Finally, the barriers that lead to quality problems will largely disappear; your
company’s cross-departmental business processes will have been integrated.
Your sales capabilities will skyrocket, too, because obstacles to the market
will also have been eradicated. Come the end of the day, your competition
will be hard pressed to keep up when your products are reaching the market
faster, greener, and at far less cost.
The risks of failing to comply ...........................................................
Today’s active laws and directives, Registration, Evaluation, Authorization of
Chemicals (REACH) and Reduction of Hazardous Substances (RoHS) among
them, are government-sanctioned. If your company should fail or refuse to
comply with them, the penalties will be immediate. Frequently, they will be
extremely harsh, too, as the record shows.
For example, when a number of Apple’s products did not comply with environ-
mental regulations, many countries in the EU were forced to stop purchasing
them, resulting in heavy losses of revenue on both sides of the value chain.
The same thing happened when Palm, Inc. failed to comply. One of their major
products is no longer available to the European market.
If you are a company doing business in or with the United Kingdom, it can cost
up to £5,000 per instance for failing to comply with RoHS. The same goes for
failing to submit compliance documentation to any authority that requests it.
The retailer Boots, for example, was penalized for not having informed its cus-
tomers that a percentage of its profits are put into a product recycling fund.
In Germany, regulators fine noncompliant businesses 50,000 and ban their
products from the market. In France, companies can be fined 7,500 for an
infraction. Spain and Ireland, on the other hand, are off the charts when it
comes to fines: In these countries, you can suffer penalties of upwards of
1.2 million and have your products removed from your customers’ shelves!
A penalty was issued against a Dutch producer that refused to comply with
the Waste Electrical and Electronics Equipment (WEEE) directive; another
was levied against municipal authorities for failing to create a municipal recy-
cling location. Sony used more cadmium in their PlayStations than is allowed
for by RoHS in the Netherlands and paid for the mistake dearly: When the
country refused to sell the product in 2001, Sony lost an estimated $110 mil-
lion in revenue.
The moral to the story is clear: failure to comply with product safety regula-
tions results in lost revenue and fines, delayed or restricted access to the
market in the short term, and lost market share in the long term, all of which
can result in still more costs that are precipitated by the emergency measures
you will likely have to implement when confronted with these unwanted out-
comes. As we noted in Chapter 9, the events that resulted from the failure of
toy giant Mattel to produce environmentally friendly products were both
224 Part III: Going Green
