What are the financial risks of ignoring WEEE?

If your company manufactures or imports electrical goods, you can no longer afford to ignore the WEEE (Waste Electrical and Electronic Equipment) Directive. Despite continued hitches and delays, the implementation of this complex piece of EU legislation is inevitable.

The link between the Directive and your bottom line may seem unclear, but the fact is that failure to plan effectively for WEEE could leave your business open to considerable financial risk – at best the unexpected costs of eleventh-hour compliance, and at worst prosecution. With the DTI recently announcing a further postponement of the legislation, EEE (electrical and electronic equipment) producers who are not prepared would be well advised to use this time to make WEEE compliance a top priority.

For many companies which produce electrical items, the WEEE and RoHS Directives represent the most significant pieces of EU legislation to date, yet many firms remain insufficiently prepared.

Because of the lead-in times required to ensure components that go into finished products are compliant, the electronics industry was gearing up for the RoHS Directive for some time. As a result, however, many companies’ plans for WEEE compliance have been put on the back burner. If you fall into this category, it is time to turn to WEEE. By taking steps now to understand your obligations you will gain the opportunity to plan effectively and thereby reduce the risk of liability while at the same time stealing a march over your less prepared competitors.

As a producer, the best way to begin assessing how the WEEE Directive will affect your business is to consider a few questions.

Are the products I sell ‘EEE’?

In order to be subject to the Directive, the electrical items you sell, whether as a manufacturer, importer or distributor, have to fall within the definition of ‘EEE’ set out in the Directive. EEE essentially means any equipment that is dependent on electricity to work properly and which falls within one or more of a broad range of categories defined by the Directive.

In most jurisdictions, only producers of finished products (as opposed to components) will take on the recycling and other obligations. However, different EU Member States may take a divergent view on this, so you will need to check the position of every Member State in which you do business.

If so, do any exemptions apply?

The WEEE Directive exempts certain categories of EEE, including EEE intended specifically for military purposes, so-called large-scale stationary industrial tools and implanted and infected medical devices. More generally, the Directive does not apply to EEE that is part of another type of equipment not subject to the Directive.

Am I a ‘producer’?

Although distributors are subject to certain requirements for taking back WEEE when selling new EEE, the bulk of obligations under the Directive fall on the ‘producer’.

Essentially, the producer is defined as either the person whose brand name appears on the product or who imports the product into the relevant jurisdiction. Importantly, in many cases the distributor will be the importer and will therefore take on producer obligations.

What are my obligations as a ‘producer’?

Although the obligation to fund the collection, treatment, recovery and disposal of WEEE is probably the Directive’s most attention-grabbing feature, producer compliance actually comprises a number of elements.

This includes producers having to register with the relevant authority of the Member States in which their EEE is placed on the market.

It also includes financing obligations which depend on whether the WEEE in question is ‘historical’ or ‘new’ (put on the market pre or post 13 August 2005), and if it is either ‘separately collected’ household WEEE or non-household WEEE.
Although the Directive only provides for the transfer of obligations to end users to the limited extent described above, some manufacturers are seeking to pass on other financing obligations contractually. If you decide to go down that route, you need to be aware that the responsibility at law for discharging the obligations will remain with you and then consider whether you are happy for the other party to discharge the obligations in your name. It is also important to consider in principle what contractual protection you will need to put in place.

Labelling

There are three labelling requirements that producers must meet. All EEE put on the market after 13 August 2005 must be marked with the crossed-out wheelie bin symbol. Producers must also mark the product so the producer is clearly identifiable and it is clear the product was put on the market after 13 August 2005. In most cases, this will be achieved by adopting the CENELEC, or equivalent, standard.

A financial guarantee

Producers must have a means through which they can guarantee they will be able to finance the management of separately collected WEEE from domestic households. Guarantees may also be required in relation to non-household WEEE. This will usually be fulfilled by joining a collective compliance scheme.

How do I meet these obligations?

Producers may opt either to go it alone, which would require the set up of their own private scheme or sign up with a compliance scheme.

The health and safety implications, need for waste licences and obtaining sufficient storage space are just some of the issues a producer will have to deal with if it opts for the DIY route.

Depending on the quantity and rate at which your products end up in the waste stream and whether you already have systems in place to treat and recycle your products when they become waste, compliance schemes could offer a convenient and cost-effective answer. Producers will be able to join one compliance scheme which can offset both B2B and B2C obligations.

The national variations in WEEE implementation mean it is essential to get specific information about the above issues for each EU jurisdiction in which you operate. Opting for a compliance scheme to meet the bulk of your obligations will cut through much of the red tape. However, you will still need to determine whether the products you sell are caught by the Directive in the first place, as well as ensuring labelling and information requirements are fulfilled.

Convoluted as it may appear, this is in fact a very brief run through the Directive. Hopefully it will enable you to focus in on the key points and allocate resources accordingly.

Original text is here