Conflict gold: a note to jewelry manufacturers

Manufacturers and distributors of gold jewelry have a challenge ahead. It seems like an impossible challenge but if you really burrow into it for a short while, SEC compliance with conflict gold is quite possible.

Days of miracle and wonder...

If you manufacture gold jewelry and you have a wholesaler that directly supplies an SEC-listed company, you must talk to Acme and find out what they require, based on their communications with the SEC-listed company that is their customer. You'll likely need to obtain gold from LBMA “Good Delivery” sources or EEIC-GeSI “Conflict Free” smelters, or from other sources, such as banks, that are compliant with OECD due diligence guidance.

Compliance short-cut  One way "around it" is to simply use recycled gold, or gold from existing stockpiles, if you are able to verify that representation. Here, you'll need careful inventory management to make sure supplies and products that conform to supply chain due diligence standards are separated from other sources.

Additional requirements can include the implementation of your own supply chain due diligence program, for example a program like this one can cut time and burden of supply chain communication and report generation, can hold certificates that your gold is conflict free, and can also keep records of independent third party audits. Legal resources include the Jewelers Vigilante Committee and Schulte Roth & Zabel.

Gold-plated compliance  Yes, the Dodd Frank rules do not apply any minimum quantity to the materials involved. So if you supply gold-plated products — or products with metal alloys which contain tin, tungsten or tantalum, even in small amounts — you have to follow the appropriate procedures.

Sources outside the U.S. Even if you source gold jewelry from manufacturers and suppliers outside of the U.S., these suppliers have to provide you with assurances regarding their supplies. The EU is looking at some type of conflict mineral restriction in the next year-ish, so even if you weren't obligated you may as well get a leg up on an international obstacle course of conflict mineral rules. So yes, the rules apply to the supply chains of gold (and the other three minerals) irrespective of country of origin. If you source gold, tin or tungsten in any form—as components, settings, findings or finished products—your customer may well require you to get detailed information from your overseas suppliers about source.

2 ways to handle 15,000 national product regulations

There are more than 15,000 national technical regulations that can make it challenging for a company to sell products in and around Europe, notes the European Commission. However, there are tools that enable enterprises to anticipate the creation of such barriers to trade.

National technical regulations are adopted to ensure the safety of products, from substance level to nano, from soup to nuts. Nobody wants their sofa to go up in flames. Or their food to contain chemicals it shouldn't. Or their product components to contain substances or minerals from the wrong side of the tracks.

15,000 regulations on the wall  Since 1984, more than 15,000 draft regulations have been notified and adapted to the rules of the EU internal market. Foodstuffs and agricultural sectors, as well as construction, telecommunications, transport, environment and mechanical engineering are the major areas of focus.

In 12 % of cases, the European Commission (EC) found the new regulations could have hampered trade. However, in more than 95 % of these cases, solutions were found before Member States adopted the new regulations. Here's where TRIS comes in.

Analyse TRIS   Updated daily, the Technical Regulations Information System (TRIS) database gives you access to EU Member States' draft legislation. Using the TRIS database, stakeholders can check proposed EU-based legislation. They can also subscribe to receive an automatic alert when a new notification is published. Drafts are classified according to their aim and area of activity, notifications are also.

Get up, get Actio  Commercial software, which has the advantage of corporate control over data, is available to serve similar purposes. There was a write-up about Actio recently in World Trade 100. The Actio system is set up within an enterprise. The tool is designed to monitor the flow of goods up through a supply chain. It employs the collaborative help of suppliers themselves. The collective data is housed with many layers of permissions at the enterprise itself. The data allows for high level views, automatic regulatory flags and for "drill down." Drill down is interesting. It means an item isn't just a Bill of Materials of BOM for, say, an automotive component, but is also a list of chemical ingredients. It depends on how you view the data. The drill down view where you can see substance-level detail is called "an exploded BOM." Quite catchy.

Again, in this commercial software example a new regulatory action triggers a notification, in this case sending a message to your dashboard. It's not just for Europe, it has a global REACH, if you'll pardon the pun. Depending on your company's needs it could be something to know about. More information is here: http://www.actio.net/default/index.cfm/products/material-disclosure/

15,000 regulations proposed in the past 20 years requires near-genius on the enterprise end in terms of risk assessment and management. Good luck staying on top. We'll continue to bring ideas for making it easier.

Big E's now betting on Africa

Big electronics companies are betting on Africa as the next emerging market. Take Samsung and IBM in particular.

Big electronics companies see potential

Circuits Assembly editor and market analyst Mike Buetow recently published a blog piece called Africa: The Next China?  This market snapshot is compelling:

Samsung is moving fast [into Africa] for multiple reasons. Africa is home to one billion people, and the opportunity to capture market share is enticing. Ethiopia and Kenya are neighbors in East-Central Africa, where some 142 million people reside and the economies are flourishing. In Ethiopia alone, the economy has been growing an average 8% per year over the past five years. And East-Central Africa’s electronics market is forecast to grow 11% per year on average over the next decade.

Of course, many raw materials useful in electronics manufacture are sourced from Africa. Which makes the land itself attractive.

Days of miracle and wonder

Bloomberg recently quoted the head of IBM’s global sales on the subject of Africa as an economic contender: “It’s nascent, it’s unstable, but it has a huge potential.” Potential as in: having the same potential that was to be found in China a decade back, as Ariella Brown at EBN put it.

It's nascent, it's unstable, but it has huge potential sums it up. The key difference between Africa as the next big China opportunity is that bit in the middle: instability. China had an advantage in that regard.

A long distance call

I had it out with a colleague down the hall who said, "The US and China had an infrastructure advantage -- it's hard for us in the US to fathom the realities of 50 different nations trying to work in concert."

I said, "Africa is as diverse as the EU -- which hasn't turned out so badly for the EU."

Colleague: "But it took Europe a long time to get where they are, like, 2000 years."

"No," I said, "You only get to measure from the onset of the Industrial Revolution. In that sense, we're all neck and neck."

"Actually," piped up the intern, who was apparently listening in, "we only get to measure from the onset of the internet age -- where computer advances met the global supply chain in earnest."

Good point, intern.

"In ten years," said he, "it could be Africa, if they play their cards right." Then he paused and shrugged, looking precisely like a twenty-something of the internet generation to whom ten years is an unfathomably long time full of near-infinite possibility.

"In ten years," he said, "it could be Africa -- or it could almost be anywhere." And he's kind of right.

Cosmetics regulation seeks input (FDA)

Cosmetics regulation moves forward.  (So do glaciers... but anyway here's the news....)

The Food and Drug Administration (FDA) will host a public meeting entitled, “International Cooperation on Cosmetics Regulation (ICCR)—Preparation for ICCR-7 Meeting.” The purpose of this meeting is to get public input on various topics pertaining to cosmetics regulation. (The main event on this subject, the ICCR-7 meeting, will be held in Japan this summer, July 8 to 10, 2013.)

Cosmetic regulations? *

This preliminary meeting will be held on May 8, 2013, from 2 p.m. to 4 p.m. at the Food and Drug Administration, University Station Building, 4300 River Rd., Conference Room 3172 (third floor), College Park, MD 20740, which is also, of course, the location of the U.S. FDA Office of Cosmetics and Colors.

For some back story, review past information on lead in lipstick and chemicals in fragrances and cosmetics.

Do you want to present to FDA? Deadline to register is April 22, 2013. The meeting invites interested parties to "present data, information, or views orally or in writing, on issues related to cosmetics regulation." Time allotted for oral presentations may be limited to 10 minutes or less for each presenter.

Transcripts: As soon as a transcript is available, it will be accessible at http://www.regulations.gov. It also may be viewed at the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD.

The purpose of the multilateral framework on the ICCR is "to pave the way for the removal of regulatory obstacles to international trade while maintaining global consumer protection."

Who is ICCR?  

ICCR is a voluntary international group of cosmetics regulatory authorities from the United States, Japan, the European Union, and Canada. These regulatory authority members will enter into constructive dialogue with their relevant cosmetics industry trade associations and public advocacy groups. Currently, the ICCR members are: Health Canada; the European Directorate General for Health and Consumers; the Ministry of Health, Labor and Welfare of Japan; and the U.S. Food and Drug Administration.

More info  

Go to the announcement in the Federal Register for more info on this.

* Image credit: iStockphoto.com-NadyaLukic

SIN listers: the top 20 toxic chemical producing companies

Our friends in Europe are in a frenzy about endocrine disrupting substances.

A new database "names and shames" corporations using the most toxic chemicals. Top 20:

In brief, ChemSec has compiled information about companies that have registered production or imports of the chemicals under REACH regulation in Europe, and incorporated the data into its own 'SIN List' database. The "sin" in SIN List means Substitute it Now! Meaning simply that a chemical listed there is either currently restricted by REACH regulation or it is likely to be in the future, so companies should substitute it now, rather than later. For example, some chemicals are carcinogenic or impair reproduction, but are still present in many consumer products such as detergents, paints and toys and are likely to be identified in the future as toxic. So "don't pretend to be surprised later when this chemical is identified as toxic and banned from commerce." is the subtext.

A ChemSec representative said the purpose of the database is not to embarrass companies.

Find out more here: http://www.chemsec.org/what-we-do/sin-list/latest-on-sin/1141-reach-reveals-the-companies-behind-the-sin-list-chemicals

Swedes make a move 

Sweden’s environment minister is now threatening to introduce national bans on endocrine-disrupting chemicals if the European Union does not act, citing growing evidence of their health-damaging effects. 

Of course, the European Union (EU) has already started a process of phasing out phthalates (which are plasticizers and are widely understood to be endocrine disruptors). Danish Environment Minister Ida Auken -- as we reported last year -- has stated that the EU process "can take a really long time" and Denmark does not want to wait around for European action on certain chemical bans, and will therefore likely initiate a phthalate ban on its own.

EPA 2013 chemical risk assessment to focus on flame retardants

On March 28, 2013 the US Environmental Protection Agency (EPA) announced it will begin assessments on commonly used chemicals. A focus will fall on flame retardant chemicals.

EPA scientist

This effort is part of the Toxic Substances Control Act (TSCA) Work Plan which identifies commonly used chemicals for risk assessment. The focus is because Americans are often exposed to flame retardant chemicals in their daily lives; flame retardants are widely used in products such as household furniture, textiles, and electronic equipment.

EPA will conduct full risk assessments on TBB, TBPH, TCEP, and HBCD:

TSCA Work Plan Chemicals:

1. 2-Ethylhexyl ester 2,3,4,5- tetrabromobenzoate (TBB)
2. 1,2- Ethylhexyl 3,4,5,6-tetrabromo-benzenedicarboxylate, or (2-ethylhexyl)-3,4,5,6 tetrabromophthalate (TBPH)
3. Tris(2-chloroethyl) phosphate (TCEP)
4. Octamethylcyclotetrasiloxane (D4)
5. 1-Bromopropane
6. 1,4-Dioxane

Action Plan Chemical:

1. Hexabromocyclododecane (HBCD) and related congeners

Details on the US EPA Assessment Chemicals

TBB and TBPH are members of the brominated phthalates group. Five other members of this group are 2-(2-Hydroxyethoxy) ethyl 2-hydroxy propyl 3,4,5,6 tetrabromobenzenedicarboxylate; 3,4,5,6-Tetrabromo-1,2-benzenedicarboxylic acid, mixed esters with diethylene glycol and propylene glycol; '1,2- (2,3-dibromopropyl) benzenedicarboxylate; and two chemicals whose identities have been claimed confidential, listed here as “Confidential A” and “Confidential B.”

TCEP is a member of the chlorinated members of the halogenated phosphate esters group. Two other members of this group are 2-Propanol, 1,3-dichloro-, phosphate (TDCPP); and 2-Propanol, 1-chloro-, phosphate (TCPP).

HBCD is a member of the cyclic aliphatic bromides group. A second member of this group is 1,2,5,6-Tetrabromocyclooctane.

Some have multiple CAS numbers, to account for the 23 total chemicals in question

Reference

Here in the US, the public can submit info on assessment candidate chemicals here, and also find more information on TSCA Work Plan and flame retardant chemicals for risk assessment:

http://www.epa.gov/oppt/existingchemicals/pubs/workplans.html

REACH fees shrink for SMEs

Do the math... if it's doable...

Last year, a review of Europe's REACH regulation concluded that complying with REACH regulation obligations posed a disproportionate cost burden on Small to Mid-sized Enterprises, or SMEs, relative to the burden of larger companies.

Depending on the size of the company, SMEs could benefit from reductions of 35%-95% in relation to standard registration fees, and of 25%-90% in relation to standard fees for authorization requests, says IHS, a provider of global market and economic information

REACH fee increase for larger companies 

However, REACH fees for larger companies will actually increase. Your company is considered large if the headcount is above 250 and revenues are higher than Euros 50 million per year.

The hope is that

1. increasing fees for larger companies and 
2. decreasing fees for small to mid-sized companies

will level the playing field, and overall the revenue paid to the European Chemicals Agency will be balanced and unchanged.

However, again  But all fees will also be adjusted for inflation. This means increased. Confused? Welcome to REACH! Here's a good REACH problem solver tool, if you need one. Consult your internal or external problem solver for details of the fee changes if you'd like more information on this.

I'd say don't worry too much about the fee change, just be aware it's happening. Changes will be rolled into REACH-IT by Friday, March 22, 2013.

REACH-IT is closed until that date for maintenance / adjustments towards a new fee structure.