Unraveling the mystery of RoHS exemptions

Manuel Suarez, a lawyer at Brussels-based law firm White & Case LLP, which assists manufacturers with RoHS compliance issues, said there is no system in place or form a company can send to the European Commission (EC) to request and receive official certification for an exemption.

Nonetheless, there are certain steps a producer can take to build the case for an exemption, Suarez said.

The first step is to determine if the product is within the scope of the RoHS directive. Specific product categories such as medical, military, industrial monitoring and control, automotive and telecommunications are excluded.

Therefore, if a manufacturer produces a product that it believes is a monitoring and control device, for example, a meter for measuring voltage, then they don't need to do anything; the product is not subject to RoHS.

In addition, equipment specifically designed for transport is also excluded from the directive. "If a manufacturer makes a piece of equipment for a car or a jet, it's considered part of that [transport] and excluded because RoHS has no category for cars or airplanes," said Paul Goodman, senior materials consultant at ERA Technology Ltd, a U.K.-based firm contracted by the European Commission to review specific RoHS exemptions.

Moreover, spare parts are not subject to RoHS requirements, provided they are used for products put on the market before July 1, 2006.

If the product doesn't fit into an excluded category, the next step is to check the exemptions list in the annex on page five of the RoHS directive. There are a number of agreed upon product application exemptions such as lead in high melting temperature solders.

One thing to remember is that products are not exempt, product applications are. "Exemptions are applications of restricted substances in a specific way," said Steve Andrews, at the U.K.'s Department of Trade and Industry (DTI), who is responsible for implementing the EU RoHS directive in the U.K. "Exemptions are not product-specific and are not company-specific."

For example, all lead in glass in any cathode ray tube made by any manufacturer is exempt.

Another point to keep in mind is that the exemptions in the annex are for the stated specific applications, not the entire product, Goodman said. A component can use a high melting point solder, for example, and be RoHS compliant. However, the same component must not contain lead in any other restricted form, such as standard tin/lead solder, and it must not contain the other five restricted substances, he added.

Assessment may require expert help

The key challenge with exemptions is assessment. From a manufacturer's point of view, a product may seem to be excluded or exempt, but authorities may have a different interpretation. If the manufacturer is not sure and wants to manage risk, outside help is needed.

"If you start from the position that you need to work out an exemption, you can convince yourself black is white," said Chris Robertson, head of reliability and failure analysis at ERA. "Having an outside consultant can help."

Robertson recalled one company that considered taking its product off the market because it wasn't worth re-designing to bring it in line with RoHS requirements. It turned out the product was not within the scope of RoHS at all. "They just didn't understand what the directive said."

ERA's Goodman recommends getting expert feedback from technical consultants and a relevant law firm, but also from the EC itself.

A manufacturer can do that by first creating a file with its own technical justification along with independent technical and legal analysis, and then send the documents to the EC asking for its opinion. The EC provides a checklist for manufacturers requesting an exemption. (See checklist and contact information below under editor's note.)

Suarez added the commission will respond but it will be an informal response. "An e-mail from a commission official could say 'We think your product may be considered under the exemption, but it is not up to the commission to interpret community [member state] law'," he said.

Still, all the various supporting opinions should be kept in a file. If authorities challenge an OEM after the July deadline, the file serves as proof of due diligence, which is what authorities will be looking for.

Sources emphasized that at the end of the day, consultant and legal opinions are not legally binding. "No company will have full legal certainty for an exemption, so the answer is to try to obtain as much legal certainty as you can," Suarez said.

Suppose the product is not excluded and no applications are exempt from the directive, yet the manufacturer believes an application should be. A company may propose a new exemption.

The new exemption process is basically the same as determining if your product is exempt. Manufacturers gather technical assessments and legal opinion, then send it all to the EU (contact information below under editor's note) explaining why they believe their product application should be included in the annex. An exemption request carries more weight if it is done with a group of manufacturers or through an association.

Goodman said there are currently 40 new exemptions under review by the European Commission with decisions expected by year's end. However, the commission will discuss the new exemptions with the Technical Adaptation Committee (TAC) and the results have to be scrutinized by the EU parliament.

"The final decision on the new exemptions could actually be made after the July 1 deadline," Goodman said. "That makes it difficult for manufacturers who have to make [production] changes now."

Some companies that requested a new exemption have argued that because the final decision will occur close to the RoHS deadline, they cannot ramp production processes now. "Therefore, they are asking for a grace period and the decision on that is still pending," Suarez said.

Suarez cautioned that the EC may apply strict criteria to exemptions in order to avoid straying from the original goal of RoHS, which is to reduce the amount of hazardous waste.

"We have seen suggestions that in general terms manufacturers expect 50% of their telecommunications/network infrastructure equipment to be exempt, but we fear this may be too optimistic,” he said. "The EU and national authorities may converge on a stricter position in order to avoid over-broad interpretations."

Show due diligence

In the end, an exemption is really about proving compliance. So how do you prove your product complies with the RoHS directive? There is no conclusive answer.

"The requirement for producers is to show due diligence and at the moment the European Commission is discussing what form that will take," said Goodman. "It will likely be based on materials declarations from suppliers."

Determining the level of due diligence in material declarations, and collecting all the declarations are two areas that are causing a lot of confusion and a lot of spending, said Eric Karofsky, senior research analyst at Boston-based AMR Research Inc., who has co-authored a report on assessing the risk of non-compliance.

OEMs should not stop once they get the supplier's declaration in hand, Karofsky said. He estimates that more than 50% of suppliers for U.S. companies are inaccurately providing yes or no responses.

"Suppliers have no legal exposure with non-compliant components. It's the OEM that carries the legal exposure," Karofsky said. As a result, he recommends collecting the suppliers' compliance statements, then asking them to prove it.

If a manufacturer is uneasy with the supplier's declaration or can't get it, then testing, either in-house or by a third-party, may be necessary, advised Goodman.

Documents become the insurance policy. "They're not a guarantee that the manufacturer is right, but in any dispute, authorities can review the documentation," Goodman said. If independent consultants and the European Commission give supporting opinions for the exemption, it's unlikely that enforcement authorities would challenge it in court, he added.

Editor's note: The steps provided to apply for an exemption are not meant as a definitive guide. As always, you should consult with industry groups, legal advisors, technical consultants and/or the EC for more detailed information. Here are some additional links that may be helpful.

• To check if your product falls within the scope of RoHS, a FAQ published by the EU is helpful: http://europa.eu.int/comm/environment/waste/weee_index.htm NOTE: Scroll down to "Other Related Documents" and click on the link.

• The UK's Department of Trade and Industry in August issued a 23-page document that provides some RoHS exemption information: http://www.dti.gov.uk/sustainability/weee/index.htm NOTE: Scroll down the page. Click on "Latest information" then "click here".

• 23 of the pending exemptions currently under review can be found on the EU web site: http://europa.eu.int/comm/environment/waste/rohs_3_consult.htm NOTE: Click on the title to show the substantiating evidence for the exemption.

• Click here for the EU's Check list for an exemption request.

• After gathering supporting technical and/or legal assessments for a specific exemption, the EU commission may be contacted to review the documents and offer an informal opinion. A point of contact for RoHS exemption issues is:

  Anna Passera European Commission DG Environment, Unit A.2., Avenue de Beaulieu/Beaulieulaan 5, B-1160 Brussels, Belgium Anna.Passera@cec.eu.int