REPIC, which is backed by many household name manufacturers, representing 52% of the market, says the WEEE regime, now in its second year, causes serious injustice to some, whilst allowing others, who “over-collect” waste, to profit handsomely.
REPIC says it has been left in an “invidious position” and in danger of Government enforcement action by “over-collection on a massive scale” by some recycling operators so that there are simply not enough obsolete and broken electrical and electronic goods to go round.
In a vital test case for the industry which began on Tuesday (see letsrecycle.com story), REPIC, a not-for-profit producer compliance scheme (PCS) set up by leading electrical and electronic goods producers, claims that there are serious “systemic” flaws in the regulatory regime, leading to widespread unfairness.
To avoid enforcement action, REPIC says it is being forced to pay “ransom” money to other PCS's it says are engaged in large-scale “over-collection” of redundant goods, in return for “evidence notes” proving to the Government that its clean up obligations have been met.
REPIC – which says the unfairness in the system could be quickly remedied by the introduction of a price regulatory scheme, or “price cap” – is asking Mr Justice Wyn Williams to intervene in the dispute, but the Government says the company's complaints are simply “unarguable”.
Yesterday, Mr Elvin told the judge that the regulations had been drafted in lawful compliance with the EU WEEE Directive and were designed to give producers, distributors, local authorities and recyclers “freedom to choose” how they comply with their obligations.
The aim, he said, was to “avoid disrupting, so far as possible, existing waste collection and disposal arrangements” for local authorities, retailers, producers and charitable or voluntary organisations involved in collecting WEEE.
Enforcement
Describing REPIC's court challenge as “pointless”, the QC said the Department of Business and the Environment Agency are carefully monitoring the implementation of the regulations and properly considering the possibility of taking enforcement action against those who do not comply.
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.
Turning to REPIC's complaints about evidence notes, the barrister 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.”
Attacking REPIC's financial losses in the evidence note market as “to a large extent self-inflicted”, Mr Elvin told the judge: “This is a market based scheme and that is a perfectly permissable policy approach.”
He added that, with the weight of so many household name manufacturers behind it, REPIC has more than enough “wherewithal and clout” to set up its own scheme collecting WEEE directly from householders, but had not done so.
Instead, he claimed, the company had “set its mind on getting its own way”.
Collection scheme
REPIC, he said, had “shut its mind” to the possibility of setting up its own household collection scheme or reaching arrangements with third parties – including local authorities – so that it can itself collect the amount of WEEE required by the regulations.
Mr Elvin also alleged that REPIC “wants control of physical waste”, particularly large household appliances, which can have substantial scrap value.
Of REPIC's failure to set up its own door-to-door collection scheme, the QC said: “REPIC has largely avoided the issue of why it has not attempted to utilise this approach to meet its obligations if, as it contends, to do otherwise would give rise to a ransom situation.
“Given that it is a scheme which comprises a significant number of major producers, it is difficult to understand why it has not made its own system to take back WEEE from private households.
“That would have the potential of both ensuring that REPIC collected sufficient WEEE and reduced the amount available for those over-collecting, as it complains”.
The QC added: “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”.
It would be inappropriate for the court to intervene before market forces have been given a reasonable period in which to settle down
David Elvin QC
Mr Elvin said the Government accepts that “significant over-collection of WEEE is not consistent with the proper operation of the regulations”.
However, he insisted that “some degree” of trading in evidence notes is “lawful and reasonable in the light of the primary objective of securing the financing from producers of the payment of the costs of collection, treatment etc.”
The QC said the Government's approach to enforcement for non-compliance – both by over- and under-collectors – had been “fair and consistent” and a final decision has yet to be made on whether any enforcement action will be taken in respect of the 2008 compliance period.
He added: “The defendants agree that significant over-collection of WEEE is not consistent with the regulations. Nevertheless, given the novelty of the WEEE system and the need for the market to establish itself, the defendants maintain that a period of adjustment is necessary and continuing.
“It would be inappropriate for the court to intervene before market forces have been given a reasonable period in which to settle down.”
Quota
Although Mr Elvin accepted that there is a “finite” amount of WEEE that can be collected, he said that, despite the success of the regulations, there should still be enough WEEE for REPIC itself to collect in order to reach its quota.
And he said that, just because some operators are “over-collecting”, that does not mean that REPIC has no choice but to pay for evidence notes.
REPIC's complaints of “serious prejudice” and “inherent unfairness” in the system were, said Mr Elvin, “not supported by the facts”.
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