Republican members on the House Financial Services Committee have proposed a repeal of section 1502 of the Dodd-Frank Act and therefore a repeal of the US’s conflict minerals reporting rules. The proposal is included in a draft of the Financial CHOICE [Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs] Act.

According to the House Committee’s analysis, the committee asserts that the rules have been “overly burdensome” on industry and have done more harm than good (Note: several other organizations disagree with these conclusions). From the executive summary of the analysis:

Title   XV   of   the   Dodd-Frank   Act   imposes   a   number   of   overly   burdensome   disclosure  requirements  related  to  conflict  minerals,  extractive  industries,  and  mine  safety  that  bear  no  rational  relationship  to  the  SEC’s  statutory  mission  to  protect  investors,  maintain  fair,  orderly,  and  efficient  markets,  and  promote capital formation.  The Financial CHOICE Act repeals those requirements.  There  is  overwhelming  evidence  that  Dodd Frank’s  conflict  minerals  disclosure requirement has done far more harm than good to  its intended beneficiaries – the citizens  of  the Democratic  Republic  of  Congo  and  neighboring  Central  African countries.

A discussion draft of the Bill is available on the House website.

As if the proposed Bill to repeal the conflict minerals rule isn’t enough, the House of Representatives has approved an appropriations Bill  containing an amendment that would defund enforcement of the SEC’s conflict minerals rule.

Amendment 34 to the Financial Services and General Government Appropriations Act, 2017 (HR 5485) was introduced by Representative Bill Huizenga (R-Michigan), chairman of the House Financial Services Monetary Policy and Trade Subcommittee. It states that no funds appropriated by the bill could be used to “implement, administer, or enforce” provisions in section 1502 of the Dodd-Frank Act.

An overview of the Bill and the amendment to defund 1502 enforcement are available on the House website.

Not surprisingly, NGOs are protesting the proposal.

One June 20, 2016, one additional substance was added to the EU REACH Candidate List of SVHCs. This is one of four substances that had been proposed for this round of Candidate List additions and had been posted in February for public consultation.

Table 1: SVHC added to REACH Candidate List

Two of the other three substances that went out for public consultation did not receive unanimous support from the Member State Committee (MSC) for listing and were sent to the European Commission for final decisions. This includes the phthalate DCHP which has known uses in plastic materials used in EEE. The third proposed SVHC that was not added, 4-methylbenzylidene camphor, was withdrawn by Germany in order to further elaborate on the justification.

A new material declaration standard for the aerospace, defense and heavy equipment industries is being developed as IPC-1754. The standards development committee officially kicked off development of the standard in October 2015. The IPC-1754 standard came out of a initiative started by the International Aerospace Environmental Group (IAEG(tm)).

ECD Compliance principal, Walter Jager, has been appointed as co-chair and will help lead the committee (which now includes over 100 members) in developing the standard.

The India E-Waste Management Rules, 2016 were recently finalized and published in the Gazette of India by the Ministry of Environment, Forest and Climate Change. The new Rules come into effect on October 1, 2016, superseding the e-waste (Management & Handling) Rules, 2011. They tighten up responsibility for funding e-waste management and for the operation of the entire e-waste collection, reuse and recycling chain. The India e-waste Rules also include requirements for RoHS compliance of products sold in India (changes are also discussed below).

A draft of the revised rules were posted and notified to the WTO in 2015 (“India – Proposed Revision to RoHS Provisions” in our November 2015 report). The Ministry says that it received 584 suggestions and objections in response to the draft rules and subsequently made several changes to address some of the comments.

WEEE requirements

In addition to tightening up responsibility for funding and operations of the entire e-waste reverse logistics, the new Rules also provide some additional flexibility to producers in setting up their own collection and reuse/recycling system under Extended Producer Responsibility. We’ve provided a brief summary of some changes in the Rules:

• Several additional economic actors have been added to the Rules, including: manufacturer, dealer, refurbisher and Producer Responsibility Organization (PRO).
• The applicability of the Rules has been extended to components, consumables, and spare parts of EEE products that within the scope of the Rules;
• Compact Fluorescent Lamp (CFL) and other mercury containing lamps are included in the scope of the rules
• Collection mechanisms, particularly with regard to Extended Producer Responsibility
• Deposit Refund Scheme
• Clarification of government bodies that have authority and responsibilities with regard to e-waste management and enforcement.

The Rules are available on the government website along a “What’s New?” and a summary of “Salient Features”. Schedule 1 of the Rules specifies the EEE products that are within scope of the Rules (excerpted in Figure 1 below).

Figure 1: Categories of EEE in scope of the revised WEEE regulation

RoHS Requirements

In general, the Ministry has tried to align the RoHS substance restrictions with the requirements specified in the EU RoHS Directive (2011/65/EU), including the substances that are restricted, the thresholds, exemptions, and the requirement to provide technical documentation that conforms to the European standard EN 50581.  The RoHS requirements are specified in Chapter V (Rule 16). RoHS exemptions are listed in Schedule II.

However, there are a few sub-rules which raise questions about additional requirements that could prove challenging, depending on exactly how they are implemented. This includes sub-rule (5) and sub-rule (8):

(5) Every producer shall provide the detailed information on the constituents of the equipment and their components or consumables or parts or spares along with a declaration of conformance to the Reduction of Hazardous Substances provisions in the product user documentation.

(8) Every producer while seeking Extended Producer Responsibility – Authorisation will provide information on the compliance of the provisions of sub-rule (1) of rule 16. This information shall be in terms of self-declaration

No additional information is provided on the nature of the “detailed information on the constituents” stated in sub-rule (5), making it difficult to judge the impact of this provision.  With regard to sub-rule (8), Form-1 specifies that the “information on compliance” must be technical documents based on EN 50581.

To enforce the substance restrictions, sub-rule (9) places responsibility for conducting random sampling of EEE product on the “Central Pollution Control Board”; however, sub-rule (9) also states that the Producer must cover the cost of acquiring a sample product and for conducting the testing.  The Central Pollution Control Board is also responsible for publishing the methods for sampling and analysis of hazardous substances.

The ‘Blue Guide’ on the implementation of EU product rules 2016 was published on April 5, 2016. The ‘Blue Guide’ provides EU Guidance on how European Union regulations apply to products that are manufactured in the EU or imported into the EU. It also describes the rules surrounding the free movement of products within Europe.

The Blue Guide is very important to foreign manufacturers in understanding how and when regulatory requirements apply to their products, especially when a new regulation is implemented and new requirements need to be met.

With regard to the EU RoHS Directive, the Blue Guide provides guidance on the interpretation of what is a finished product and on the terms “placing on the market” (section 2.3) and “making available on the market”.

Most of the changes in the 2016 Blue Guide compared to the previous 2014 version are to provide additional detail and clarification in the guidance, particularly with regard to new business models. The Guide provides:

• additional clarification of several terms used in EU regulations and that the rules are applicable to the EU market as whole and not individual national markets;
• more information about responsibility when products are sold online and then shipped to the end user;
  • Section 2.2 titled “Placing on the Market” provides examples of when an online sales channel is “specifically targeted at EU consumers”.
• Section 2.4 on “Products Imported From Countries Outside the EU” is nearly twice as long in the new version, and now explicitly addresses the responsibility of customs authorities and market surveillance authorities.

A proposed U.S. Senate Bill proposes to eliminate mandatory third-party certification for Energy Star registration of products. The proposed bipartisan “Energy Policy Modernization Act of 2015” is intended to modernize a broad range of energy infrastructure requirements. The change to the Energy Star registration is included in section 1104 of the Bill.

Mandatory third-party certification for Energy Star was implemented several years ago when a broad range of Energy Star registered products were found to be non-conforming.  In several publicized cases, the product manufacturer claimed that they misunderstand the requirements, which, in turn, led to non-conforming products and a loss of credibility of the Energy Star program.  To rectify this issue, third-party certification relying on standardized testing by an accredited test lab was mandated.

The bill has bipartisan support within the Senate, but this particular provision has opposition from the President’s office and testing laboratories. It’s too early to provide an educated guess at the eventual outcome.