Capacitor Industry Takes Steps to Promote Environmental and Social Responsibility

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In the era of standards and legislation like the Reduction of Hazardous Substances (RoHS) directive and the Dodd-Frank conflict minerals rule, it’s critical for the electronics industry in general and the capacitor business in particular to ensure their operations are favorable for the global environment and for labor. However, many capacitor makers are going above and beyond the letter of the law and adopting practices that enhance their commitments to protect the earth and the people who live on it.

RoHS by Any Other Name

The current era of environmental awareness in the electronics industry can be traced back to 2003, when the European Union adopted RoHS. RoHS restricts the usage of toxic and environmentally hazardous substances in electronic equipment.

While attention is often focused on RoHS’s lead ban, the directive also restricts the use of mercury, cadmium, hexavalent chromium, polybrominated biphenyls and polybrominated diphenyl ether.

RoHS was followed by similar measures adopted in other countries and regions, with names including China Order No. 39—A.K.A. China RoHS—and California’s Electronic Waste Recycling Act of 2003 (EWRA).

Within REACH

The next step after RoHS was the Registration, Evaluation, Authorization and Restriction of Chemical Substances (REACH), a regulation that went into effect in the European Union in 2007.

A wider ranging standard than RoHS, REACH makes companies responsible for monitoring and supervising risk posed by chemicals in their products. Companies also must present safety information regarding these chemicals to their chemicals. REACH also allows the European Union to take action regarding highly dangerous substances.

Conflict Resolution

The next major development occurred in 2012, when the U.S. Securities and Exchange Commission (SEC) approved a final rule on conflict minerals. The rule implemented disclosure requirements for conflict minerals for the U.S. and some foreign companies.

Unlike RoHS and REACH, the conflict minerals rule does not specifically address environmental issues. Instead the measure was focused on labor.

The genesis of the rule was the conflict in the Democratic Republic of the Congo (DRC). Warring factions in the DRC and surrounding countries long have used mineral sales to fund their military activities. These groups sometimes employ forced labor in their mines, including children, in terrible and dangerous working conditions.

Capacitor Suppliers Step Up

Leading capacitor suppliers have taken steps to comply with RoHS, REACH and the conflict minerals rule.

For example, EPCOS offers products that comply with the RoHS directive. Although EPCOS and parent company TDK note that RoHS specifically applies to systems, rather than components like capacitors, the organizations highlight their efforts to comply with the directive with compliant parts.  

TDK states that it completed the process of having all of its components comply with the RoHS directive in 2004. These companies, and others in the industry, also have issued policies on compliance with the REACH regulation.

Conflict Measures

Capacitor suppliers and other electronics firms also have taken steps to comply with the conflict minerals rules. While the rules involve disclosure, many companies have taken additional steps to ensure their supply chains are free of minerals obtained from disputed mines in the DRC.

These efforts often involve extensive audits of their supply chains, auditing not only mines, but smelters to identify all sources of minerals. Suppliers often are working to simplify their supply lines, cutting out middlemen to ensure their products remain free of conflict minerals.

Fair Deal

These efforts resemble the movement in other industries to adopt fair trade practices, according to an analysis by Technology Forecasters.

The fair trade business model has been developed by companies involved in importing materials or using labor from developing countries. These efforts involve industries including coffee, chocolate and textiles. Fair trade practices are designed to reduce worker exploitation and provide general social benefits for third-world nations.

Beyond reducing the intermediaries in the supply chain, fair trade involves pricing and branding strategies designed to address the high end of the market. The additional profit margin can be devoted to benefitting producers, while promoting higher wages, better working conditions and new or improved government services.

EICC Guides the Way

One organization leading the way for establishing fair trade practices in the high technology industry is the Electronic Industry Citizen Coalition (EICC). The EICC describes its vision as building “a global electronics industry supply chain that consistently operates with social, environmental and economic responsibility.”

The EICC offers a code of conduct for its members designed to promote responsibility on these issues. At the heart of the code is an understanding that businesses must comply with the laws, rules and regulations of countries where they operate. But beyond that, the EICC code encourages members to go beyond the legal guidelines and work to promote social and environmental responsibility.

Among its members, the EICC lists capacitor supplier Vishay Intertechnology Inc.

Capacitors for a Better World

Capacitor makers already have shown they can contribute to creating an environmental and socially sustainable world with their support for the letter and the spirit of RoHS, REACH, conflict minerals and other rules and directives. Some companies have moved beyond the legal and regulatory realm to adopt practices that promote greater benefits. In the future, expect to see more capacitor suppliers adopting such environmental and fair trade practices.

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