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WEEE is No Small Issue for US Exporters

by Paul James, GM Environmental Compliance Solution, DHL

Reverse Logistics Magazine, Winter/Spring 2006

Despite the fact that the UK Government has postponed its long-awaited introduction of the WEEE Directive, there are still plenty of issues for exporters in the US electronics industry to address, says Paul James, of DHL's environmental compliance solutions.recovery. One or two phone calls to the same old jobbers took care of the problem – to a degree.

One important issue on most business' boardroom agendas is the raft of environmental regulations that are becoming law across Europe which include the RoHS (Restriction of certain Hazardous Substances) and WEEE (Waste Electrical and Electronic Equipment) Directives. While the two directives go hand in hand, RoHS comes into effect in July 2006, but WEEE is not likely to be enforced until early 2007 in the UK, following the UK government's recent announcement to review the draft legislation this year.

While the casual observer might think this gives companies breathing space to focus on other matters, nothing could be further from the truth. Our experience indicates that while understanding of WEEE among many corporations is generally good, many have not actually begun to prepare for the realities of WEEE. And while many non-movers on the WEEE issue claim that, without clear guidance from the authorities, developing RL solutions and compliance strategies is impossible; such an ostrich-like mentality will clearly put their organizations at a distinct competitive disadvantage when the Directive is enshrined in UK law.

Let's look at some of the issues that executives involved in the export of electrical and electronic goods to the UK can be addressing without reference to the finer, as yet unpublished details of the regulations.

Who's obligated?

Establishing whether you have an obligation as a ‘producer' of equipment under the WEEE Directive is not simple, particularly as there may be subtle difference in the transposition of the Directive between EU member states.

As a starting point, it is generally the brand owner who will be responsible for the WEEE obligation. However, there are exceptions. If the branded product is purchased outside of the UK and imported into the country by, for example, a wholesaler or retailer, they inherit the obligation on that product, even if the brand owner has operations in the UK. This means that two identically branded products can be the responsibility of different organisations.

So, if a US manufacturer of computer equipment has a plant in Holland, supplying products to subsidiaries in the UK, France and Spain, it has to pick up the relevant WEEE obligations in these three countries, as well as an obligation on any products sold in Holland. Alternatively, if the same products are imported by a wholesaler into the UK direct from Holland, then there would be no obligation to pick up on the part of the US manufacturer. Where things are less clear is when products are dual branded. If a product is imported into the UK by the brand owner for example but is then re-branded or dual-branded by a retailer, who holds the obligation?

Once a business has clarified it is a producer under WEEE in the EU, it needs to consider its exposure across all 25 member states and understand how each countries' different interpretation of the Directive could impact on their business. This is no mean feat and requires a significant amount of management time to fully understand the implications of the Directive on your corporation's export market; whether you currently have trading agreements with just one or all of the EU countries.

The WEEE Directive required the 25 EU member states to transpose its provisions into national law by 13 August 2004. Only Cyprus met this original deadline. By August 2005, all member states except for Malta and the UK had transposed at least framework regulations. Provided the fundamental aim of the Directive, to reduce the environmental impact of electrical and electronic equipment at the end of its life is achieved, member states are allowed to adopt it to suit their existing economic and environmental circumstance. This means that the interpretation of the WEEE Directive varies between the member states and a patchwork of requirements and compliance solutions is now emerging across Europe. This presents a signifiacnt challenge for businesses exporting to the EU, as corporations may need to understand and implement up to 25 different sets of regulations, which could require major investment in terms of people and systems. It is for this reason that some orgainsations, such as DHL, have set up pan-European WEEE services to help and guide customers through this legislation maze.

Advice to the obligated

Once a business has clearly defined the scope of its producer obligations under WEEE, a number of actions need to be undertaken to ensure compliance.

Firstly, the corporation needs to be registered with the relevant authority in each individual country in which it has an obligation. There is no central EU registration, although companies like DHL provide a one-stop pan-European registration service. In the case of the UK, registration will be with one or more of the UK's environmental agencies. Alternatively producers will be able to join one of the compliance schemes, established by environmental solutions providers, to discharge their obligations.

In terms of deliverables, businesses will need to provide information, broken down by the ten WEEE categories, showing the tonnage of electrical and electronic items placed on the market. Again, this type of information will need to be prepared for each EU country to which you export, in the format, style and regularity that the relevant authority has specified. And as the definition of "placed on the market" varies slightly from country to country this will not be as simple as it could have been.

This also highlights the issue of which products are included in WEEE and which are not. As the implementation of various flavours of WEEE rolls out across Europe, grey areas regarding which products are or are not covered by the Directive, or individual countries' regulations, are emerging. For example, a toy car that uses a battery to power a flashing light is likely to be excluded in the UK as the battery is not needed for the car to perform its primary purpose, whereas a battery powered remote control car is likely to fall under the regulations. How the product is sold can also affect its classification. A standard computer mouse sold separately is unlikely to be included under WEEE, however the same mouse if sold as part of a complete computer package would be included. On the other hand, a battery powered wireless mouse sold separately is likely to be fall under the scope of the regulations as it cannot perform its primary function without power.

Clearly, the area of product identification and the correct assessment of its status under WEEE is potentially complex and has the ability to create significant distraction within a business. However, the risk for potential mis-calculation of WEEE can be minimised by investing time now in the correct classification and grouping of products and ensuring that systems are up and running to cope with the Directive.

The RL challenge

While WEEE associated with business-to-consumer (B2C) transactions provides few opportunities, in the UK at least, for reverse logistics to play a positive role (as much of this waste will be collected by local municipalities) the business-to-business arena is much more attractive to RL practitioners.

B2B WEEE – covering everything from IT equipment to medical devices – provides much more scope for RL to play a part and significantly reduce compliance costs. Certainly in the UK, regulations will require redundant equipment to be recycled whether the obligation resides with the seller of new replacement equipment or the end-user of the old equipment. Either way, old electrical and electronic equipment will need to be removed and recycled in accordance with regulations. And given that businesses will no longer be able to throw old electrical equipment out with their general trash, new or additional infrastructure will be required to ensure that the practical, cost effective solutions are available to those who hold responsibility for redundant equipment.

While the final details of the WEEE Regulations in the UK are yet to be finalised, it is already clear that reverse logistics practitioners will have a central role to play in the smooth operation of the new law.

Paul James is general manager of DHL's environmental compliance solution and is based in Coventry, UK. E mail: Tel: 00 44 2476 214100.

Reverse Logistics Magazine, Winter/Spring 2006

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