Wall Street Journal - 2 Jul 09

Prof. Robert B. Laughlin
Department of Physics
Stanford University, Stanford, CA 94305

(Copied 21 Nov 09)

Electronics Firms Fight State Recycling Programs

July 2, 2009

Old computer monitors are stacked for processing at a recycling center in Madison, Wis., in March.

Small electronics makers are struggling with -- and fighting against -- new state laws mandating they pay for electronic recycling programs for consumers.

Five companies, including ViewSonic Corp., CTX Technology Inc. and ToteVision Inc., are threatening litigation against Washington state's new electronic waste law, which requires manufacturers to fund recycling and collection services for old TVs, personal computers and monitors

The companies argue the law, which took effect this year, charges them too much and improperly includes out-of-state businesses.

Meanwhile, the Consumer Electronics Association, a trade group representing 2,000 electronics companies, is negotiating with the New York City officials to change a city ordinance that would require electronics companies to pick up old gadgets door-to-door.

The CEA says the ordinance, scheduled to take effect July 31, would cost the industry $200 million annually.

"We're extremely alarmed" by electronic recycling laws, says Bill Taraday, president of ToteVision, a Seattle maker of LCD screens with annual sales of about $10 million. ToteVision has had to pay 4% of its profits to cover its recycling bills in Washington since January, he says. If legislation like this existed in all 50 states, "we wouldn't be in business," Mr. Taraday says.

State officials and environmental groups say electronics companies should be responsible for recycling costs. "The manufacturers will absolutely pass the costs along to consumers," says Barbara Kyle of the Electronics TakeBack Coalition, a consortium of environmental groups.

While some big players such as Dell Inc. and Best Buy Co. have expanded their recycling programs, parts of the tech industry are fighting the spread of legislation mandating industry-funded electronics recycling.

Since 2003, 19 states and New York City have passed such laws. Twelve other state have introduced similar legislation this year. The laws have taken effect in ten states, including Washington, Oregon and three others this year. Laws in New Jersey and Illinois are set to go into effect in January.

The laws have resonated with consumers. In the first quarter, Oregonians recycled almost five million pounds of electronics, on pace to exceed the state's annual goal of 12 million pounds. Washington is set to collect almost 36 million pounds of e-waste this year, officials say.

But some electronics makers gripe that states largely put the cost of these programs on them. ViewSonic, a Walnut, Calif., maker of TVs, computer monitors and other products, says it's spending more than $100,000 this year to comply with recycling laws nationwide.

"A lot of these companies are really, really hurting," says Joseph Bruce, a lawyer representing ViewSonic and the others protesting Washington's law.

In Washington state, electronics firms can be charged for recycling fees even if they go out of business or pull their products off shelves in the state. CTX, City of Industry, Calif., doesn't sell its monitors in Washington but says it has been billed more than $70,000 to recycle electronics there since January.

"This is a huge amount of money," says David Lin, CTX's general manager, who declined to discuss CTX's finances.

John Friedrick, executive director of the Washington Materials Management and Financing Authority, which runs the state's electronics recycling, said officials won't lower charges for the five companies, but they have collected more accurate data to reflect how many units are being recycled from each company to be used in future billing.

"They can't cry foul and say, 'Hey, we never sold that computer there,'" Mr. Friedrick said. "It was still destined for recycling regardless of the state that it's in."

New York City's e-cycling ordinance is particularly controversial. Unlike programs that ask manufacturers to pay recyclers for collecting electronics, the city will require companies to provide free, door-to-door pickup of e-waste, in addition to recycling costs.

Bill de Blasio, a New York City Council member who sponsored the ordinance, says it protects individuals from "growing problem of toxic electronic equipment."

The CEA says it is lobbying state officials in New York to pass legislation that doesn't mandate door-to-door pickup and would supercede the city ordinance.