In a market economy such as Canada’s, the idea that competitive markets result in innovative products at less cost to consumers is generally understood. Competitive markets are also necessary to ensure innovative, environmentally effective and economically efficient recycling and Extended Producer Responsibility (EPR) programs.
Unfortunately, the planners of Ontario’s Waste Electronic and Electrical Equipment (WEEE) program have missed this point, and the plan is failing miserably from an environmental and economic perspective.
Operated by Ontario Electronic Stewardship (OES), Ontario’s WEEE program was tasked with diverting 42,000 tonnes of WEEE in its first year of operation. Approved in July 2009, it should have recovered and recycled 31,500 tonnes of WEEE by January 2010, but only managed to recover and recycle about 12,000 tonnes (or 38 per cent of the target).
To date the program has levied over $30 million in electronic stewardship fees from Ontario electronics consumers, yet the overwhelming bulk (about 80 per cent) of WEEE generated in Ontario is still hoarded, disposed of, or handled outside of the OES program (a program approved by the Ontario’s environment minister).
OES itself admits that a lot of the material it’s responsible for recovering and recycling is flowing outside of its program to markets unknown, stating, “OES Phase 1 WEEE collection tonnage is tracking substantially lower than projected in the Revised WEEE Program Plan. This is largely due to the fact that OES is actively competing for WEEE with a group of companies that have chosen not to participate in the OES program. As a result, non-participating collection organizations are handling some of the volumes that OES had anticipated would flow through the OES system…”
The question is: Who are these companies and where is the material that’s supposed to be recycled by OES-approved WEEE processors going? (And why have regulated WEEE programs if the bulk of materials flow outside of those programs to unregulated processors?)
Notwithstanding well documented program failure, OES’ continues to resist redesign of key elements of its program. As a result Waste Diversion Ontario (WDO) has filed a notice of breach-of-agreement with OES under the WEEE Program Agreement between WDO and OES. The breach notice contends that OES has failed to comply with the terms of WEEE Program Plan.
The largest WEEE processor under the Ontario WEEE program is Sims Recycling Solutions. Sims operates 39 WEEE recycling operations worldwide, including a flagship processing facility in Brampton, Ontario. It’s getting less material now than it was pre-program and has lost money for the first time in Ontario as a result of the OES program.
In an October 2009 letter to Environment Minister Gerretsen, Cindy Coutts, President of Sims Recycling Solutions Canada, states, “Under the WEEE program all WEEE collected by registered collectors is consolidated (in OES controlled consolidation centers) and then allocated to WEEE processors under a quota system. There is no way for a processor to ‘grow the business’ — any WEEE collected by a given processor on its own initiative is then allocated to its competitors by OES based on the set quotas.”
The Sims letter goes on to highlight a bizarre effect of the OES quota system, noting that “…if Sims Recycling Solutions were to organize and fund a creative collection event (say through a school board or Rotary Club) we would only receive our allocated 30 per cent of the WEEE we collect for processing despite the fact that Sims was responsible for recovering 100 per cent of this material. The other approved processors would receive the remaining 70 per cent of what Sims collected despite not being involved in the development or execution of the innovative collection event.”
Sims has put a hold on a $16 million planned investment into an innovative technology in Ontario since there’s no mechanism to ensure an acceptable return on the investment in the current climate.
Despite the failure of the current OES WEEE program, Ontario’s environment ministry and OES announced the expansion of this program to include other materials on March 30, 2010. Then, on March 31, OES quietly announced they will be reviewing their WEEE allocation system.
Hopefully the review will lead to replacement of the current anti-competitive EPR model for WEEE with a system in which any processor who meets the environment standard will be free to engage collectors and haulers to “pull in” WEEE from whatever part of the province it can.
Specifically, the WEEE program amendments should eliminate OES-controlled consolidation and quotas and offer decent incentives to collect materials and encourage competition and innovation. The system should include a rigorous environmental standard for processors, a point-of-pickup to post-processing tracking system for WEEE, and an audit and verification program to ensure ongoing proper processing of the materials.
A pretty good example of a program that does not pick winners and losers in collection, transportation and processing markets, and which harnesses competition to meet environmental objectives is Ontario’s stewardship program for scrap tires, which is the subject of our Cover Story on page 8.
Guy Crittenden is editor of this magazine. Contact Guy at email@example.com