By Paul Davies and Andrew Westgate

As a world leader in the manufacturing of electronic devices, China is beginning to reform its rules and regulations to ensure that the resulting framework is able to keep pace with the rapid developments now taking place in this sector both in China and globally. Two recent developments in this regard are discussed below.

Battery Waste. In December of 2016, the Ministry of Environmental Protection (MEP) issued the “Battery Waste Pollution Prevention Technology Policy.”[1] The policy, which applies to all kinds of battery waste, does not impose specific requirements, but instead defines key policy priorities for regulators to develop standards for battery waste. Priorities reflected in the policy include the following:

  • Closed Cycle and Green Collection: Battery manufacturers will be encouraged to address the full life cycle of their products in their manufacturing processes so as to assist MEP in tracking the flow of battery waste and identifying the party liable for contamination resulting from battery waste.
  • Prioritizing Reuse: Manufacturers will be incentivized to reuse raw materials in production of well-developed and mature battery technologies. For developing technologies, sorting of battery waste will be encouraged to promote future recycling of such waste.
  • Safe, Proper Disposition: Promoting and incentivizing recycling channels for battery waste, and discouraging incineration (a key method of waste disposal in China) for battery waste. Municipalities will also be encouraged to continue compulsory recycling programs in urban areas.
  • Risk Management: Promotion of targeted risk-management practices based on the key risks applicable to each type of battery (i.e. electrolyte leakage for lead-acid batteries and transportation risk for lithium-ion batteries).
  • Parallel Restrictions and Guidance: Promoting and guiding the development of new technologies for recycling and reuse of battery waste without stringent regulation while simultaneously increasing requirements for disposal and recycling of mature battery technologies.

Extension of Manufacturer Liability. On December 25, 2016, the General Office of the State Council (China’s highest administrative body) released a “Plan for Extension of Manufacturer Liability,”[2] which provides guidelines for regulators to increase the liability for manufacturers of a number of products (including electronic products and lead-acid batteries) to cover liabilities arising out of the collection, transportation, storage, recycling and disposal of their products. The plan includes an implementation schedule that calls for rules relating to the collection and disposal of lead acid batteries to begin this year.

Although these documents lay out policy priorities rather than specific requirements, they signal that China is moving towards a more robust regulatory scheme for the electronics sector that will require manufacturers to be responsible for the hazardous contents of their products and the wastes they produce. Firms with manufacturing operations in China will need to pay close attention to these developments to ensure that their own facilities, as well as third-party suppliers and contractors, are able to comply with the new regulations as they are released.

[1] See (Chinese only).

[2] See (Chinese only).

This post was prepared with the assistance of Veronica Ye in the London office of Latham & Watkins.