Can WEEE Cope? How to Turn a Problem into an Opportunity

by Paul James, DHL

Reverse Logistics Magazine, May/June 2007

Any brand owners and importers of electrical equipment obligated by the new WEEE regulations have officially missed the boat if they have not yet joined an approved compliance scheme. Paul James, head of WEEE services at DHL takes a look at some of the main issues facing companies and says that it’s not too late to turn a problem into a business opportunity.

The seriousness of fulfilling your obligations under the WEEE regulations cannot be underestimated. As a pan-European piece of legislation, the Waste Electrical and Electronic Equipment Directive is a cornerstone of the EU’s approach to environmental responsibility.

“Hence, the new legislation demanded that obligated WEEE producers should have registered with a compliance scheme by 15 March, with full compliance coming in by July 2007. Certainly, the Environment Agency and the DTI are initially likely to use a light touch when it comes to ‘bedding down’ the WEEE regulations, but be warned, there are sharp teeth behind the wan smile of the agencies tasked with the smooth implementation of the legislation.

“Research from DHL, supported by figures from the Environment Agency, suggests that as few as 30% of businesses affected by the WEEE Directive actually met the deadline of 15 March, when all obligated companies should be registered with a Producer Compliance Scheme.

“Clearly, awareness levels of the new legislation are “depressingly low,” especially among small and medium sized businesses, with up to a quarter of affected companies not even being aware of the new regime.

“Before launching our own publicity campaign to highlight the WEEE legislation, we undertook research among smaller businesses in the UK. We were shocked by the low levels of awareness and understanding about this important new law that was introduced in the UK in January this year.

“Using independent agencies to undertake research into current awareness levels of the new law, we found that while most larger retailers, electrical equipment manufacturers and importers were generally well aware of the issue and progressing towards compliance, many small and medium sized importers and manufacturers of branded goods were largely in the dark over the WEEE regulations. Nearly 20% of companies we spoke to either didn’t know if they needed to register with a compliance scheme or admitted that they would miss the deadline.”

“While many larger brand owners and importers are working towards compliance, many businesses run the risk of being left behind or facing fines simply through ignorance. If these businesses do not act now, they could find themselves at a competitive disadvantage when the legislation comes fully into force and risk heavy recycling bills, or even prosecution, for non-compliance.

“Under the legislation, all retailers of electrical goods will be required to provide a free ‘take-back’ service to non-business customers who purchase a new electrical product. The customer would either bring their old product to the store when they buy a like item or, in the case of deliveries, the retailer may be expected to collect the old appliance from the customer’s house. The retailer will be responsible for covering this cost as well as delivering the WEEE to a designated collection point, the next stage in the logistical chain, to be recycled in accordance with the new regulations. Alternatively, retailers can contribute towards the funding of local authority collection infrastructure to which they can then direct their customers.

“Companies who manufacture or ‘produce’ electrical or electronic products will be required to meet the collection costs of WEEE from local authority sites as well as the treatment, recovery and environmentally sound disposal of it in accordance with the regulations. This involves correctly documenting the type of WEEE, storing and handling it correctly, contracting and managing appropriate recyclers and providing an auditable trail to the Environment Agency to prove that the old products have been recycled in accordance with the regulations.

“For those businesses that have not yet joined up, electing a compliance scheme that can be relied upon to discharge your company’s legal obligation is not a simple job and deserves serious consideration.

“Similarly, choosing a compliance scheme based purely on its ability to fill in forms and quote possible WEEE costs is unlikely to provide a wholly satisfying solution for most companies. A quality scheme should be able to offer much more strategic level advice, helping your business to understand more of the bigger issues surrounding the new legislation, particularly the potential impact on customers. Taking a pan-European view of the issue could also, for example, enable many larger businesses to take full advantage of economies of scale and international experience.

Brand values

“Businesses and their compliance scheme could get a rude awakening once they begin to appreciate that the WEEE regulations will oblige them to interact with that most unpredictable of creatures; the general public.

“While offloading your WEEE responsibilities to a third party certainly takes away a lot of the pain, the wrong choice of partner could cause havoc with your hard-earned reputation.

“Remember, the fulfilling of the WEEE regulations will mean that the supply chain needs to work in both directions and far more customer interaction is likely to occur than is currently the case. You need to make sure that your compliance scheme understands your brand values – otherwise you might find a discrepancy between your idea of ‘quality aftersales service’ and theirs.

In short, it would be wise to appoint a compliance scheme with a strong reputation of its own to protect before entrusting it with yours.

Logistics costs

“Relatively little has been written about the logistics element of WEEE regulations, which most industry experts predict will account for around 60% of the total cost of compliance.

“While a track record in the waste sector is an obvious prerequisite for any potential WEEE partner, proven capabilities and experience in the logistical challenges of the new legislation will be equally important. Make sure you ask your prospective compliance scheme about its previous experience of WEEE in other EU states and its transport capabilities in the UK. Has it previous experience of collecting waste electrical equipment or returned goods, how will it minimise costs and environmental impacts, can it ensure adherence to waste and transport legislations and does it understand how to maximise value recovery?

Global WEEE experience

“Being able to join the dots when it comes to WEEE is another important capability that a good compliance scheme should be able to offer. For any business operating in more than one EU country, being able to handle collection and recycling on a pan-European basis will bring benefits of sharing best practice and achieving economies of scale for customers.

“Also, a good working knowledge of the practical implementation of WEEE across Europe – which differs from country to country - will be a major issues for to those businesses operating across borders.

Money talks

“Few people realise that compliance schemes, like businesses, that go belly up have no legal obligations towards their members should they fold. So, once you’ve paid you’re membership fee – which might tie you in for more than one compliance period – you’re taking a gamble that your chosen scheme will be around for at least that period. With the large number of schemes having applied for EA approval, it’s a fair bet that some will fall by the wayside as the WEEE market matures.

“Without sounding over-dramatic, it is worth considering the financial stability of any prospective schemes before handing over any monies.

“Undoubtedly, the WEEE regulations form an important part of the UK’s new legislative landscape. Choosing the right compliance scheme should not be a case of sticking a pin in the donkey and hoping for the best. It should be about forming a long-term partnership with a service provider that really understands your business and how the WEEE regulations will affect relations with your customers.

“WEEE gives good businesses another opportunity to turn a negative into a positive. The right choice of compliance scheme is a central part of this decision making process. Getting it right takes time, care and a lot of management input. Getting it wrong could take just minutes, but cost years to repair.”

Paul James is general manager of DHL’s environmental compliance solutions and is based in Coventry, UK. DHL is the global market leader of the international express and logistics industry, specializing in providing innovative and customized solutions from a single source.

Reverse Logistics Magazine, May/June 2007