Get the lead out, EU says

Firms rush to meet RoHS environmental directive for their exports to Europe

Friday, July 7, 2006

Starting last week, the European Union has cracked down on hazardous electronic imports, spurring manufacturers and merchants to ensure that their products pass environmental muster — and are so certified.

Several Maryland companies — among them security electronics supplier SafeNet Inc. in Baltimore and broadcast audience rating company Arbitron Inc. in Columbia — find themselves needing to meet the new directive, called the Restriction of Certain Hazardous Substances in Electrical and Electronic Equipment, or face losing sales in EU nations.

Meanwhile, the new regulation, known as RoHS, is helping another Maryland company, software firm Precience Inc. of Silver Spring, which markets a computer program designed to help other companies meet the directive.

RoHS prohibits electrical and electronic manufacturers and retailers from marketing products in the European Union that contain certain banned substances. It is part of a global environmental movement to switch from imposing fines to restricting market access.

In February 2003, the European Union passed the RoHS directive to restrict imported products with more than very limited amounts of any of six hazardous substances: lead, mercury, cadmiuim, hexavalent chromium, polybrominated biphenyl (PBB), and polybrominated diphenyl ether (PBDE).

Lead is widely used in solder. Mercury, cadmium and chromium are used to inhibit corrosion.

And PBBs and PBDEs are flame retardants used in plastic housings of appliances and computers.

Most aerospace and defense contractors are exempt from the new regulation.

But public U.S. companies that sell in Europe must disclose to their investors any environmental risks of their products’ materials, with the Sarbanes-Oxley Act requiring accurate disclosure in annual reports.

Efforts to pass a similar U.S. law have failed. But at least six states, including Maryland with its computer recycling act of 2005, have laws restricting sales of products with hazardous substances.

Products most affected by the new EU directive are those produced by the information technology and telecommunications industries, as well as household appliances, consumer equipment, lighting equipment, hand or household tools, toys, and leisure and sports equipment.

More about RoHS IPC Association of Connecting Electronics Industries 1901 N. Moore St. Arlington, VA 22209 703-522-0225 www.ipc.org National Electrical Manufacturers Association 1300 N. 17th St. Suite 1752 Rosslyn, VA 22209 703-841-3200 www.nema.org National Institute of Standards and Technology 100 Bureau Drive Gaithersburg 20899-8600 301-975-2763 www.nist.gov NIST 2005 symposium on RoHS www.cstl.nist.gov⁄ nist839⁄RoHS⁄ RoHS_Meeting.htm

‘‘It has caused electronics companies to spend a lot of money to make sure all of their suppliers, parts and materials are RoHS compliant and there is all sort of documentation that has to be done,” said Robert Straetz, international trade specialist the Office of the European Union, U.S. Department of Commerce.

Straetz said ‘‘companies are going to have to go over to this [RoHS compliance] anyway” because China has a similar directive that will go into effect on Jan. 1, and ‘‘even our own state of California” will enforce such a rule starting March 1. Japan, Argentina and several other U.S. states are also considering similar legislation.

‘‘Manufacturers are not going to make a separate line of products for three large markets like that and another line for everyone else,” Straetz said. ‘‘It will force suppliers” to toe the environmental line across the board.

Compliance help

Precience recently marketed a computer program that allows manufacturers to make sure that ‘‘the complete structure” of their complex electrical and electronic products meets the RoHS compliance standards.

The program, Tornado Environmental Compliance Management, speeds up a company’s compliance process by analyzing each component through a database by PartMiner Inc., covering more than 39 million part numbers and more than 1,900 manufacturers. PartMiner Inc. is a global supplier of electronic components and intelligence.

The Precience program also provides buyers of parts and materials some assurance that their purchases will be compliant, said CEO and founder Ahmed Khan.

‘‘Even though the [U.S.] government is not saying, ‘Be environmentally friendly,’ the supply chain now says we are not going to make things with lead,” Khan said. ‘‘People are changing their manufacturing. A typical electronics company is making network boards with many parts that have to be imported in the system. That is where we come in. Our program looks at all the data on each part, and the legislation requirements for them. Each country has its own reporting requirements.”

Privately held Precience, founded in 1995, has 18 employees, with more than 180 customers worldwide.

‘‘We make sure everybody is following the same standards, but this is a monstrous industry,” Khan said. RoHS is a ‘‘huge burden to a small company.”

Arbitron Inc., which measures audience levels for radio and television broadcasters, has met an ‘‘engineering challenge” to make its Portable People Meters compliant with the RoHS directive, said senior manufacturing engineer Sheldon Tolchinsky.

‘‘We took the requirements of RoHS and we reviewed all of our products and we pulled out those substances in the components and the soldering that are restricted,” Tolchinsky said. ‘‘We have been working on it for about a year.

Arbitron markets the meters in Belgium and Norway for radio and in Great Britain for radio and television, with plans to start marketing in Singapore, Kazakhstan and Canada.

‘‘We saw RoHS coming for three years, and we don’t mind if it improves the environment either,” Tolchinsky said. ‘‘So, when we look at the scale of what we do, and we make tens of thousands of units for existing use and for future expansion, then we needed to find parts that met our specs and we had to redesign the [circuit] boards.”

Last week, SafeNet Inc., which had 2005 sales of $263 million, told its customers that it has retooled its SafeXcel security semiconductor products to be ‘‘free of hazardous materials and meet compliance standards” defined by the new EU standards.