Wasting away: Resellers fear proposed garbage levy will discourage sales

Like many computer users across the nation, Tim Moore doesn’t know how to get rid of old equipment he has around his house.

“”I have a couple of non-functioning monitors and I don’t know what to do with them,”” he admits. “”I would guess it goes into landfill.””

This is ironic, because Moore

is chairman of Waste Diversion Ontario (WDO), a new agency charged with helping industry come up with plans for diverting waste away from the province’s garbage dumps.

But WDO’s first priority, as ordered by the government, is dealing with the ever-growing mountain of paper and cardboard packaging waste. Then it will turn attention to the safe recycling or disposal of used lubricating oil and vehicle tires.

Moore figures it will be another two years before he asks the information technology industry to come up with a plan for the collection and safe disposal of unwanted monitors, servers, workstations, laptops, routers and other gear filled with potentially toxic materials.

Meanwhile, the growing problem of discarded electronics, which have potentially toxic metals like mercury, lead and cadmium, is giving the industry a bad name. Last October, for example, a CBC-TV program highlighted a dingy street in China filled with circuit boards, some with Canadian labels, as proof that less-developed nations are being used as dumps. Particularly worrisome are monitors, whose cathode ray tubes include lead oxide that can dissolve into the ground.

A report for Environment Canada estimates that in 2005 some 67,000 tonnes of IT equipment waste will be disposed of — roughly one-third of that will be monitors.

While some jurisdictions are in the middle of studies, others, such as Manitoba and the Information Technology Association of Canada (ITAC) aren’t waiting. They’re suggesting the creation of so-called stewardship plans led by industry soon — in Manitoba’s case, by the fall. But resellers and retailers worry these initiatives may mean extra fees, which will translate into lower margins and lower sales.

Manitoba is expected to announce this month it is going ahead with regulations forbidding manufacturers and retailers to sell products with hazardous materials in 11 categories — including consumer electrical and electronic equipment — unless they have a disposal management plan to keep them out of dumps.

The hope is to begin implementing stewardship plans run and paid for by industry this fall, says Rod McCormick, a policy analyst with the province’s conservation ministry.

Hoping to head off governments before something not to industry’s liking is imposed, ITAC has come up with its own solution. By the time you read this an ITAC-sponsored organization called Electronics Products Stewardship Canada will have been incorporated, with a goal of giving birth in nine months to a national, industry-run action plan for collecting and safely getting rid of that unwanted beige box on your desk.

Backed by 15 major vendors — including the Canadian divisions of Hewlett-Packard, IBM, Sony, Dell, Apple and Epson — the organization’s tentative plan is to have manufacturers levy a waste handling fee on every product they sell, which will be passed on through the channel to distributors, resellers and the purchaser. If sold direct, the manufacturer would collect the fee.

The monies collected would be remitted to a national not-for-profit organization run by industry, which would then forward it to approved waste recovery and recycling agents in every province who would actually do the dirty work.

The fee would be a visible, extra item on invoices so all buyers across the country see everyone has to pay, and pay the same levy.

“”By doing it that way we have standard pricing across the country for each major category of electronics,”” explains Dave Betts, the organization’s president. “”We can standardize reporting, we can standardize performance targets, terms and conditions of disposal, but we leave the maximum amount of flexibility to the provinces.

“”And, to be fair and honest, it allows us to cap the amount of money we’re providing the provinces and municipalities because, of course, we can’t be an open chequebook.””

While promising there will be months of consultation with governments, resellers and retailers before the final plan is released, the outline was met with skepticism by VARs interviewed by CDN.

“”I guarantee you if they leave it at the reseller level you will get VARs that will put it up front, there will be VARs that will bury it,”” says Paul Furtado, vice-president of Audcomp Computer Systems of Hamilton, Ont. “”There will be no common ground for how it’s deployed. It won’t let people compare apples to apples.””

“”Any additional cost to our margins is not a good thing,”” says Patrick Power, managing partner of OAM Computer Group in Toronto, “”especially if it has to be passed on to the customer.”” He’d rather use tax incentives to encourage those who have the responsibility for computer equipment — be they buyers or computer leasing companies — to properly dispose of it.

The complaints will be faced when his organization consults the channel, promises Betts. But, he adds, for an industry-funded program to work, buyers across Canada have to participate. To make sure everyone thinks it’s fair thesame levy has to be on every sales slip.

In the meantime, some manufacturers are acting on their own. In October, NEC-Mitsubishi Electronics Display of America announced a North American-wide trade-in program for companies buying its monitors. Called Total Trade, NEC-Mitsubishi looks after picking up and shipping old monitors to recycling or refurbishing plants in the U.S. Last summer Hewlett-Packard extended its U.S. take-back equipment program here.

However, Ottawa is considering imposing restrictions on the export of hazardous goods, which the industry doesn’t want.

This year, garbage will be on the minds of resellers in more ways than one.

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@] soloreporter.com

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