In this article we report on key product-related EU legislation in the news in 2014, specifically: (1) the extended reach of the recast WEEE Directive; (2) increasing regulation of ecodesign and energy labelling; (3) new guidance on the batteries regime; (4) the EU's watered down conflict minerals proposal; and (5) a proposal to add four new substances to the RoHS Directive.
1. The recast Directive on waste electrical and electronic equipment (the "recast WEEE Directive")
EU Member States were supposed to transpose the recast WEEE Directive into their national laws by 14 February 2014. All but a small minority of Member States missed this deadline, with a number of Member States (including Germany and Spain) still not having adopted final legislation at the time of writing.
Like the original regime, the recast WEEE Directive aims to prevent the generation of waste electrical and electronic equipment ("WEEE") while also encouraging re-use, recycling and other forms of recovery to minimise amounts of WEEE disposal. Key changes include:
- expanding the scope of the WEEE regime from the current ten categories of EEE to cover all EEE, subject to certain exclusions (see further below);
- clarifying the definition of "producer" and the role of distance sellers supplying products to end-users from a third country;
- creating a new role for "authorised representatives" to discharge producer obligations;
- extending take-back requirements for very small EEE where distributors supply EEE from retail units with a sale area relating to EEE of at least 400m2;
- setting higher, but more flexible, Member State targets on collection and recycling; and
- introducing shipping requirements for "used EEE" (see further comments below on "Shipments of 'used EEE'").
The EU Commission published guidance on the new law in the form of "Frequently Asked Questions on the recast WEEE Directive" ("FAQ Guidance") in April 2014 following the original publication of an earlier draft version of the guidance in 2013.
Set out below is an overview of some of the issues that have arisen under the recast WEEE Directive during the course of 2014.
Expanded scope and printer cartridges
From 15 August 2018, the scope of the WEEE regime widens from the current ten categories of electrical and electronic equipment ("EEE") to cover all EEE (subject to specific exclusions). One product type causing considerable uncertainty is printer cartridges. While it is generally accepted that printer cartridges containing electrical parts should be considered to be "EEE" under the recast WEEE Directive, stakeholders have disagreed as to when this should happen: from 14 February 2014 or 15 August 2018. Whereas the July 2013 draft of the Commission's WEEE guidance suggested printer cartridges would be in scope of the recast WEEE Directive from 14 February 2014 the final guidance does not deal with this point, leaving it open for different approaches by different Member States. The UK Government has publicly stated that it is not intending to treat printer cartridges as being in scope until 15 August 2018, but that other Member States may not necessarily follow the same approach.
Shipments of "used EEE"
The recast WEEE Directive contains important provisions for businesses involved in repair and refurbishment activities who ship used EEE in, out and around the EU.
Annex IV of the recast WEEE Directive sets out minimum requirements for international non-waste shipments of used EEE similar to those contained in the Revised Correspondents' Guidelines No 1, albeit with small differences. These requirements have been put into law to give competent authorities powers to presume suspect shipments are waste shipments unless proved otherwise, thereby supposedly helping them to tackle the growing number of e-waste crimes.
One scenario where used EEE may be shipped as non-waste under the WEEE Directive is where it is being sent back to a producer (or third party acting on its behalf) as defective for repair under warranty with the intention of re-use. The equivalent scenario in the Revised Correspondents' Guidelines No 1, however, only specified that the used EEE had to be sent "e.g. under warranty". This has caused speculation about the circumstances in which a product will be considered as "under warranty". The FAQ Guidance suggests that this term should be construed broadly as covering a wide range of service, maintenance and repair agreements, but the outer limits of this broad interpretation remain untested.
Large scale fixed installations ("LSFIs") and large scale stationary industrial tools ("LSSITs")
As a result of the expansion of the WEEE regime to cover all EEE from 15 August 2018, various new exemptions to the scope are provided in the recast WEEE Directive, including exemptions for LSFIs and LSSITs. While the 2013 draft version of the FAQ Guidance attempted to clarify the meaning of "large-scale" and other aspects of the exemptions, the final FAQ Guidance is considerably briefer and largely just cross-refers to the Commission's RoHS 2 FAQ Guidance Document. This leaves a number of potential areas of uncertainty in connection with the exemptions:
- what requirements must parts meet to be considered "specifically designed" as part of an excluded LSFI or
- when will LSFIs and LSSITs be considered "permanently" installed or used and does this prevent movement from one site to another?
- what are the minimum requirements for a tool to be considered "large-scale"? The 2013 draft version of the FAQ Guidance had included a "rule of thumb" for determining if a tool was large enough to be a LSSIT but this did not make it into the final version. Further, the RoHS 2 FAQ only provides minimum requirements for LSFIs and states that specific guidance metrics should be developed for LSSITs.
UK approach to "dual use" EEE
The UK Department for Business, Innovation & Skills ("BIS") has recently announced that it will change its approach to "dual use" EEE (i.e. EEE that potentially could be used by both household and non-household end-users) to bring it into line with the approach of the EU Commission as set out in the Commission's FAQ Guidance. Historically, the UK took the view that "dual use" products did not have to be counted as household EEE when used by a non-household end user. However, BIS' new approach means that "dual use" EEE should be classified as "household EEE" if the product could be used in both households and business premises even if, in fact, it is only used in business premises. For example, a laptop could only be treated as a non-household product if it could be demonstrated that it had a different specification to one that could be purchased by a consumer. This new approach means that producers in the UK will have to report and account for all dual use EEE as household EEE.
2. Updates on the Ecodesign and Energy Labelling Regimes
The Ecodesign Regime's expanding scope and the need for guidance
The coverage of the EU's ecodesign regime has expanded with new energy efficiency requirements for computers applying from 1 July 2014 (under Regulation (EU) No 617/2013) and for vacuum cleaners applying from 1 September 2014 (under Regulation (EU) No 666/2013); as well as new "networked standby" power consumption requirements for "networked equipment" applying from 1 January 2015 (under Regulation (EU) No 801/2013).
These new measures are already causing challenges for manufacturers. For some products, the requirements and procedures for energy efficiency testing lack clarity or detail, and the approach of market surveillance authorities to their own conformity tests remains unclear. This includes whether and when products sold with accessories should be combined for energy consumption tests (the question being whether the accessory is such an integral part of the main product that it does not have a separate identity for ecodesign purposes). There has been little guidance from the Commission on these points and, with the increasing scope of the ecodesign regime, further guidance would be very timely.
Tailoring the Energy Labelling Regime to internet sales
The EU's energy labelling regime was amended in 2014 to better address the different methods of disseminating energy information to end-users in distance (i.e. internet) and in-store sales scenarios.
Regulation (EU) No 518/2014 amends ten product-specific energy labelling Regulations, including those for white goods, refrigerators, washing machines and televisions, to introduce new labelling and information requirements tailored to distance sales. The new provisions require that dealers are provided with electronic versions of a product's energy label and product fiche and prescribe the manner in which these must be displayed electronically. These new requirements apply in respect of in-scope energy-related products placed on the market from 1 January 2015.
3. Updates to the Batteries Regime
There has been much focus in 2014 on the requirement under the EU Batteries Directive 2006/66/EC, as amended, ("Directive") for batteries incorporated into electrical or electronic equipment ("EEE") to be capable of being "readily removed". The European Commission's revised guidance on the interpretation of the revised Directive, published in May 2014, makes it clear that batteries must be removable without delay or difficulty, and at a reasonable cost, by either an end user or a qualified independent professional.
In addition, the revised Directive requires EEE that incorporates batteries to be accompanied by instructions on how the batteries can be removed, again either by the end user or an independently qualified professional. During the preparation of the of the Commission's revised guidance, there was much discussion between industry and the Commission as to whether this requirement should be interpreted as meaning removal instructions must accompany the EEE in all cases, irrespective of whether the battery was designed to be end-user removable or not. Industry's concern here related to the safety of providing end-users with removal instructions for batteries that should only be handled by qualified professionals (e.g. because of risks arising from improper handling of soft cell Lithium-ion batteries).
The revised Commission guidance does not, however, indicate that it would be sufficient for batteries that are not end-user removable simply to state that the battery should only ever be removed by a qualified professional. Instead, the guidance states that removal instructions should accompany all EEE containing batteries. The former approach did seem to be endorsed by the UK Government's guidance on battery removability, which until December 2014 stated that "an alternative to instructions on how to remove a battery is providing information on who, in the view of the manufacturer, is the best person to do it." However, this text has been removed from the UK Government's guidance (see:https://www.gov.uk/placing-batteries-on-the-uk-market-producer-responsibilities#removability-requirements) and the guidance aligned with the Commission's guidance. Any entities that have previously relied on the pre-December 2014 UK guidance will need to ensure that all of their EEE which incorporates batteries is now accompanied by instructions on how the batteries can be removed.
The guidance does not therefore directly address the safety concerns of industry. An approach endorsed by the UK Government, however, may go some way to mitigate these concerns. The UK Government guidance states that it would seem reasonable, as an alternative to full instructions being provided with the product, for a product to be accompanied instead by "Simpler instructions" which are both "suitable to meet the base requirement of the [UK Batteries] regulation" and "supported by more detailed information on a free access website". Although this guidance is only reflective of the UK Government's interpretation of the requirement, we consider it to be a pragmatic approach for companies concerned about enclosing detailed removal instructions with products whose batteries should only be removed by a professional.
4. Update on EU Conflict Minerals Proposal for Voluntary Regulation
EU manufacturers and importers seem likely to avoid mandatory supply chain due diligence for conflict minerals, contrary to expectations that the EU would follow the US Dodd-Frank Act and impose compulsory requirements. On 5 March 2014, the European Commission published a legislativeproposal for a voluntary self-certification scheme for importers of tin, tungsten, tantalum and gold (and their ores). This proposal is now being considered by the European Parliament and Council, both of which need to approve the proposal before it can enter into force.
Why have conflict minerals laws?
The rationale for conflict minerals laws, such as the one proposed, is to address the immense hardship and suffering caused when mining revenues are captured by armed gangs to fund violence and human rights abuses in conflict-affected areas, such as the Great Lakes Region of Africa. Tin, tungsten, tantalum and gold (and their ores) are generally targeted by such laws because they are often sourced from conflict-affected countries. These minerals play a vital role in many different applications, including in the automotive, electronics, jewellery, aerospace, packaging, construction, lighting and industrial machinery and tooling sectors.
The EU Proposal
The EU proposal comprises a package of measures on conflict materials, including a proposal for a new regulation on the responsible sourcing of minerals.
Significantly, the proposed regulation is far weaker than forecast by earlier commentary on the expected form of the measures. Firstly, the proposal would only establish a voluntary self-certification system. Secondly, that system would only apply to importers into the EU of the relevant materials themselves (and their ores). This means that manufacturers and importers placing finished products on the EU market that contain the relevant minerals are not within the remit of the scheme, contrary to the expectations of some commentators. This approach appears to reflect business concerns that a mandatory due diligence requirement with a broader reach would be too onerous and costly.
As with the US Dodd-Frank Act, the list of minerals is a closed one. However, unlike the US approach, which only applies to minerals sourced from the Democratic Republic of Congo the ("DRC") and neighbouring countries, the EU proposal applies to minerals sourced from all "conflict-affected and high-risk areas", a determination that importers will have to make themselves. The Commission is reportedly working on guidelines to assist companies in making this determination.
In order to self-certify that their supply chains are "conflict-free", companies will have to follow the steps in the OECD due diligence conflict materials framework. Responsibility for checking whether or not self-certified importers are compliant will lie with Member States authorities.
The EU will then publish annually a global list of responsible smelters and refiners, drawn up in cooperation with the OECD. "Responsible smelters and refiners" will be those in the supply chain of certified "responsible importers". The aim of the list is to increase accountability and encourage responsible sourcing, particularly from conflict-affected areas, and to allow downstream purchasers to easily identify responsible smelters and refiners. By this list the Commission is clearly trying to avoid criticism levelled at the US Dodd-Frank regime that it has created a de-facto embargo of minerals sourced from the DRC and surrounding areas. This unintended consequence has arisen because companies appear to find it easier simply to ban minerals originating in the region from their supply chain, leading to a decline in legal mining, a sharp fall in mineral prices, and increased mineral smuggling.
In addition to the proposed regulation, the Commission has published a Communication setting out further measures for conflict minerals. These include introducing into the Commission's own public procurement contracts requirements that any products supplied to it are "conflict-free", and financial support for small and medium enterprises that participate in the voluntary certification scheme.
The proposal is now under consideration by the European Parliament and Council. Discussions in meetings of the EU Parliament's Committee on International Trade (INTA) in November and December 2014 show that the Parliament has several issues with the scope of the current proposal. On the other hand, Council working party meetings have reportedly been less contentious.
The Commission's view is that by targeting what it considers to be the "weak spot" in mapping mineral supply chains (i.e. focussing only on importers) with a voluntary self-certification scheme, it will do enough to break the link between mineral extraction and the financing of armed conflict (one of the Commission's stated objectives for the proposal). The Commission has stated that it thinks this approach will support compliance with existing conflict minerals initiatives (e.g. the OECD Due Diligence Framework and the US Dodd-Frank regime).
However, the INTA meetings have revealed that some still think that imposing voluntary obligations on the 400-500 EU importers of minerals does not go far enough. Separately, some NGOs have called for the scope of the proposal to be broadened, e.g. so as to become mandatory and capture entities placing products containing conflict minerals on the market.
A further area of contention within the Parliament relates to the closed list of minerals covered by the proposal. Suggestions were made in the INTA meetings that this list should be expanded to capture additional materials, including copper, jade and coal, as these are often also sourced from conflict-affected areas.
With so many aspects of the proposal still under discussion, the Commission considers it unlikely that adoption of the regulation will occur until the end of 2015 at the earliest. Nevertheless it seems clear that, notwithstanding specific areas of contention, in principle the European Parliament very much supports the introduction of conflict minerals legislation.
5. Proposal to add four new substances to the RoHS Directive
In December 2014 the European Commission notified the World Trade Organization of its proposal to add four new substances to Directive 2011/65/EU on the restriction of the use of certain hazardous substances in electrical and electronic equipment (the "RoHS Directive").
The new substances
The new substances consist of four phthalates which are primarily used as plasticizers in plastics, particularly PVC plastic. The four phthalates are: Bis(2-ethylhexyl) phthalate (DEHP), Butyl benzyl phthalate (BBP), Dibutyl phthalate (DBP) and Diisobutyl phthalate (DIBP). These substances will be restricted at 0.1% concentration by weight per homogenous material, in line with the thresholds of most existing RoHS restrictions (the exception being cadmium, which is restricted at 0.01%).
The brominated flame retardant hexabromocyclododecadane (HBCDD) is not included in the proposal despite being one of the "priority" substances for consideration for inclusion in the RoHS Directive. This substance was, however, added to the Stockholm Convention on Persistent Organic Pollutants in May 2013 and so a complete phase-out of HBCDD in electronics, whether imported or produced in the EU, will occur within the next few years in any event.
DIBP was not one of the original "priority" substances named for inclusion in RoHS and, although not currently used in traditional EEE, has been included in the proposal because of concerns that it would otherwise become a substitute for DBP and thereby require restriction at a later date.
Overlap with existing phthalates restrictions
Notably, the new RoHS restrictions for DEHP, BBP and DBP will not apply to toys because the presence of these substances in toys is already subject to restriction under entry 51 of Annex XVII of the REACH Regulation (1907/2006/EC). Entry 51 restricts DEHP, BBP and DBP in the plasticised materials within toys in concentrations greater than 0.1% by weight of the plasticised material, calculated for the three phthalates cumulatively.
It is also worth noting that the four phthalates have already been included in the REACH Regulation Annex XIV "Authorisation List", prohibiting their use in EU-based manufacturing operations from February 2015 unless authorised. Annex XIV does not, however, apply to imported products manufactured outside of the EU and so, without the new RoHS restriction, these products would not currently be caught.
The proposal is in the form of a delegated directive so will not need to be approved by the European Parliament or Council. The Commission is expected to adopt the proposal formally in the first part of 2015, with Member States subject to a transposition deadline of 31 December 2016. The restrictions will then apply from 22 July 2019 for all EEE except for medical devices and monitoring and control instruments, which will only be caught from 22 July 2021. On this basis, EEE manufacturers and the global supply chain will have at least four and a half years to prepare for the new restrictions.