PFHxS

• PFHxS refers to perfluorohexanesulfonic acid, which is a type of per- and polyfluoroalkyl substance (PFAS) commonly found in various industrial and consumer products due to its water- and oil-repellent properties, as well as its resistance to heat and chemicals. A restriction on a Union-wide basis on PFHxS, its salts, and related substances will reduce the release of these substances into the environment and prevent any future manufacturing, placing on the market, and use.

• European entities such as the European Union (EU) have revised Part A of Annex I to Regulation (EU) 2019/1021 concerning persistent organic pollutants (POPs). After the amendments, the POPs Regulation will ban Perfluorohexane sulfonate (PFHxS), its salts, and other PFHxS-related compounds. The chemicals on the list must be prohibited by each Party to the Convention and take the legal and administrative measures necessary to eliminate their production, use, import, and export.

• The Asia entities, including Japan, will prohibit the manufacture, import, and use of PFHxS, its isomers, and their salts. On September 15, 2023, a joint consultation was issued by the Japanese Ministry of Health, Labour, and Welfare (MHLW), the Ministry of Economy, Trade and Industry (METI), and the Ministry of Environment (MoE). This is related to the designation of PFHxS, its isomers, and their salts as Class I Specified Chemical Substances through a partial revision to the Enforcement Ordinance of the Chemical Substance Control Law (CSCL). Products containing PFHxS or its isomers or salts, such as firefighting equipment that may lead to environmental pollution, shall be subject to technical standards and labeling obligations. This approach aims to mitigate environmental pollution and secure product manufacturing and usage sustainability.

• The supply chain should act seriously in the restriction to reduce the environmental emissions of the substances present in imported articles and mixtures intentionally treated or manufactured with PFHxS, its salts, and PFHxS-related substances.

PFAS

We have received communications from our customers and need to take appropriate action.

• PFAS (per- and poly-fluoroalkyl substances) are a group of artificial chemicals that have gained significant attention and concern globally. As a result, many regulatory authorities worldwide have prioritized the cessation of PFAS production and usage. Major global entities such as the EU and the United States are taking substantial steps to reduce the production, importation, sale, and utilization of PFAS. Currently, viable alternatives for PFAS are not available for many applications, and in certain instances, the research and development of suitable options might require several years.

• Several major PFAS manufacturers have initiated PFAS withdrawal from the market. The 3M Corporation, the inventors of PFOA and significant manufacturers of PFAS in the U.S., announced on 20 December 2022 that they will discontinue using PFAS across its product portfolio by the end of 2025. Dupont has eliminated the utilization of long-chain PFAS in both their processes and products. They have replaced all aqueous film-forming foams (AFFF) in fire suppression systems at their manufacturing operations that contained PFAS with fluorine-free foam, except in cases where it is legally mandated.

Regardless of your position within the supply chain, you must evaluate your products and operations for using PFAS substances/chemicals, identifying and removing them from your operations as quickly as possible. This is crucial to guarantee the continuity of our business operations.

PROPOSITION 65

• Proposition 65 requires businesses to provide warnings to Californians about significant exposures to chemicals that cause cancer, congenital disabilities, or other reproductive harm. These chemicals can be in the products Californians purchase, in their homes or workplaces, or released into the environment. Proposition 65 enables Californians to make informed decisions about their exposure to these chemicals by requiring that this information be provided.

• California's Office of Environmental Health Hazard Assessment (OEHHA) is concerned that the short-form warning – which can be placed directly on a product and does not require identification of a specific chemical – is being overused, causing dilution and consumer confusion.

• OEHHA is proposing amendments to Proposition 65. Several significant aspects of the proposal include:

  • Amendments to short-form warnings include requiring the name of a Prop 65 listed chemical in the warning and removing the requirement that font type size must be the same as the largest font size that provides consumer information.

  • Added more wording options for signal word warnings.

  • The warning must be included on or with the product during customer delivery for online and catalog purchases.

  • Additional warning options for passenger or off-highway motor vehicle parts and recreational vehicles marine vessel parts.

• OEHHA has scheduled a public hearing on December 13, 2023; interested parties can submit comments until December 20, 2023. The proposal comes with a grace period of two years so that products manufactured or labeled according to existing rules can still be sold.

• Although this amendment proposal is still under review, it is not foreseen that the changes will significantly impact the industries. Stay tuned for upcoming publications to monitor the progress and changes to this amendment.

CONFLICT MINERALS

In recent developments, industry leaders actively advocate excluding specific Chinese smelters from their supply chains. This initiative is driven by a commitment to uphold compliance with U.S. regulations and to mitigate risks associated with sanctioned entities. As part of this effort, companies are requesting their partners to ensure that materials sourced from entities subject to U.S. sanctions or trade restrictions have not entered their supply chains, and their specific concern is outlined below:

• "Your company has listed an entity currently subject to sanctions or creates a risk of shipment detention under U.S. law. You must provide a product level report detailing the specific 3TG smelters/refiners, ultimately to confirm that material from such entity did not enter xxx's supply chain while subject to U.S. sanctions or other U.S. trade restrictions."

• While exact details haven't been explicitly communicated, it is inferred that this initiative is closely tied to compliance with the Uyghur Forced Labor Prevention Act. There are indications that the implicated smelters may have connections to individuals or mines in Xinjiang.

As responsible stewards of our supply chain, we encourage heightened diligence in our sourcing practices. This proactive stance aligns with industry best practices and affirms our commitment to ethical and responsible sourcing.

TSCA

• In October 2023, the U.S. EPA published a proposed rule under Section 6 of TSCA to ban all applications of the widely used volatile organic compound Trichloroethylene (TCE). The proposed rule aims to address the unreasonable risk to human health due to the significant adverse health effects associated with exposure to cancer-causing TCE.

• EEPA'sproposed rule would prohibit most uses of TCE within one year. For limited services with longer compliance timeframes, stringent workplace controls are required to reduce exposures (including proposed phaseouts and time-limited exemptions) in the near term until the prohibitions come into effect, and it would establish recordkeeping and downstream notification requirements.

• This rule, when finalized, is expected to impact various entities, including Electronic Connector Manufacturing, mainly due to the vast usage of TCE as a solvent in a variety of industrial, commercial, and consumer applications, including for hydrofluorocarbon (HFC) production, vapor, and aerosol degreasing, and in lubricants, greases, adhesives, and sealants.

Manufacturers and importers in the electronics industry must stay informed and ensure compliance with these regulations to avoid civil and criminal penalties. Jabil offers our customers a solution to identify PBT substances in their products to help them comply with the new rules.

UYGHUR

• According to the latest enforcement statistics on its website, CBP has provided the exam result for 5062 shipments (representing 83.7% of all shipments) under UFLPA detention. This is a dramatic increase in the closure rate since May.

• A close examination of the resulting breakdown shows an equal split between “shipments released” and “ shipments denied.” We also observe that a significantly higher percentage of shipments were denied entry rather than released during this period.

• Multiple reasons contribute to the increase; chief among them could be the inability of the importer to provide CBP with the documentation required for the shipment release on time. Thus, companies must deploy an efficient supply chain traceability program to map the supply chain accurately.

The Importance of Using an Effective Traceability Program

Supply chain traceability enables companies to understand their suppliers better, anticipate disruptions, and optimize resources.

• For companies to get the shipment released timely, a traceability program must equip companies with the capability to quickly produce the required documentation showing the chain of custody of the materials when faced with detention notice from the authority. 

• An efficient supply chain traceability program also has other applications and benefits. For example, when using a traceability program, companies can position themselves better to meet the needs of their customers and shareholders.

• A supply chain traceability program provides better visibility into the source and flow of goods and services, without which it becomes difficult for companies to identify and address issues in the supply chain, which can lead to increased costs, delays, and disputes. The supply chain traceability program may also help companies to promote supply chain transparency, build trust, and improve communication.

• Supply chain transparency includes disclosures on raw material sourcing, environment protection, product quality, safetcompany 'sds, and labor practices. The lack of transparency in the supply chain can have far-reaching implications for a company's operations and bottom line.