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Jabil's Global Category Intelligence Archive
Global Category Intelligence
Q4 2022
Jabil's Global Category Intelligence Archive
Global Category Intelligence
Q4 2022
MATERIALS COMPLIANCE
AREAS OF ACTIVE IMPLEMENTATION
- The Uyghur Forced Labor Prevention Act, commonly referred to as UFLPA, 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. In particular, we are seeing a significant focus on several specific materials such as silica. All levels of the supply chain must begin to gather and document their efforts to comply with this regulation to have the due diligence required should enforcement action be brought on products or materials at the time of import. Not doing so risks import holds on products, fines, and reputational harm.
- Our SCIP compliance and submission activities and now fully integrated into our standard processes and systems across all operations and divisions. This particular compliance program is still disproportionately time-consuming to execute, but we will likely spend the next 12 months working closely with our sites and partners before making further process changes and improvements. As a reminder, we have expanded our SCIP service offerings to customers and suppliers - if your compliance program needs manpower and expertise, we can help you achieve your own compliance goals.
- PFAS regulations and associated inquiries continue to increase, not only from customers but also from general liability and product liability insurers. These PFAS substances are sometimes referred to as “forever chemicals” 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, you must evaluate your products and operations for the use of PFAS substances/chemicals, identifying and removing them from your operations as quickly as possible. The vast majority of insurers are taking a very serious tone and approach on the topic of PFAS, including termination and non-renewal for some policyholders.
- 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. Most customers have started to evaluate the products they are selling in 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. As an example, the Ukrainian Cabinet has approved a new chemical management regulation that aligns with EU and UN standards. 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.
- Conflict Minerals have once again become entangled in unrelated compliance issues, this time related to Russian smelters that have become OFAC concerns and/or being associated with funding violence. As expected, conflict minerals requests from customers slowed down this quarter now that the May 2022 SEC filings are complete, but we expect that to ramp back up, as usual, starting sometime in Oct/Nov and reaching maximum capacity in Dec/Jan. We continue to see more customers making sourcing decisions and BOM/AVL changes based on this important public disclosure.
- Customer inquiries and industry scrutiny of Cobalt continue to increase, with all levels of the supply chain insisting on greater transparency around Cobalt sourcing. Suppliers should expect to see firmer requirements from customers related to Cobalt disclosures, and increased scrutiny of Cobalt smelters within their supply chain. If you have a Conflict Minerals Compliance Program, with existing processes around CMRT declarations, you should aggressively extend that program and process to include Cobalt and the associated CRT declarations.
- Progress continues to be slow with regards to the new TSCA regulations (PBTs, PIP, etc) – this regulation continues to be extremely disruptive and complex. The new EPA enforcement deadlines, including POP 3:1 substances (October 2024), have 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. Overall, we continue to see an increasing number of customer requests related to this new regulation. We continue to advise suppliers and customers to take this opportunity to more thoroughly evaluate their use of these substances in your products, and work with downstream suppliers to ensure compliance.
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