Where does the buck stop

The imminent RoHS and WEEE directives have become part of everyday language in the electronics industry. Most organisations exporting electrical and electronic equipment (EEE) into Europe have a pretty good idea what is required and by when. But are you doing too much or not enough? At the beginning of the supply chain matters are fairly clear-cut. Without compliant alloys, for example, you cant manufacture a compliant lead-frame. Without a compliant lead-frame you will never manufacture a compliant component and without conforming components, RoHS compliant equipment simply isnt achievable. As a single non-compliant lead-frame can cause an entire electronic system to fall foul of the legislation, all parties have to trust their preceding supply chain partners, allowing time for compliance to filter down stream.

At the other end of the supply chain is the consumer, who is usually thought to be untouchable in all aspects of environmental legislation. This is not strictly true however, as the following scenario demonstrates.

Who is the principal producer?

The consumers immediate neighbour within the supply chain is perhaps a local agent or importer. Both RoHS and particularly the WEEE directive pose a potentially Herculean challenge for these often-anonymous members of the supply chain. Although they typically have no control over the design or manufacturing processes, they are expected to bear the brunt of any legal, financial and logistical responsibilities. This is because, from a legislative perspective, an importer is considered the principal producer.
In simple terms, the principal producer is the party that places the equipment on the EU market regardless of who or where the equipment was originally manufactured. In this scenario an importer could effectively inherit responsibility from an OEM in North America.

While RoHS has a limited impact on the relationship between the OEM and his importer, the legislation still requires the importer to have exercised due diligence. He must be able to confirm the products he sells on behalf of the manufacturer comply with RoHS if he is to avoid future legal liability for non-conformance.

Facing the burden of responsibility

WEEE, on the other hand, is far more challenging, placing even more responsibilities on the importer. As the principal producer, an importer is obliged to register within his country if the products he sells fall within the scope of the directive. He is required to provide a financial guarantee and supply detailed information relating to the volumes and weights of products placed on his local market. The importer is also responsible for the take-back of products at their end of life. While much of this information and financing will undoubtedly come from the original OEM under some form of a contractual agreement, it is apparent that an importer of electrical and electronic equipment (EEE) into Europe is no longer simply a box shifter.

Will importers or agents want the responsibility and additional burden the legislation imposes, and at what cost? It is worth remembering that although producer registration can cost thousands of Euros within each EU member state for each product registered, non-compliance could amount to millions in fines and lack of market access.

What would happen, for example, if a US based OEM lost the services of a local agent or importer within Europe and decided to deal direct? Most EU member states only permit WEEE registration for organisations with a legal entity within their borders. In this business-to-business transaction the North American OEM would be considered a distance seller and as such, would not be required or allowed to register within many of the 25 EU member countries. The OEM must still ensure the exported equipment complies with RoHS, however he would not be expected to register as a producer with regard to WEEE. Moreover, the OEM would no longer be required to provide the necessary financial guarantees and wouldnt even be required to collect or recycle his equipment as responsibility would now rest with the end user.

Modern supply chains in the electronics industry are complex structures, which look set to get even more intricate following the introduction of environmental legislation.