New-Tech Europe | Sep 2017 | Digital Edition

The Growing Impact of Compliance in the RF/Microwave Supply Base

Arthur Ackerman, Vice President of Quality, Mini-Circuits

Growing global concerns about environmental, social and ethical issues are changing the regulatory climate in electronics industries, and the impact of these issues on corporate policy and strategic decision making has grown in kind. In the RF/microwave industry, environmental standards such as RoHS and Reach have long been givens for most off-the-shelf parts, while more recent regulatory requirements have included documentation and disclosure of responsible sourcing of conflict minerals, and now reporting requirements for corporate social responsibility or “CSR.” The goals of these regulations are noble, and the social value of preventing environmental pollution, human rights abuses, and other forms of unethical business conduct is self-evident. However, what is less clear is the effectiveness

of new and existing regulatory requirements in realizing those underlying goals. Driven in large part by new legislation, rising levels of shareholder activism among public companies, and consequent pressure up the supply chain, companies have assumed greater responsibility in addressing some of today’s most challenging social, economic, and environmental problems. Unfortunately in the cases of regulations currently in place for the electronics industry, the ideal of social and political reform through flow-down regulation of global business is lost in the practical details of administering those regulations at the ground level. As regulatory requirements increase in number and complexity, as they have in the cases of Conflict Minerals and CSR, companies incur high costs associated with management systems, legal reviews, data

management platforms, and due diligence activities. These activities add significant administrative burden to operations, but no direct value to the products and services being sold to the customer. At the same time, evidence demonstrating the social benefits of these programs has been vague or absent altogether, and their efficacy has been met with skepticism by policy experts Advocacy efforts by industry groups, most notably the IPC, have led US regulators to reconsider the effectiveness of such disclosure and reporting requirements. On April 7th, acting SEC chairman Mike Piwowar released a statement citing IPC comments relaxing enforcement of its conflict minerals rule, suspending requirements of costly due diligence reviews and audits. In a speech to the Economic Club of New York on July 12th, SEC chair, Jay Clayton remarked that lawmakers

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