Increased consumer electronics costs a small price to pay

In a recent submission to a draft product stewardship scheme for small electrical and electronic equipment and solar photovoltaic (PV) systems, Sircel CEO Anthony Karam said that the increased cost to retailers and manufacturers of small electronic goods is likely to trickle down to consumers, driving up the price of many everyday household items.

“There is an increasing number of retailers and original equipment manufacturers (OEMs) set to be included as liable parties under the broader e-waste recycling scheme proposed by the federal government. The change in the scheme will increase the number of items that fall within the scheme, particularly smaller electronic items such as kettles and toasters.

“It’s likely that costs for retailers and OEMs to participate will trickle down to consumers, potentially increasing the price of small electronics by ensuring end-of-life strategies are built in from the get-go.”

Karam said the implementation of the scheme is a positive and necessary step forward for the sustainability of our planet… if it’s done right.

“It’s a move that shares the responsibility of ensuring these precious resources don’t end up in landfill. It’s a small price to pay for access to specialist recycling services for a more sustainable future,” he said.

However, there are concerns over the implementation of the scheme creating competition between recyclers to win contracts from network operators. There’s a risk this could create a ‘race to the bottom’ scenario between recyclers forced to offer the cheapest rates rather than the best service.

“Running a high-quality service at a low cost is almost mutually exclusive in the e-waste recycling sector as acquiring and running the technology, plant and equipment in a compliant and safe environment to address the problem at scale requires significant capital investment. Creating a sense of scarcity and uncertainty surrounding contracts could negatively impact the industry by stretching resources thin and impacting the service delivery,” Karam said.

He fears some network operators could control industry revenue flows by favouring some recyclers over others, creating virtual monopolies favouring lower-cost alternatives that, history shows, will ultimately fail.

“Clients who are currently accessing recycling services from specific recycling providers could essentially be cut off from that provider and have to go through the network operator for an approved contract. For example, Sircel currently works with multiple councils and large corporations with whom we have longstanding relationships. We plan to work with those clients for the foreseeable future to achieve a set of ever-improving outcomes, which we have developed in collaboration with those clients. The scheme, as proposed, could potentially jeopardise those plans.

“What one recycler might be able to offer a client might go beyond what the scheme/network operator approved recycler might be able to offer in terms of service and reporting. With the single scheme administrator body and geographical network operators managing contracts for e-waste recycling, there’s potential for an administrative bottleneck to occur that results in longer lead times and an increasing e-waste stockpile,” he said.

The Sircel submission raised several key areas for review, including:

• The role of the scheme administrator: The scheme administrator should be an independent body focused on identifying liable parties, setting the standard of reporting, auditing recyclers and providing annual reviews and recommendations to keep the industry accountable. The scheme administrator should not be setting the recycling fee as the recyclers need to be able to set this based on their unique running cost and service offerings.
• The role of network operators: If recyclers are allowed to be network operators, there must be measures in place to ensure contracts are awarded fairly across the industry. The scheme needs to ensure that contracts awarded by the network operators are done so based on best quality recycling, not the lowest price point, to encourage industry innovation and best practice.
• The definition of “recycling”: The current definition of “recycling” is not fit for purpose to mandate maximum recovery of e-waste materials. The definition needs to be redefined to hold service providers to the highest standards of recycling methods to ensure all materials are being kept out of landfill, not just the most valuable ones.
   

Karam said it’s important for the government to get this right as the scheme plays an important role in reducing electronic waste in landfill.

“In our view, we believe the scheme administrator should be a public authority that is aligned with actual policymakers, not outsourced. We are glad the government is seeking feedback as it’s critical that the scheme supports recyclers so we can properly address this rapidly growing e-waste problem,” he said.

Image credit: iStock.com/Igor-Kardasov