Revised RoHS Directive, and an Erroneous Name in RoHS 2

Article Clipped from:

ElectroIQ

By Lev Shapiro, Component Master Ltd.

The European Commission (EC) proposes several changes to its RoHS Directive. Medical devices and other exempted end products will be affected, product labeling will change, and the character of the RoHS legislation will be reinvented. However, calling this revision "RoHS2" is a misstep, based on the informal but generally accepted RoHS5/6 terminology.

On December 3rd, 2008, the Commission of the European Communities issued the proposed revision of the original RoHS Directive. The objective of proposed reforms is to develop "a better regulatory environment, one that is simple, understandable, effective and enforceable".

The major changes that are in these proposed amendments include:

1. Categories 8 (medical devices) and 9 (monitoring and control instruments) of WEEE will be included in the scope of RoHS Directive in a stage manner commencing 2014 through to 2017.

2. Exemptions will be granted for a maximum validity period of four years (currently exemptions are granted with no expiration date).

3. It is provided a binding list of products for each category of equipment covered by RoHS.

4. For demonstration of compliance, products must have an EC declaration of conformity from the manufacturer and they must bear the CE mark.

5. The term "producer" is replaced with "manufacturer," distributor," "importer," or "authorized representative" — to be collectively known as "economic operators."

6. The list of banned substances is not changed; however, four substances are identified for priority assessment in view of a possible future inclusion in the list of banned substances.

In official European Commission documents, there is no concrete and definite name for this proposal; however, in many articles and publications, the revised RoHS Directive is already called RoHS2.

An erroneous name like RoHS 2 may seriously mislead the electronics industry and generate wrong interpretations. For example, the terms RoHS5 and RoHS6 became popular a few years ago. These terms are related to existing exemptions of RoHS (section 7 of the Annex), "... lead in solders for servers, storage and storage array systems, network infrastructure for switching, signaling, transmission as well as network management for telecommunications ..." According to this exemption, the products of exempted industries may use components and materials containing lead (Pb) on second level interconnect (components-to-PCB connections). For these products, only 5 of the 6 restricted substances are described as within the scope of RoHS. Lead is exempted. In other words, RoHS5-compliant parts do contain lead >1000 ppm, but meet the concentration limits for the other five hazardous substances. Such leaded components and applications are called RoHS5, in comparison with RoHS6, which reflects a full RoHS compliance.

The terms RoHS5 and RoHS6 are slang abbreviations that have not been formally adopted by the EU Commission. They are not defined either in the RoHS documents or in any standards related to lead-free technology. Despite this, today they are wide-spread definitions. In a Google search, about 20,000,000 references are found for RoHS5 (RoHS-5 or RoHS 5/6).

Intel and many other semiconductor manufacturers, together with manufacturers of passive and electro-mechanical components, offer the ROHS5 compliance certificates and sometimes even define the RoHS 5 (RoHS 5/6) components in their data sheets. Under these circumstances and this terminology history, the name RoHS 2 for new RoHS proposal will be erroneously perceived by many users. Based on the analogy of RoHS5, some may conceive of RoHS2 as a vague "two substance" restriction.

The European Commission must define a correct name for the revised RoHS Directive and avoid the doubtful name that is exposed to wrong interpretations. Otherwise, the main objective for proposed revisions to make RoHS legislation more "simple" and "understandable" will be not achieved.

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Lev Shapiro, Lev Shapiro, M.Sc. E.E., may be contacted at Component Master Ltd., Tel Aviv, Israel, lev@compmaster.co.il. Read his recent article for SMT, Avoiding Counterfeit Electronics: The Role of Component Manufacturers, OEMs, and CEMs.

Autodesk’s Ambition to Change the Green Building Industry

Source: Reuters

By Justin Moresco - Earth2Tech

When software is designed well, it can radically improve the way an industry works. That’s the vision behind ongoing efforts at Autodesk to upgrade its building performance modeling software — to make energy retrofits of buildings cheaper and easier.

The San Rafael, Calif.-based firm believes the improvements it’s making to its suite of construction industry software will compress the time it takes to do detailed sustainability analysis (energy, water, emissions) from weeks to days and as a result, make such analysis cheap enough to be accessible to a majority of the building market.

More than 100 million buildings in the U.S. are leaky and inefficient and could use an energy makeover with measures like better insulation, heating and air conditioning systems and natural ventilation. But most of these structures are relatively small (homes and offices), and the cost of building accurate computer models to do detailed analysis on them is often too high with current technology, according to John Kennedy, senior manager for sustainable analysis products at Autodesk. He says energy service companies (ESCOs) -– businesses that develop, install and finance energy efficiency projects –- today won’t touch a building less than 10,000 square feet.

But Autodesk believes the economics will dramatically change once engineers and architects can build a model in, say, a day or two and have it automatically spit out recommendations with the impact on cost and performance for each measure. Some of the new or improved features Autodesk is working on include: an increased use of cloud computing that would make sophisticated analysis quicker, more leverage of deep reservoirs of data about local weather conditions and the performance of different building products, more accurate and faster modeling of natural ventilation and water use, and an emphasis on making sure all of this “sustainability criteria” can be easily and accurately shared between the different software used by architects and engineers. Kennedy didn’t provide a timeline for these upgrades.

Autodesk also wants to incorporate the embodied energy of building materials (the total energy used in manufacturing, transporting and installing) more thoroughly into its software models. “It makes no sense to put triple-paned windows in a house in Los Angeles when the energy saved from its use would never exceed the amount needed to build it,” Kennedy said. Few vendors currently supply or even have this data to provide, he added.

Still, even with Autodesk’s planned improvements, it’s unclear how far down into the building market its software can penetrate. At some point, it will always be cheaper for boutique energy retrofitters focused on the residential market to analyze a home than an architectural or engineering firm charging $150 an hour.

Autodesk says that current versions of its software –- such as performance modeler Ecotect Analysis and its on-demand Green Building Studio –- has already shrunk the time it takes for sustainability analysis from months to weeks, and the firm can also boast of a growing customer base. But the use of building performance software, from Autodesk or anyone else, is still relatively uncommon among design firms.

Part of the reason for this slow adoption is the perceived high cost of using these tools. Another reason, however, is that the industry –- broadly speaking -– is still operating collectively as if energy and water use don’t need to be factored in during design. It’s what Dawn Danby, sustainable design program manager at Auodesk, calls a “cultural” problem. While stricter building codes and the growing prominence of green building standards like LEED are pushing the embrace of performance software, widespread adoption won’t happen until architects and engineers change their habits.

That helps to explain Autodesk’s mounting marketing push alongside its software development. As part of that effort, in July the firm announced its “Clean Tech Partner Program” through which it will give away software packages worth up to $150,000 each to 100 early-stage cleantech startups. According to Danby, the firm is working hard to inform designers and building owners that its software is relatively easy to use, inexpensive and gives quick feedback.

Still, changing the construction industry will be a long slog, even when one of the strongest pushes is coming from a fast-moving software company.

Hyundai Wins Building Bid for Singapore Oil Cavern Storage Facility

Pictures Source: The Straits Times, Singapore.

Via Your Industry News:

Friday, Apr 17, 2009

Singapore moved forward with plans to build a 9.5 million-barrel rock cavern oil storage facility by awarding on Thursday an S$890 million ($594 million) building tender to South Korea's Hyundai Engineering (000720.KS: Quote).

The first phase of 1.48 million cubic metres (9.5 million barrels) comprises five caverns on offshore Jurong Island that could hold crude, naphtha, condensate and gas oil, most likely for commercial, rather than strategic purposes. The first two caverns are expected to be operational by early 2011.

A planned second phase could add another 1.3 million cu m of storage but a decision has not yet been made.

For cost and operational reasons, underground caverns are often used to hold long-term strategic stocks rather than more actively traded barrels.

The U.S. government stores its strategic crude reserves in four underground sites, while South Korea leases out its tanks to refiners to be used for strategic purposes.

Industry sources say underground caverns, which normally cost more than an above-ground facility of similar capacity, are typically used for barrels that remain in-tank for longer periods and are not traded in and out of tanks rapidly.

"The cavern facility will be used for commercial purposes, but there will be physical limitations for storage of trading barrels, particularly those that need to move quickly or be blended, as transferring of products will be involved," said a source in the storage business.

State-owned industrial landlord JTC Corp had said it would unveil the winning bid for the operator of the Jurong Rock Cavern project in the April-June quarter, delaying it from end of February.

A spokeswoman said the results would be unveiled before end-June.

JUMP IN STORAGE CAPACITY

This is not the first time the decision has been postponed -- the tenders were first called in late 2007, and the results have been plagued by months of delays since.

JTC said that more time was needed to study the design and construction process for the large-scale, complex project, as safety was a key priority.

Industry sources said bidders for the operation tender include Dutch oil and chemicals storage firm Royal Vopak NV (VOPA.AS: Quote), New York-based engineering and infrastructure consultants Parsons Brinckerhoff and storage operator Horizon Terminals Ltd, wholly owned by Emirates National Oil Company (ENOC).

Vopak already operates landed oil storage tanks next to the planned facility.

For phase one of the cavern project, there will be about 7.0 km (4.3 miles) of galleries and tunnels.

Once both phases are completed, the project could raise oil storage capacity in land-scarce Singapore to nearly 11 million cubic metres or almost 70 million barrels.

Since end-2005, Singapore has almost doubled independent oil storage capacities, but all of it has been leased out, leaving the market short of tanks despite slowing consumption.

For example, fuel oil storage capacity in Asia , following the opening of three new terminals with a Total of 4-5 million cu m since end-2006, has increased substantially but has not been balanced by a similar rise in demand for the residual fuel due to the economic downturn.

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Related News: Energy Business Review

JTC Awards Contract To Hyundai Engineering & Construction For Oil Storage Project In Singapore

Published:17-April-2009

By Staff Reporter

JTC Corporation (JTC), a provider of industrial real estate solutions and services, has handed the construction tender for the city-state's rock cavern oil storage project to Hyundai Engineering & Construction Co., Ltd. Jurong Rock Cavern (JRC) is an initiative driven by JTC to increase underground oil storage capacity on Jurong Island. JRC will comprise an oil storage complex to be built at subterranean depths beneath the seabed of Banyan basin.

Upon completion, the underground caverns will have a potential storage capacity of close to three million cubic meters catering specifically to liquid hydrocarbons like crude oil, condensates and diesel oil.

Development works for Phase 1 of JRC, with a storage capacity of about 1.5 million cubic meters, had commenced at the end of 2006. JTC is currently appointing an operator to manage, operate and maintain the JRC facility.

The first contract of the Phase 1 JRC project involving the construction of two access shafts and start-up galleries is near completion. JTC is progressing onto the next critical milestone of the JRC project -- the construction of tunnels, caverns and associated facilities.

Work will now commence with the detailed design of the caverns/facilities and actual construction is expected to start by end of the year. When completed, the JRC will have an overall storage capacity of 1.47mil cubic meters. The whole project will be completed in stages, with the first two caverns targeted for completion in 2013.

Foundation stone ceremony at Neste Oil's NExBTL renewable diesel plant in Singapore

Taken from: Fox Business News

Friday, March 06, 2009

ESPOO, FINLAND, Mar 06, 2009 (MARKET WIRE via COMTEX) ----- project proceeding on schedule and budget

Neste Oil held today a Foundation Stone Ceremony to officiate the construction of its EUR 550 million NExBTL renewable diesel plant in Singapore. Neste Oil's President and CEO Mr Matti Lievonen was in attendance, and Mr Lim Hng Kiang, Minister for Trade and Industry, Singapore was the Guest-of-Honour at the event.

"The construction of our NExBTL renewable diesel plant in Singapore is proceeding on schedule and on budget. The market has been highly unpredictable in the past year but the Singapore plant plays an important part in our long-term strategy for growth, and our commitment to the project remains solid. We are very grateful to the local government for the support they have given us and look forward to when the plant is officially inaugurated in 2010," stated Mr Matti Lievonen.

Upon completion in 2010, Neste Oil's renewable diesel plant in Singapore will be the largest in the world with an annual capacity of 800,000 metric tons. Neste Oil's patented NExBTL technology allows flexible use of any vegetable oil or animal fat in the production of NExBTL renewable diesel, the cleanest diesel in the world. NExBTL-diesel is the only renewable diesel in the world that is fully compatible with existing diesel engines and logistics systems. The use of NExBTL-diesel significantly reduces greenhouse gas and tailpipe emissions compared to even the best fossil fuels, thereby contributing to better air quality. Feedstock, to be used at the NExBTL renewable diesel plant, are animal fat, palm oil and other types of vegetable oils. When fully operational, the plant will employ around 100 people.

Neste Oil Corporation

Osmo Kammonen Senior Vice President, Communications

More information: Mr Jarmo Honkamaa, Deputy CEO and Executive Vice President, Renewable Fuels, tel. +358 10 458 4758

About Neste Oil

Neste Oil Corporation is a refining and marketing company concentrating on low-emission, high-quality traffic fuels. The company's strategy is based on growing both its oil refining and premium-quality renewable diesel businesses. Neste Oil's refineries are located in Porvoo and Naantali and have a combined crude oil refining capacity of approx. 260,000 barrels a day. The company had net sales of EUR 15 billion in 2008 and employs around 5,200 people. Neste Oil's share is listed on the NASDAQ OMX Helsinki. www.nesteoil.com.

About NExBTL renewable diesel

NExBTL renewable diesel is an advanced fuel, based on renewable raw materials, that performs more efficiently and has a lower level of environmental impact than fossil diesel or FAME-type biodiesel. Neste Oil requires its raw material suppliers to commit to responsible and sustainable production methods. Feedstock of this type ensures that NExBTL renewable diesel has a 40-60% lower level of greenhouse gas emissions over its entire lifecycle compared to fossil diesel. NExBTL renewable diesel can be blended with conventional diesel fuel or used as such, and it is suitable for all diesel engines.

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

Copyright Copyright Hugin AS 2009. All rights reserved.

SOURCE: Neste Oil Oy

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From The Business Times, Singapore

Growing Market for Singapore Renewable Diesel Plant

By RONNIE LIM

OTHER investors may be scrapping their projects but it's flashing 'green' for Neste Oil's $2.4 billion investment in Singapore and Rotterdam. The Finnish giant is brimming with confidence about its two renewable-diesel refinery plants that cost $1.2 billion apiece and that will start operations in 2010 and 2011 respectively.

DOING THE SPADE WORK (From left) Mr Honkamaa, Mr Lim, Mr Lievonen and Neste Oil managing director Olli Virtas laying the foundation for Neste Oil's renewable diesel plant in Singapore

In fact, it is already considering adding second lines at both to produce either more renewable diesel, or even renewable jet fuel for aircraft.

'We have no other competitor in 2G, or second-generation, biodiesel manufacturing,' Matti Lievonen, Neste's president and CEO, told media after a foundation stone-laying ceremony at its Tuas site. The two plants, when completed, will make Neste - until now, mainly a traditional oil refiner - the leading global producer of renewable diesel.

Both plants are 'on schedule and on budget', he said. Financing is not an issue at all, as Neste has a credit line of 1.6 billion euros (S$3.1 billion) until 2011, plus it has over 500 million euros in cash flow from last year.

Besides, given growing environmental concerns, the European Union is expected to pass legislation enforcing greater use of such renewable fuels soon. 'This is the whole logic for our renewable diesel - a market which mandates use of biofuels,' said deputy CEO Jarmo Honkamaa.

After earlier targeting 5.75 per cent mandatory biofuel use by 2010, the latest EU directive is that measures must be taken by all member countries to replace a minimum 10 per cent of all transport fossil fuels (petrol and diesel) with biofuels by 2010.

The Neste officials said this in response to questions on whether today's low oil prices of around US$40 - which means that normal diesel is roughly half the price of biodiesel - would impact the economics of its Singapore and Rotterdam biodiesel investments.

Each plant will produce 800,000 tonnes per annum (tpa) of renewable diesel - the largest such facility in the world - from one million tpa of renewable materials comprising vegetable oils such as palm oil, animal fat or tallow.

Neste - which operates two crude-oil refineries in Porvoo and Naantali with a total capacity of 260,000 barrels - already has a 170,000 tpa biodiesel plant at Porvoo, and is set to start up a second biodiesel plant of similar scale there this July.

'Neste is sourcing its biodiesel raw materials like palm oil and tallow on a group-wide basis, and is in talks with suppliers, like for instance, for jatropha in Thailand,' Mr Honkamaa said. Depending on the costs, over half of each plant's raw materials can be palm oil, with the rest tallow, although the biofuel refineries are completely flexible in their feedstock mix.

Neste is already in talks with big oil companies to take biodiesel from its Singapore and Rotterdam plants. 'We don't see a challenge in (securing) markets, the challenge is more in raw materials,' Mr Honkamaa said.

Speaking at the ceremony, Trade & Industry Minister Lim Hng Kiang said that Neste's project 'affirms Singapore's position as a trusted business destination', adding that 'the outlook of the energy and chemicals industries remains positive'. Underlying this, he said, are two main factors: the increasing emphasis on addressing environmental challenges and the Asian growth story, especially in China and India, and increasingly, Asean.

South Korea to Produce Wood-Pellet Fuel in Indonesia

Taken from: Emirates News Agency

Mar 7, 2009 - 08:22 - SEOUL, 7 March,2009 (WAM) -- South Korea signed an agreement with Indonesia Friday to produce wood pellets that are cheaper and cleaner to burn than fossil fuels, Yonhap News reported.

The memorandum of understanding between the Korea Forest Service and Indonesia's Forest Ministry calls for 200,000 hectares of forest land to be set aside to produce wood for pellets starting in late 2010.

The Daejeon-based state forestry service said that the deal signed on the sidelines of President Lee Myung-bak's visit to the Southeast Asian country gives the South Korean government a free 99-year lease on Kalimantan Island, with Indonesia benefiting from investment that can lead to jobs for its people.

"The forest service will provide administrative support, with the actual building of the pellet-making facilities and everyday operations to be carried out by private companies," Yonhap quoted an official as having said in its dispatch from Jakarta,. He said the size of fuel production will be determined after the forest has been examined in detail to check for usable plants.

"The process will involve both cutting trees and planting to make up for those used as fuel," he said.

Wood pellets are made from finely ground and compressed wood that is cheap to use, has relatively good fuel qualities and does not release as much greenhouse gas as refined fuel products.

The cylinder-shaped pellets on average have lower heat value than diesel fuel, liquefied natural gas (LNG) and kerosene, but could provide an 99-square-meter living space with adequate heat for 1.8 million won (US$1,160) per year.

This is better than the 4.2 million won needed when burning diesel, 2.0 million won for LNG and 3.0 million won for kerosene.

The pellets have also been found to produce 12 times less greenhouse gases than diesel fuel.

At present, South Korea's wood pellet consumption is small and generally limited to use in some rural communities and greenhouses. It has only one operational wood pellet facility, with two more to be opened within the year. The majority of products used are imported from China and Canada.

The 200,000 ha deal, meanwhile, increased the size of forest land leased by South Korea in Indonesia to 700,000 ha.

The 500,000 ha leased in 2006 under a similar long-term arrangement is used by companies like SK Networks Co. and Inni Joa Co. to grow timber for wood products and palm oil.

WAM/MAB

How REACH impacts electronics components use

Reference Link:
http://www.allbusiness.com/government/international-organizations-bodies/12283847-1.html

How REACH impacts electronics components use: seven steps on navigating the new set of regulations for those importing assemblies to the EU.

By Schultz, Steve
Publication: Circuits Assembly
Date: Sunday, March 1 2009

The requirements of the European Union's REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) Directive are massive and involve manufacturers and importers of chemicals, compounds and articles. Here are seven basic points about REACH that every manufacturer of electronics assemblies selling product in Europe must understand.

1. No data, no market. If your company builds electronic assemblies for import into the EU, you are directly impacted by the REACH requirements. Failure to comply with these new regulations risks having your products denied access to the European market.

2. Reporting requirements. Electronic components are "articles" under the definition of REACH, as are electronics assemblies, and are subject to specific reporting requirements with regard to Substances of Very High Concern (SVHCs). The REACH Directive requires that SVHCs be controlled, reported, and eventually phased out in favor of safer materials when it is technically and economically feasible.

The manufacturer of electronics assemblies must determine if the electronic components used in their products contain any of the SVHC restricted chemicals/substances. If present, REACH requires that importers to Europe of articles, or manufacturers of articles in Europe, provide information on SVHCs greater than 0.1% w/w in the article to the immediate downstream recipient and to any other consumer that requests it. This requires the manufacturer to aggregate the total weight of each SVHC contained in its finished product and represent it as a percentage of the total weight of its product. This information must be provided free of charge and made available within 45 days.

Starting in 2011, manufacturers and importers also will be required to report this information directly to European Chemical Agency (ECHA) if it is greater than 0.1% w/w and the manufacturer imports greater than one metric ton of the SVHC into Europe each year. However, manufacturers need not report this information if they can demonstrate that the substance is already registered for the same use, or prove that the SVHCs in their product cannot be released during its lifecycle or during the disposal process.

3. Why the concern about SVHCs? SVHCs have major health consequences. These are chemicals or substances that have been demonstrated to be carcinogens, mutagens and reproductive toxins; or they have been identified as being persistent, biocumulative and toxic; or fall into a category considered "Substances of Equivalent Concern," which includes endocrine disruptors.

ECHA identifies SVHCs on what the industry has come to call the "SVHC Candidate List" (Candidate Substances for Authorization). The initial "Candidate List" includes fifteen chemicals/substances and can be accessed at http://echa.europa.eu/chem_data/candidate_list_table_en.asp.

Over time, many more chemicals and substances will be added to the Candidate List, with some experts estimating as many as 1,500 SVHCs eventually will be identified.

4. Sunset date. At some point in the future, ECHA will designate a "Sunset Date" for each SVHC. After that date, manufacturers will be required to stop using the component containing the SVHC or to obtain specific ECHA authorization to continue using the component. Firms seeking authorization to continue using an SVHC after the Sunset Date must demonstrate that the socioeconomic benefits from its use outweigh the SVHC risk to society.

To maintain a global market for their products, component manufacturers will eventually have to replace SVHCs with substitute chemical/substances. If the electronics industry's experience with the European RoHS directive is any indication, this Sunset provision will result in the discontinuance of many components and the performance requalification of others.

5) No part number change. There is no indication component manufacturers will change part numbers as a result of the migration to substitute chemical/substances, and there is no official "REACH Compliant" designation for the component as there was with RoHS-compliant components. As such, there will be no component marking or labeling, making identification between a part number containing the SVHC and the same part with a substitute chemical/substance problematic. This situation becomes enormously more complicated when you consider that a component may have multiple SVHCs that are phased out of the component manufacturer's supply chain at different points in time.

6. Obtain SVHC information from component manufacturer.

Only the component manufacturer is in position to provide detailed SVHC data on the electronics components that they manufacture. They control the manufacturing process, and only they are in position to know when their internal processes change or when they change raw material vendors. The industry will be best-served if component manufacturers work together to uniformly list SVHC data openly on their websites using standard material data reporting formats.

7. Establish a REACH task force. As with the RoHS transition, many firms are underestimating the time, expense and energy necessary to meet all REACH requirements. REACH is much more complicated than RoHS and will grow in complexity over time. Each company in the electronics industry, if not already doing so, should establish a cross-functional task force composed of engineering, quality, purchasing, operational, finance, marketing, IT, legal and other personnel to begin tackling this latest EU environmental initiative.

While REACH is expected to have a significant long-term impact on the electronics supply chain, distributors can help minimize the impact. Distribution plays a central role in the supply chain and the unique ability to facilitate communication between OEMs and component makers. Further, diverse technical resources offered by distributors can help guide OEM design engineers by offering component options that don't include non-registered chemicals or SVHCs. By establishing open communication channels early on with authorized distributor partners, manufacturers and importers of chemicals, compounds and articles can help minimize the possibility of future supply chain disruptions.


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Steve Schultz is director, strategic planning and communications, Avnet Logistics (avnet.com); steven.schultz@avnet.com.

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Stern Review on the Economics of Climate Change

Sir Nicholas Stern, Head of the Government Economic Service and Adviser to the Government on the economics of climate change and development, is delighted to present his report to the Prime Minister and the Chancellor of the Exchequer on the Economics of Climate Change:

• Full report
• Executive Summary and Executive Summary in other languages
• Postscript and Technical Annex to postscript
• Launch Press notice , Comments on the Review , launch presentation and speaking notes
• Supporting commissioned research
• Background to the Review
• Presentations by Sir Nicholas Stern

The Stern team has moved to the Office of Climate Change. Publications posted after the Stern Review including the series of papers printed in the World Economics Journal, are now available on the Stern team page on the Office of Climate Change website .

Siemens AG's $1.6 Billion Penalty for Bribing Foreign Officials is a Warning to the International Energy Industry

Via Renewable Energy World:
Seattle, WA and Boise, ID
6 January 2009

For over 30 years, companies operating in the global energy arena have had to comply with the U.S. Foreign Corrupt Practices Act ("FCPA"). During the past 10 years, other countries have enacted their own versions of the FCPA. International energy companies that have thus far discounted or ignored these anti-corruption laws recently received a $1.6 billion warning from the U.S. and German governments.

The FCPA prohibits companies (both private and publicly traded) and individuals from paying or promising to pay foreign officials (defined broadly), directly or indirectly, anything of value with the corrupt intent of obtaining or retaining business. The FCPA also mandates internal accounting controls and record-keeping practices aimed at preventing and detecting illegal bribes. The penalties for FCPA violations are stiff. Companies may face criminal fines of up to $2 million per violation, civil penalties of up to $10,000 per violation, and disgorgement of any benefit the company received by the violation. Individuals face criminal fines of up to $100,000 or imprisonment for not more than five years, or both, per violation, and civil penalties of up to $10,000 per violation. Companies may also be prevented from participating in U.S. government procurement and contracting programs. On December 15, 2008, Siemens AG, a German conglomerate company, and three of its subsidiaries ("Siemens"), pled guilty in U.S. federal court to violating the FCPA. As part of its settlement with the U.S. Department of Justice ("DOJ") and the U.S. Securities and Exchange Commission ("SEC"), Siemens agreed to pay a $450 million criminal penalty and to disgorge $350 million in wrongful profits. On the same day, Siemens announced an agreement with German prosecutors to pay a €395 million ($569 million) fine for violating Germany’s anticorruption laws, adding to the €201 million ($285 million) that a Munich court sentenced Siemens to pay in October 2007. The $1.6 billion penalty Siemens must pay U.S. and German authorities is roughly 35 times larger than any previous anticorruption settlement. This staggering figure does not include the €850 million ($1.2 billion) Siemens has reportedly paid to attorneys, accountants, and other service providers to deal with its global bribery scandal since late 2006. Nor does it include the significant sums Siemens must pay an outside FCPA compliance monitor for the next four years as part of its settlement with the DOJ and the SEC. Wakeup Call for the Global Energy IndustryU.S. authorities estimate that Siemens paid $1.4 billion in bribes to foreign officials in Asia, Africa, Europe, the Middle East, and the Americas, and that a significant portion of this illegal activity occurred in the energy industry. Indeed, starting in 2001, Siemens’ Power Generation and Power Transmission and Distribution divisions paid at least $356.9 million in bribes to foreign officials in multiple countries. In recent years, once the DOJ and the SEC have learned of one company’s violation of the FCPA, they have increasingly expanded the scope of their investigation to include other players operating in that industry. The business of energy companies is highly dependent on the discretion of governmental agencies (including development banks, which qualify as "foreign officials" under the FCPA). Siting, permitting, environmental review and enforcement, local community support, responding to RFPs, negotiating and performing under power purchase agreements, conducting project build-out, establishing generation interconnections and transmission tie-ins, obtaining transmission services, obtaining subsidies or tax advantages, and complying with safety and antitrust requirements: all of these aspects of an international energy company’s business, as well as other operations, often involve the discretion of a foreign official. Some of these officials expect bribes from companies (or third parties engaged by companies) in exchange for favorable treatment. The DOJ’s and the SEC’s discovery of Siemens’ corrupt activities has cast a bright spotlight over the global energy industry, making it especially fertile territory for industrywide FCPA dragnets. Lessons Learned from the Siemens Case Siemens paid massive fines for violating the FCPA’s accounting and record-keeping provisions, demonstrating the importance of a robust compliance program. The Siemens settlement provides many additional lessons and reminders for energy companies, including:

	•	Vicarious Liability for Third Parties: Siemens’ foreign business consultants played a significant role in bribing foreign officials to secure business advantages in the energy industry. The FCPA can leave companies and individuals vicariously liable for the conduct of third parties, like consultants, distributors, and sales agents, even if the company lacks actual knowledge of their wrongdoing. Accordingly, the mere failure to recognize and investigate a foreign business consultant’s suspicious activities may expose a company to FCPA liability. Such vicarious liability makes it especially important for companies to (1) conduct due diligence on their potential business consultants; (2) include FCPA-specific representations, warranties, covenants, audit rights, and termination rights in all business consultant contracts; and (3) train employees on how to recognize the red flags associated with business consultants’ unsavory activities and report these red flags to management. Even compliance-conscious energy companies can become entangled in FCPA enforcement actions if they do not have robust compliance programs that are tailored to specific industries and geographic locales.
	•	Tone at the Top: The DOJ and the SEC have publicly criticized Siemens’ senior management for tacitly condoning bribery of foreign officials as a legitimate business strategy. Both agencies have also acknowledged an intention to pursue FCPA criminal penalties (which could include jail time) against Siemens executives, employees, and consultants who participated in the bribery schemes. In short, Siemens lacked the necessary "tone at the top" to foster a culture of FCPA compliance within the company. Companies can take a crucial first step toward avoiding this scenario by working with their attorneys to draft a clearly articulated policy against FCPA violations. This policy should highlight prohibited behavior, accommodate employees who blow the whistle on compliance violations, and set forth disciplinary procedures to address such violations.
	•	Internal Accounting Controls: The DOJ and the SEC based their charges against Siemens almost exclusively on the FCPA’s accounting and record-keeping provisions. Siemens’ subsidiaries attempted to cover up bribes by routing the money through slush funds or intercompany accounts and recording the illegal payments with misleading labels like "commissions." To avoid illegal accounting tactics, businesses should centralize their accounting systems to ensure corporate headquarters review all foreign financial transactions. Careful analysis of the financial records of employees and business partners abroad can enable businesses to quickly detect and eliminate conduct prohibited under the FCPA.
	•	FCPA’s Jurisdictional Scope: Siemens is a German corporation with its principal place of business in Germany, and many of the bribes it paid abroad did not implicate U.S. territory in any way. Nevertheless, Siemens is subject to the FCPA because it has listed its securities on the New York Stock Exchange since 2001 and, therefore, qualifies as an "issuer" under the FCPA. Moreover, in many instances, Siemens routed bribes through U.S.-based banks, providing the U.S. government with an additional jurisdictional basis for pursuing Siemens under the FCPA. These facts serve as a reminder of the FCPA’s sweeping jurisdictional reach. All U.S. companies with international operations—and many non-U.S. companies—have FCPA liability exposure.
	•	Cross-Border Enforcement: The cooperation exhibited in the Siemens case between the DOJ and the SEC, on the one hand, and the German enforcement agencies, on the other, is a noteworthy development in cross-border FCPA enforcement. Companies should recognize that the DOJ, the SEC, and their foreign counterparts share FCPA-related information about the non-U.S. operations of companies subject to the FCPA.
	•	Cooperation with Government Investigations: The DOJ and the SEC have indicated that Siemens’ total FCPA penalty could have been considerably larger than $800 million. Indeed, application of the Federal Sentencing Guidelines would have resulted in an FCPA criminal fine of between $1.35 and $2.7 billion. Due to Siemens’ "exceptional" cooperation with the U.S. government’s investigation and demonstrated commitment to remediating its operations, however, the DOJ and the SEC exhibited leniency. Siemens’ strategy of cooperating with authorities, rather than attempting to stonewall them, provides a model for future targets of FCPA enforcement actions. For more information, contact Ashley Henry, Energy Industry Liaison, 503-294-9506, ahenry@stoel.com

For Further Information

• Energy Law Alert
• Stoel Rives LLP
• Renewable + Law Blog

Cleantech VC investments hit record high in 2008

Via EE Times Europe
8 Jan 2009

Clean technology venture capital (VC) investments last year in North America, Europe, China and India totaled a record $8.4 billion, up 38 percent from $6.1 billion in 2007. Three of the top five funding rounds focused on thin-film solar ventures.

The 2008 total represents the seventh consecutive year of growth in clean technology venture investing, according to the Cleantech Group which tracks the sector.

"As expected, clean technology venture investing slowed in Q4 08, but it is important not to miss the forest for the trees," said Nicholas Parker, executive chairman, Cleantech Group. "In 2008, there was a quantum leap in talent, resources and institutional appetite for clean technologies. Now, more than ever, clean technologies represent the biggest opportunities for job and wealth creation."

Preliminary results for Q4 08 suggest venture investment commitments worldwide of $1.7 billion across 99 disclosed investments, the smallest quarterly total in six quarters. Q4 08 was down 35 percent from Q3 08, but only 4 percent off what was achieved in Q4 07, despite a much more difficult economy.

Solar accounted for almost 40 percent ($3.3 billion) of total clean technology investment dollars in 2008, followed by biofuels at 11 percent ($904 million) and 9.5 percent, or $795 million in ventures focusing on transportation, which includes electric vehicles, fuel cells and advanced batteries.

Regional share
The five largest VC rounds in 2008 included $300 million raised by NanoSolar, $219 million by Solyndra and $200 million by SoloPower, all U.S. companies and all for thin-film solar ventures, followed by $177 million raised by Finnish group WinWinD Oy for wind turbines and $140 million by U.S. group Solar Reserve for concentrated solar thermal.

European and Israeli companies raised $1.8 billion in 146 disclosed rounds, up 43 percent from 2007. Europe and Israel accounted for 21 percent of the global total.

The most significant country growth was seen in Germany ($383 million invested, an increase of 217 percent from 2007) and Israel ($247 million invested, an increase of 224 percent from 2007), both led by very large solar deals.

Germany overtook the United Kingdom as the country receiving the most venture capital in 2008, helped significantly by the region's largest deal of 2008, the $133.7 million investment in Berlin-based solar thin-film manufacturer Sulfurcell Solartechnik.

The United Kingdom's decline in total investment ($337.8 million, down 11 percent from 2007) left it second in the country league table, with Israel moving into third place from sixth in 2007.

In 2008, U.S. companies raised $5.8 billion in 241 disclosed rounds, up 56 percent from 2007. U.S. companies accounted for 68 percent of the global total. Canadian companies raised $159 million in 14 disclosed rounds, down 58 percent from 2007.

Chinese cleantech companies raised $430 million in 18 disclosed rounds last year, up 22 percent from 2007.

China accounted for 5 percent of the global total, and the country saw steady gains in clean technology investment, with solar accounting for 60 percent of the total, reflecting the continuing migration of solar module manufacturing from Europe and the United States to China.

- John Walko