Distributing the responsibilities of WEEE

Just when channel players started to think that the Waste Electrical and Electronic Equipment (WEEE) directive could not get any more confusing, resellers are being called distributors under the regulations. Laura Hailstone takes a closer look

Under the Waste Electrical and Electronic Equipment (WEEE) directive responsibility falls onto two distinct parties’ shoulders – producers and distributors. Last week CRN looked in detail at the producer side of WEEE (CRN, 12 March) so this week we have unravelled the obligations of a distributor under the directive. Just to clarify, under WEEE, the term ‘distributor’ does not relate to the Ingram Micros and Computer 2000s of the channel, it actually relates to resellers. Confused? Read on and hopefully all will become clear.

According to the Department of Trade and Industry’s (DTI) WEEE Guidance Notes, a business is a distributor (irrespective of selling technique) for the purposes of the WEEE regulations if it is a retailer of new electrical and electronic equipment (EEE) or a wholesaler of new EEE.

Derek Morgan, head of strategy at IT equipment recycling and remarketing firm CKS Group, explained: “Anyone selling EEE onto an end-user is a distributor so VARs are classified as distributors under the regulations.”

The WEEE regulations distinguish between EEE sold to households, known as business-to-consumer (B2C) EEE, and EEE sold to businesses, known as business-to-business (B2B) EEE. Here is the good news, if resellers only sell B2B EEE then they do not have any legal obligations under the directive. Resellers that sell to consumers do have legal obligations; the main being to provide a take-back service to consumers enabling them to return their WEEE free of charge.

VARs who sell B2C can offer “in-store” take-back themselves; join the Distributor Take-back Scheme (DTS) run by Valpak Retail WEEE Services; or provide an alternative system for free take-back for householders.

The DTS will develop a network of Designated Collection Facilities (DCF) to provide distributors with an alternative to instore take-back of WEEE and be funded by the distributor community.

Membership of the DTS will initially last for the first three WEEE compliance periods (2007, 2008 and 2009), and is open to anyone with distributor obligations in the UK. The DTS has a three-tier membership structure (with one-off payment for membership until December 2009) according to sales of EEE during 2006 as follows:

Large B2C distributors with sales of EEE in 2006 greater than £1.5m together fund £8.8m, apportioned by sales (2006 figures are required);
Smaller B2C distributors with sales of EEE in 2006 between £100,000 and £1.5m (likely to be electrical specialists) pay a flat fee of £1,500;
Small B2C distributors with sales of EEE in 2006 below £100,000 pay a flat fee of £400.

Although B2B resellers do not have any legal obligations under the directive, they still have a role to play.

Terry Maguire, managing director of refurbisher and remarketer Computer Remarketing Services (CRS), said: “B2B resellers sit right between the producer and the end-user so they definitely have a role to play, but what that role is, is very vague.”

Jon Godfrey, managing director of Life Cycle Services, agreed. “The B2B obligations are very vague,” he said. “Originally B2B distributors were going to have to provide take-back services, but this has now been relaxed and resellers can actually step away from handling EEE at its end of life.”

The DTI Guidelines state that businesses purchasing new EEE to replace like-for-like EEE should arrange with the producer of the new product or the producer’s compliance scheme to collect and dispose of the old EEE. However, if businesses are discarding old EEE (purchased before 13 August 2005) without making a like-for-like purchase of new EEE they will need to finance the costs of treatment, recovery and environmentally sound disposal of WEEE themselves. For all EEE purchased after 13 August 2005, the producers of that equipment are responsible for its end of life disposal.

According to Godfrey, resellers are beginning to amend their terms and conditions to say ‘unless otherwise agreed, we’re not responsible for take-back at end of life’.

“Some resellers realise that if they do take on responsibility for end of life disposal then it’s incremental business – they can offer it as a service to business customers,” Godfrey said. “It tends to be mainly the larger ones that are willing to embrace this – the smaller VARs tend to not want to bother, which means that the correct disposal of WEEE will be left to businesses.

“We may see corporates demand that resellers deal with end of life because it will be a nightmare for a corporate to do the reporting and recording of WEEE themselves.”

Maguire pointed out that although VARs can pass on the responsibility of handling EEE at its end of life to their customers, firms could then negotiate a better price on goods for taking this on themselves so it may be more viable for a reseller to provide it as a service.

“Potentially the WEEE directive is a good thing for a firm such as ours because it should make people more aware of refurbished machines,” he said. “We’d like to work with resellers. We know about the WEEE directive, we have experience of refurbishing and putting these products on the market, but what we don’t have is the contact with the end-users which is where resellers can help us.”

Shaune Parsons, managing director of VAR Computer World Wales, told CRN: “We have a lot of tenders going on at the moment where we have to show how we’ll dispose of kit at end of life, but we’re finding it hard to get information from our vendors as to what they’re doing to comply.

“We don’t mind taking on the responsibility of disposing of old kit correctly for our customers. We’ve been offering this kind of service for the past year now, but obviously from 1 July we’ll have to make sure that the way we handle the products complies with WEEE so we might join up with a specialist such as Life Cycle Services.”

Pan-European integrator SCC has gone one step further and invested in its own WEEE treatment plant. Andy Mclay, supply services director for

the UK at SCC, said: “We’ve applied to become an authorised treatment facility. We have been doing refurbishment and recycling for the past 10 years so it is really an extension to this. The WEEE facility will be based in our 50,000 square feet facility in Birmingham.

“We have invested in a piece of technology that can break down a PC entirely so that nothing goes to waste. For everything that can’t be reused or refurbished then our four-shaft granulator will grind components down into raw materials that can be sent to refineries around the world.”

SCC is awaiting final approval from the Environment Agency to become an authorised treatment facility, but said its plant would be operational from today.

Although B2B distributors have no legal obligation under WEEE, there are things they should be aware of. From 1 July ‘distributors’ should make sure that all the vendors they buy from have a producer registration number. According to the DTI’s guidelines, distributors of EEE should make sure that their suppliers have a producer registration number to show that they are registered. If distributors import EEE from overseas and a producer has not registered for this EEE, then they will be regarded as the producer having put that EEE onto the UK market.

The guidelines also state that distributors of EEE should pass on information about which producer is responsible for each piece of EEE, so that end-users can trace who to contact to arrange disposal.

“A responsible reseller should not be buying any product if it is not covered by a producer registration number after 1 July,” Morgan said. “Also resellers have a pivotal role to play in communicating information to their customers about how they can dispose of products at the end of their lives, such as passing on producer details.”

Meanwhile, Godfrey advises that from 1 July resellers need to check that the people that are taking their WEEE are registered treatment facilities. “What’s currently happening is that most resellers know a firm who can come and take away their old equipment free of charge with no questions asked. So resellers need to check that the treatment facility they use is registered or at least going through the process of being registered.”

Despite compliance of WEEE being less than four months away, many resellers are still unaware of their responsibilities. Lee Bevan, managing director of VAR Leapfrog Computers, said: “We sell B2B and B2C and I

certainly wasn’t aware of our responsibilities as a B2C reseller. The government hasn’t told us a thing. They’re very good at sending out tax reminders, but we have not received one bit of communication regarding the WEEE directive.”

Morgan said the DTI had produced a simple fact-sheet that high-lighted both producers and distributors responsibilities, but was amazed that it was never sent out to businesses. “The fact that the DTI did not widely distribute this literature concerns me,” he added. “It is available on the DTI web site, but not everyone would think to look there.”