In July, Massachusetts became the most recent state to pass legislation to reduce emissions from mercury-containing products. The most stringent law yet enacted, Massachusetts' “An Act Relative to Mercury Management” followed legislation enacted by Maine, Connecticut, Rhode Island and Vermont.
Among other mandates, the bill requires manufacturers selling mercury-containing light bulbs to educate the public about mercury content and proper disposal of fluorescent light bulbs and set goals for recycling rates for mercury-containing light bulbs. Seventy percent of mercury-containing light bulbs should be recycled by 2011. If those rates are not reached, the law requires manufacturers to provide grants to municipalities to set up collection programs for mercury-containing bulbs.
The Massachusetts law also requires automobile manufacturers to achieve targeted capture rates for mercury-containing switches (primarily used in trunk and hood lights). If those targets are not reached, manufacturers must pay a $3 per switch bounty to recyclers to increase their incentive to remove the switches.
Other states are also following suit with similar mercury phase-out laws.
Meanwhile, a California bill to amend its Electronic Waste Recycling Act of 2003 died in Senate committee this summer. The existing law prohibits an electronic device from being sold in California (effective Jan. 1, 2007) if the device is prohibited from being sold in the European Union (EU) due to the presence of certain heavy metals. The amended law would have more clearly defined “electronic device” and established a process by which manufacturers and distributors of electronic devices could seek exemption or time extension from the sales prohibitions.
Referred to by some U.S. industry observers as “European look-alike” bills, both the New England and California legislation was largely based on European models. In February 2003, the EU promulgated two laws binding all 25 of its member nations: the Directive on Waste Electrical and Electronic Equipment (WEEE) and the Directive on Reduction of Hazardous Substances (RoHS).
The two directives essentially govern the life cycle of electrical and electronic equipment and its components, delegating to industry what has been called a “cradle-to-grave product stewardship.” Several gray areas exist in the European legislation, including what products fall under its scope, how take-back costs for recycling of products should be charged and whose responsibility this is. Whatever the variables, failure to comply carries stiff financial penalties, and European wholesalers have been legitimately concerned as to what their liability may be.
Stephen Greene of Howland Greene, Lowell, Mass, which specializes in environmental issues, explained why and how the European directives could impact the United States' market.
“In 2002, the EU put into effect its End of Life Vehicle (ELV) Directive,” Greene said. “It controls the content of some half dozen metals used in automotive parts, with very strict parameters. The auto supply chain is tighter and more demanding than in most industries, and today wherever an auto part is made globally it is compliant with the ELV Directive, even though Europe buys only 40 percent of the auto parts manufactured worldwide. Nobody wants to — or can afford to — run dual production lines.
“This is a prime example of how European directives can and will impact the global supply chain and individual national markets; and this is already beginning to happen here with the WEEE and RoHS Directives.”
About 30 percent of the members of the European Parliament represent national “Green Parties,” which are well organized in promoting their environmental agenda, and will continue to do so.
“This is a high priority issue for the U.S. electrical industry,” said Mark Kohorst, senior manager of environment, health and safety at the National Electrical Manufacturers Association (NEMA), Rosslyn, Va. “Our members have seen what has occurred in Europe and want it understood that the industry can contribute a great deal on the waste disposal and hazardous substance regulation issues here, and we should be consulted.”
In July of this year, in what it entitled “A Call to Action,” NEMA's board of governors approved an industry-wide commitment to reducing hazardous substances in NEMA products, pledging “to assist lawmakers at all levels to develop reasonable, attainable regulations to govern the content and life-cycle management of electrical products.”
European slip-ups
Observers in Europe generally agree that the present confusion in Europe regarding the WEEE and RoHS regulations is a result of missteps by both the EU lawmakers and the industry itself.
On the one hand, meetings held in Brussels were too often closed to many stakeholders in the supply chain and limited to participation by EU staff and the Technical Adaptation Committee (TAC) representatives from member countries.
On the other hand, the industry had ample time to make itself heard during the discussion and drafting period from 1997 to 2003, but the opportunity for organized and forceful lobbying was, to a large extent, overlooked and missed.
What resulted was a WEEE directive so loosely drafted that it provides considerable leeway for interpretation by the member nations as they adapt the legislation, resulting in conflicting and overlapping requirements in different countries.
Some manufacturers bundle anticipated waste disposal costs into the base price; others treat it as a separate surcharge or “visible fee.” It varies by country and company.
It also generates cost accounting problems because distributors have to integrate these disparate procedures into their internal management systems.
“Far too much attention was paid to ideological and bureaucratic issues like individual versus collective responsibility, what the interaction with the RoHS directive might be, how fees should be structured, and timetables for compliance,” said one European observer. “But there was little focus on the essential necessity of nailing the directives down tightly so that there would be a single, clearly understandable, and practically efficient European system for a global market.”
Perhaps the most perplexing aspect of the EU directives for European electrical distributors is the term “producer,” which is used with great frequency but never actually defined. It can apply to manufacturers, importers, or distributors, depending on who is considered in the eyes of the law to be the entity that “put the product on the market.” The role of the distributor in the supply chain was never discussed until after the fact when the EU began to wonder exactly who they were going to prosecute if a product failed to comply.
“It's critical in the formulation of any regulation to get the definitions right,” said Pamela Horner, director of industry relations and standards at Sylvania, Danvers, Mass.
The Massachusetts law defines “manufacturer” a bit more clearly than the European directive. “If an importer, retailer, or distributor goes to an overseas manufacturer that does not have a presence here to obtain a given product, then the U.S. company bringing the product in is considered to be the manufacturer,” said Horner.
“Distributors should be aware what their responsibility is,” said Kohorst at NEMA. “If various states here take the European approach, then distributors could be on the hook if they are the party identified as ‘putting the product on the market.’”
Harmonization
The consensus within the European industry is that there is no room for country-by-country flexibility (i.e., for the United States, state-by-state) and free-form interpretation of such a globally pervasive regulatory situation.
Orgalime, the Brussels-based alliance of trade associations representing 33 European electrical, electronic, mechanical and metalworking federations in 23 countries, has been tracking this issue for a decade. The group's judgment, based on the evolution of the two directives, is that universally accepted harmonization of definitions, scope of products covered, and terms of compliance have to be at the core of finding any equitable and workable solution to hazardous substance and waste disposal problems.
“If there is to be legislation in this area, it only makes sense if consumer, law-maker, environmentalist, manufacturer and distributor work toward harmonized regulation,” said Orgalime's Secretary General Adrian Harris.
Europe has seen that individual national interpretations and variations don't work. Different recycling fees have resulted in cross-border purchasing, and distributors are faced with either adjusting prices downward or losing business.
“The ideal situation here would be a uniform federal approach,” said Horner of Sylvania. “Otherwise, we could end up with the same patchwork situation that Europe has.”
Getting it done
In its July environmental statement, NEMA said it supports the concept of federal “preemptive” legislation aimed at harmonizing requirements throughout the 50 states.
“National legislation is the solution, but the challenge is for the whole industry to work together, sooner rather than later, to get this done,” said consultant Greene. “When the environmental community senses they can solve a problem, they turn up the political heat. The industry might not like the results.”
Orgalime's Harris notes that if Europe had to do it all over again, it would be essential to reconcile environmental objectives early on with the realities of the marketplace. “Give industry the environmental policy objectives to be reached, and then let industry conduct business in a manner that allows them to achieve these aims,” he said.
Sylvania's Horner believes a basic organizational structure is key to any effort to participate in the legislative process on this issue. “Fifty different approaches would be a nightmare,” she said. “And what about the impact on manufacturer regional warehouses and wholesaler distribution centers?
“Manufacturers should work through NEMA to establish a consensus, and distributors should communicate with their major suppliers as to what they need to know in terms of their own day-to-day business, and what they can do to help in the lobbying effort,” said Horner.
Lobbying will most probably be complicated. Sources agree that there is no federal bill on the horizon in Washington and no white knight in either house interested in this issue as a hobbyhorse. For the near term, it will fall to industry to work on the state level. If one state settles on a reasoned, practical and doable approach, then the industry should try to get other states to adopt this model in order to achieve a growing critical mass of harmonization or uniformity of regulations. This will require effective communication networking on the part of the industry.
One European source who had reviewed the July NEMA position paper made a wry comment: “The U.S. seems to be saying that they'd rather get it right the first time around, given the EU experience — but if that's the case, they have to move quickly.”
John Paul Quinn is a free-lance writer and international communications consultant based in Stamford, Conn. He can be reached at (203) 323-9850 or via e-mail at [email protected].
Reflections From Both Sides of the Pond
At the annual meeting of the 14-nation European Union of Electrical Wholesalers (EUEW) in Malta this past June, the association's president, Markku Nihti of the Hagemeyer Group operations in Finland, concluded his state of the industry remarks this way:
“Over the past few years, the most challenging task in the majority of our member countries has been dealing with the WEEE (Waste Electrical and Electronic Equipment) Directive. Unfortunately, in many countries, implementation will mean extra costs for distributors that will not be fairly compensated.
“I hope we have all learned from this experience that in the future we must be more alert and become involved in the legislative process at a much earlier stage.”
The following month, NEMA president Evan Gaddis made this observation:
“We are running out of time to make our voices heard on the RoHS and WEEE issues, since a growing number of proposed restrictions in various states will soon have us reacting to regulatory mandates that may or may not have taken into account industry guidance. We either have to lead or get out of the way and suffer the consequences.”