women and children with acts of violence (including killing, maiming, torture, and rape or other sexual violence), abduction, forced displacement, or attacks on schools, hospitals, religious sites, or locations where civilians are seeking refuge, or through conduct that would constitute a serious abuse or violation of human rights or a violation of international humanitarian law
  4. The use or recruitment of children by armed groups or armed forces
  5. Obstructing the distribution of, or access to, humanitarian assistance
  6. Attacks against United Nations missions, international security presences, or other peacekeeping operations.

Earlier this month, ahead of the Executive Order, US and United Nations Security Council added a Ugandan rebel group, the Allied Democratic Forces, to the sanction lists for “targeting children in situations of armed conflict through rape, killing, abduction and forced displacement.”

As far as conflict minerals go, this is yet another reason to know thy product ingredients and to continue tracking conflict minerals for compliance.

Thanks to many sources for these updates, for this one in particular thanks to Christopher T. McClure, Crowe Horwath LLP.

GHS Timeline in USA

The Globally Harmonized System (GHS) of Classification and Labeling of Chemicals is a worldwide initiative to promote standard criteria for classifying chemicals according to their health, physical and environmental hazards.

GHS is a universal pictograph language. So that a worker in Asia, or in the Americas —or in Africa or Europe or Antarctica — can all read and render the same hazard insignias at a glance. GHS makes sense.

A lot changes with the new system. Most readers of this blog are familiar with the new system’s use of pictograms, hazard statements, and signal words “Danger” and “Warning” to communicate hazard information on product labels and safety data sheets.

So what are the GHS deadlines for US companies?  At the right you’ll see a graphical timeline showing dates for US implementation of GHS.

For help with GHS compliance, contact your favorite consultancy or check with a neutral, platform-agnostic software provider. On the software note, the GHS challenge is formidable enough to have spawned newbie GHS solutions. Do basic Google searches and research. Talk to a few software vendors. Actio Corporation is a good example of a veteran, proven software company that can help with GHS conversion. Whether you decide to use software or not is up to you. Just know that a software company might really help with your GHS challenge.

GHS: Gobs in the details

I recently attended a Environmental themed conference.  Nearly 5000 professionals in Environmental, Health and Safety were there.  I saw many things at the show, but nothing surprised me more than seeing standing room only — and a line out the door — for one event.

What was it?  It was a talk on GHS, the Globally Harmonised System of Classification and labeling of chemicals.  I mean — it was a general talk.  Just a lay-of-the-land kind of talk.

Now, call me crazy, but I had to pull a high-level EHS association official aside and ask, “Really — are people really that confused about GHS?  You add a couple of sections onto the MSDS and use slightly different pictograms. Why all the commotion?”

The official nodded slightly as if she understood the question. She said it was true that most companies may have a GHS solution built in with their current MSDS management system. But then she explained why there were lines out the door for general GHS information.  So for those who — like me — are puzzled by the fuss over GHS, this one’s for you.

Understanding the new GHS.  To help understand the fuss about the US Occupational Safety and Health Administration’s (OSHA) newly final Hazard Communication Standard (HCS), it’s important to realize that this rule is OSHA’s most comprehensive rulemaking in a decade.  Of this I was reminded.

The updated HCS impact affects over five million businesses.  These are manufacturers, and to some extent distributors, that use or store chemicals. Plus, the new HCS affects almost 100,000 chemical manufacturers, importers, and distributors.

Because the new rule is a major revision of the HCS, OSHA is requiring employers to train all employees on the new rules. Training is expected to impose the bulk of the cost burdens on US businesses.

Software for GHS won’t be much different from the current MSDS vault type programs companies use today.  So training there should not be required, except for label making differences. Outsourced and SaaS solutions pose few training challenges — because these can be adjusted anytime, in real time. (SaaS is like the cloud — but believed to be more secure.)

But if you don’t outsource MSDS and GHS already — now is a good time to start.  Rather than accrue costs while piece-mealing SDS responsibilities under REACH, OSHA and now, effectively, GHS — some companies have found value in investing in a centralized, comprehensive, outsourced solution.

Billions of dollars at stake.  While the big-picture changes aren’t so scary, the details of it will get cumbersome. Largely the folks lining up at conferences to learn more are the consultants. They have to know everything, in theory.  There’s a lot of money at stake.

The new GHS introduces a set of criteria for classifying human health and physical hazards while identifying OSHA-defined hazards. It requires that companies classify substances and/or products to ensure the appropriate classifications are assigned. Chemical data and labels will often need revision — perhaps significantly — to conform to new document requirements as they emerge.

Achieving and maintaining compliance will be a complex and time-consuming undertaking for many companies. I’ve heard OSHA officials use the word “billions” when discussing total costs. (As soon as I can lock down a quotable source, you’ll hear about it here.)

Who’s attending “about GHS” forums?  Attending is anyone who has an eye on the money, basically.  No, that’s not fair.  Also attending are folks really trying to learn as much as they can. Groups and their motivations include:

  1. Industry professionals seeking to understand / react to implications of the new HCS rule, so they can competently and strategically manage resources, budget, training, and compliance
  2. Leading regulatory compliance experts and industry representatives who provide strategic advice to a broad spectrum of industry clients relative to regulatory standards, rule-making, and compliance.
  3. Journalists trying to distill key insights and analysis of the OSHA HCS adopting GHS
  4. Folks seeking discussions the multiple impacts, risk factors and estimated costs to be incurred by employers and manufacturers
  5. Individuals looking to refine and discuss definitions for “substance,” “mixture,” and hazard “classification,” among other critically important new terms
  6. Executives analysing strategic planning considerations and potential compliance/risk exposures

Audience by professional role?  Well, look out, here comes everybody:

  1. Environmental, Health, and Safety (EHS) Managers
  2. Product Marketing/Safety/Packaging & Labeling Professionals
  3. Human Resource Managers
  4. Fire Services Professionals
  5. International Marketing Professionals
  6. Compliance and Training Staff
  7. Environmental and Process Engineers
  8. Engineering and Plant Services Professionals
  9. Facility/Energy Planning Professionals
  10. Environmental Compliance and Reporting Management
  11. Monitoring/Environmental Resource Managers
  12. Environmental Health and Safety Management
  13. Production/Operations/Engineering/Environmental Management
  14. Environmental Consultants and Attorneys
  15. Environmental Risk Management Professionals
  16. Environmental/Corporate Counsel SVP/VP/Director
  17. SVP Finance/Engineering/Operations Management
  18. Power Plant Chief/Supervisor/Managers
  19. Physical Plant/Facility Management

If the question you ask yourself is, “Is this much ado about nothing?” then you’re probably all set.  If you really do have questions about GHS solutions, sign up for a seminar or webinar soon, before it’s too late! I say that and am not even promoting such a thing.  Just don’t get left out in the corridor like I did:  people are hot on this trail right now and it’s standing room only.

Cheers, and, as always, happy compliance.

The New RoHS

In RoHS news, the real news is that the RoHS2 is really just RoHS.  We still hear people talking about “RoHS2” and “RoHS Recast”  — and there is simply no such thing:  there is just RoHS.  Yes, there were significant updates to the EU Directive that Restricts Hazardous Substances.  That process occurred over the past year.  Amendments to RoHS have been incorporated into RoHS itself.  So the terms “RoHS recast” and “RoHS2” have no meaning.

RoHS right now. Over the past year, the ban on heavy metals and other dangerous chemicals in electrical and electronic equipment has been extended to a much wider range of products. The changes apply to electronic products such as thermostats, medical devices and control panels.

European Member States have until the end of 2012 to transpose the new rules.  This means most will wait until the last minute (and beyond), but some will not, and to an American mind the order and timing will seem somewhat random.  Since there is no orderly way to hedge your bets here, getting to RoHS compliance in Q1 2012 or (Q2 at the latest) is the path of least risk.

The RoHS Directive will continue to ban lead, mercury, cadmium, hexavalent chromium and the flame retardants Polybrominated biphenyls (PBB) and Polybrominated diphenyl ethers (PBDE). The previous RoHS Directive covered several categories of electrical and electronic equipment including household appliances, IT and consumer equipment, but RoHS has now been extended to all electronic equipment, cables and spare parts.  Exemptions can still be granted in cases where no satisfactory alternative is available.

Updates to RoHS.

  •  A gradual extension of the rules to all electrical and electronic equipment (EEE), cables and spare parts, with a view to full compliance by 2019
  •  A review of the list of banned substances by July 2014, and periodically thereafter
  •  Clearer and more transparent rules for granting exemptions from the substance ban
  •  Improved coherence with the REACH Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals
  •  Clarification of important definitions
  •  CE marking denoting compliance with European norms reserved for electronic products that also respect RoHS requirements

In view of the significant extension of the scope, the new Directive introduces transition periods of up to 8 years for the new products affected by the rules.

Photovoltaic panels are exempted from the new Directive in an effort to help the EU reach its objectives for renewable energy and energy efficiency.  Also included in the new RoHS is a mechanism to make it easier for the Commission to monitor compliance.

RoHS2 background. The revision was launched in 2008. Agreement between the European Parliament and the Council was reached in 2010 and the Directive was adopted in June 2011. Member States have 18 months to transpose the Directive. Until then, RoHS I continues to apply.

Detailed information can be found in the directive here.  See also the site on waste and RoHS.

RoHS is a directive, not a regulation:  A directive is about results, not process.  With RoHS for example, the required result is the restricted use of certain toxic metals in electronics manufacturing & in related disposal and waste.  A regulation, on the other hand, delineates how to get the result, a good example being the REACH regulation, which contains a detailed process for substance registration, use, and data sharing.

This blog is hesitant to recommend specific consultants for RoHS compliance.  However, some software for RoHS compliance such as Material Disclosure from Actio Corp., is worth looking at for RoHS compliance.

REACH Database: Over 5000 Substances Registered

The European Chemicals Agency (ECHA) announced Wednesday that ECHA’s Dissemination Database contains now 4413 records. In total, 5181 substances have been registered as of Nov. 3, 2011, says the agency.

There are now 3908 substances published on the list of registered publishable substances.

On ECHA’s dissemination portal, you can download information or search for substances; an excellent resource for folks looking more deeply into REACH compliance.

The next big REACH deadline is May, 2013, but ECHA is asking companies to start preparing now.

En route to the 2013 deadline, there are two key deadlines for 2012:

1. Late preregistration deadline prior to the 2013 registration deadline, for first time manufacturers and importers;

2. Downstream users should notify suppliers of uses by May 31, 2012 at the latest.

REACH Gets A 5-Year Review

It’s been five years since REACH* was adopted. Now, five years later, the European Commission (EC) is preparing to review the legislation.

The review is expected to be significant but not overwhelming. The EC-led review will be based on “lessons learned” from the implementation of REACH, focusing on the costs and administrative burden and other “impacts on innovation.”REACH regulation The review will include:

    1. Test method costs and spends: an audit of the amount and distribution of funding made available by the EC for the development and evaluation of alternative test methods.
    2. REACH scope: whether to amend REACH scope to avoid overlaps with other EU legislation.
    3. ECHA: a review of the European Chemicals Agency (ECHA).
    4. Lower tonnage substances: a review of registration requirements for lower tonnage substances.

‘So, how’s my driving?’ Originally, REACH sought to test, analyze, categorize and track ~100,000 chemical substances. But since 2006, only a small number of chemicals have actually been reviewed, starting with a list of 47 Substances of Very High Concern (click here for full SVHC list), which are suspected of causing cancer or disturbing the human reproductive system.

“But there are a lot more substances out there,” said Jamie Page from the Cancer Prevention and Education Society, as reported by Euractiv.

Page is calling for the screening process to be accelerated. “Obviously, there are a lot of chemicals on the market – people estimate between 80,000 and 100,000 – so it is like a few down, a lot to go.”

ChemSec, an environmental lobby group, has recently accused the EU of delaying action on “endocrine-disrupting” chemicals such as phthalates, calling on regulators to speed up work. ChemSec wants 378 substances included in the SVHC list. “There are a lot of controversial products,” Page concurred, citing Bisphenol A, a compound which has recently been banned in plastic baby bottles but which some scientists believe could be harmful in other guises, such as coatings for food cans.

Activist lawyers ClientEarth and chemicals campaigners ChemSec recently said they had sued ECHA for refusing to disclose the names of facilities producing 356 potentially dangerous chemicals. ECHA told Reuters in May it had decided to publish company names ONLY in the case of firms that are suppliers of hazardous substances, but that those entities and stakeholders could request confidentiality.

For producers of nonhazardous chemicals, the disclosure would be voluntary.

Notes: * REACH is the European regulation for the safe use of chemicals. REACH deals with the registration, evaluation, authorization and restriction of chemical substances. Adopted in 2006, it entered into force on June 1, 2007. The European Chemicals Agency (ECHA), based in Helsinki, Finland, acts as overseer of the REACH system.

REACH strives to do two things: 1) catalogue all ~100,000 chemicals in use today, and 2) set restrictions on uses of toxic chemicals.

ECHA guidance:

RoHS Recast — Regulatory Update Made Official

The Council of the European Union (“the Council“) officially revised the RoHS directive on hazardous substances in electrical and electronic equipment.  The chemical restrictions will now apply to all electrical and electronic equipment, as well as to cables and spare parts, and to medical devices, medical equipment, control and monitoring equipment – which were previously exempt from RoHS compliance but are not exempt now.

Further, this recast will harmonize the directive across the European Union.

The product categories affected by RoHS include large household appliances, computer equipment, TVs, lighting, toys and video games, and vending and ATM machines – as well as the categories listed at the top of this article.  You can imagine then that almost all discrete manufacturing sectors are affected – as most use computer equipment in parts, components or assemblies.  RoHS creates a notable data management challenge in terms of supplied parts and compliance certification.

RoHS Recast provisions. Provisions are included in the recast to allow time for the market to adjust.

A three-year transitional period is allowed for some devices:

  • monitoring
  • control
  • medical

A five-year transitional period is allowed for:

  • in vitro medical devices

A six-year transitional period is allowed for:

  • industrial control appliances

Nanomaterials under RoHS. Everyone wants to know how nanomaterials will be regulated.  It’s a grey area.  Rightly, the European Commission says that work towards a common definition of nanomaterials is necessary (yes!) and ongoing. The EC intends to adopt a Commission Recommendation on a common definition “in the near future.”

The Commission considers that the RoHS provisions cover different forms (including nanoforms) of the substances which are currently banned. The Commission also considers that these RoHS provisions cover forms subject to a priority review under RoHS in the future.

RoHS Recast next steps. Next steps include:

  • Signatures and Journal publication
  • Transposition into EU member state laws
  • Industry implementation

There are a few good resources for more information. Design Chain Associates (DCA) has a good article and some (reasonably priced) on-demand webinars for more in depth review.

Would you accept this RoHS? It may be a good idea to review why we are gathered here today. While the ins and outs of regulations can be like jungle hacking – a look from the air is a good idea from time to time.

There are measurable environmental benefits to a well-executed and enforced RoHS program. Reported environmental benefits include:
•    reduction of lead (Pb) use in products by 82,700 tons in the EU
•    reduction of cadmium (Cd) use in products by 14,200 tons
•    reduction of mercury (Hg) use in products by 9,500 tons due to changes in copiers and fluorescent light bulbs
•    reduction of mercury in waste streams by 6,900 tons

RoHS restricted substances. RoHS focuses on six hazardous substances: lead, mercury, cadmium, hexavalent chromium and two types of flame retardants in plastics (PBB and PBDE). The restrictions have not changed since last November, but additional hazardous substances are now expected, whereas the list of substances of concern under the previous version of RoHS was considered more stable. Click here for the current list/threshold amounts.

To wit, RoHS is a directive, not a regulation. The difference is that a directive cares only about the result. With RoHS, for example, the required result is the restricted use of certain toxic metals in electronics manufacturing. A regulation, on the other hand, delineates to each entity under the umbrella of the regulation how to get the result.  A good example is the REACH regulation, which has a detailed process for substance registration, use, and data sharing.