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Jabil's Global Category Intelligence Archive
Q3 2022
Jabil's Global Category Intelligence Archive
Q3 2022
MATERIALS COMPLIANCE
AREAS OF ACTIVE IMPLEMENTATION
- Our SCIP submission activities have fully ramped up and we have fully integrated the SCIP activities into our standard processes and systems across all operations and divisions. We recently launched a new tool at all EU sites to facilitate data sharing and data collection among suppliers and site operations. In addition, we have expanded our SCIP service offerings to customers and suppliers, helping them to achieve their own SCIP compliance goals.
- Conflict Minerals Reports for CY2021 were required to be filed with the SEC at the end of May 2022, and with all companies having the same reporting schedule, we completed a record number of last-minute customer requests to help them close any remaining gaps in their data before the deadline. We continue to see more customers making sourcing decisions and BOM/AVL changes based on this important public disclosure. Most companies used significant additional resources to meet the May 2022 SEC reporting deadline and will now take a 2 to 3 month break from this compliance activity before starting on the next reporting cycle in August/September 2022.
- Progress is slow with regards to the new TSCA regulations (PBTs, PIP, etc.). These delays continue to be extremely disruptive and complex. The new EPA enforcement deadlines, including POP 3:1 substances (effective October 2024), has given companies throughout the supply chain a better opportunity to plan a more diligent and thorough approach and transition away from these substances in a more orderly fashion. We continue to advise suppliers and customers to take this opportunity to thoroughly evaluate the use of these substances in your products and work with downstream suppliers to ensure compliance.
- We continue to see increased activity and engagement related to the potential for several new countries to be admitted to the EU, such as Ukraine. Many customers have started to evaluate the products they are selling into these countries to see what new products/materials might be subject to existing EU regulations like RoHS, REACH, and SCIP, should these countries become EU members. We have seen the same evaluation by suppliers with manufacturing operations in these potentially new EU countries to evaluate the impact that will have to their operations and compliance activities. There continues to be a widely held belief that the current issues in Ukraine will result in a meaningful number of new EU member countries and that those changes may occur more quickly and with shorter runways than we’ve seen historically.
- Customer inquiries and industry scrutiny of Cobalt continue to increase. With all levels of the supply chain insisting on greater transparency around Cobalt sourcing, we expect that trend to continue to accelerate and be more formalized during the CY2022 reporting cycle that will start in August/September 2022. Suppliers should expect to see an increased number of inquiries and requests for Cobalt (CRT) declarations, firmer requirements from customers for Cobalt disclosures, and increased scrutiny of the smelters within the supply chain. If you have a Conflict Minerals Compliance Program, with existing processes around CMRT declarations, we encourage you to aggressively extend that program and process to include Cobalt and the associated CRT declarations.
- A new US regulation, the Uyghur Forced Labor Prevention Act, is now fully in effect and bans imports from China’s Xinjiang region unless the importer can prove they were not produced with forced labor. This ban applies to all categories of products and includes any product that was even partially made or assembled in the XinJiang region. We have already experienced a significant increase in customer inquiries on this topic, as product companies and importers have started to gather data to defend against any enforcement actions. It is critical that all levels of the supply chain begin to gather and document their efforts to comply with this regulation to have the due diligence required should an enforcement action be brought on products or materials at time of import. Not doing so risks import holds on products, fines, and reputational harm.
- PFAS regulations and associated inquires have hit a fever pitch, not only among customers, but also from all types of general liability and product liability insurers. These PFAS substances are sometimes referred to as “forever chemicals” or “forever substances” and present a very real liability for product companies as well as traditional manufacturers. New PFAS regulations are being adopted or considered in nearly every state in the US and across nearly every developed country. Regardless of your position within the supply chain, it is critical that you begin to evaluate your products and operations for the use of PFAS substances/chemicals, identifying and removing them from your operations as quickly as possible. Most insurers are taking a very serious tone and approach, including termination and non-renewal for policy holders.
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