Plymouth City Council has been fined £8,000 for allowing unauthorised firms to remove and sell unwanted computers from its waste plants.
The council breached the Waste Electrical and Electronic Equipment Directive (WEEE) by letting firms take computers and other electronic items without checking that they were bona fide recyclers.
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The Environment Agency took the council to court where it was also told to pay £3,742 in costs.
The agency is trying to stop councils and companies throwing their IT equipment away without checking where it's going. The technology can end up dumped in developing countries where it causes health and environmental risks.
Charity Computer Aid UK takes unwanted IT, refurbishes it and sends it to developing countries for use in schools and community projects.
Anja ffrench, director of communications at Computer Aid, said, "We are pleased to see that the Environment Agency is moving to prosecute and fine organisations that do not comply with the WEEE Directive.
"This, however, highlights the continuing lack of knowledge and awareness of UK organisations who still do not know how to dispose of e-waste responsibly.
"Their ignorance also undermines the trust placed in local authorities by the businesses that send them electronic waste for disposal by potentially putting them at risk of having their valuable personal data ending up on a dump in Nigeria or Ghana.
"E-waste cowboys continue to operate, posing as legitimate reuse and recycling organisations, enticing unwitting businesses to use them for the disposal of their electrical equipment."