The industry under threat! - Part II

Government Decision 1037/2010 transposing Directive 2002/96/CE into national legislation

June 2011 - From the Print Edition

The Ministry of Environment elaborated and promoted a draft decision, adopted by the Romanian Government as GD 1037/2010, regarding waste electrical and electronic equipment (WEEE), meant to improve transposition of the relevant European Directive into national legislation. However, the final result is significantly worse than the law it replaces, since it sistematically ignores the current European models and practices, as well as the proposals brought forward by the main actors involved in the management of electrical waste, and it even exposes Romania to an ”infringement” procedure in the field.

D. The new GD eliminated sanctions for producers that are not registered with the National Environment Protection Agency (ANPM), and this fact will favor the “free riding” phenomenon especially for small producers that supply equipments on a business to business manner. This will encourage unfair competition through the fact that producers that will not want to take on legal responsabilities will be able to do this without the menace of a sanction, thus “avoiding” supplementary costs associated to the management of WEEE.

Art. 13 Paragraph 1, Letter E of the GD 448/2005 contained significant sanctions, all the way to suspending the activity of producers that did not register within the producers’ directory from ANPM and that did not communicate the registration number to the retail networks they had contracts with. This obligation, explicitly provided by Art. 12 Paragraph 1 of the GD 2002/96/CE has as main purpose surveilling the way in which producers comply with their legal obligations.
GD 1037/2010 eliminated sanctions for not complying registration obligations. Thus, an important instrument at the disposal of control authorities has dissapeared, through which could be imposed applying the legislative deed. Registering producers, although theoretically mandatory, becomes rather voluntary because of lack of sanctions. It leads the way to significantly accentuating ”free riding” phenomenon. Among the effects can be included:
Encouraging unfair competition – precisely the registration process asks producers to prove they are according to specific legislation, that implies the assumption of the costs for WEEE management. By evoiding registration, currently not sanctioned,will allow avoiding taking on legal responsabilities and in the same time decreasing costs obtained for not complying with regulations.
The lack of financial resources for financing „non-historical” WEEE:
• if for EEE introduced on the market until January 1st 2007 („historical” WEEE) the legislation stipulated that is the obligation of existing producers to provide their management, for the other equipments put on the market after this date the obligation becomes individual, the producers have to provide a guarantee in this respect (a blocked banking account, a recycling insurance, membership to a collective organization);
• in the case of WEEE coming from equipments put on the market by unregistered producers, these resources do not exist, so a question arises: who will finance the management operations?;
• increase in the degree of imprecision in the official data referring to the actual quantities put on the market;
• difficulties in surveilling producers in meeting their obligations.

E. Art. 5 Paragraph 1 Letter C of the GD1037/2010 stipulates in general terms that municipalities are compelled to turn in collected WEEE to producers or collective organizations. However, there is no mechanism to make this happen and there is no legal provision referring to creating one in the future.

Apparently correct, the stipulation from Art. 5 Paragraph 1 Letter C of the GD 1037/2010, according to which local authorities should deliver collected WEEE to producers and collective organizations, will not be applicable due to the lack of a coordination and compensation mechanism.
This type of mechanism is specific to EU member states where there are several collective associations that manage the same waste categories.
The main functions of such an organism are:
• Periodic inventory of WEEE supplies from municipal collection centers;
• Determination, based on the marketshare established by ANPM’s directory, of the obligations for WEEE take-back from municipal collection centers of each collective organization or individual producer, by using geographical and temporal distribution models to ensure a non-discriminatory treatment for the participants in the process;
• Transmitting apportionments as take-back dispositions of WEEE from municipal collection centers;
• Operating possible compensations among participants;
• Reporting and monitoring the quantities towards ANPM;
• Managing financial guarantees.

Unfortunately, GD 1037/2010 does not contain any element that could indicate such an organism will be established in the near future.
Currently, there is no requirement or minimum performance criterion for the local authorities regarding collected quantities. Reducing to the absurd, local authorities can organize even a formal collection system with 0 performance in order to accomplish their obligations from GD 1037/2010 and avoid sanctions. This is another element that indicates the intention of the ones that elaborated GD 1037/2010 to transfer the entire responsability for the 4 kg/capita towards to registered producers, under the threat of suspending their activity for not accomplishing their duty, indirectly exempting local authorities from the obligations they have.

F. Restrictions imposed to colective associations regarding the use of funds creates uncertainty and affects the property rights guaranteed and protected by the Constitution.

Art. 8 Paragraph 12 of GD 1037/2010 stipulates: „Money collected by collective organizations from producers, representing costs mentioned in Paragraph(10), will be used exclusively for financing operations of collecting, handling, transport, treatment, capitalization and non-poluting disposal of WEEE from private households and for financing education and information campaigns for consumers regarding collecting WEEE, according to laws.
Firstly, this restraint in using funds of collective organizations has an unconstitutional characteristic, by breaking stipulations reffering to property protection. The money collected by collective organizations from producers are part of their patrimony, and thus being object to the private property right. By limiting through this legislative deed the way and destination of spending the money that are the exclusive property of the collective organizations means bringing severe prejudices to the property right, as it is stipulated in Art. 44 Paragraph 2 from the Romanian Constitution, that states: „Private property is guaranteed and protected equally by the law, regardless the owner”.
On the other hand, should be taken into consideration the fact that money collected by collective organizations from producers represent a mutual benefit for the service they deliver the producers, taking their responsabilities in WEEE and executing several services in exchange for these amounts. So, the funds we are discussing about are from the beginning to the end part of the budgets of independant legal entities, which are not going to be restrained in using their money, as they already are for public funds – see the state budget, the local budgets for everything that means „public money”.
By applying exactly this stipulation could lead to blocking the operation of a collective organization dedicated to its mission in the name of producers.
This happens because money cashed from producers come from billing costs of WEEE management and are the only sources of income. Therefore, if they will be required to spend the money only for „collecting, treating and non-poluting elimination” if WEEE and „financing education and information campaigns for the consumers with regards to the collecting of WEEE”, would mean that for other types of expenses, inevitably necessary in current activity, they would not be able to use they resources, having an immediate effect, namely ceasing operational activity. It is not possible that „allowed” expenses should be made without a general management, investments in fixed assets or for sorting facilities, reconditioning and not only, that are now in the „forbidden” area. Execution of market research, consumer surveys of public opinion, research and development projects for new technologies and processes, including involving technical universities, are as many other types of expenses that are “forbidden” by the new legislation. ■

Romanian Recycling Association
RoRec
Bucharest, April 2011