Green Legislation for Display Manufacturers

by Jenny Donelan

Manufacturing companies taking a stronger environmental line these days do so because it's good for public relations, good for business, and good for the soul – and also because they are required to do so, if not now, in the near future. Many regulations, mostly from the European Union, are making it necessary for businesses to take a harder look at their supply chains. With some exceptions, companies in the United States have not had to do this to the extent that their overseas partners have "All the toughest legislation comes out of Europe – or California – these days," says Kimberly Allen, principal of Pañña Consulting. But as a practical matter, any company that wants to do business globally, and that includes most display companies, has to make sure that its products comply with EU rules. New legislation from other parts of the world – Asia, for example – is also in the works, and old legislation is constantly changing. RoHS, which went into effect July 2006, is currently being updated, as is REACH. These directives will only become more stringent.

Below is a short list of the environmental legislation most likely to affect display manufacturers. The accompanying Web addresses contain more information about specifics, deadlines, and exemptions.

• RoHS (Restriction of Hazardous Substances). The directive originated in the European Union and restricts the use of specific materials found in electrical and electronic products: lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls, and polybrominated diphenyl ethers. Since RoHS covers every component of a product, manufacturers need to know who made which components and where each component was made. "Some little pushbutton on your phone might have been made in one country and gone through two or three different factories in other countries" before it ends up in a finished handset, notes Allen.

• REACH (Registration, Evaluation, Authorization, and Restriction of Chemical Substances) is an EU directive that came into force in 2007, but is being phased in over a period of years. Similar to RoHS, it requires manufacturers to know the origin and contents of their products. Unlike RoHS, it does not ban substances (although it calls for progressive substitution of the most dangerous ones) but asks that all listed materials, harmful or not, be cataloged in a database. "RoHS involves six substances," says Allen. "REACH deals with 10,000–20,000." Whoever is deemed responsible for the product, usually the OEM, she notes, will need to maintain the necessary database. Manufacturers will be expected to be in full compliance with REACH by 2011 or 2012, she estimates.

• WEEE, another piece of legislation from the EU, is the Waste Electrical and Electronic Equipment Act, in force since 2003. Unlike RoHS and REACH, "It's more about the end of life of a product," says Allen. WEEE was designed to promote collection schemes for the recycling of electronic equipment, although it also requires that heavy metals and certain other chemicals be phased out of products. The directive sets targets for collecting and recycling, and places the onus, for the most part, on manufacturers. Some companies, such as Dell, have been fairly proactive about this, offering free computer recycling to customers worldwide (see, Certainly, end of life is a challenge for the entire industry. Even cell phones, which might seem, on account of their portability, to be easy for customers to recycle, represent a lot of potentially hazardous waste. According to Allen, only about 10–11% of cell phones in the U.S. are currently recycled. "The rest end up in desk drawers or in landfills," she says.

• Electronic Waste Recycling Act. This 2003 legislation out of California also has to do with end of life. Key elements of the ruling include a reduction in hazardous substances used in certain electronic products sold in the state, collection of an electronic waste-recycling fee at the point of sale (about $8–$25 per viewable screen, according to Allen), and distribution of recovery and recycling payments to qualified entities handling the cost of electronic waste collection and recycling.

• EuP (Energy-Using Products) is yet another EU directive (finalized in 2005 but not yet enacted) and is aimed at encouraging environmentally friendly design before the supply chain even gets exercised. "It requires DfE (Design for Environment) to have occurred before you make the product," says Allen, who adds that it will involve some type of stamp that can be displayed by approved products.

Environmental legislation has already changed the way business is done in many areas of display manufacturing, and it will continue to do so in greater and greater measure. Some of the challenges are daunting: cataloging all the substances under the REACH directive, for example, will take time and cause some pain. Allen believes, however, that the end result will be positive. Companies will have a better knowledge of their supply chain and closer relationships with suppliers. "I think it has the potential to harmonize the supply chain," she says.

A question on some people's minds – at least in the U.S. – is, "Do companies really have to comply yet?" The answer is, "In most cases, yes." Admittedly, enforcement and penalties are not standardized, and in some cases have been phased in over time. And there are exemptions, such as for medical equipment. But the processes of detection and enforcement are becoming more rather than less rigorous and legislative overhauls will provide for fewer exemptions as time goes on.

What actually happens if a company is discovered to be in violation of a directive depends on where the detection takes place. In the case of the EU directives, for example, it is up to individual countries to achieve results, and the EU does not dictate the methodology. Checking for compliance might mean requesting documents in one instance. It could mean physical checks with handheld XRF (X-ray fluorescence) analyzers in another, or both. Penalties vary as well. For non-compliance with WEEE/RoHS, examples include a fine of 300,000 Forints (about $US1600) in Hungary to a maximum penalty of 15 million Euros and 10 years in prison in Ireland. Fines have been levied in Europe and products recalled. In practical terms, however, perhaps the biggest setbacks for non-complying companies are sales bans, loss of contracts, and negative publicity. Companies are starting to prefer to do business with companies that are compliant. The negative aspects of getting caught not complying seem to outweigh any financial and practical benefits of avoiding compliance.

One of the biggest challenges to companies in terms of compliance is end-of-life legislation. Manufacturers are going to have to figure out how to collect and recycle (and induce customers to recycle) their products on a global basis without losing money. Some cross-company collaboration efforts are already being made in this area, and, of course, recycling represents a new opportunity for third parties willing to figure out the logistics. The upcoming final installment in this series of green-manufacturing news articles will look at end-of-life issues and the practical solutions some companies and organizations are proposing and enacting. •