STATES WARY OF NEPSI AGREEMENT WITHOUT H-P AND DELL

“That split is a major reason why we have not been able to come to an agreement on a system,” said Scott Cassel, dir. of Product Stewardship Institute (PSI) and representative of state govts. on NEPSI. Hybrid system will start with advanced recovery fee (ARF) on devices for collection and recycling and move into cost internalization model at later stage.

Although govt. group agreed to move ahead with hybrid system, it was concerned that companies such as Dell and H-P may not sign on to eventual agreement, Cassel said. Sizable number of govts. believe they shouldn’t sign agreement that isn’t representative of “significant market share” of producers, he said: “They felt that signing something that the outside world would perceive as an agreement for a national system would in reality have little chance of passage and in their minds it would subvert their efforts on state legislation.” Split in industry isn’t falling neatly into categories of TV and computer manufacturers, with Dell entering CE market and other computer companies considering similar plans, Cassel said. TV manufacturers may reach agreement on financing model, but members of govt. group made it clear that they were “not in this just for one of the waste streams.” Govt. segment would find it unsatisfactory to split off one group of manufacturers and not have agreement with other, he said.

To accommodate H-P and Dell, some NEPSI stakeholders have floated proposal for opt-out system in which manufactures could meet certain criteria and not be part of full financing system. Companies such as H-P and Dell, which have their own recycling infrastructure and program, prefer to take responsibility for their own products rather than impose fees on purchase price of their products. Opt-out was conceived as “way to have an equivalent system that was separate from the basic system,” Cassel said: “They wanted no fee, but the problem was that the industry itself was not in sync.” Everyone has open mind on opt- out proposal because they understand that what works for one company may not work for another, EIA Environmental Affairs Dir. Heather Bowman said. It would give manufacturers that want to do something different ability and flexibility to do so, she said, and “we are continuing to work on that.”

Cassel said govt. group was open to working with H-P and Dell on opt-out system, but there was concern whether that could be in final agreement. Some companies such as IBM didn’t want cost internalization because they had larger share of historic market -- products already in waste stream. States have no objection to H-P and Dell proposal that companies take individual responsibility for their products, Cassel said: “States prefer individual responsibility. But the only problem with what H-P wants is that it wants to take care of its own products from a consolidation point through processing.” H-P wasn’t interested in covering costs of collection and transportation, he said: “Their proposal falls short of what the government group needs.”

Both Cassel and Bowman said much work was needed for NEPSI to reach agreement by Dec., when last meeting is scheduled. “We are on an aggressive schedule to try to get to an agreement or at least a draft agreement by December and have that package together,” Bowman said. She said she was optimistic that “we will have an agreement and there will be some federal guidance from this group that will help shape what is happening in the states in the coming session.” Cassel sounded cautious: “We need a process that would drive us, and the question is whether or not we have a process in place that is strong enough to drive this group to decision.”

On Cal. e-waste legislation (SB-20) that was signed by Gov. Gray Davis (D), Cassel said besides creating leverage for other states to pass their own legislation, it would put pressure on national system. Also, given that national system is moving forward with financing model that they don’t like, companies such as H-P and Dell may prefer to work on state legislation, he said, and could support PSI models, including one that’s based more on performance than on individual responsibility. Asked whether PSI in its model legislation had addressed concerns of companies over enforcing fee on remote sales (Internet and catalog) of covered devices, he said there was nothing other than what Cal. legislation had proposed. “California believes it can enforce that and it remains to be seen if anyone challenges that.”

EIA continues to have concerns with SB-20, Bowman said, but it would work with manufacturers to help them comply and with regulators to ensure that it was implemented in way that didn’t disadvantage some manufacturers. She said EIA also wanted to make sure law was implemented in fair way across state lines and that restrictions on use of materials in products were handled in exactly in same way as in European Union. Industry also was concerned that alternatives proposed for prohibited materials weren’t as sound environmentally as was being claimed. Asked if she saw Cal. measure driving regulation in other states, Bowman said Cal. set benchmark and other states that wanted to act would do so whether or not it made sense.