Approach on a new information transfer

scheme for chemicals in products

March, 2014

Chemical Management Policy Division Ministry of Economy, Trade and Industry (METI)

JAPAN

Unable to disclose CiP info on some compounds due to confidentiality.

Current situation

Takes long time to obtain CiP info, which is often less accurate .

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Overseas suppliers do not provide CiP info.

Heavy burden to provide guidance & training to suppliers

Not easy for SMEs to request for info to large companies.

Info-handling via a trading company is often stagnant or disrupted.

Still have many issues to be solved for smoother information handling practice from such reasons…

Data input into different formats are too inefficient, especially to fill out each of company’s-own format!

More adoption and reinforcement of substance restriction in global areas e.g. EU, US and Asia.

For products manufactured in supply-chain, compliance with such restriction relies on information from suppliers.

Manufactures (suppliers) need to be compliant to their own relevant regulation while addressing their clients’ relevant regulation on chemicals in products (CiP) as B to B relationship.

Lack of manpower; Gaps in perception on substances after reaction process.

upstream midstream downstream (chemicals) (chemicals articles) (articles/final products)

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SMEs Average (breakdown) analysis cost

Upstream 3,000 1,680

Midstream 1,530 870

Downstream 1,560 540

Other 4,180 3,810

SME total 2,230 1,280 [Source] Research on actual situation of CiP information transfer (research commissioned by METI, FY2013)

[Uses of information transfer scheme] [Cost for chemical management]

Large companies Average

(breakdown) analysis cost

Upstream 25,230 7,740

Midstream 26,850 13,890

Downstream 28,710 19,090

Other 16,350 500

Large co. total 25,790 11,770

JAMP (Panasonic, RICOH, Sumitomo Chemical, Mitsubishi Chemical, Murata Manufacturing, Hitachi, Fujitsu, etc.)

* JAMP: Joint Article Management Promotion-consortium

Automotive industry (Toyota, Nissan, Honda, etc., major auto makers in Europe and the US) * IMDS: International Material Data System

JGPSSI (current VT62474) (Sony, Canon, etc.; plus electric/electronic manufacturers in EU, US.)

* JGPSSI: Japan Green Procurement Survey Standardization Initiative

[Reference] Current situation on standardization of information transfer scheme

Currently, two schemes of JAMP and former JGPSSI serve as Japan’s standard CiP guidelines for electric/electronic field. (IMDS for auto industry) Nevertheless, such “standard schemes” account for 36% of overall data-handling practices: another 64% is comprised with company’s own reporting format, which causes substantial burden to midstream operators. Once information transfer is disrupted in a supply chain, operators in lower stream are unable to prepare information on their own products, and often have to conduct chemical analysis by themselves at high cost. Smooth information transfer will save such analysis cost: presumably a huge amount of money in total over entire Japan’s industries.

Proportion of data format required by clients (164 SMEs; multiple answers)

(1,000 yen/year) Chemical management cost per company (Averages of 65 large companies and 74 SMEs)

Recipients’ own format

(domestic) 30%

Recipients’ own format

(overseas) 4%

Providers’ own format

11%

Analysis data 16%

Other 3%

Other (own formats,

etc.) 64%

Basic requirements for the new scheme

1. Usable to address current substance regulations and risk assessment/management, and capable to handle info to be used as basis of risk evaluation and management while

contributing to achieve the 2020 target under World Summit on Sustainable Development (WSSD); 2. Available for entire supply chain, not limited to type of business/product categories, plus, for those who have already introduced a CSiP communication through supply chain, the new

scheme shall provide an equivalent or better quality in info-handling and management practices; 3. Enough qualified as an international (de jure) standard, in conformity with requirements in IEC 62474 which has already been published for EE, with an

intention to get approved as an ISO/IEC standard at some point in future by expanding its scope. 4. Important to work on making it not only de jure standard but also de facto standard. To do so, the new scheme needs promotion, in BtoB, mainly in the supply chain in Asia where

Japanese manufactures are widely involved. Moreover, the initial premise is to standardize this Scheme at a national level covering Japan’s industries, in order to facilitate GtoG promotion by the Government of Japan.

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Three Major Elements for Information Transfer Scheme

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CompanyＡ

XML XML XML

input/output data

information

flow

information

flow

Info-handling & accumulation infrastructure

Company Ｂ Company Ｃ [Supporting tools for data preparation] Software for filling out and/or browsing data format as necessary. eg., simplified tool at reasonable price; multifunctional tool provided by vendors.

[IT system] Group of systems for efficient information handling among operators in a supply chain, such as database and communication portal, etc.

Scope of the scheme is defined as the “substance list”: rulemaking required.

[Data format] Format for recording CSiP data to handle between operators, based on “XML schema” data form. Creating a uniform data format is the top agenda of this study group.

Other important elements may include documents of operating rules and guidelines, etc., dissemination and education activities.

[I. Overview] 1. Scope of substances (substance lists)

Prepare consolidated substance list contained substances falling under relevant legislations and industrial standard where final products are sold. (Red dotted line in the figure)

Scope of the substance lists can be selectable depending on specific product categories in downstream manufactures who are responsible for the requirements of the legislation and industry standards (e.g., IEC 62474)

(Blue solid line in the figure) (Note 1) JAMP’s substance management list is a precedence of

consolidated list (red dotted line). The list is designed to reflect opinions/comments from member companies, however, some issues remain to be solved for international deployment.

(Note 2) For full declaration (info-handling for entire substances), the substance list will be designed to function as data format and supporting tools for data preparation. At the same time, certain rules needs to be introduced for restricted use; e.g., an agreement between operators is required for information requests .

Figure of substance lists for the new scheme

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GADSL

IEC62474

REACH

Chemical

substances Evaluation

Law

・・・・・・

Common recognition: the basic spec of the new scheme

[I. Overview] 2. Basis of responsible reporting

<common to articles and chemical products> “Responsible reporting” is a way of chemical communication for CiP info authorized by

information providers regarding chemical substances within a certain range. (Note) For an authorization approach , IEC62474 requires name of person responsible as a reporting item. <for articles> For operators that produce articles in mid- to downstream, “responsible reporting”

refers to delivery of the following information authorized by information providers: Scope of reporting substances can be selected in the new scheme (setting “Area”).

Therefore information provider must report authorized information on all substances contained in this area.

For the substances in consolidated list (red dotted line) other than those in the “Area,” (blue solid line), only known available information obtained from upstream operators shall be reported to downstream operators.

<for chemical products> CiP communication for chemicals needs to have consolidated substance lists (red dotted

line) as long as CiP level is above threshold as stipulated in relevant laws and regulations.

(Note) Rules will be developed with regard to providing CiP information (of substance in red dotted line), such as handling confidential business information (CBI) (e.g., CiP info of substances shall not conflict with CBI, etc.). In this regard, chemical industry will lead to establish a guideline on CBI protection policy for operators.

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[I. Overview] 3. Info-handling flows; Compliance judgment for final products

[I. Overview] 4. Coverage against overall weight of product

In the new scheme, extent of disclosure in the CiP communication (Coverage)will be configurable. (We can determine weight percentage ratio to the whole product to be subject to disclosure.) (Notes 1-2)

Where industry/product-specific “Area” is provided, coverage will not be applied for the substances in “Area”. In the outside of “Area”, coverage will be applied.(Note 3)

(Note1) This provision is applied to future cases assuming that an industry/product type will establish its own “Area” setting coverage as a reporting item.

(Note2) For industries that do not set coverage as required item for the “Area”, another option is that a downstream operator may request coverage info to his upstream as a reference to risk management.

(Note3) IMDS, the CiP communication scheme in automotive industry, requires disclosure of all chemical components in principle, with non-disclosure conditions for substances with confidentiality as long as they are less than 10% of total product weight and not listed in its substance list (GADSL).

The new scheme will accommodate both “distribute” and “request to reply” types of information transfer flows

Recognizing that basic information is on chemical component to be shared in a supply chain, the new scheme will accommodate both types of communication

i. Provide information on above threshold level (Y/N) about regulated substances ii. Provide information on components of chemicals in products.

Comply with IEC 62474 as the international standard which specify the data format to be used in EE industry products and adopt XML schema also specified in IEC 62474.

Satisfy all required data field specified by IEC 62474 then determine using “optional data field” so that CiP information of the product categories other than EE industry can be applied.

Prepare some recommended formats(so called “Area”) in combination with optional data fields and substance lists.

“Area” can be used by the industries other than EE industry (e.g. toy, textile, building, etc.).

The image of “Area” (recommended for an industry) in combinations with information items and substance lists

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[II. Data format] 1. Reporting format for articles(mid- to downstream)

Sum

of sets

More

Scope of the substance lists

Information items(Use option)

More

IEC 62474

Area BSubstances：CMR-Cat.1,2

Area ASubstances: IEC 62474

Area BPurpose： XX products area

Area APurpose： EE products area

Selectable Area for substances and Information items

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[II. Data format] 2. Reporting format for chemicals (upstream)

Supporting tools (PC software) are necessary to facilitate data preparation such as recording, processing and compiling data, which are designed as corresponding to the data format of the new scheme. In addition, for assuring amplified info-handling practices in a supply chain, the scheme should create an environment where operators have an access to easy-to-use tools at a reasonable price.

Supporting functions for data preparation are the key to reduce info-handling costs, especially for SMEs.

For operators who requires more functions for the supporting tool, attentions should be paid to allow them to use other options such as paid tools provided by third vendors.

[III. Supporting tools for data preparation]

It is desirable to have a cooperated delivery system with the SDS which is generated with the substance content information.

Data format for upstream companies should be designed in which information can be smoothly converted to downstream data format (i.e., IEC 62474 XML schema).

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[IV. IT system] 2. Basic image

AS for commercial business

(AS: application service)

AS for group companies

AS for connecting with GP

AS for SME -Provides DB that can be used as its own IT system

- Supports to utilize and prepare data

- To be developed with attention to alleviate SME’s cost burden for such as IT investment

AS for individual company

AS for individual company

With simple-structured GP, each AS provides various supplement services, promoting competition of AS for commercial business.

AS for commercial business

Overseas operators can use the system;

- on company’s own - by corporate group

- via overseas DB (BOMcheck, etc.)

other DB (connected as AS)

・Checking XML in entire system ・Managing data-handling history ・Managing whereabouts on CiP

info, etc.

There are two types of IT system: centralized DB (e.g., IMDS, BOMcheck) and distributed DB (e.g., JAMP-IT).

This figure below shows an example of distributed DB type. Materializing the concept, and defining basic requirements will be discussed in FY2014.

Provides simplified data handling protocol, facilitating participation of new entrants.

A system with clear allocation of roles between GP and AS, securing flexibility for partial expansion and modification.

AS for individual company

Global Portal (GP)

2018.4- FY2017 FY2016 FY2015 FY2014

MSDSplus

AIS

JGP file

new chemicals data

new articles data

Design (considering data format and tools)

Construction GP in operation (trial for improvement)

Spec planning,

developing Tools of official version in operation

Release of official version Converter in operation

Spec planning, developing trial Β-ver. Tools of official version in operation

Converter in operation (Tools for JGP file remain effective until March 2016)

Materializing the concept, defining basic requirements (in the form of tech mtgs)

Transition of official version

Full-fledged operation of the new scheme (tools, IT system)

Publicly-available data

Operational body

Operational body of the new scheme

Operational body for the new IT system/business entity

Release and transition of official ver.

Official ver. developing

Data format; supporting tools for data preparation for chemicals

Data format; supporting tools for data preparation for articles

IT system

Transition of tools completed. (former scheme abolished)

[Reference] Steps and timelines for transition to the new scheme

Preliminary body

trial

Official ver. developing

β-ver.

▼EU REACH: regulation onPAH content

▼EU RoHS: review of exemption requests (Appendix III) ▼EU RoHS: adds prohibited substances

▼Denmark: bans phthalate (including RoHS)

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▼Denmark: bans phthalate (excluding RoHS II)