Negotiate recycling costs with suppliers

Suppliers will be handling the disposal of old equipment under EU recycling laws in 2006, but IT managers should prepare now by...

Companies have long been under pressure to clean up their act on recycling, but now forthcoming legislation is due to put the IT industry in the spotlight.

Under the Waste Electrical and Electronic Equipment (WEEE) Directive from the European Commission, computer producers and resellers will become responsible for the collection and disposal of all electronic waste, including computer hardware. The targets for IT recovery and recycling will be 75% and 65% respectively, although these do not have to be met until the end of 2006.

During the first quarter of 2005, producers of electronic equipment will be required to register in preparation for August 2005 when they will become responsible, along with resellers, for the take-back of electronic goods.

These directives were due to be introduced into UK law this August, but are currently going through the final consultation phase where views are being sought on how they can be implemented. This consultation will close later this month and it is expected that the directives will be made law by the end of this year.

In addition, there is a Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS) Directive, which will limit the use of certain substances within computers and their components. These restrictions from July 2006 include the use of lead, PBB and PBDE flame retardants.

Although the burden for recycling will fall primarily on suppliers, IT managers cannot afford to wash their hands of recycling IT hardware. Details of penalties for ignoring the WEEE Directive have yet to be agreed, but it is thought there could be sentences of up to two years' imprisonment if producers, resellers, or end-user companies are found to dispose of the equipment negli-gently.

The government-funded programme, Envirowise, which works with companies in the UK to help them reduce the environmental impact and minimise waste pollution from their business, has looked at the cost implications of these directives.

The costs of research and development into replacement substances and the introduction of new manufacturing techniques will have to be met. "It could cost UK industry £45m a year for meeting the WEEE Directive and £200m a year for RoHS," said Stuart Ballinger, head of cleaner design at Envirowise.

The cost of research and development together with waste treatment and recycling will mean that suppliers are likely to pass on costs to users. "We can expect to see cost increases of 1% to 4% on larger, more complex products," said Ballinger.

Until the consultation period is over, it is not clear where the funding for recycling will come from, said Meike Escherich, PC analyst at Dataquest.

"Although producers have to finance the treatment of waste, individual member states of the EU can make users partly or wholly responsible for costs. For 2004 they only needed to budget for end-of-life of PCs, but from 2005 they will need to budget for purchases that include the costs of recycling," he said.

Hewlett-Packard has been offering take-back and recycling services to its customers for 10 years, and Kirstie McIntyre, manager of the WEEE programme for HP, said that companies already using suppliers' recycling services will not be overly affected by the changes.

"In reality the new directives will make little difference to our customers. Companies have always had a duty to dispose of their waste responsibly," she said.

Fujitsu Siemens offers its customers in some countries the opportunity to dispose of waste through its recycling centre, but the firm does not yet have a recycling programme in the UK, said Hans-Georg Riegler-Rittner, head of quality management at Fujitsu Siemens.

"We are in talks with interested parties and these partnerships will be arranged to meet the dates for compliance. If any of our customers want to give back today, there are people they can contact who can arrange that," he said.

Those companies that do not dispose of their redundant computer equipment through recycling will have to start considering what they will want from their computer suppliers and how they are going to meet the WEEE Directive.

Figures from a survey commissioned by Dell have shown that nearly 33% of British businesses are throwing away old IT hardware, and only 11% of businesses felt disposing of this waste in an environmentally friendly way was important.

The release of these figures in September coincided with the launch of Dell's recycling programme and show that suppliers and the government have a long way to go in educating end-user companies. Lena Pripp, regional sustainability manager for Dell, said, "Of those responsible for disposing of these products, 92% had no idea when the WEEE Directive will come into play."

IT managers who do not recycle should be aware that these programmes offer much more than simply allowing companies to get rid of their old hardware. IBM, HP, Fujitsu Siemens and Dell provide recycling options that not only dispose of hardware in an environmentally friendly way, but also offer the opportunity for customers to reclaim some of the costs in doing so.

Remarketing, reusing, refurbishment, redistribution or value recovery - whatever the service is called - offers the possibility for old hardware to be tested and resold.

From August 2005 computer producers will only be obliged to accept products on a one-to-one basis linked to sales. Therefore if a customer has 3,000 PCs and is only looking to buy 2,500 they will be responsible for the disposal of the extra 500 computers. In practice, suppliers will accept this extra hardware, but directors will have to negotiate terms.

Companies that dispose of their computer hardware need to be aware that they will assume the liabilities of suppliers under the WEEE Directive.

Care for the environment comes at a cost, what that cost will be depends on the deal you strike with your supplier.

Target dates

  • 29 October 2004 - consultation period closes
  • End 2004 - WEEE transposed into law
  • First quarter 2005 - producers to register
  • 13 August 2005 - producers responsible for financing alongside retailer take-back
  • 1 July 2006 - RoHS substance ban effective
  • 31 December 2006 - targets to be achieved for collection and recycling.

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