Electronics firms set for legal battle over recycling

Date: 21/06/01

By Laurence Frost

ELECTRONICS manufacturers are planning legal action over a move by environment ministers to make them pay for the recycling of goods whose makers have gone bankrupt or 'disappeared'.

Companies say the measures will encourage 'fly-by-night' firms to dump millions of appliances on the market to avoid the extra costs of the new recycling schemes.

The multi-billion-euro industry has asked a Brussels law firm to begin work on a legal challenge after the Environment Council earlier this month agreed its position on the forthcoming directive on waste from electric and electronic equipment (WEEE).

A challenge could take the form of a member state's request for judicial review at the European Court of Justice or a complaint to the European Court of Human Rights in Strasbourg.

Under an earlier version of the proposal which was broadly accepted by industry, firms would pay for the collection and recycling of their own goods. European producers estimate this would add €7. 5 billion to their annual costs.

But the ministers decided that the cost of recycling bankrupt brands should also be shared out among companies remaining in the market - a move which critics say will allow irresponsible firms to charge lower prices. "This sends out a signal that if you go onto a market, release products and disappear, you won't have to contribute to the recycling," said Victor Sundburg of Electrolux. "When a free-rider places a product on the market he won't have to account for those costs. "

The industry claims the measures would distort competition between well-established producers and those for whom bankruptcy is part of the business plan. "This is going to turn free-riding into a prosperous business,"

Sundberg said. Electronics producers' federation EACEM is preparing legal moves to be taken against proposals if - as seems likely - they are adopted in the final directive. "The council work is irresponsible," said Townsend Feehan, EACEM secretary-general. "It will encourage fly-by-night people who come and put 100,000 televisions on the market and then disappear. And it goes against normal principles of legal certainty - it's very bad law. "

Feehan discussed legal options earlier this week with representatives from the association of computer and high-tech manufacturers, EICTA, as well as white-goods group CECED and umbrella federation ORGALIME.

The sector is encouraged by the findings of a study of the original proposal by German competition lawyer Professor Torsten Stein, which spelled out that "the 'polluter pays' principle could not justify [financial] responsibility for products from other manufacturers".

Industry lobbyists say hasty progress made in the week before the Council - with around 30 disagreements apparently resolved - reflects heavy political pressure from the Swedes, keen to chalk up one more environment "policy trophy" as the end of their Union presidency approaches.

Legal experts have also questioned the wisdom of the ministers' stance. "It sounds as if they're on very dubious ground," said competition lawyer Mike Pullen of Dibb Lupton Alsop. "It makes individual firms liable at law for an act they haven't committed. "

Pullen believes such a move away from the 'polluter pays' principle would invite a challenge at the European Court of Justice or even the European Court of Human Rights. He added: "In my opinion this sounds like something that was agreed after a very good lunch. "

Electronics manufacturers are planning legal action over a move by environment ministers to make them pay for the recycling of goods whose makers have gone bankrupt or 'disappeared'.