Solar Industry Developing Strategies to 'Navigate' UFLPA Uncertainty, Law Firm Says
While the Uyghur Forced Labor Prevention Act and other factors have led to uncertainty and a "more complex risk environment" for imports, some companies have found strategies to "effectively navigate" this environment, law firm Bradley said in a new blog post. Some of those strategies included being "proactive" in engaging their original equipment manufacturers (OEMs), in developing "internal protocols" to monitor their supply chains, in incorporating "traceability audits," in finding "backup sourcing" and in shifting risk of "non-performance" to "downstream parties" or OEMs, Bradley said.
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The post focuses on the implementation of the UFLPA and how the solar industry has adapted to the law and is finding ways to be compliant. One adaptation is the "due diligence" of overseas suppliers. OEMs have adapted their supply chain to the regulations, "especially the larger foreign OEMs," the post said. Many developers and contractors in the U.S. also have begun implementing "additional controls and compliance programs," the post said.
Companies also are implementing "ongoing reporting and monitoring programs", such as rolling "supply chain traceability" audits rather than one-time audits, the law firm said. Also effective is "initial disclosure of the balance of materials suppliers and the representations regarding the origin" of the raw materials, with "approval rights for any changes," the firm said.
Meanwhile, OEMs are "insisting on relief for border delays and importation-related impacts" due to "significant losses" experienced in 2022 because of the uncertain regulatory environment, uncertainty about CBP's enforcement measures, and retaliatory laws and requirements enacted by the Chinese government, the firm said. Still, there is "no one-size-fits-all approach," Bradley said. "Contractors and developers must each manage different risks relative to potential detention of modules," Bradley said.
The post added that smaller companies may not be able to implement some of these strategies.