Home > Penalties ahead for non-compliers

Penalties ahead for non-compliers

Supplier News

WITH less than two months to go, electronics companies all around the world should be in the final stages of implementing processes to comply with the European Union’s Reduction of Hazardous Substances (RoHS) and Waste Electrical and Electronic Equipment (WEEE) directives. If not, they could be in for some financial hardship come 1 July.

On the one hand, if companies that export to Europe have not made sure all of their products comply with the directives, then they could face a number of penalties. Under the directive, EU member states can determine what penalties are applicable to breaches as long as they are effective, proportionate and dissuasive. Based on information collated by SGS, non-complying companies can face fines up to €15 million and lengthy prison terms for executives.

However, the main penalty will be in lost sales if a product is impounded, according to Roland Sommer, the managing director of New Zealand-based RoHS and WEEE Specialists International .

“An infamous example, is when the Dutch government halted shipments of Sony Playstations in October 2003 due to excess cadmium in its cables,” he said.

“The root cause of the problem was Sony’s supplier supplying cables out of spec. Shipments resumed in mid December, but the cost to Sony was €110 million in sales and €52 million in operating profit.”

Sommer said a communication network has been established that alerts all EU States if a product is impounded, so the financial repercussions for multinational corporations could be the Sony Playstation scenario multiplied by over 25 times.

“The companies would also have to cope with brand equity damage, the cost of recall and the possible cost of rework. If non-lead free solder has been used there is no way you could rework the units. Hopefully you can sell them into other markets, albeit secondhand,” he said.

Companies that do not export to Europe could also face problems when standard parts eventually become scarce.

“When traditional parts start to become harder to obtain the main risk is tin whiskers growing in high reliability applications such as network servers and telecommunications (which are presently exempt), as well as medical devices,” Sommer explained.

“Also when Ball Grid Array (BGA) components become non-available in traditional tin/lead versions, the entire board has to be converted to lead-free solder as you cannot mix lead-free BGA with traditional tin/lead solder unless under extremely controlled circumstances.”

As well as providing advice through his consultancy and seminars, Sommer is involved with the WEEE & RoHS Committee established by the Australian Electrical & Electronics Manufacturers’ Association (AEEMA). At the committee’s last meeting, he gave a presentation on material declaration management, with particular reference to the IPC1752 standard. Committee chair Keith Anderson, president of Melbourne-based Adilam Electronics , said AEEMA will investigate the adoption of IPC1752 to assist local companies.

“Australian and New Zealand companies need to be fully aware of the international trends in WEEE and RoHS issues as eventually there will be similar legislations enacted locally,” he said.

“As an analogy, this situation can be compared to the introduction of the ISO Quality Standards some years ago. Many thought it would go away, but in the end, if you wanted to do business you needed to have installed an accredited quality system.”

Anderson said AEEMA has been working closely with the relevant federal government departments to give guidance on the situation in Australia to ensure the national is not left behind in the international trend to enact environmental legislation.

Further information and advice on the RoHS and WEEE directives can be obtained from the sponsors of Electronics News magazine’s special RoHS Supplements – Adilam, Arrow Electronics , Farnell In One , SGS and Soanar .

Newsletter sign-up

The latest products and news delivered to your inbox