Polluters will pay

Chris Webb finds most UK businesses unprepared for the WEEE and RoHS Directives - but uncovers the beginning of a collaborative approach from some sectors

The UK's record on implementing EU directives is pretty dire, as the fiasco following introduction of the EC Regulation on Substances that Deplete the Ozone Layer and the furore about the End-of-Life Vehicles Directive demonstrate. The introduction of the Waste Electrical and Electronic Equipment (WEEE) and Restriction of Hazardous Substances (ROHS) directives, both of which became European law on 13 February, offered the UK an opportunity to redeem itself, but instead, squabbling about producer responsibility continue.

Member states have just 18 months to put in place mechanisms to implement the directives, and a further year to put the necessary recycling systems in place. However - despite months of prior knowledge - industry's reluctance to accept producer responsibility has meant that the UK is seriously under-prepared.

Falling behind

For industry, the key provisions of WEEE are the requirement for producers to set up systems for the treatment of waste electrical and electronic equipment to a set standard; to provide for recovery and re-use of separately collected waste equipment; and significant data reporting obligations.

Manufacturers will have to foot the bill for their products' collection and safe disposal, and will have to adopt a lifecycle economy approach to manufacturing processes. They will also be responsible for recycling any products placed on the market after September 2005.

According to European trade federation Orgalime, it could cost industry in the UK in the 15 EU member states £10bn in new investment, £27bn to deal with equipment already on the market and annual running costs associated with collection and dismantling/recycling of another £5bn.

Orphaned goods

But by far the most bitter pill to swallow for manufacturers comes in the form of a clause in the new legislation compelling firms to pick up the bill for the recovery and recycling of so-called orphaned goods - those made by manufacturers that have gone out of business.

John Morrell, managing director of WEEE Recycle, says this particular requirement is causing a lot of concern in some quarters. Although it is not yet certain how companies that are still trading will be billed - it will probably be by market share - it is a particularly unpopular clause and departs from the polluter pays principle. "It will cost companies millions," Morrell says.

Lack of infrastructure

Worryingly, it is not only the manufacturers themselves that are unprepared - the evidence suggests that the companies which will be dealing with the waste are too. Ten years after WEEE was first discussed in Brussels, is the UK only now beginning to get a true picture of how recyclers and dismantlers will cope with the growing mountain of electrical and electronic waste.

"Nobody is prepared, because nobody knows what to prepare for," says Industry Council for Electronic Equipment Recycling (ICER) director, Claire Snow. Consequently, ICER last month launched a survey of major shredders and dismantlers to gauge the state of the UK's recycling infrastructure. "The problem is, the recycling industry is largely unregulated, and we simply don't know at this stage if it can cope," Snow says.

The other major problem, Snow says, is uncertainty over the mechanism by which the recyclers will be paid by producers. "Producers of waste are divided on how to finance the scheme. Should it be through a compliance organisation or between individual companies? Nobody knows where they stand at present."

Regulatory burdens

While companies are not too delighted with the idea of paying for producer responsibility, they should note that the situation is only going to get worse. The independent regulatory watchdog, Better Regulation Task Force (BRTF) is launching a review of proposed government regulations on producer responsibility, but is already convinced that regulation is going to get tighter.

"All businesses are going to find that environmental regulations will have an increasing impact on their work in the coming years," David Arculus, BRTF chairman said at the organisation's launch in January.

Brussels is convinced that such schemes work. EU regulators regularly point to the Packaging Regulations as a measure of how producer responsibility schemes can force industry to take responsibility for the waste that is generated from its products. There are lessons that can be learnt from the Packaging Regulations, says Janet Russell, who will head the BRTF's work on producer responsibility. "It's important that we do because soon, manufacturers of vehicles and electrical goods and the consumers who buy them will have to deal with used products differently."

Industry initiatives

In response to the onset of the WEEE Directive, some companies are reacting positively. A number of mobile phone manufacturers have signed a voluntary agreement with the United Nations Environment Programme (UNEP) and have called on network providers to share the burden of recovering unwanted handsets from their customers.

Companies such as Canon and Kodak have set up initiatives to ensure they comply with the essence of the new law, even if the framework of the specific law which will be applied within the UK market remain elusive.

Also, some recyclers are already recycling electronic scrap. Currently less than 1% of old computer equipment in the UK is disposed of to landfill.

Minimising the cost of compliance

The WEEE Directive will inevitably force companies to seek more efficient ways to recycle and develop products. Unless that happens, costs will be unnecessarily high, and the excess cost will end up on customers' bills, forcing consumers to look elsewhere for their gadgets.

Mindful of the new rules, producers are already considering ways to minimise the cost of complying with them. Four leading manufacturers recently announced that they are joining forces to minimise the cost of recycling their products. They plan to develop a common waste management programme for their operations across the EU. Electronics manufacturers Braun, Electrolux, Hewlett Packard and Sony are looking at ways to create a common recycling system, and so benefit from shared costs. The companies aim to obtain estimates for the recycling of their waste products in the hope that their combined purchasing power will attract a more competitive price. By targeting a pan-European procurement platform the companies hope to stimulate cross-border competition in the waste management services market.

The challenge for the UK

Braun's European environmental affairs representative, Hans Korfmacher, says EU-wide competition in the market for recycling of waste electrical products is essential if the directive is not to be excessively costly for producers, and hence consumers.

As it stands, manufacturing and the recycling industry in the UK do not appear to be ready to cope with the demands of producer responsibility. Prime minister Tony Blair has said he "wants Britain to be a leading player in this coming green industrial revolution", and that will mean getting the infrastructure and systems in place.

However, the WEEE; RoHS, and ELV directives have focused business on the problem and with 18 months to go there are positive signs that the UK is beginning to wake up to its responsibilities.



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