High Court backs Agency and BERR in WEEE case

In a vital test case for the industry, the Department of Business, Enterprise and Regulatory Reform faced REPIC's claims that there are serious “systemic” flaws in the regulatory regime allowing some recycling operators to profit at the expense of others. However, top judge, Mr Justice Wyn Williams, today dismissed the company's judicial review challenge and cleared the Department of failing to lawfully transpose the European “WEEE Directive” into domestic law. But the ruling shows how from 2010 the Environment Agency, a defendant in the case, expects “viable” collection plans from schemes to avoid intentional over and under collection.

The judge also ruled the system of “evidence notes” used by some producer compliance schemes is not outlawed by any “express provision” in the regulations, nor does the practice “necessarily infringe” the provisions of the WEEE Directive. And the judge also refused to order the Department to take “enforcement action” against REPIC rivals, Electrolink Recycling Ltd and Werc Ltd, trading as City Compliance Scheme.  

REPIC Ltd, a not-for-profit producer compliance scheme (PCS) formed by leading electrical and electonic goods producers, says there are simply not enough derelict fridges and computers to go round and, as a result, it is being unfairly threatened with Government enforcement action. To escape that threat, the company argued in its submission that it has been forced to pay “ransom” money to other PCS's it said are engaged in large-scale “over-collection” of redundant goods, in return for “evidence notes” proving to the Government that it's clean up obligations have been met.  

Injustice

Claiming it was suffering a “real injustice”, REPIC had asked the judge to intervene in the dispute and hopefully order the Government to introduce a price regulatory scheme – or “price cap” – that the company says would instantaneously solve the problem.  

The court heard “enforcement authorities” – the Department for Business, the Environment Agency and the Scottish Environment Protection Agency – agree that “significant over-collection” of WEEE by PCSs amounts to a breach of the regulations. This, however, was disputed by some PCSs – including Electrolink Recycling Ltd and Wercs Ltd, trading as City Compliance Scheme (CCS) – who argued that collection of more waste than the minimum required is lawful and “perfectly compatible” with the regulations.  

David Elvin QC, for the Department, told the judge the regulations had been drafted in lawful compliance with the WEEE Directive and were designed to give producers, distributors, local authorities and recyclers “freedom to choose” how they comply with their obligations. He added that regulators are carefully monitoring the implementation of the regulations and properly considering the possibility of taking enforcement action against those who do not comply.  

Bedding down

Mr Elvin said that a bedding down process was inevitable in the early days of the scheme and, on the principle that all operators should be treated equally, no enforcement action had yet been taken against either under-collectors, or over-collectors, of WEEE. He added that the objective of the regulations is to ensure that collection and environmentally acceptable disposal of WEEE is “financed” by producers and, so far, the scheme had been very successful, exceeding the requirements of the EU directive.  

Whilst accepting that large-scale over-collection of WEEE may not be compatible with the regulations, the QC said: “The trading of evidence notes does not undermine the purpose of securing the appropriate collection of WEEE and its subsequent treatment. The trading of notes in fact ensures that, where there has been non-compliance with the obligation to collect, there is nonetheless compliance with the obligation in the producers to finance an amount equivalent to the WEEE for which they are responsible.  

Trading

“Trading in evidence notes is a market mechanism and ensures, through the market, that there is such compliance with the producers' obligations to finance WEEE. It is not inconsistent with the terms or purpose of the WEEE directive that the cost of financing the collection and disposal of WEEE should be determined by market forces. The market in trading evidence notes is a new one and is likely to settle over a number of years”.  

Mr Justice Wyn Williams concluded today: “There is no express provision within the regulations which prevents a producer compliance scheme from purchasing evidence notes; indeed producer compliance schemes are permitted to purchase such notes from the Department.  

“I do not think that the sale and purchase of evidence notes necessarily infringes the provisions of the WEEE Directive.” He added: “I conclude that the Directive has been lawfully transposed into domestic law by the regulations.” Also refusing to order enforcement action to be taken against REPIC's two rivals, the judge said: “I have reached the clear conclusion that the enforcement authorities…have not acted unlawfully under domestic law in failing to take enforcement action over and above that which they have taken to date.”

2010

Now, compliance schemes look set to have to ensure they have viable compliance plans for 2010 which means both Repic and Electrolink having to look closely at their proposals. The court ruling notes how the Environment Agency has in its correspondence given to the Judge that “its tone…leaves no doubt it consider that intentional over-collecting of WEEE (or intentional under-collecting of WEEE) to be in conflict with paragraph 4 of part 4 of Schedule 7.