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The Government Circuit: Coping With COVID-19 and Emerging Environmental Regs

The second quarter of the year is usually one of the busiest times of the year for IPC advocacy, and this year is no different, but with some obvious major twists in the story.

Across all regions where IPC has an advocacy presence, the policy debate is still dominated by the need to beat COVID-19 and climb out of the economic crisis. Governments are still working through their massive pandemic-recovery plans, and it is unclear whether national economies will snap back within months or take years to recover.

COVID-19 Recovery Measures Still Evolving

In the United States, discussions are continuing in the U.S. Congress on a fourth COVID-19 recovery bill. The U.S. House has already passed a $3 trillion package that includes a long list of provisions, while Senate leaders are developing a more streamlined package. IPC is working with a broad-based business coalition in calling on Congress to enact temporary and targeted liability relief legislation.

Meanwhile, Congress passed, and President Trump signed, a Paycheck Protection Program (PPP) reform bill after just two months of the program’s existence ^[1]. The bill extends the time to use PPP loans from eight weeks to 24 weeks, requires 60% of the loan to be used for payroll (instead of the current 75%), and extends repayment terms for loans that aren’t forgiven to five years.

In Europe, the debate seems a bit more genteel, as the European Commission’s €750 billion ($826.5 billion) recovery package ^[2], called the "Next Generation" fund, and a revised long-term budget (MFF) proposal were applauded by all major political groups in the European Parliament ^[3]. On the industry side, IndustriAll Europe ^[4] said the recovery plan would help small and mid-size enterprises (SMEs) recover from the crisis and promote the upskilling of workers. Other industry actors, including Huawei ^[5] and Eurometaux ^[6], welcomed the focus on improving the bloc’s strategic autonomy in key areas, such as materials and minerals, which are needed for Europe's digital and environmental transitions. The European Council and Parliament will discuss the proposals on June 19 with the goal of reaching a final agreement by July.

Meanwhile, the commission also unveiled its revised 2020 Work Programme ^[7], affirming that Europe remains committed to delivering on “its flagship initiatives, the European Green Deal and the Digital Strategy, as they are key to relaunching the European economy and building a more resilient, sustainable, fair, and prosperous Europe.”

If your company is looking for advice and resources on how to operate safely and take advantage of the various public and private-sector programs related to COVID-19 recovery, view IPC’s COVID-19 resources page ^[8] and our “Roadmap to Economic Recovery” ^[9] on our IPC Advocacy Team page ^[10], where you can send it to your elected officials with a few clicks.

Are You Keeping Up With All the Environmental Regulations?

Another hot topic in world capitals is environmental regulation. Our team is tracking a dizzying array of new and emerging requirements.

For example, is your company affected by the U.S. Environmental Protection Agency’s current initiative on high-priority substances? You may recall that in 2019, the EPA designated 20 chemicals as high-priority (HP) substances for upcoming risk evaluations ^[11]. In mid-April, the EPA took the next step in the process and released all 20 “scoping documents” for its upcoming reviews of high-priority chemical substances under the Toxic Substances Control Act (TSCA).

Several of the substances are relevant to electronics manufacturing—flame retardants, phthalates, solvents, and formaldehyde—and IPC has been actively working with electronics manufacturers like you to ensure a thorough review of the draft scoping documents. Our collective mission is to help the EPA develop policies that accurately reflect the uses of these chemical substances in our industry, and properly balance risk and cost-effectiveness. The comment period for the 20 substances has now closed. Delve into the full details in an IPC blog post ^[12].

On another front, June 1 marked the opening of the EPA’s Chemical Data Reporting (CDR) submission period ^[13]. The CDR rule requires manufacturers and importers of certain chemical substances listed under the Toxic Substances Control Act (TSCA) Chemical Substance Inventory to report data to the EPA every four years. There are several new reporting requirements you should be aware of, including requirements for making confidentiality claims (CBI); reporting refinements related to byproducts, including exemptions; phasing out certain processing and use of data codes; and introducing an improved process for reporting co-manufacturing.

Meanwhile, in a separate rulemaking ^[14], the EPA also updated definitions for small manufacturers that are exempt from reporting. Also, to report using e-CDRweb, you must first register with the Chemical Data Exchange (CDX) system ^[15]. In response to the coronavirus pandemic, the EPA has extended the deadline for reporting to November 30. Please let us know if you have any questions as your company goes through the reporting process!

On a related matter, the EPA extended the comment and reporting period on the preliminary lists of manufacturers and importers subject to the Toxic Substances Control Act (TSCA) Fees Rule from May 27 to June 15 ^[16]. The new deadline will allow companies additional time to self-identify as a manufacturer potentially subject to the fees rule. The extension will also allow those who are incorrectly listed on the preliminary lists to use the Chemical Data Exchange (CDX) system ^[17] to remove their company’s listing. Learn more about your company’s potential obligations under the fees rule ^[18].

In Europe, despite calls from several European trade associations, the European Commission confirmed that companies should continue their preparations to comply with the January 2021 deadline to submit notifications to the Substances of Concern in Products (SCIP) database ^[19]. The SCIP database will be further discussed at the Competent Authorities for REACH and CLP (CARACAL) meeting on July 9. IPC will attend the meeting to follow up on previous advocacy regarding the possible impact of new reporting obligations.

The European Commission has also opened the feedback period for their roadmap ^[20] on the upcoming chemicals strategy for sustainability, which is expected later this year. The strategy will aim to reduce risks associated with producing and using chemicals, simplify and strengthen European Union rules on chemicals, and “review how EU agencies and scientific bodies can work together towards a process where substances are only reviewed by one agency.” The feedback period runs until June 20.

On the other side of the world, on May 19, China’s Ministry of Ecology and Environment (MEE) published a draft revision to the “Regulations on Administration of Ozone-Depleting Substances (ODS)” ^[21]. Notably, the updated regulations will incorporate hydrofluorocarbons (HFCs) into the regulatory framework. The decision was made to keep pace with international conventions.

And on April 29, China’s Ministry of Ecology and Environment (MEE) published the “Measures of Environmental Management and Registration of New Chemical Substances” (MEE Order 12) ^[22], replacing the current new chemical regulation “Measures of Environmental Management of New Chemical Substances” (MEP Order 7). MEE Order 12 “introduces substantial changes to the registration system for new chemical substances and will likely have significant impacts on producers, importers, and processors of the new chemical substances.” It will take effect on January 1, 2021. 

If you missed the online educational session on Critical Environmental Requirements for Electronics, please contact Kelly Scanlon, IPC’s director of environment, health, and safety policy and research, with any questions.

Industry Groups Object to New U.S. Export Controls

In the area of international trade, last week, 19 industry groups including IPC and the National Association of Manufacturers sent a letter to the U.S. Department of Commerce’s Bureau of Industry and Security, objecting to two new export control rules affecting U.S. dealings with “countries of national security concern,” including China, Russia, and Venezuela. The groups said, “We share the Administration’s goal of controlling technology exports to military end-users and military end-uses” in these countries. But the bureau defined these terms “with such breadth and ambiguity that they appear to extend beyond the intended goal and into commercial, mass-market products and sales to end-users with indirect or limited connection to the military,” the groups said.

The new rules, EAR § 744.21 ^[23] and EAR § 740.5 ^[24], are final and will go into effect on June 29, annulling requests from IPC and other industry groups to go through the usual rulemaking process, including public comments and changes before becoming effective. Will this change affect your business? If so, we want to hear from you.

Is Your Company Looking to Source Inputs From New Countries?

Over the last year, electronics manufacturers have been adjusting their supply chains due to COVID-19, trade tensions, tariffs, and the worry that higher tariffs may become permanent. We have already seen evidence of a “decoupling” between China and the United States and shifts to other sources of supply, such as Mexico, Vietnam, Indonesia, Taiwan, and India, and if your company is thinking about sourcing from new countries, we would be interested in hearing from you as part of our research and monitoring efforts. For more information, read a short blog post on this issue by IPC Chief Economist Shawn Dubravac ^[25].

Now You Can Brag About the Electronics Sector’s Economic Importance

You and I already know that electronics manufacturing contributes powerfully to the U.S. economy. But now we have fresh data and story-telling resources to back that up.

In mid-May, IPC released a landmark report ^[26] that finds that our industry supported over 5.3 million U.S. jobs and contributed $714 billion (3.7%) to U.S. GDP in the months before COVID-19. Sixteen states led by California and Texas account for about 75% of direct electronics manufacturing jobs, and the sector plays an outsize role in states you might not think of, including Oregon and Minnesota. While we don’t yet have a complete picture of the epidemic’s impacts on our industry, companies like yours are critical to the economic recovery and long-term prosperity of the United States. Please share the report with your elected officials so they can be aware of your role, too!

More recently, IPC released a short video ^[27] designed to help us tell our industry’s story to non-technical audiences. The 90-second clip features a series of vignettes in which electronics are making people’s lives safer, healthier, more connected, secure, and fun, and it demystifies the technology by comparing it to the workings of a lightbulb. IPC members and allies are encouraged to share it on social media with the hashtag #OurLivesDependonElectronics; and/or send a link by email to your workforce, business partners, families and friends; and/or use our IPC Advocacy Page ^[10] to send it to your elected officials.

Please let us know if you have any questions or suggestions for IPC advocacy. We are here to support you, now more than ever. 

References

1. J. Pramuk, “Senate passes bill to give businesses flexibility in spending coronavirus aid, sends it to Trump,” CNBC, June 3, 2020.
2. European Commission, “Europe's moment: Repair and Prepare for the Next Generation,” May 27, 2020.
3. European Commission, “MFF Legislation,” May 2020.
4. IndustrialAll Europe, “Recovery must be ensured for all European industrial workers,” May 28, 2020.
5. Huawei, “Huawei Praises European Recovery Plan,” May 28, 2020.
6. Eurometaux, “COVID-19 recovery plan: A vital catalyst to improve Europe’s strategic autonomy for metals and minerals,” May 26, 2020.
7. European Commission, “2020 Commission Work Programme: Key Documents,” May 27, 2020.
8. IPC, “COVID-19 (Coronavirus) Update.”
9. IPC, “Roadmap to Economic Recovery.”
10. IPC, “IPC Advocacy Team.”
11. K. Scanlon, “IPC: New EPA Proposal for ‘High Priority’ Chemicals,” September 10, 2019.
12. K. Scanlon, “Important Advocacy Opportunity: How Is Your Company Affected by U.S. EPA Action on High-Priority Substances?”
13. EPA, “Chemical Data Reporting Under the Toxic Substances Control Act.”
14. EPA, “TSCA Chemical Substance Inventory.”
15. EPA, “Small Manufacturer Definition Update for Reporting and Recordkeeping Requirements Under the Toxic Substances Control Act (TSCA) Section 8(a),” Federal Register, May 28, 2020.
16. EPA, “TSCA Fees for EPA-Initiated Risk Evaluations.”
17. EPA, “Instructions for How to Complete Self-Identification and Other Certifications in CDX for EPA-Initiated Risk Evaluations.”
18. K. Scanlon, “Deadline Extended for TSCA Fees Rule Self-Identification Obligation.”
19. ECHA, “SCIP Database.”
20. European Commission, “Chemicals: Strategy for sustainability (toxic-free EU environment).”
21. Regulations on Administration of Ozone-Depleting Substances (ODS).
22. Measures of Environmental Management and Registration of New Chemical Substances.
23. Industry and Security Bureau, “Expansion of Export, Reexport, and Transfer (in-Country) Controls for Military End Use or Military End Users in the People's Republic of China, Russia, or Venezuela,” Federal Register, April 28, 2020.
24. Industry and Security Bureau, “Elimination of License Exception Civil End Users (CIV),” April 28, 2020.
25. S. DuBravac, “Electronics Supply Chain in Flux Due to Tariffs, Epidemic, Other Factors.”
26. IPC, “Interconnecting America’s Economy: The Economic Impacts of the U.S. Electronics Manufacturing Sector,” 2020.
27. IPC, “What Is Electronics Manufacturing and Why Is It Important?”

Chris Mitchell is IPC’s VP of global government affairs. Contact him at ChrisMitchell@ipc.org.