Industry Survey Reveals Significant Cost for Conflict Minerals Compliance

The first year of conflict minerals reporting has come and gone, but how much did it cost? What lessons have we learned? A comprehensive Tulane University survey of 2013 issuers shows average costs per issuer, identifies qualitative measures issuers are currently using, and identifies common supply chain practices.

The survey results indicate an overall cost of $709 million. On average, issuers dedicated 2.7 employees – either part-time or full-time – to their conflict minerals compliance efforts. The procurement, supply chain and quality departments were identified as the departments primarily responsible for conflict minerals compliance. Management and legal departments were distant followers. When asked about procuring external resources, 75 percent of respondents reported they hired a consultant to assist in their compliance efforts. Several issuers also hired lawyers to assist. A company’s IT needs were generally outsourced, however, 37 percent of respondents reported they did not have any software needs.

The survey also explored various qualitative aspects of conflict minerals compliance. Survey results discuss several “good” practices exhibited by respondents. These included: verifying 3TG (tin, tantalum, tungsten and gold) presence or lack thereof; effectively and efficiently conceptualizing and implementing an internal conflict minerals program; effective supply chain communication and engagement; and collaboration and standardization through trade associations. Issuers also identified the need to pursue additional opportunities for consolidation and supply chain cost reduction.

The survey included a long list of perceived benefits from the conflict minerals legislation and ensuing regulation that an overwhelming majority of respondents disproved. Responses indicated clear disincentives from sourcing from the DRC region, including higher costs associated with additional reporting and audit requirements and potential damage to brand recognition.

The majority of respondents were downstream, U.S. companies. A total of 178 responses were received, with the electronics sector and aerospace and defense being the largest sectors represented at a combined 31 percent of total respondents.

Chris Bayer, a newly conferred International Development Ph.D., who helped author the 2011 Economic Impact Analysis, worked with the Payson Center of International Development at Tulane University Law School, to develop this survey. IPC was an integral participant in the stakeholder advisory group, which provided important feedback to Mr. Bayer on the survey, and was instrumental in advocating for issuers to participate in the survey.

Read more for complete survey findings.

 

Congressman Rob Woodall Visits Leading Georgia Companies in the Electronics Manufacturing Industry

Today, Congressman Rob Woodall (R-GA-7) met with executives and employees of IPC member-companies, Hunter Technology in Lawrenceville, Ga. and Viscom in Duluth, Ga., as part of a nationwide effort to discuss with policymakers legislative and regulatory issues that affect the electronics manufacturing industry. IPC and its member companies have hosted more than a dozen Members of Congress in 2014 at a variety of locations across the country.

“I’m grateful to Hunter Technology and Viscom for inviting me out to their operations today,” said Rep. Woodall. “The opportunity to hear first-hand from those who work in the manufacturing industry is tremendously helpful. We’re fortunate to have such a robust manufacturing community in the Seventh District, and it’s vitally important that we in Washington, D.C. work in cooperation with our local job-creators and innovators rather than in opposition to them.”

Hunter Technology provides a full range of electronic design, manufacturing and test services. “On behalf of IPC, Hunter Technology, our 350 employees and their families, I’d like to thank Congressman Woodall for his visit to our Lawrenceville factory and for his ongoing support of the manufacturing industry” said Joe O’Neil, President and CEO of Hunter Technology and Vice Chairman of IPC’s Board of Directors.

Viscom is one of the leading suppliers of high-quality inspection systems for electronics assemblies. “It is important for the manufacturing sector to reach out to policymakers and provide a first-hand look at our industry, and I want to personally express our appreciation to Congressman Woodall for taking the time to hear our perspectives,” said Carsten Salewski, CEO of Viscom.

Rep. Woodall toured the facilities and discussed with staff at both sites important policy and regulatory issues impacting the electronics manufacturing sector. Of particular importance was the Revitalize American Manufacturing and Innovation (RAMI) Act. The RAMI Act, recently passed by the U.S. House of Representatives, is awaiting Senate approval. The bill will establish multiple centers for manufacturing innovation, known as Institutes for Manufacturing Innovation (IMI). These centers will focus on different technology areas to strengthen advanced manufacturing in the United States.

Rep. Woodall’s visits were part of IPC’s “Meet the Policymakers” program, through which IPC government relations staff arrange opportunities for IPC members to host elected officials at company locations. IPC member companies interested in hosting a legislator should contact IPC Vice President of Government Relations John Hasselmann at JohnHasselmann@ipc.org.

Hunter Technology visit

Hunter Technology visit

Viscom visit

Viscom visit

 

Experts Question Conflict Minerals Action

While advocacy groups have made conflict minerals a centerpiece of their campaign to stop human rights abuses in the Democratic Republic of the Congo (DRC), a recent open letter by a group of 70 policy experts from around the world questions the benefits of the focus on conflict minerals.

According to the experts, “the conflict minerals campaign fundamentally misunderstands the relationship between minerals and conflict in the eastern DRC.” In contrast to what advocacy groups imply, the academic consensus is that mining is neither the cause of conflict in the Congo nor necessary to keep the fighting going. Conflict minerals contribute to the violence, but they’re also vital to the Congolese people’s survival. The result, according to the letter, is that the ore trade “holds as much potential to help steer the region away from conflict as it does to contribute towards it.”

In recent years, activists believing that removing conflict minerals trade will stop the bloodshed by denying revenue to those perpetrating violence, have succeeded in pushing for language in the U.S. Dodd-Frank Wall Street Reform Act, the Organisation for Economic Co-operation and Development (OECD) and the United Nations published recommendations aimed at cutting off the Congo’s ore trade, and now guidelines under consideration by the European Union.

IPC continues to voice concerns about the cost and unintended results of conflict minerals legislation, both in the United States and European Union.   In May 2012, IPC Board Chairman Steve Puddles testified before the U.S House of Representatives regarding, “The Costs and Consequences of Dodd-Frank Section 1502.”

 

Congressman Prods EPA on Value of Chemicals Reporting

On October 8, 2014, Congressman Bill Johnson (R-OH) sent a letter to U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy requesting an analysis of reporting data pertaining to byproducts sent for recycling collected during the 2012 Chemical Data Reporting (CDR) reporting cycle. Johnson’s letter stated that, “an analysis of such CDR data is a necessary first step in realizing EPA’s own commitment to reassess the need for CDR information in future reporting cycles and also whether further legislative changes may be needed to ensure that the benefits to EPA of this data collection justify the cost to industry.”

The letter from Congressman Johnson followed February 4, 2014 testimony by Dr. Brent Grazman, vice president, Viasystems Group, Inc. regarding the Toxic Substances Control Act (TSCA) requirement that byproducts sent for recycling be reported to EPA as new chemicals. Dr. Grazman testified that EPA’s reporting requirements for byproducts sent for recycling are burdensome and unnecessary, and serve to discourage recycling.

On August 16, 2011, the EPA issued the TSCA CDR rule (formerly the Inventory Update Reporting (IUR) rule). The CDR rule requires manufacturers of chemicals to report information about the manufacturing (including import), processing, and use of those chemical substances. The final CDR rule explicitly states that byproducts sent for recycling are new chemicals subject to TSCA CDR reporting because they are a feedstock to the recycler and therefore subject to TSCA reporting. This applies to several byproducts produced during the manufacture of printed boards, including copper hydroxide (WWT sludge), copper sulfate (spent baths), cupric chloride (spent etchant), and tetraamine copper dichloride (spent ammoniacal etchant).

For more information on TSCA Reform efforts and the CDR rule, visit IPC’s Environment, Health & Safety web page.

U.S. Congress Holds Briefing on National Network for Manufacturing Innovation

Yesterday, the four lead sponsors of the Revitalize American Manufacturing and Innovation (RAMI) Act (S. 1468 & H.R. 2996), Senators Sherrod Brown (D-OH) and Roy Blunt (R-MO), and Representatives Tom Reed (R-NY) and Joseph Kennedy (D-MA), jointly hosted a special congressional briefing on the National Network for Manufacturing Innovation (NNMI).

Secretary of Commerce, Penny Pritzker served as keynote speaker at the well-attended briefing. In addition, two panels were held. One panel consisted of companies that currently participate in the recently launched Institutes for Manufacturing Innovation (IMIs), which included Steve Betza, Lockheed Martin’s corporate director for Advanced Manufacturing & Development and member of the IPC Board of Directors. Betza told the audience that Lockheed Martin is a Tier 1 member at all four of the established IMIs and he discussed the high level of collaboration taking place. The second panel comprised representatives from three of the four IMIs that were established:

  • Digital Manufacturing and Design Innovation Institute,
  • America Makes – National Additive Manufacturing Innovation Institute, and
  • Lightweight and Modern Metals Manufacturing Innovation Institute.

The industry and institute panelists addressed the benefits and impacts of the NNMI, highlighted the activities of the four recently established IMIs, and expressed the need for the pending RAMI Act to be enacted into law. To help in understanding, a display area for the existing IMIs was set up, where congressional staff could witness firsthand innovative technologies like the 3-D printer in the National Additive Manufacturing Innovation Institute display.

IPC thanks Senators Brown and Blunt as well as Representatives Reed and Kennedy for their leadership on the RAMI Act.  This past Monday, the House of Representatives passed its version of the RAMI Act by voice vote.  IPC applauds the House action on the bill and strongly urges the Senate to pass its bill before Congress adjourns for the year.

RAMI Act Passes U.S. House of Representatives

RAMI Act

The Titan microscope, a cutting-edge technology in use at NC State.

Yesterday, the U.S. House of Representatives passed H.R. 2996 the Revitalize American Manufacturing and Innovation (RAMI) Act. Viewed as a critical piece of legislation in America’s renewed effort to preserve and recapture manufacturing jobs, the RAMI Act focuses efforts to spur innovation and capitalize on emerging manufacturing technologies.

“On behalf of IPC and our 2,200 U.S. member companies, I applaud the House of Representatives for working in a bipartisan manner to pass this critical piece of legislation,” said John Mitchell, president and CEO of IPC. “IPC urges the Senate to take similar action and pass its version of the bill before Congress adjourns for the year.”

A top policy priority for IPC, growing advanced manufacturing in the United States through federal investment is critical, and IPC strongly supports the RAMI Act. If enacted into law, the RAMI Act will establish a National Network for Manufacturing Innovation (NNMI). This network will consist of multiple centers for manufacturing innovation operating as public-private partnerships focusing on different technology areas to accelerate, strengthen and grow advanced manufacturing in the United States.

The bill was introduced in the House by Representatives Tom Reed (R-NY) and Joseph Kennedy (D-MA) in August of last year and passed the House today with an impressive number of 100 co-sponsors, 50 Democrats and 50 Republicans.

“Lockheed Martin is proud to be a charter member at all four Institutes for Manufacturing Innovation established to date,” said Steve Betza, Lockheed Martin’s corporate director for Advanced Manufacturing & Development and a member of the IPC Board of Directors. “These centers represent an unprecedented collaboration between government, industry and academia to accelerate manufacturing innovation. As such, we support the goal of the RAMI Act to expand the NNMI.” On September 18, Betza will participate in a Senate briefing to outline the benefits and impacts of the NNMI.

The U.S. Senate is considering its version of the RAMI Act (S. 1468), which was introduced during August 2013 by Senators Sherrod Brown (D-OH) and Roy Blunt (R-MO).

IPC Working Group Focuses on Nuances of Conformal Coating

As products get smaller and denser, factors that used to be fairly easy to deal with can become areas of concern. Conformal coatings are getting increased interest now as usage grows and the quality of coatings comes under more scrutiny.

These coatings have typically been applied and examined using a range of related standards. For example, IPC-CC-830 addresses some basic testing of materials properties, while IPC J-STD-001 and IPC-A-610 define how a cured film should look.

A new IPC working group, 5-33awg, Conformal Coating Requirements Working Group, was formed to leverage the considerable amount of coating experience of the 5-33c IPC Conformal Coating Handbook Task Group, and focus on areas not covered by existing specifications. Among their areas of interest are the differences in the ways that an aerospace OEM might test coatings for NASA for outer space, or for the FAA’s tests on humidity condensation. Testing automotive OEM coatings in a damp heat environment is another area being examined.

5-33awg is working to develop criteria for conformal coating application and evaluation. Its goal is to come up with methods that allow a user of conformal coating to determine how conformal coating performs in particular end-use environments.

The group’s work is ongoing. Those interested in joining the working group can contact Kris Roberson, IPC manager of assembly technology.

 

The Road to DFX

IPC President and CEO John Mitchell discusses a new IPC initiative: IPC DFX — Design for Excellence program and the advances the design community has seen over the years due to the leadership and contributions of the late, great Dieter Bergman.

 

 

Department of Commerce Publishes Conflict Mineral Smelter List

On September 5, 2014, The U.S. Department of Commerce published a list of known conflict mineral processing facilities, as required under Section 1502(d)(3)(C) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

The U.S. government finally acknowledged Friday it cannot determine which refiners and smelters around the world are financially fueling violence in the war-torn Congo region.

While the list identifies more than 400 sites from Australia to Brazil and Canada, the Department of Commerce report states that it “does not have the ability to distinguish” which are being used to finance conflict in the Democratic Republic of the Congo (DRC) or adjacent countries.

The Department missed its original January 2013 deadline, under the 2010 Dodd-Frank Act, to list “all known conflict mineral processing facilities world-wide.” A June 26, 2014 report by the Government Accountability Office blasted the department for the delay.

According to a September 8, 2014 article in the Wall Street Journal, “The inconclusive report underscores the challenges faced by hundreds of U.S. public companies that also had to comply with the rule and file reports on their efforts to discover conflict minerals in their supply chains.”

Electronics Assembly Standards IPC J-STD-001 and IPC-A-610 Updated

conformal-coating-targetF’ Revisions Cover More Advanced Technologies

IPC has released the F revisions of two of the industry’s most widely used standards, IPC J-STD-001, Requirements for Soldered Electrical and Electronic Assemblies, and IPC-A-610, Acceptability of Electronic Assemblies. The documents have been updated to include technical advances in solder on plastic surface mount (SMT) components, new criteria for P-style and solder-charged Butt/I SMT terminations, a change to void criteria for BGAs, and enhancements to the language within the documents to provide ease of use and clarity. New photos facilitate further understanding.

The revision process involved dedicated volunteers from electronics companies in the Americas, Europe and Asia. With the mantra, “in data we trust,” IPC committee members focused major changes in areas such as the shrinking sizes of plastic packages that affect solder touching component bodies.

Dispelling past concerns that solder could not touch plastic components for fear of future failure, Teresa Rowe, IPC director of assembly technology, said “We [committee] didn’t find significant occurrences of failures when solder touched the plastic bodies.” Rowe explains that there was much discussion on this topic and expects that as research in this area continues, the committee will consider it in future revisions.

The chapter on conformal coatings also underwent significant changes. “We revised the way we look at conformal coatings, providing new information on coating thickness,” Rowe said. “We also looked at bubbles, voids and transparency, expanding our criterion for acceptance.”

The standards also cover Class 2 plated-through hole vertical solder fill requirements and Class 2 flux activity criteria.

Often used as companion documents, IPC J-STD-001F and IPC-A-610F each has a unique purpose. Whereas IPC J-STD-001 is a material and process requirements document and is critical for use during manufacturing, IPC-A-610 is a post-assembly acceptance standard.

Translations of the F revisions and training programs based on the revised standards will be released in the coming months. For more information on IPC J-STD-001F, visit www.ipc.org/001; for more information on IPC-A-610F, visit www.ipc.org/610 or contact Rowe at TeresaRowe@ipc.org or +1 847-597-2838.

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