A Memorandum of Understanding on Electronics Stewardship

Document Sample
A Memorandum of Understanding on Electronics Stewardship Powered By Docstoc
					This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.


                        DRAFT DATED 2/6/2004
                   For Use at the Portland NEPSI Mtg.
                        DO NOT DISTRIBUTE

This draft document is intended as a working document only for use of the
 NEPSI participants and should not be relied upon by either the NEPSI
  Participants or any third party for any purposes other then within the
context of the NEPSI negotiations. This document is subject to change by
                         the NEPSI participants.

     A Memorandum of Understanding on Electronics Stewardship
        This Memorandum of Understanding (MOU) is entered into between the
undersigned consumer electronic manufacturers (hereinafter electronics manufacturers),
state and local governmental units (hereinafter collectively referred to as government
Entities), Processors/Recyclers, Retailers and Non-governmental Organizations
(hereinafter collectively referred to as NGOs) as an expression of their good faith
agreement to develop a national system, with a sustainable financing mechanism to
collect and process used consumer electronics (hereinafter referred to as the NEPSI
System). This MOU sets forth the roles and responsibilities of the parties to this MOU in
the development of the NEPSI System.

       Whereas, _____ ________ becomes obsolete and available for disposal annually;

      Whereas, these pieces of consumer electronics contain heavy metals and plastics
some of which are hazardous to the environment if they are improperly handled;

      Whereas, the nature of this material is such that the present solid waste system
was not designed to nor can it handle or finance the collection and processing of said
consumer electronics;

        Whereas, a system that is designed to recapture and recycle the component parts
of consumer electronics has the potential to reduce the life cycle impact of consumer
electronics on the environment by conserving resources and reducing pollution;

        Whereas, a number of states across the country have begun to adopt state
legislation to address the problems posed by the collection, handling, processing and
disposal of consumer electronics and these legislative solutions are or have the potential
to be inconsistent and place inconsistent obligations on consumers, retailers and
consumer electronic manufacturers;

      Whereas, to address the challenges posed by the management and/or disposal of
consumer electronics a group of stakeholders representing manufacturers of consumer


                                            1
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
electronics, retailers, processors, reuse organizations, NGOs and federal state, and local
government (hereinafter collectively referred to as the NEPSI Participants) met in good
faith to craft the elements of a national consumer electronics end of life management
system1;

       Whereas, the NEPSI Participants have developed a plan for an Interim Program
to be managed by a National Coordinating Entity that may be used on a voluntary basis to
cover the collection, handling, processing and disposal of consumer electronics until the
National NEPSI System has been implemented pursuant to the terms of this MOU;

        Whereas, it is the desire of the NEPSI Participants to establish a national system
to collect, transport and process consumer electronics in a manner that is protective of
human health and the environment, is economically sustainable and market driven;

       Whereas, it is the intent of the NEPSI Participants that said national system be
premised on the principles of Product Stewardship and Shared Responsibility; and

        Whereas, the NEPSI Participants further recognize that the system must be
premised upon creating a level playing field among all manufacturers of consumer
electronics that sell consumer electronics to persons residing within the United States.

        Now, therefore, the parties agree as follows:

Section 1 Nature of this MOU

        1.1.   This is a voluntary agreement between the parties. Nothing contained in
this MOU is intended to create a legally binding obligation on or to convey rights in or to
any signatory hereto or any third party that is not a signatory to this MOU
notwithstanding any language used herein that may give rise to a contrary implication.
Notwithstanding, it is the intent of the Signatories to this MOU to make a good faith
effort to implement the terms of this MOU.


Section 2 Definitions

       For purposes of this MOU and its Exhibits and unless otherwise specified, the
terms used herein shall have the definitions set forth in Exhibit 1 which is attached hereto
and made a part hereof.




1
 The NEPSI Participants have done extensive work beyond the documents sited in this Memorandum of
Understanding. For a full reference to all documents prepared in the NEPSI Process see (Reference to the
Center for Clean Products Work/Report prepared by the University of Tennessee Center for Clean
Products)


                                                   2
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.


Section 3 National NEPSI System and Implementing Legislation

        3.1    Long Term Goal. The purpose and intent of the NEPSI System is to
establish an economically viable, market driven, uniform, national infrastructure and
financing system to recycle consumer electronics (hereinafter NEPSI Products) in the
United States as said equipment becomes obsolete. To fully capture the bulk of orphaned
and historic NEPSI Products the NEPSI Participants agree that an ARF driven system,
which is flexible enough to allow for an Alternative System that permits individual
manufacturer responsibility as set forth in Section 3.3 of this MOU, should be
implemented on a national basis. It is further the intent of the NEPSI System that the
ARF Financed System transition to a Partial Cost Internalization (PCI) System pursuant
to an agreed upon time schedule and process as set forth in Section 3.3.d

      3.2   Federal Legislation. It is the intent of the NEPSI Participants that the
NEPSI System should be enacted through federal legislation.

        a.     Effective Date. The NEPSI System shall not become effective until
Federal Legislation has been enacted implementing the NEPSI System as set forth in
Section 3. This MOU shall expire within five (5) years after the execution of this MOU
unless expressly extended by a written amendment to this MOU which has been executed
by the signatories to this MOU.

       b       National Uniform System. The NEPSI System is intended to provide
national uniformity for the collection, transportation and processing of NEPSI Products
and the financing for said system. Except as provided in the National Uniformity
Document, which is attached hereto as Exhibit 2 and made a part hereof, state legislation
regarding the, collection, transportation and processing of NEPSI Products shall become     Deleted: financing
pre-empted only to the extent that it is inconsistent with the Federal Legislation
implementing the NEPSI System. Provided further that upon implementation of the
national ARF any state or local financing system/fee tied to the sale of a NEPSI Product    Deleted: any
or cost internalization system to cover the collection, transportation and processing of    Deleted: adopted by a state for
NEPSI Products in individual states shall become null and void. (NOTE: This is              Deleted: upon implementation of the
Tentative Language subject to further Work by the NEPSI Participants).                      NEPSI System.


       c      Federal Legislation.

               (1)   Model Legislation: Upon execution of this MOU a small
stakeholder group consisting of no more than 8 signatories of this MOU shall be
established to oversee the drafting of Model Federal Legislation that reflects and
implements the terms of this MOU (hereinafter Stakeholder Legislation Panel).
Representation on the Stakeholder Legislation Panel shall include, at a minimum,
representatives from the follow categories: State government, local government,
manufacturers, processors/recyclers, retailers and other non-governmental organizations.




                                           3
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
                       The Stakeholder Legislation Panel shall hire an independent
consultant without a stake in the outcome of the NEPSI Process to undertake the drafting
of the Model Federal Legislation. The Model Federal Legislation shall be completed
within 6 months after execution of this MOU.

                     This work shall be funded financing the drafting of legislation –       Deleted: Financing
grant, contributions…

               (2)   All signatories to this MOU shall exercise due diligence to effect
the passage of the Federal Legislation to implement the National NEPSI System as set
forth in this MOU.

      3.3    National NEPSI System. The national NEPSI System shall initially be
an ARF Financed System and transition into a PCI.

       a.     ARF Financed System.

                (1)    Fee. The NEPSI System shall be financed with an ARF in an
amount not to exceed an amount set by Congress. Preliminary analysis indicates that his
cap would not exceed $10 in 2003 dollars. This CAP may be periodically adjusted by the
Congressional Budget Office (?) General Accounting Office (?) (or equivalent non-
partisan organizations) upon a recommendation by the EPA that the amount of the cap is
insufficient to cover the minimum requirements of the Base Service Level as set out in
the Base Service Level Document which is attached as Exhibit 6 and made a part hereof.
The ARF shall be assessed on and paid at the point of sale of any NEPSI ARF Product to
the consumer. See generally, Exhibit 4 which is attached hereto and made a part hereof.
The ARF shall be set by Federal Legislation per unit of NEPSI ARF Product sold,
provided, however, that the Federal Legislation shall grant the TPO the authority to
evaluate and adjust the fee if the TPO determines that the fee will be inadequate to cover
the cost of financing the NEPSI System, provided, however, that under no circumstances
may the TPO set the fee in such a manner that it exceeds the cap established by Congress.
The ARF shall be assessed in a manner that it is visible to the consumer and in such a
way that the consumer is aware that it is an environmental fee to cover the cost of
recovering and recycling NEPSI Products at the end of their useful life.

               (2)    Level Playing Field and Flexibility. The ARF shall be assessed
on all NEPSI ARF Products sold in the United States regardless of the type of sale and
manufacturer. NEPSI ARF Products shall not be exempt from the ARF unless the
manufacturer of said NEPSI Product has met all applicable requirements to participate in
the NEPSI System under the Alternative Participation System set forth in the NEPSI
Alternative System Document set forth in Exhibit 4 which is attached hereto and made a
part hereof. Provided, however, that an Alternative System is incorporated into the
applicable Federal Legislation. Provided further, that the Alternative System shall
incorporate, at a minimum, individual manufacturing responsibility equivalent to the
level of service provided by the ARF and that the manufacturer using the Alternative
System assure the TPO that it will not assess a visible fee on the consumer.



                                            4
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.


                (3)    Setting the ARF. The actual ARF for each class of NEPSI ARF
Product shall be set by Federal Legislation. The TPO may, however, lower the fee below
the ARF cap set forth in Federal Legislation. The ARF shall be set at a level to cover the
collection, transportation and processing of NEPSI Products as set forth in the Base
Service Level Document which is set forth in Exhibit 5 which is attached hereto and
made a part hereof. In no event shall the fee exceed the ARF set by Federal Legislation
as described in Section 3.2.a (1) of this MOU.

               (4)     Trust Account. Upon collection the ARF shall be deposited in a
private/public trust account that is separate from the National Treasury. The proceeds
from the Trust Account shall be used exclusively to finance the NEPSI System. The
account shall be subject to an annual audit by an independent auditor. A copy of the
audit shall be submitted to the TPO, EPA, and Congress on June 30 of each year. In
conjunction with the annual audit the TPO shall prepare an independent report assessing
the balance of the Trust Fund in light of the volume of NEPSI Products collected and
processed; make recommendations to Congress regarding the ability of the fund to meet
the processing needs; advise Congress of its intent to adjust the fee within the cap; make
recommendations to Congress regarding the need, if any to expand the list of NEPSI
ARF Products or increase the cap; and advise the Congress of its intent to modify the
scope of NEPSI Products covered by the NEPSI System.

       b.     Third Party Organization (TPO).

                (1)    TPO composition. The NEPSI System shall be managed by a not
for profit TPO as set forth in Federal Legislation. The TPO shall be a non-government
organization managed by a Board of Directors appointed by the EPA Administrator. The
Board of Directors shall be composed primarily of representatives from the Consumer
Electronics manufacturers with representation from government and NGOs as set forth in
Exhibit 6 which is attached hereto and made a part hereof. The Board of Directors shall
have, at a minimum, the power to hire an Executive Director and staff which shall
constitute the TPO.

               (2)     Management and Powers of TPO. The TPO shall operate
pursuant to the terms set forth in the TPO Document which is attached hereto as Exhibit
6 and is made a part hereof. The TPO shall be empowered by Federal Legislation to
manage the NEPSI System pursuant to the parameters of the Base Service Level
Document which is attached hereto as Exhibit 5 and made a part hereof.

                      For purposes of managing the NEPSI system the TPO shall be
empowered to enter into contracts as necessary to accomplish the collection,
transportation and processing of NEPSI Products and to audit said collection,
transportation and processing contractors.

           (3)   Alternative System Applications. The TPO shall also be
empowered to receive applications made by individual Consumer Electronics



                                            5
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
Manufacturers to participate in the Alternative System described in Section 3.3.a (2)
herein. All applications received by the TPO shall be forwarded to the EPA for
evaluation. If the EPA determines that the applicant meets the requirements to operate an
Alternative System as set forth in the Alternative System Document attached hereto as
Exhibit 4, the EPA shall notify the applicant and the TPO that the applicant is
authorized to operate an Alternative System as part of the NEPSI System.

              (4)     Environmentally Sound Management: Any contract entered
into by the TPO with a processor must meet the requirements of the NEPSI
Environmentally Sound Management Protocol as set forth in Exhibit 7 which is attached
hereto and made a part hereof.

                (5)    Market Development:       In order to assure the economic
sustainability of the NEPSI System and meet Performance Measures viable markets must
exist for NEPSI Products at the end of their useful life. To aid in the development of
markets the TPO will be guided by the NEPSI market development strategy as set forth
in the Market Development Document, which is attached hereto as Exhibit 8 and made a
part hereof.

       c.      Performance Measures. The TPO shall operate the NEPSI System to
meet the collection and processing rates set forth in the Performance Measures Document
which is attached hereto as Exhibit 9 and made a part hereof. The TPO shall annually
prepare a report to the EPA and Congress documenting the progress made toward
accomplishing the Performance Measures. EPA shall submit a biennial report to
Congress evaluating the progress made under the NEPSI System to recapture historic and
orphan NEPSI Products.

       d       Transition to PCI. It is the intent of the NEPSI Participants that the
NEPSI System transition from an ARF system to a PCI System that recovers NEPSI
Products at the end of their useful life in a manner that is protective of the environment.

              (1)     After the ARF has been in effect for seven years the EPA shall
convene a multi stakeholder panel to review and assess the demonstrated benefits of the
ARF pursuant to the requirements set forth in the Transition Document which is attached
hereto as Exhibit 10 which is made a part hereof. The multi stakeholder panel shall also
make a recommendation to EPA regarding whether the system shall transition into a PCI
System.

              (2)      Should either the EPA or the multi stakeholder panel fail to act
within ____ months after the formation of the stakeholder panel, the NEPSI System will
automatically transition into a PCI System. (There currently is no time line in the
Transition Document, we have asked the Finance/Transition Group to address this
issue and advise us on how they wish to proceed)




                                            6
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.


Section 4 Interim System

       4.1     Effective Date. The NEPSI System shall not become effective until
federal legislation implementing the NEPSI System has become effective. This
Memorandum of Understanding shall become effective upon execution by ___number
NEPSI Participants.

        4.2    Interim Program.         Prior to enactment of        federal legislation
implementing the NEPSI System an interim program shall be established on a state by
state basis to collect, transport and process used NEPSI Products as set forth in the
Interim Program Document which is attached hereto as Exhibit 11and which is attached
hereto and made a part hereof. All signatories to this MOU agree to try to work within
the Interim Program by supporting the Interim Program activities and to participate in the
Interim Program where possible.



SIGNATURE BLOCKS INSERTED HERE




                                            7
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
                               MOU EXHIBIT LIST

Exhibit 1:    Definitions

Exhibit 2:    National Uniformity Document

Exhibit 3:    ARF System Document

Exhibit 4:    Alternative System Document

Exhibit 5:    Base Level Service Document

Exhibit 6:    TPO Document

Exhibit 7:    Environmentally Sound Management Protocol

Exhibit 8:    Market Development Document

Exhibit 9:    Performance Measures

Exhibit 10:   Transition System Document

Exhibit 11:   Interim Program Document

Exhibit 12:   NEPSI Products and Consumer Electronics (should identify the products
              covered in each scenario or how the TPO will determine which products
              are covered.)




                                           8
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.

EXHIBIT 1:            DEFINITIONS

                For purposes of this MOU and its attached Exhibits the following terms
shall have the following definition, unless otherwise, expressly specified:

        a.      Alternative System shall mean a system where by a consumer electronic
manufacturer’s products may be exempt from the ARF upon demonstration that said
consumer electronics manufacturer has met the individual manufacturer responsibility
requirements set forth in Exhibit 4, the Alternative Systems document which is attached
hereto and made a part hereof. Any Electronics Manufacturer opting to participate under
the Alternative System shall be responsible for providing an equivalent level of service
equal to that covered by the ARF and shall not charge a visible fee to the consumer.

       b.     ARF shall mean advanced recovery fee as set forth in Section 3.3 of this
MOU.

        c.      Base Level of Service shall mean the standard collection, transportation
and processing services for NEPSI Products that shall bee covered by the NEPSI System
as set forth in the Base Level of Service document which is attached hereto as Exhibit 6
and made a part hereof.

       d.   Board of Directors shall mean the appointed representatives who oversee
the management of the TPO.

       e.      Consumer shall mean private households and conditionally exempt small
quantity generators as defined by the Resource Conservation and Recovery Act

       f.     Consumer Electronics shall mean NEPSI Products sold to Consumers.

       g.    Consumer Electronics Manufacturer shall mean any manufacturer or
importer of NEPSI Products that sells said Products in the United States for use by
consumers

       h.     EPA shall mean the U.S. Environmental Protection Agency

       i.     Historic Consumer Electronics shall mean consumer electronics that
reach the end of their useful life at a time which predates the date of execution of this
MOU.

       j.     Interim Program shall mean the collection, transportation and processing
of NEPSI Products that will occur prior to the passage of the Federal legislation needed
to implement the NEPSI System as set forth in Section 4.2 of this MOU.

       k. NEPSI shall mean the National Electronics Product Stewardship Initiative.




                                           9
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
       l.      NEPSI Environmentally Sound Management Protocol shall mean the
protocol for the environmentally sound management of used NEPSI Products as set forth
in Exhibit 7 which is attached hereto and made a part hereof.

      m.     NEPSI Participants shall mean those parties that participated in the
NEPSI Negotiations and developed the NEPSI System.

       n.      NEPSI Processor shall mean a processor or recycler of used NEPSI
Products that has met NEPSI Environmentally Sound Management (ESM) protocol and
has entered into a contract with the TPO for the processing of said products.

       o.     NEPSI Products shall mean ____________________ whose collection
and processing is covered by the national NEPSI System as set forth in Section 3 of this
MOU.

       p.    NEPSI ARF Product shall mean all consumer electronics on which the
ARF is charged as set forth is Exhibit 12 which is attached hereto and made a part hereof.

        q.       NEPSI System shall mean the national system developed through the
NEPSI negotiation process and established through federal legislation for the collection,
transportation and processing of consumer electronics and the financial mechanism
established to finance said system as set out in Section 3 of this MOU.

        r.      Orphan Consumer Electronics shall mean consumer electronics for
which the original manufacturer or a successor in interest to the parent manufacturer is no
longer in business at the time said product reaches its end of life.

        s,     Partial Cost Internalization (PCI) Cat did we ever decide what partial
cost internalization was. My notes indicate that under the PCI model the
manufacturers would internalize the cost of processing and transporting Consumer
Electronics from a consolidation point and that collection would be handled on the
local level by either government, non-profits, private businesses or retailers. Is this
correct. Who covers the cost of managing the consolidation centers?

        t.      Product Stewardship shall mean that all parties who have a role in
producing; selling or using a product shall also have a role in managing the product at the
end of its useful life.

       u.      Shared Responsibility shall mean that every stakeholder (including
consumers, manufacturers, recyclers, government and NGOs) has a role to play in the
proper lifecycle management of products.

       v.     Third Party Organization (TPO) shall mean the national third party
organization established to manage the NEPSI System as set for in Section 3.3 of this
MOU.




                                            10
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.

                              EXHIBIT 2
                    NATIONAL UNIFORMITY DOCUMENT
                         UNIFORMITY SUB-GROUP
                                              2/5/04


Purpose
The purpose of this document is to identify areas of a national program where operations would
need to be uniform throughout all of the states in order to ensure a smooth, cost effective and
environmentally beneficial system to collect and recycle products. This document also describes
methods that could be used to achieve national uniformity.
This document also provides guidance for the development of the federal legislation that will be
drafted to implement the NEPSI system. Due to the complex and difficult nature of the issues
involved, guidance in some areas is limited to statements of the concerns of stakeholders. The
Uniformity Sub-group also developed a table of issues that may guide the drafting of Federal
Legislation. This table is included in the NEPSI Working Documents compiled in the final
NEPSI Report which has been prepared by the University of Tennessee Center for Clean
Products.
The NEPSI Uniformity Subgroup discussed many of the issues, but was not able to reach
consensus. The group did not have the time or resources necessary to fully explore and
understand the extent of all of the issues related to this topic
The NEPSI Uniformity Subgroup did, however, agree that short of a full scale NEPSI
Agreement, nothing in this document should be used by any individual NEPSI Participants
or any third party to argue that the NEPSI Participants all agreed that state laws in this
area should be preempted.
Intent
In drafting this document, NEPSI was guided by the belief that national uniformity would be
achieved by using, as appropriate, the following methods:


         1.     Preemption - Occurs when federal law so occupies the field that state courts or
                legislatures are prevented from asserting jurisdiction, either express or implied.

                •   With the exception of the financing mechanisms and issues associated with it
                    is the belief of the NEPSI Participants that Congress should expressly state
                    when Federal Law preempts state law as it pertains to NEPSI Products and
                    operation of the NEPSI System.

         2.     Regulatory Relief - Modifying a regulatory scheme found in an existing federal
                statute.

                •   Any modifications to limits on liability should be restricted to changes
                    ensuring a smooth, cost effective and environmentally beneficial system.




                                                11
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
        3.      Other Methods - While there was a belief that there may be other methods to
                achieve the goals of uniformity, none were identified and examined to determine
                whether they would meet the needs of the NEPSI System.

Identified Issues that should be addressed in the NEPSI National Legislation
•   Fees - To prevent multiple front-end fees and ensure a level playing field regarding the
    financing mechanism at the federal level.

•   Product labeling - To ensure a uniform, educational and motivational (are we really
    motivating products?) program for the products

•   Transportation - To ensure that products transported for recycling in program are effective
    and efficient from the collection point to the processing facility.

•   Scope of products -To develop a system that is fair to all stake holders for making any
    changes to the NEPSI product list

•   Superfund relief - To prevent the TPO, manufacturers and others that direct or control the
    product from Superfund liability for improper handling or disposal by recyclers selected by
    the TPO provided that there is no gross negligence on the part of TPO in selecting/certifying
    the recycler

•   Antitrust relief - To develop uniform language that allows ARF to be set by TPO (including
    manufacturers) without violating anti-trust law.




                                                12
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.

                      EXHIBIT 3
            ADVANCED RECOVERY FEE SYSTEM
    DOCUMENT/PARTIAL COST INTERNALIZATION HYBRID

Summary
   • Establish a visible, national fee at all points of purchase ("Advanced Recovery Fee"
     (ARF)) for a limited amount of time (discussion needed regarding timeframe) to fund
     establishment of NEPSI infrastructure and retire significant quantities of historic NEPSI
     Products. [Rationales: Addresses industry concerns that Cost Internalization (CI) is not
     practical for historic equipment and creates no design incentives. Incorporates the
     education benefits of an ARF. Establishes a short-term funding mechanism. for historic
     NEPSI Products]. See, Addendum A.
   • Sunset the fee after prescribed period. See Transition System Document Exhibit 10
   • Thereafter split costs according to a shared responsibility model or Partial Cost
     Internalization (PCI) Model (how/who to be discussed). Id.
   • Key objectives are to:
     1) Establish uniform, national program which preempts inconsistent state requirements;
         See Uniformity Document Exhibit 2[pending agreement from preemption subgroup]
     2) Educate consumers through use of the initial ARF;
     3) Use ARF as a means to allocate costs of collecting, transporting and processing
         historic NEPSI Product, for a significant period of time and to equitably cover these
         costs;
     4) Make the system as administratively simple as possible;
     5) Assure a level playing field [among industry participants]; and
     6) Provide opportunity for design incentives for new products through some level of
         cost internalization [Rationale: meets NGO and some government’s desires to create
         opportunities for design changes and creates potential economic benefits from such
         changes]
   • Assume that the NEPSI Participants Agree to above framework in 2003 (“NEPSI
     Memorandum of Understanding (MOU)”); further assume that federal legislation is
     passed as soon as politically feasible that establishes this framework as law.
   • NEPSI Participants will work together to achieve federal legislation.

Interim Infrastructure Development: There exists a voluntary agreement between Consumer
Electronics Manufacturers and government to expand the current system of collection and
voluntary, Consumer Electronics Manufacturer take-back programs for NEPSI Products while the
national ARF is being implemented. Funding for all activities is voluntary.
Primary Features of Legislated ARF
   (Note: The details of the ARF under this model would be the same as the stand-alone ARF
   model currently being discussed. See, Supra. at ___. It is understood that the ARF model
   has not been finalized, and these system aspects may change. Only the major features are
   summarized below).
       •   Visible, advance recycling fee (“ARF”) is collected from consumers at all points of
           sale of a NEPSI ARF Product and passed in trust into a trust fund. The ARF is not a
           negotiable part of the product price.




                                              13
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
         •   Legislation authorizes establishment of a trust fund and national TPO with multi-
             stakeholder governance and a predominance of Consumer Electronics Manufacturer
             representation. Legislation will clearly define limited responsibilities and powers of
             the TPO.
         •   ARF pays for: 1) collection incentive, 2) transportation, and 3) recycling of NEPSI
             Products. See Exhibit 5, Base Service Level Document (containing details on what is
             covered by ARF).
         •   The ARF will be collected at retail from customer at point of sale of a NEPSI ARF
             Product, and the retailer will pay fee to trust fund.2
         •   Individual Consumer Electronics Manufacturers have the flexibility to act
             independently in some circumstances (e.g., recycling their own products rather than
             having them recycled by others and receiving payment for same from the fund).
         •   ARF is reviewed or sunsets after a period of time or after meeting some performance
             standard.
Post-ARF Shared System Costs
    After ARF sunsets, NEPSI system costs are shared according to shared responsibility model
    [precise entities and responsibilities to be determined at the time of transition(?)]
    Government and other “collectors” (e.g., retailers, haulers, others) will cover costs of
    collection and transportation of NEPSI Products to consolidation points. Collectors may
    charge drop-off fees to cover collection and consolidation costs if necessary.3
    The NEPSI Participants will jointly determine how consolidation points will be identified.
    Consumer Electronics Manufacturers cover transportation costs from consolidation points
    and processing costs.
    Retailers, Consumer Electronics Manufacturers (and TPO if it still exists) shall provide
    general and national promotion synergistic with local promotion. States/local governments
    are primarily responsible for education outreach on local services.
Key Legislative Provisions Necessary for Any System to Reach Objectives
    Preemption:
    Free Riders and Enforcement: Legislation establishes clear responsibilities for all players
    (e.g., Consumer Electronics Manufacturers, collectors, recyclers) and creates enforcement
    capability against free riders.



2
  There was considerable discussion of another payment option whereby the Consumer Electronics
Manufacturer pays a fee to trust fund, adds it as visible surcharge on wholesale price to retailer, and the
retailer collects fee from customer at time of sale. This was the preferred method for a portion of the G12;     Deleted: G12,
however it was unanimously opposed by the industry stakeholders during the NEPSI Negotiations.
3
  There is a concern of the government stakeholders about how to cover the costs of getting NEPSI
Products to consolidation points, particularly if an ARF is removed as a financial tool. Industry
stakeholders feel that if an ARF and partial cost internalization are used on products concurrently, that this   Deleted: if an
essentially represents a double-tax on their products. Government and industry stakeholders are in
discussion to try to arrive at an equitable solution.



                                                      14
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
   Antitrust: Legislation insulates Consumer Electronics Manufacturers from antitrust
   prohibitions as necessary.
   Performance Metrics and Reporting: Legislation establishes performance metrics and
   reporting requirements as appropriate. See Exhibit 9, Performance Goals.
   Environmentally Sound Management: Manufacturers, government and NGOs will develop
   environmentally sound management standards for recycling under this program. See, Exhibit
   7 Environmentally Sound Management Protocol.
   Oversight




                                             15
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
Attachment A

       Draft Framework for a NEPSI National Advanced Recovery Fee (ARF)
Objectives
   • A visible, equitable fee that educates consumers and is applied nationally to all NEPSI
       Products sold in US.
   • The ARF is collected from consumers at point of sale and passed in trust into a trust
       fund. It is not a negotiable part of the product price.
   • The ARF covers costs of Base Service (recycling, transportation of product from first
       point of collection, and a reasonable, limited collection incentive payment to encourage
       collection by a variety of entities, including retailers, municipalities, non-profits, etc. See
       Base Service Level Document, Exhibit 6.).
   • The ARF pays for collective functions (e.g. old/historic, transportation, collection
       incentive). Individual manufacturers have the flexibility to act independently in some
       circumstances (e.g., recycling their own products rather than having them recycled by
       others).
   • ARF system is as administratively simple as possible.
   • ARF ensures a level playing field.
   • Federal program preempts state and local programs. See, National Uniformity Document,
       Exhibit, 2.

Legislated ARF
    Federal legislation requires all NEPSI Products sold in US to carry a visible fee for costs of
    recovery system.
    The ARF will be set for each of a small (4-5) set of product categories (NEPSI ARF
    Products). It shall be capped for each category.
    Legislation authorizes establishment of a trust fund and national Third Party Organization
    (TPO) with multi-stakeholder governance and a predominance of industry representation.
    An entity should be authorized to set and adjust the ARF Cap periodically to keep trust fund
    solvent. [Legal advice should be sought on what entity is best to hold this authority –
    Congress, the Congressional Budget Office, the General Accounting Office, the EPA, TPO,
    the Trustee, or another entity.]
    TPO is organized under auspices of federal legislation; industry can voluntarily participate in
    TPO governance but the TPO should have a predominance of industry representation. See,
    Third Party Organization Document, Exhibit 6.


    Legislation clearly defines limited responsibility and powers of TPO.
    The ARF will be collected at retail from customer at point of sale, and the retailer will pay fee
    to trust fund.♣


        ♣
          There was considerable discussion of another payment option whereby the manufacturer pays
        fee to trust fund, adds it as visible surcharge on wholesale price to retailer, and the retailer collects
        fee from customer at time of sale. This was the preferred method for a portion of the G12,
        however it was unanimously opposed by the industry stakeholders.



                                                      16
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
   Any entity collecting the ARF is authorized to keep a set percentage of the ARF to cover fee
   collection and education costs.
   The NEPSI System and ARF should be reviewed after a certain number of years and report
   submitted to Congress.
Collective and Individual Responsibility
   Some functions must be financed collectively – e.g. recovery of historic/orphan product and
   of new product that is collected in collective system – but certain independent actions can be
   accommodated.
   Legislation requires TPO to submit a plan for how Base Service Level will be provided
   (including how collection incentive payments will be managed).
   Optional: Legislation authorizes another Joint Entity or individual (or group of)
   manufacturer(s) to submit plans for collecting and/or processing NEPSI Products.
   A Joint Entity with an approved plan is authorized to draw on trust fund for strict cost
   recovery of Base Service costs for NEPSI Product managed.
TPO Characteristics
   Membership is voluntary.
   TPO develops and implements plan to meet Performance Goals or Measures, and regularly
   reports on NEPSI System performance.
   TPO can offer refund to Consumer Electronics Manufacturers for new products that cost less
   to recycle. [How this would work must be discussed, and may be an item for implementation
   after the base program is up and running.]
   At a Consumer Electronics Manufacturers option, the TPO can contract with individual
   Consumer Electronics Manufacturers for processing their own products, same as any other
   vendor using competitive bidding, while covering costs to sort and deliver their products.
Base Services (See Base Service Level Document, Exhibit 5)
   State/local governments are responsible for assuring convenient collection services for
   NEPSI Products.
   TPO contracts for transportation and processing of NEPSI Products.
   TPO contractor pays collection incentive payment to those who collect NEPSI Products.
Program Promotion
   State/local governments have primary responsibility for promotion of local services.
   TPO, retailers and Consumer Electronics Manufacturers shall provide general and national
   promotion synergistic with local promotion.
Recovery and Recycling Goals
   The NEPSI Memorandum of Understanding (MOU) shall establish national recovery and
   recycling goals. See, Performance Measures Document, Exhibit, 9.
Environmentally Sound Management
   Consumer Electronics Manufacturers, government and Non-governmental Organizations
   (NGOs) will develop environmentally sound management standards for the TPO to evaluate




                                               17
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
   and use to select recyclers and other vendors. See, Environmentally Sound Management
   Protocol Document, Exhibit 8
Participation and Enforcement
   U.S. EPA and states will oversee implementation of the plan and achievement of the
   Performance Measures and take enforcement action if necessary.
Preemption of State Recycling Programs
   Once federal legislation is enacted, any state laws must sunset and be preempted by the
   federal program. [The timing for when the preemption kicks in, in order to best prevent
   double dipping, should be discussed.] See, National Uniformity Document, Exhibit 2.
Anti-trust Protection
   A Consumer Electronics Manufacturer or organization of Consumer Electronics
   Manufacturers and its officers, members, employees and agents who participate in programs
   to collect and properly manage waste electronic NEPSI Products are immune from liability
   under federal and state law relating to antitrust, restraint of trade, unfair trade practices, and
   other regulation of trade or commerce for activities related to the collection and management
   of NEPSI Products required under this section.




                                                 18
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.

EXHIBIT 5:           ALTERNATIVE SYSTEM DOCUMENT




                                         19
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.


                                    EXHIBIT 6
                          BASE SERVICE LEVEL DOCUMENT

               A WORKING DOCUMENT PROVIDING
           GUIDELINES FOR BASE SERVICE STANDARDS
FOR A SYSTEM THAT IS FUNDED IN WHOLE FROM A NATIONAL SOURCE

               Including Collection, Transportation, Reuse and Recycling

I.      Purpose of the Base Service Level Document

This Base Service Document outlines how the compensation for base service elements would
work if there is a single, national source of funding for collection, transportation, reuse and
recycling of NEPSI Products. It is understood that any collection costs that exceed the base
collection incentive payment, including local public education, will be funded by the party
managing the collection (e.g. local governments, retailers, manufacturers with collection
program, etc.). This funding can occur through a variety of mechanisms, such as fees charged for
products disposed, tax base funding, incorporating expenses as a cost of doing business, etc. but
shall not be funded by an additional advanced recovery fee (ARF) imposed at the point of sale
that is separate and in addition to the ARF set forth in the NEPSI System as said system is
defined in the Memorandum of Understanding.

The purpose of this document by the NEPSI Infrastructure subgroup is to define a base level of
service for the collection, transportation, reuse and recycling of NEPSI Products to be
implemented nationwide. The standards set out in this document will be necessary to determine
the costs of this base level of service. They define a base level of service that would be
compensated by the NEPSI System – the "base compensation".
The actual base level of service may need to be adjusted based on the performance of the system
over time, and on any built-in incentives or disincentives. Folks I would suggest deleting the end
of this sentence as is confusing.
This document provides flexible guidelines for those providing collection, transportation, and
reuse and recycling services for NEPSI Products on a local or national basis. The guidelines are
based on a Shared Responsibility framework, the NEPSI Desired Attributes that were adopted by
the NEPSI Participants4, and the level of public convenience that will result in effective recovery
of NEPSI Products as necessary to meet the NEPSI Performance Measures.
II.     Overall Goals of the NEPSI System Infrastructure

            1. Establish an effective and cost-efficient nation-wide baseline collection, reuse
               and recycling system that meets the agreed upon NEPSI Performance Measures.
            2. As appropriate, utilize procurement procedures, such as competitive contracting,
               for transportation and processing to ensure efficiency and effectiveness.
            3. Establish a simple reimbursement mechanism for participants in the NEPSI
               System Infrastructure.

4
 The NEPSI Desired Attributes are set out in ____________________. Here reference either Cat’s report
of other historic documents that are made to memorialize the NEPSI Process


                                                 20
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
             4. Allow for and encourage a diversity of types of private and public collection,
                reuse and recycling.
             5. Incorporate existing firms and organizations into the NEPSI System
                Infrastructure to the maximum extent feasible.
             6. Be accessible to and reasonable for all communities, urban and rural.
             7. Establish incentives for shared responsibility.
             8. Allow for continual increase in efficiencies and cost adjustments.
             9. Allow for expanded services, but not pay for them.
The national system shall have flexibility in establishing business arrangements for compensation
of base services.


II.     Base Service Level to be Provided by the NEPSI System Infrastructure
        A.       Assessment of Base Service Level
A level of public convenience is a primary goal of the Base Service Level. This is especially true
as it pertains to the Collection System. Convenience is premised upon types of collection
services and frequency of collection sites/events assessed in relation to the effectiveness of the
NEPSI System Infrastructure in meeting NEPSI Performance Measure, and the cost-
effectiveness of the of the Infrastructure. (Wayne thinks this Sent may be correct but might be
confusing…)Setting the Base Service Level for the NEPSI System Infrastructure should be based
on an initial projection of the NEPSI System infrastructure configuration (locations of processing
facilities and estimates of transportation distances, etc.), cost and benefits of the NEPSI System
Infrastructure, economic analysis and system modeling. This previous sentence is confusing, and
may not be correct. It is not the BSL that will be set by this exercise, that is set by this document.
But rather the infrastructure con figuration and the projected costs. Here it has been turned
around. The established NEPSI System Infrastructure should be monitored and analyzed for
performance on a regular basis... The Infrastructure Subgroup recommends that the Third Party
Origination (TPO) prepare regular reports analyzing the performance of the NEPSI System
Infrastructure.

In implementing the collection, transportation and recycling system that make up the NEPSI
System Infrastructure, the service providers and communities, will have flexibility in meeting
local conditions and needs.
A section has been separated out and spread around from here. It specifically addressed
COMPENSATION by the system that covered collection (CIP), transportation and
processing. It seemed to me (Wayne) that this is best separated out from the “standard” as
it was in the original doc. But I suppose that is a judgment call. I recommend keeping it as
a separate section.
        B.       The Collection System.
                 1. The base collection incentive payment:
Sego has a valid point here. We have decided that there will be compensation for collection
under the ARF. Here we recommend how. Suggestions made by WR incorporated below
The NEPSI Participants have determined that those collecting NEPSI Products should be paid for
collection services with funds from the ARF Trust Fund. The Infrastructure Committee
recommends that this compensation occur on a product unit basis – e.g. Z cents per pound (or per


                                                 21
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
unit) of NEPSI Product collected – to cover costs of the base level collection service. This
payment is the Collective Incentive Payment (CIP). To be eligible to receive the CIP the
collecting entity must deliver the NEPSI Product for processing by a NEPSI Contract Holder.
The national system would determine the CIP through implementation planning based on the
calculated costs for a base set of collection activities, as set out in section ___ of this document,
that are consistent with this standard. The base collection activities should be the most cost-
effective method of collection feasible throughout the country and that could achieve the
collection goals necessary to meet the NEPSI Performance Measures established for the NEPSI
System...
The CIP will initially be estimated using the following scenario: Drop-off collection service in
conjunction with an existing facility or business, such as a recycling or solid waste facility.
Collection of electronics may require modification or build-out of the existing facility, but the
CIP covers only the marginal cost of electronics collections at an existing facility, rather than
the full costs of a facility solely dedicated to electronics collection.
Note that the actual locations of collection may be retail sites, charities facilities, hazardous waste
facilities and stand-alone sites. Other forms of collection may also be provided and paid for by
the CIP. The purpose of this section is solely to establish the method by which the CIP shall be
calculated. All collection facilities delivering NEPSI Product to a NEPSI Contract Holder or a
transportation contractor transporting NEPSI Product to a NEPSI Contract Holder are eligible to
receive the CIP regardless of type or location of the Collection Service.
See Attachment A for further discussion of the Collection Incentive Payment.
                  2.      Collection Standards.
These standards are not intended to prescribe specific collection services that shall be
implemented in each community. Rather, they define a level or degree of service that will be, at a
minimum, provided and compensated by the NEPSI System. In implementing the collection and
recycling system the national financing source, service providers and communities will have
flexibility in meeting local conditions and needs. Concern that the previous sentence is confusing
and that there is a reference to a national financing source but it is unclear what is meant by that
term. A proposed edit is attached in the margin for consideration by the Infrastructure Sub-group.        Deleted: se standards define a level or
No Collection System will be eligible for the CIP, however, unless it delivers the collected              degree of service that must be, at a
                                                                                                          minimum, provided to be eligible for the
NEPSI Product directly or indirectly through a transportation provider to a NEPSI Contract                CIP. No
Holder for processing.

                         a. Base Collection Service Standards
    (1) Convenient, permanent drop-off sites – Permanent drop-off sites are strategically
        located, fixed facilities that balance convenience with efficiency and cost-effectiveness
        for the collection of NEPSI Products.
        Drop-off sites may be provided by:
                 Electronics recyclers, non-profit and for-profit
                 Recyclers of other commodities, non-profit and for-profit
                 Reuse organizations, non-profit and for-profit
                 Municipalities through operating sites such as recycling centers and transfer
                 stations.
                 Retailers
                 Or others


                                                  22
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
    (2) Role of Retailers – (Note per WR: the role or retailers is intended to be more flexible
        than as a drop off site. For example significant promotion, or co-sponsorship at some
        other collection point. If those words are included in the section title it could cause
        concern) In order to ensure that sufficient and convenient collection opportunities exist,
        retail stores that sell NEPSI Products are strongly encouraged to participate in the
        collection system. Due to their unique characteristics and direct contact with consumers,
        retailers may participate through a variety of means. Following are several options by
        which retailers could provide their share of the system:
                Collection events taking all NEPSI Product through business partnerships with
                recyclers, Consumer Electronics Manufacturers.
                A fair share contribution of resources to the local collection system.
                Contributions could include: collaborative collection events, co-sponsoring a
                drop off location, providing take-back with delivery service, significant
                promotional efforts, etc.
                When practical offer old-for-new (one-for-one) take back, possibly including old
                item pick-up when new item is delivered.
            Assistance with best practices, logistical issues and possibly compensation for
            collection costs would help retailers to provide collection services.
        (3) Proper Handling-- Parties collecting NEPSI Products should ensure that all NEPSI
            Products are handled so as not to adversely affect their ability to be reused or
            recycled. All NEPSI products should be transported to a NEPSI Contract Holder or
            otherwise handled by agreement with a NEPSI Contract holder, in order to receive
            the CIP.
        (4) Convenience: Convenience affects performance of the NEPSI System Infrastructure
            and includes travel distance to the nearest drop-off site, hours/days of operation of
            the facility which will be determined locally, and level of consumer service which
            relates to the ability of the drop-off facility to handle the flow of products and traffic
            in an efficient and timely fashion.

                         b.        Geographic Collection Standards
                         It is the intent of the Infrastructure Subgroup that different levels of
                         collection services shall be provided in communities based on
                         community population level. The following reflects the Infrastructure
                         Subgroups Preliminary thinking on this matter.
        (1) Urban Collection Standard No edits made to these sections but note concerns
        Urban Service areas will be defined as A. Each unit of X population will have the Base
Collection Services available.
        (2) Rural Collection Standard
        Areas with a population level less than Y but greater they A shall have the following
Collection Service Level: Note concern that the formulas set out in (1) and (2) are confusing to
the reader and contain incomplete thoughts.
            •   The Urban Service Standard will apply in central service towns that can serve a
                surrounding population greater than X
            •   Very rural areas will provide collection service as feasible, but shall receive a
                higher compensation than the base compensation due to the greater costs
                attributed to collecting in sparsely populated areas.


                                                 23
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
               •   Mail-back service may be used for those NEPSI Products that meet shipping size
                   restrictions. Mail back Service may not apply to large items, such as large screen
                   TVs. Generally if a product is commonly sold via mail delivery, it should be
                   returnable via mail-back.

      (3) National Collection Standard to Address Rural Communities
          To address rural residents and others with limited access to other collection options
      Collection Services such as a national mail-back service will be provided whereby the
      consumer (last user) pays for some portion, but not all, of the shipping (mailing) costs***.
      A national mail-back service should be established as a base-level of service:
               •   If a vendor/retailer delivers NEPSI products by mail, they shall provide a mail-
                   back option to mail order customers and may charge the customer the additional
                   cost above the reimbursement they receive for base compensation.
                   Mail-back centers (possibly regional) will receive base compensation, but the
                   collection portion will be reimbursed at a lesser rate than a collection center
                   providing direct public access

          C.       Transportation System

                   1.      Base Service Standard for Transportation:

                    The national financing system will support transport of collected materials from
          urban and rural collection sites to NEPSI Contract Holders for processing. These
          collection sites may be private or publicly owned, large or small. The system will fund
          the transport of large quantity shipments of full truck loads (FTL). It will fund, assist,
          and/or provide incentives for efficient transportation of small quantity shipments of less
          than full truck loads (LTL) that meet defined criteria and limitations.

          The following transportation services are to be included in the base service:
               •   Transportation from urban and rural collection sites to accumulation facilities
               •   Transportation from primary processing facilities to final processing facilities or
                   markets

          D.       Processing/reuse/recycling Services

                  The following accumulation, processing, reuse and recycling services are
          included in the base service provided these services are undertaken pursuant to a NEPSI
          Processing Contract: NOTE: Not sure about the pursuant part. Not discussed In fact,
          the reuse people may object. Their activities may in reality occur outside and
          independent of the NEPI Processing Contract. Need a mechanism, where reuse, to
          assure properly handled and not dumped or sent for oversees processing if re-use is not
          done pursuant to a contract with the NEPSI TPO.

***
   A subsidy of shipping costs by the national financing system shall be intended to make mail-back
service an equivalent cost to the consumer. Since the collection portion of costs is not compensated for
mail-back service, these funds can partially compensate mailing expenses. Further cost analysis is needed
to determine if a charge is needed at all, or what portion would be paid by the last user vs. the national
financing system.


                                                    24
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
               1. Regional centers may accumulate NEPSI Products if beneficial for
                  transportation efficiency
               2. Sorting of NEPSI Products for reuse and remanufacturing should take place
                  when economically feasible, in conjunction with recycling.
               3. Recycling services may be compensated for NEPSI Product that is recycled at
                  rates appropriate to the net costs and to achieve system goals.
               4. All processing, end markets, and/or disposal services shall be consistent with
                  the “Context and Outline for NEPSI Environmentally Sound Management
                  (ESM)” document developed by NEPSI and subsequent standards developed
                  during the NEPSI System implementation.
               5. Reuse should be an integral, practical and complementary part of the NEPSI
                  System. The NEPSI System should endeavor to support reuse through
                  various methods.
               6. Reuse activities supported by the NEPSI System should be expected to meet
                  certain national standards which such as:
                       •   Protection of brand owners from liability to the degree possible
                       •   Meeting minimum qualifying criteria (This is a place holder.
                           Unclear what the TPO might decide are qualifying standards for
                           reuse. This has been a hot issue in Europe. Should we leave for
                           the TPO)
                       •   ESM standards as developed.
       D. Other System Services
                The other service elements listed above would be reimbursed at their appropriate
       rate based on competitive contracting. For example, if an entity performed both
       collection and recycling, it would be compensated for both services. Any community or
       entity can exceed this level of service, but they would only receive the base
       compensation.
       .




                                              25
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.

Addendum A

           Base Service Collection Incentive Payment
                                      Discussion
This document describes a proposed approach for the Base Service Collection Incentive Payment
as defined in the Base Service Level Document of the NEPSI Infrastructure Group.
What is the Collection Incentive Payment (CIP)? See Base Service Document, p. 2.
Purposes of the CIP
   •   To provide adequate financial incentive to effectively draw a high percent of discarded
       used NEPSI Products into a safe and reliable recovery system.
   •   To motivate collection of NEPSI Products on a voluntary basis by a diversity of entities
       without mandating collection by any particular entity, such as retailers or governments.
       Collectors who find it beneficial to collect NEPSI Products should be able to afford to
       provide the service.
   •   To put a financial incentive into place as a driver or catalyst for collection of NEPSI
       Product, rather than to prescribe how and who will provide Collection services. Because
       there is a tremendous diversity of situations across the U.S. how collection is done and by
       whom should be determined locally, based on local conditions.
   •   To provide coverage for local costs of a base level of Collection Services in a simple and
       efficient manner. Other methods such as bidding out collection services, actual cost
       reimbursement, grant programs, etc. are not as simple or efficient. (Sego, Am not sure
       what the point is with this second sentence)
   •   To ensure strong support for national recovery program for NEPSI Products (the NEPSI
       System) and legislation implementing the NEPSI System because it is fair and benefits a
       multiplicity of parties.
   •   The CIP eliminates complaints from local governments about “unfunded mandates” as it
       is not a mandate and it is funded.
How is the CIP amount to be set?
   (The CIP should be established and the amount set through a planning process that
   establishes the entity that manages the front-end financing) Sego – What does this sentence
   mean?? Are you talking about setting up the TPO, the CIP, something else…. It should be
   based on and consistent with the principles that are defined for the NEPSI System. Following
   is a process for establishing the CIP:
       1. The NEPSI MOU should define and include the principles for the CIP.
       2. The Seattle Assessment (Need to define Seattle Assessment in a footnote so reader
          knows what we are talking about) was undertaken to provide an initial estimate of
          the level of the CIP so that NEPSI Participants understand the range of anticipated
          cost of collecting NEPSI Products. It modeled a number of collection scenarios and
          analyzed the resulting costs. It was a trial run to provide NEPSI Participants with
          some general understandings and preliminary cost ranges. Preliminary figures
          developed through the Seattle Assessment suggest a CIP rate of .08-.14 per lb.
          Additional modeling, as well as studies of existing collection programs by a diversity
          of collector types in both urban and rural setting will be needed to determine an
          appropriate CIP rate to be paid in the NEPSI System.



                                               26
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
       3. The entity that will implement the NEPSI System should establish the CIP based on
          sophisticated eco-efficiency modeling, business planning and analysis. It will need to
          consider any number of variables, including regional factors, urban and rural
          differences, and collector and transportation criteria.

How will the CIP be paid to collectors?

This should be left to the entity that implements the NEPSI System, but there are several
straightforward ways to do so. For example, it could be included in the contractual
reimbursement to the NEPSI Contract Holder (Processors) and simply be a fixed payment for
purchasing NEPSI Product from the collecting entity.




                                              27
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.



                                         EXHIBIT 6

                                    TPO DOCUMENT

       STRUCTURE AND FUNCTION OF A THIRD PARTY
    ORGANIZATION (TPO) UNDER THE NEPSI HYBRID SYSTEM
This document summarizes the structure and functions of the Third Party Organization (TPO)
called for in the NEPSI Hybrid System. The contents of this document are drawn from the
Infrastructure Document addressing the TPO and the work presented to the G12 Group on
Precedents5 for a TPO and has been further developed by the NEPSI Infrastructure Group.

1. Introduction
The TPO is envisioned as a non-governmental body that is authorized to draw on the funds
generated by the Advance Recycling Fee (ARF) for the purposes of managing the NEPSI System
as set out in Federal Legislation. This TPO, or a similar entity, could continue after the ARF
sunsets, if industry deems this kind of entity a valuable mechanism to help organize Consumer
Electronics Manufacturers to take collective actions that might be desirable to implement the
NEPSI System after transition.
A TPO is envisioned as a useful means of ensuring that the national ARF will be solely dedicated
to the efficient establishment and operation of national NEPSI System infrastructure for the
collection, transportation and processing of discarded NEPSI Products. A TPO is also a means to
ensure that affected Consumer Electronics Manufacturers and other stakeholders will have
considerable say in how these funds are managed so that the money is managed efficiently and
appropriate incentives exist to lower this fee over time.

2. Structure and Governance of TPO

•   Established as a non-profit 501(c) (3) or other similar corporation, specifically empowered to
    expend moneys from the ARF-generated Trust Fund, and possibly other sources, to finance
    the NEPSI System infrastructure.
•   TPO is intended to have the minimum overhead and staff to properly carry out its functions.
    It is anticipated that many if not most functions of the NEPSI System shall be performed by
    contractors that are managed by the TPO and paid for with ARF funds. (e.g., actual recovery
    services).
•   TPO shall be overseen by a Board of Directors that would have majority representation of
    Consumer Electronics Manufacturers and their designated partners, but would also include
    other multi-stakeholder representatives.
•   TPO would be subject to periodic private audits and obligated to report regularly to a
    Congressionally-specified national oversight body (e.g. EPA, the Trustee of the ARF Trust
    Fund, GAO, etc.).

3. Key Operating Principles for the TPO

5
 For copies of these supporting documents see _____________________ Report of the NEPSI Process,
prepared by the Center for Clean Products, University of Tennessee.


                                                28
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
•   Operate as the implementing arm of the NEPSI MOU during the ARF period.
•   Determine the most cost-effective distribution of funds required to meet the Performance
    Goals for the NEPSI System as established by Congress.
•   Have flexibility in how to efficiently attain the NEPSI Performance Goals.
•   Evolve over time as the system demands change.

4. Key Roles and Responsibilities of the TPO
System Planning
•   Perform program planning to ensure that the collection and recycling infrastructure reflects
    the NEPSI System attributes as articulated in the NEPSI MOU.
Accountability
•   Implement and be accountable for the NEPSI Performance Measures and Environmentally
    Safe Management Protocol and standards.
•   Implement mechanisms to assure responsible financial management and business practices
    and periodically review reimbursement rate(s) and procedures for fund distribution.
•   Establish minimum performance standards for service providers that handle NEPSI products,
    including environmentally sound management (ESM) standards that reflect the parameters set
    for in the NEPSI ESM Standards as set out in Exhibit 8, and a system for the qualification of
    processors (may be done in conjunction with another national organization such as
    International Association of Electronics Recyclers (IAER).
•   Monitor and report on system performance in attaining NEPSI Performance Goals.
Infrastructure Implementation
•   Identify appropriate recycling/recovery service providers, enter into contracts with them for
    services to meet the needs of the NEPSI System and verify proper contract performance.
•   Ensure that the ARF system implements the Base Service Level Standard.
•   Use competition in procurement of infrastructure services to continually drive down costs of
    the NEPSI System.
•   Establish and maintain relationships with regional entities to implement a flexible local
    NEPSI System Infrastructure. States and communities should have an active voice in how
    the NEPSI System Infrastructure is developed within their jurisdiction.                          Deleted: locally.

•   Incorporate existing local and national infrastructure into the NEPSI System where it is cost-
    effective to do so. The purpose of these guidelines is to minimize the need for new facilities   Formatted: Highlight
    and, where possible, achieve economies of scale by consolidating volumes of NEPSI                Deleted: is
    Products across regions.
•   Promote continuous improvement in environmental and economic performance of the
    collection, reuse and recycling of NEPSI Products by:
    o Facilitating the sharing of best management practices and technologies between service
        providers.
    o Assuring two-way communication between Consumer Electronic Manufacturers and
        service providers to share product information to maximize recovery and cost-efficiency.
    o Encouraging opportunities for recycling and reuse market development for NEPSI
        Products.



                                                29
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
    o   Investigating ways to provide incentives to Consumer Electronics Manufacturers to
        improve product design for end-of-life management.

Public education
•   Spearhead a cost-effective national educational campaign with themes and materials
    distributed through both national and local channels.

5. Aspirational Goals for the TPO
One goal of the NEPSI System is to nurture/catalyze an effective, environmentally responsible
and sustainable collection and processing infrastructure for NEPSI Products that removes
problematic materials from the waste stream and returns it to productive commerce. In addition
to addressing environmental concerns, such a system will add to domestic economic development
by creating new business opportunities and jobs. It also has the potential to address other social
concerns, such as closing the digital divide and bringing computer literacy to more low income
families.
To this end, the both the Interim Program National Coordinating Entity and the NEPSI System
TPO should:
•   Seek opportunities to encourage the reuse of operable NEPSI Products.
•   Seek opportunities to encourage the distribution of operable NEPSI Products for reuse to low
    income families and others who cannot currently afford to purchase new NEPSI Products.
•   Conduct operations such that a wide diversity of collector types and collection methods are
    supported.
•   Enter into contracts for processing of products such that:
    o   A level playing field is established and maintained (among/between whom)
            All domestic NEPSI Contract Holders and their domestic subcontractors must meet
            all applicable wage, labor, occupational safety, health, and environmental laws and
            standards for private enterprises doing business in the United States as well as the     Deleted: for private
            State in which the NEPSI Contract Holder is located. (NOTE: Concern about
            intent raised here as this edit seems to change the intent)
    o   A diversity of processors is maintained
                                                                                                     Deleted: Contract methods should be
            To foster competition the TPO should contract with a diversity of processors..           utilized that allow for a
            Competitive contracting should be used wherever possible.
                                                                                                     Deleted: diversity
                                                                                                     Deleted: to compete and hold contracts




                                                  30
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
            EXHIBIT 7: ENVIRONMENTALLY SOUND MANAGEMENT
            PROTOCOL DOCUMENT

                       A CONTEXT AND OUTLINE FOR
        NEPSI ENVIRONMENTALLY SOUND MANAGEMENT (ESM)
NOTE: This is an outline and not intended in this draft to be fully developed
standards.

Purpose
The NEPSI National Coordinating Entity (NCE) or Third Party Organization (TPO), as part of
the NEPS System, should develop Environmentally Sound Management Standards (ESM
standards for contract holders that will provide processing and recycling services (NEPSI
Contract Holders) for NEPSI Products. The guidelines for those standards are presented in this
document.
The purpose of ESM guidelines is to set forth contracting requirements to ensure that NEPSI
Products collected and processed through the NEPSI System are handled in an environmentally
responsible manner. This document is not intended to set forth regulatory requirements and there
is no intent that the NEPSI System or the NESPI TPO or NCE undertake the responsibility of
regulating those who process electronic equipment.

The guidelines set forth herein shall be incorporated in all NEPSI processing contracts as a
condition precedent of said contracts. Failure to comply with these guidelines shall constitute a
breach of the NEPSI Contract and shall be grounds for immediate termination of the NEPSI
Contract. A NEPSI Contract Holder that breaches said provisions of a NEPSI Contract may be
subject to the payment of damages to the NEPSI System through the TPO.

In drafting these guidelines the NEPSI Participants were guided by the following principles:
    •   Protecting public health and welfare and the environment
    •   Ensuring that those businesses that process electronics pursuant to a NEPSI Contract are
        responsible processors
    •   Limiting the NEPSI System’s liability for the violation of local, state, federal, or
        international laws from the acts of contractors or subcontractors.

NEPSI Context for ESM Guidelines
The NEPSI ESM guidelines are intended to define the conditions and requirements that will be
placed on any entities that process and recycle electronic products and materials that are
recovered, reused, or recycled under the NEPSI System. In other words, these guidelines provide
due diligence guidelines for NEPSI contracting procedures. NEPSI ESM guidelines will not
apply to all electronics recycling companies in the U.S., but only those under contract, directly or
indirectly, to process and recycle NEPSI Products.. For purposes of this document, these parties
will be known as “NEPSI Contract Holders”.

It is the assumption of this document that NEPSI Contract Holders will be processors of NEPSI
Products, rather than entities that primarily collect NEPSI Products for processing by another. As
such the scope of these guidelines does not apply to collection activities.

In the development of these guidelines, the NEPSI Participants are cognizant that these guidelines
create an elevated management threshold for NEPSI Products. This elevated management


                                                 31
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
threshold must be met to be eligible to contract for the processing NEPSI Products collected
through the NEPSI system. Therefore, it is intended that the strategies NEPSI Contract Holders
use to comply with the NEPSI ESM guidelines shall be flexible and appropriate to functions
performed. Ultimately, the ESM guidelines that NEPSI Contract Holders will be required to meet
must be consistent and adequate to maintain the integrity of the overall NEPSI system and its
fundamental principles, specifically as they apply to human and environmental health and safety.

The NEPSI ESM guidelines are intended to apply both in the Interim Program and the NEPSI
System and are applicable to reuse, refurbishment, recycling, and disposal activities by any
NEPSI Contract Holder. If a NEPSI Contract Holder handles non-NEPSI materials and
commodities in the same facility or operation, there must be operational procedures in place to
ensure they are handled separately from NEPSI materials and commodities if they are handled in
a different manner that is less rigorous then required by the NEPSI ESM Guidelines. Such
operational procedures are not applicable if the NEPSI Contract Holder is managing such non-
NEPSI materials and commodities in compliance with all NEPSI contract terms.

Intent
    •    To set a high standard for environmental protection and worker health and safety. These
         guidelines shall be developed to ensure consistency not reflected in current U.S. laws and
         regulations.
    •    To ensure the appropriate removal and proper handling of all hazardous materials and
         components regardless whether processed domestically or in another country.
    •    To ensure that all commodity materials, including those that are destined for export, are
         processed in a manner and in accordance with appropriate guidelines to ensure that they
         are regarded and handled as a commodity and not as a waste.
    •    To set a high level of operational guidelines for the national NEPSI System that matches
         or exceeds similar requirements in national and international standards.
ESM and market development initiatives are closely interrelated. ESM guidelines should not be a
barrier to delivering reusable products or processed industrial feedstock materials to legitimate
markets, wherever they exist. However, the NEPSI ESM guidelines are intended to protect
against the creation of hazardous public health or environmental conditions as a result of the
processing or disposal of NEPSI Products.

Outline of Requirements for NEPSI Contract Holders
1. All NEPSI Contract Holders must, at a minimum, comply with federal, state and local
   regulations, including federal and state minimum wage laws, and be properly authorized by
   all appropriate governing authorities. NEPSI Contract Holders shall comply with federal and
   international law regarding the export of products or materials. These requirements are
   minimum requirements and may be exceeded by the NEPSI ESM guidelines to the extent that
   NEPSI System participants believe these guidelines are inadequate to protect the public
   health and welfare and to protect the environment.
2. All NEPSI Contract Holders must provide evidence that completion of a NEPSI-approved
   certified training course has been fulfilled by operations management, or is planned within 90
   days. The number of staff required to complete this training is dependent upon ensuring that
   at least one NEPSI-approved certified training course attendee is always present during
   facility operations. In addition, if a change in staffing occurs and additional employees
   require training course completion, this must occur within 90 days of assuming such
   responsibilities.



                                                 32
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
3. All NEPSI Contract Holders must take sufficient measures to safeguard occupational and
   environmental health and safety, through adherence to the following:
   a. Environmental Health &Safety (EH&S) training of personnel.
   b. An up-to-date, written hazardous materials identification and management plan.
   c. An up-to-date, written plan for reporting and responding to exceptional pollutant releases,
       including emergencies such as accidents, spills, fires, and explosions.
   d. Liability insurance for accidents and other emergencies.
   e. Documentation that completion of an EH&S audit is completed on an annual basis.
   Proof of satisfaction of these requirements must be made to NEPSI prior to execution of a
   NEPSI contract.
4. All NEPSI Contract Holders must provide proof of procurement of workers
   compensation/employers’ liability insurance.
5. All NEPSI Contract Holders must provide proof of financial resources (as determined
   appropriate by the NEPSI TPO) adequate to cover expenses applicable to environmental
   liability related claims and occurrences, other than those that are of sudden and accidental
   nature (including the cleanup of stockpiled equipment and materials).
6. All NEPSI Contract Holders must have in place a documented environmental management
   system (EMS), appropriate in level of detail and documentation to the scale and function of
   the facility.
7. All NEPSI Contract Holders must remove and properly manage (as specified by the NEPSI
   TPO) all hazardous and other components requiring special handling from used electronics in
   accordance with or exceeding all federal, state, and local regulations. NEPSI Contract
   Holders must be properly authorized by all appropriate governing authorities as required for
   this activity.
8. All NEPSI Contract Holders must assure that all NEPSI Products and component parts
   thereof are processed and recycled in an environmentally sound manner at facilities that are
   fully licensed for that purpose by all appropriate governing authorities. The NEPSI TPO or
   other appropriate entity will develop specific, appropriate and flexible ESM processing
   guidelines, or they shall adopt an existing guideline system, that apply to individual NEPSI
   Products, components and/or materials. Components that might be addressed within these
   guidelines might include such items as circuit boards, batteries, capacitors, CRT devices, and
   flat panel displays.
9. All NEPSI Contract Holders proposing to export NEPSI Products collected through the
   NEPSI System to a foreign country (directly or indirectly through downstream market
   contractors) must include, at a minimum, in their proposal for sub -contract, countries to
   which exports will be made and the commodity that will be exported. Once a contract has
   been awarded, notification to the NEPSI TPO and verification (including applicable
   documentation) must be provided with respect to additional export information (within a
   required time period as determined appropriate by the TPO, not to exceed 30 days) including
   but not limited to:
    a. Destination (including facility name and address) to which shipment is exported.
    b. Shipment contents and volumes.
    c. Specific use of contents by the destination facility.
    d. Specifications required by the destination facility in relation to shipment contents and
       how the sub-contract holder will ensure meeting these specifications.
    e. Manner by which sub-contract holder is ensuring appropriate handling, by destination


                                                33
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
         facility, of shipment materials in accordance to guidelines and requirements that are
         comparable with and generally equivalent to those that apply to contract holders.
    f.   Manner by which sub-contract holder is ensuring any waste produced at the destination
         facility will be handled in accordance with guidelines and requirements that are
         comparable with and generally equivalent to those that apply to NEPSI Contract Holders.
    g. Assurance that all shipments for export, as applicable to the sub-contractor, are legal and
       satisfy all applicable laws in the destination country.
       Once initial notification is provided, the NEPSI Contract Holders may comply with
       exporting requirements (as noted above) by maintaining shipping records to be submitted
       to the NEPSI TPO on a quarterly basis. In the event any information provided in initial
       notification does change, initial notification, as specified above, must once again take
       place.

    Any export shipment of NEPSI Product, if approved by the NEPSI TPO, must also meet the
    following criteria, as applicable:

    a. Be whole products, working or requiring minor repair, destined for reuse with respect to
       their original purpose. Verification must be provided that specifies that the recipient has
       the capability to test and has the markets to sell or donate items for reuse.
    b. Be materials that have been prepared for processing, appropriate for the intended use as
       stated in the NEPSI TPO notification, and will be used in accordance to this intention.

    Copies of applicable licenses of downstream markets, as well as relevant transportation
    documents (e.g. manifests and bills of lading) shall be maintained on file and be made
    available for viewing by the NEPSI TPO.

    An exception to the above prior-approval and notification requirements for export of NEPSI
    Products through the NEPSI System may be granted to a Consumer Electronics Manufacturer
    on case-by-case basis by the NEPSI TPO, when the materials will be exported to companies
    or facilities owned or controlled by the Consumer Electronics Manufacturer. The Consumer
    Electronics Manufacturer will be required to satisfy the same EMS standards for the
    management of these materials as a NEPSI Contract Holder.

10. All NEPSI Contract Holders must have a regularly implemented and documented monitoring
    and record keeping program that tracks key process parameters, compliance with relevant
    safety procedures, effluents and emissions, and incoming, stored and outgoing materials and
    wastes.
11. All NEPSI Contract Holders must maintain a record of the chain of custody for downstream
    markets and applicable supporting documentation that downstream markets for NEPSI
    Products electronics meet the requirements below.
12. All NEPSI Contract Holders must complete a pre-contract, on-site audit and agree to be
    subject to, at will, periodic audits (on-site or otherwise) by the NEPSI TPO or its agents or
    employees of all sites where NEPSI Products will be processed.

Any items submitted to the TPO to fulfill the above requirements for NEPSI Contract Holders
shall be considered confidential, private, non-public if so requested by the NEPSI Contract
Holder. These documents shall not be subject to public disclosure except as agreed upon by the
parties or as may be ordered by a court having proper jurisdiction.


                                                 34
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
Outline of Requirements for Downstream Markets
NEPSI Contract Holders are responsible to assure that their downstream markets comply with
guidelines that are comparable with and generally equivalent to those that apply to NEPSI
Contract Holders. A violation of NEPSI ESM Standards by any of a NEPSI Contract Holder’s
downstream market contracts is a NEPSI contract violation and will result in contract breach and
is grounds for termination.

The TPO shall determine specific requirements for downstream markets. These standards shall
be based upon perceived risks related to the NEPSI Products that are being handled and the
processes that will be used to handle the NEPSI Products.

Primary Resources
Electronics Recycling Council (ERC) of the Institute of Scrap Recycling Industries (ISRI).
Criteria for ESM of E-Scrap, draft document, August 12, 2003.

International Association of Electronics Recyclers. IAER Certification Standards,
http://www.iaer.org/certificationstandards.htm, July 2003.

Organization for Economic Cooperation and Development. OECD Environmentally Sound
Management Guidelines for Dismantling of Computers,
http://www.olis.oecd.org/olis/2001doc.nsf/linkto/ENV-EPOC-WGWPR(2001)3-FINAL, 2001.

U.S. Environmental Protection Agency. Plug-In Campaign Criteria for Environmentally Sound
Management (ESM), June 2003.

Other Resources
Computer Take-Back Campaign, Silicon Valley Toxics Coalition, and the Basel Action Network.
Electronics Recyclers Pledge of True Stewardship. February 2003.
http://www.svtc.org/cleancc/recycle/pledge_and_form.pdf, July 2003.

Neil Peters-Michaud, John Katers, Jim Barry. Occupational Risks Associated with Electronics
Demanufacturing and CRT Glass Processing Operations and the Impact of Mitigation Activities
on Employee Safety and Health, ISEE 2003 Proceedings, May 2003.
National Electronics Product Stewardship Initiative. NEPSI Due Diligence Guidance for
Selection of Electronics Reuse and Recycling Services, Draft Document, June 2002.

New Jersey Department of Environmental Protection. Management of Spent Computers and
CRT's (Computer Monitors) in New Jersey, http://www.state.nj.us/dep/dshw/lrm/uwrcompu.htm,
February 2003.

Roman, Lauren S. Environmental Challenge 2003: How to Audit an Electronics Recycler, United
Recycling Industries, Inc. (973) 584-859; Lroman@unitedrecycling.com;
www.unitedrecycling.com.

Western Electronics Product Stewardship Initiative. Action Plan for the Western Electronics
Product Stewardship Initiative (WEPSI),
http://www.recyclingadvocates.org/wepsi/actionplan.pdf, August 2002.




                                               35
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.

                          EXHIBIT 8
                MARKET DEVELOPMENT DOCUMENT

INTENT

This document includes policies and action items to stimulate end-market demand for collected
NEPSI Products to ensure that there are economically viable and environmentally sustainable end
markets for NEPSI Products. The purpose of market development is to increase revenues for the
                                                                                                      Deleted: from collected material
sale of collected NEPSI Products and to reduce the overall costs of the NEPSI System.
                                                                                                      Deleted: sales
For purposes of this document, “collected NEPSI Products” includes whole NEPSI Products and
                                                                                                      Deleted: materials
their subsystems, components collected or processed through the NEPSI System...
                                                                                                      Deleted: and/or materials

In addition, this document expressly does not limit the intention of market development to the use    Deleted: electronics-recycling
                                                                                                      infrastructure
of collected NEPSI Products in electronic products. It is anticipated that electronic products will
account for a significant portion of related market development, but is neither expected nor          Deleted: materials
intended to be the sole market for collected NEPSI Products.                                          Deleted: these materials


These policy recommendations focus primarily on stimulating demand for collected NEPSI
Products: recycled content for new products, government procurement requirements, and                 Deleted: materials
allocation of available funds to stimulate demand. Issues concerning collection, processing,
demand for recycling services, and other product design issues are not addressed in this document
as these are considered to be under the purview of the entire NEPSI Infrastructure Committee.

The outcome of NEPSI should include commitments by all NEPSI Participants to enhance market           Deleted: parties
development for collected NEPSI Products in ways that are both feasible and within their              Deleted: materials
capabilities. For example: Consumer Electronics Manufacturers should include recycled materials
and/or components in new electronic products; suppliers of components should incorporate
recycled content in new components, and government and NGOs should incorporate recycled
content requirements into purchasing decisions.

ACTION STATEMENTS
Following are the specific actions that the NEPSI System will take to promote adequate end-
markets for the reuse and recycling of collected NEPSI Products.                                      Deleted: materials


Recycled Content. In order to ensure the use of collected NEPSI Products in new products,             Deleted: materials
Consumer Electronics Manufacturers and suppliers of electronic equipment should establish their       Deleted: m
own specific post-consumer recycled content targets for collected Collected NEPSI Products in         Deleted: materials
electronic products and associated service parts. This includes targets for recycled glass in
cathode ray tubes, recycled plastics, and all other materials in NEPSI Product housings/casings       Deleted: electronic p
and other components and parts.

Such targets should seek continuous improvement in the use of collected NEPSI Products with           Deleted: materials
superior accomplishments recognized through a national award program.

It is recommended that the NEPSI Third Party Organization (TPO) and/or National Coordinating
Entity (NCE) (during both the interim and in the ultimate NEPSI Systems) and/or the Electronics       Deleted: entity charged with
Industry Alliance (EIA), the American Plastics Council (APC) and other industry trade                 implementing the NEPSI system

associations work collaboratively to develop guidance documents and a system to ensure and            Deleted: s



                                                36
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
implement reporting of these commitments by the Consumer Electronics Manufacturers as well              Deleted: industry
as insure that collected NEPSI Products are used to encourage the broad development of markets          Deleted: and
for collected NEPSI Products. The TPO will be responsible for ensuring that such guidance               Deleted: material usage as a way
documents are developed and disseminated.
                                                                                                        Deleted: broader use of

In order to reduce electronics recycling system costs, the TPO (or other appropriate entity) will       Deleted: materials
work to develop viable markets for collected NEPSI Products in applications within and beyond           Deleted: entity charged with
the electronics sector (e.g., in the building and construction industry). Various techniques to         implementing the NEPSI system
stimulate market demand should be explored, for example development of a recycled electronics           Deleted: entity charged with
                                                                                                        implementing the NEPSI system
credit system, and local electronics market development opportunities.
                                                                                                        Deleted: materials
It is understood that incorporation of recycled content into new products requires that collected       Deleted: seeking
materials be available where new products are manufactured, which is frequently overseas.
NEPSI should, therefore, develop ESM guidelines that provide for appropriate and
environmentally responsible export and domestic management of collected NEPSI Products in               Deleted: materials
compliance with relevant state, national and international laws and treaties. Such ESM guidelines
shall include pre-requisite reporting requirements prior to export or domestic management of
collected NEPSI Products.                                                                               Deleted: materials


Procurement. In order to maximize potential end-markets, the NEPSI System should encourage
procurement officials throughout the public and private sectors to strengthen and broaden
commitments to the purchase of environmentally preferable electronics and recycled-content
products derived from collected NEPSI Products. Such action includes development and                    Deleted: used electronics
implementation of such procurement standards by EPA or other appropriate entity.

Funding to stimulate market demand. Some fraction of the ARF6 should be designated for use              Deleted: funds
for research, incentives and programs in order to increase demand for collected NEPSI Products.         Deleted: collected for recycling
Investment in market development by the NEPSI system will be designed to reduce the overall             services
costs of the system by ensuring the movement of collected NEPSI Products (not stockpiling or            Deleted: materials
disposal) to end markets and enhancing revenue from collected NEPSI Product sales. These                Deleted: materials
markets (?? What are they) will be evaluated on the basis of return-on-investment, like any other
                                                                                                        Deleted: material
financial investment and will be managed for cost-effectiveness.
                                                                                                        Deleted: y
Specific financial incentives for research, capitalizing processing equipment and developing new
technologies that will increase the cost effectiveness and sustainability of reuse and recycling of
electronic products should also be developed and implemented.
The NEPSI Participants encourages demand stimulation initiatives by EPA, states and other
governmental agencies.
Industry standards and material specifications
The NEPSI System should support the development and implementation of industry-based                    Deleted: NEPSI
standards and specifications7 for scrap material in order to ensure that the highest quality material
enters the recycling marketplace.




6
    To be established as part of the overall NEPSI program operating budget.
7
    Such as ISRI guidelines.


                                                      37
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.


                             EXHIBIT 9
                       PERFORMANCE MEASURES

This document is still in progress.




                                         38
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.

                                 EXHIBIT 10
                          TRANSITION SYSTEM DOCUMENT

                               NEPSI Hybrid System Transition

Based on the work of the NEPSI Participants and its Finance and Transition (F&T) Subgroup, the
following statements on the NEPSI System transition from an Advanced Recovery Fee (ARF)
system to a Partial Cost Internalization (PCI) system seem to have significant support:

        It is the intent of the NEPSI Participants that the NEPSI System transition from
        an ARF system to a PCI system unless:

        (a) the original near term objectives* of the ARF system have not been
             accomplished and the ARF needs to be kept in place to accomplish them (*
             deal with the orphan and historic NEPSI Products that have not been
             recovered, build necessary NEPSI infrastructure to recover NEPSI Products
             to meet Performance Goals, etc.)
                                          --OR--
        (b) The original near term objectives of the ARF system HAVE been
             accomplished but there is substantial evidence that an ARF system, rather
             than a PCI system, would best serve the long term NEPSI objectives.

System Review for Transition

Seven years after the effective date of the national ARF system, EPA will convene a multi-
stakeholder advisory committee, pursuant to the Federal Advisory Committee Act, to review and
assess the demonstrated benefits of the ARF system. The assessment shall be based on the
criteria below, and provide advice on whether and when to transition to the PCI system8. The
intent of the transition is to move to a financing system based on greater individual manufacturer
responsibility to increase incentives for product design and any additional long-term objectives
that the stakeholders might identify. In evaluating the NEPSI System and financing mechanism,
the following questions, at a minimum, should be considered:

        (1)   Has a set portion/percentage of orphan and historic NEPSI Product been recovered/
              managed (e.g., removed from storage and the waste stream)?

        (2)    Is the collection, transportation, and processing infrastructure sustainable without
              the ARF?

        (3)    What is the public awareness/satisfaction with the NEPSI System, and are

        8
          The Federal Advisory Committee Act acknowledges Advisory Committees as a
“useful and beneficial means of furnishing expert advice, ideas, and diverse opinions to
the Federal Government”. Section 2, FACA. To make sure that these Committees are
most valuable and transparent, the Act sets requirements to ensure that these Committees
are “fairly balanced in terms of the points of view represented” as well as provisions for
timely public notice of meetings, and requirements that the records, notes, reports,
working papers etc. of the Committee are made available for public inspection.



                                                39
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
              there indications that the public would be more satisfied with an alternate system?

        (4)    Are there other benefits for moving or not moving to a different system, such as
              further promotion of green design?

The multi-stakeholder review of the NEPSI System shall be completed within six months. In
order for the NEPSI System evaluation to occur within six months, EPA will initiate the
evaluation prior to Year 7, have the multi-stakeholder group selected, pertinent records available,
etc. prior to commencing the review period. It is further recommended that in Year 6 reports be
requested from the General Accounting Office or other independent, government research entity
on the status of electronics collection and recycling in the US to help inform the work of the
multi-stakeholder advisory committee. However, the absence of such a report shall not impede
the evaluation process.

The multi-stakeholder group will provide recommendations consistent with one of the following
scenarios:

        (1)     The near-term objectives of the ARF have not been met, but progress is being
                made, and the funding mechanism needs to continue. The recommendations will
                include the time period for the next evaluation, not to exceed three years.
        (2)     The ARF is accomplishing near-term and long-term goals and should be kept in
                place.
        (3)     The ARF is not accomplishing the goals and it is necessary to transition to a new
                system. The recommendations should include guidance on whether the NEPSI
                System should transition to PCI at that point or to an alternate system. There
                should also be a cost/benefit analysis of that shift.
        (4)     The ARF has accomplished the near-term goals, but a transition to a new system
                is deemed necessary to achieve the long-term goals. The recommendations
                should include guidance on whether the NEPSI System should transition to PCI
                at that point or to an alternate system. There should also be a cost/benefit
                analysis of that shift.

EPA shall make a determination regarding the transitioning of the NEPSI System, taking into
account the input and recommendations of the Advisory Committee. Note that the Federal
Advisory Committee Act dictates that the function of Advisory Committees shall be advisory
only (Section 2(b)(6), unless otherwise specifically directed by statute or Presidential Directive
(Section 9(b). Thus if it is desired that the Advisory Committee’s findings have more definitive
effect, Congress should be asked to so specify in the legislation setting up the NEPSI System.

If EPA and the multi-stakeholder panel fail to act, the system will transition to PCI unless
Congress acts to change the financing system.




                                                40
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.

             EXHIBIT 11: INTERIM PROGRAM DOCUMENT
                   NEPSI INTERIM PERIOD PROGRAM
This working document of the NEPSI Infrastructure Subgroup provides guidance for the
electronic product end-of-life (EOL) management infrastructure that would be developed during
“interim period.” The interim period is defined as the time after the NEPSI Memorandum of
Understanding (MOU) agreement is signed, but before NEPSI System is implemented as set forth
in the MOU. The NEPSI Participants recognize that there will be some ramp-up time for the
NEPSI System, and that the existing infrastructure for the processing and reuse of Consumer
Electronics will need to be enhanced in that period. This document describes the roles that
individual stakeholder groups could play, in the Interim Period to enhance the existing activities
and to begin to develop the infrastructure for the NEPSI System. All of the tools described below
are part of the infrastructure development process. The tools must be mutually supportive and no
one tool by itself will achieve the result. Following signing of the NEPSI MOU, a top priority in     Deleted: top priority
creating an Interim Period Infrastructure and initiatives should be the creation of a National
Coordinating Entity (NCE).

I.      GOALS AND OBJECTIVES

        A. Overall Goals

            •   Prevent EOL NEPSI Products from being disposed of in landfills and
                incinerators.
            •   Draw NEPSI Products, including historic/orphan products that are in storage by
                the public, into the various reuse/recycling systems while also building the
                infrastructure needed for the NEPSI System.
            •   Develop incentives for entities that make efforts during the interim period to
                develop the infrastructure for the NEPSI System.

        B. Priorities for Action
                                                                                                      Deleted: impact

            •   During the interim period, it will be necessary to prioritize the actions that will   Deleted: will receive
                have the most impact (Unclear –Impact on what?) until implementation of the           Deleted: priority
                NEPSI System. The NCE should be designed to offer support to the states and           Deleted: their
                communities that express an interest in developing or enhancing their electronics     Deleted: whether
                recycling infrastructure.
                                                                                                      Deleted: ir
            •   States and communities will receive priority Interim Program assistance based
                on efforts currently in place to develop necessary infrastructure, the existence of   Deleted: that would be
                disposal bans are in effect or upcoming, the projected commitment of resources,       Deleted: Different levels of support
                and the population served by the infrastructure. Communities or states with less      (financial or other) w

                developed infrastructure or rural populations will be offered a lower (?) level of    Deleted: ould be offered for those
                                                                                                      states and communities with minimal
                support. (this section is a bit unclear and confusing. See what you can do            current infrastructure and those
                with it I made a couple of changes but it probably needs your insight.)               encompassing rural areas.
                                                                                                      Deleted: <#>Note that the following
            •   Priority support may also be provided during the Interim Period to private            criteria refer to a “community”, that is,
                                                                                                      any jurisdictional area such as a state,
                recyclers, retailers, or others who are contributing to the development of national   municipality, or county over which a
                or regional infrastructure by offering collection services on a regular and wide-     disposal ban, collection network, etc. can
                                                                                                      be provided. ¶
                                                                                                      Deleted: a



                                               41
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
              scale basis. The NCE shall provide criteria for these private initiatives and the    Deleted: appropriate
              level of support they should receive.                                                Deleted: support
                                                                                                   Deleted: ational Coordinating Entity
          C. Criteria for Prioritizing Support During the Interim Period.                          Deleted: such

              The Interim Program will be phased in accordance with the development of the
              system infrastructure and the community participation rate. A hierarchy for the
              allocation of support during the Interim Period will be established based on a       Deleted: will
              community's existing infrastructure and participation. The more developed the        Deleted: with the communities at the
              infrastructure and the greater the participation the higher a community will be in   top having
              the hierarchy. Communities higher up on the hierarchy shall receive priority
              support. The hierarchy will set out tiers with required infrastructure and           Deleted: infrastructure and highest
              participation standards. The NCE or other appropriate entity will develop the        participation rates. These communities
                                                                                                   will receive the largest amount of
              specific standards that must be met by states and communities to qualify for         support.
              classification in a tier. The following standards are offered here only as           Deleted: ational Coordinating Entity,
              examples.
                                                                                                   Deleted: entity,

              Measures should be developed for each Tier and should allow communities to           Deleted: for

              move between Tiers as Infrastructure is developed and participation increases.       Deleted: The higher tiers will receive
                                                                                                   priority support.
              These measures should be based on the amount of NEPSI Product collected per
              capita, the total volume of NEPSI Product collected, the percent of population       Deleted: meet Tier I, II III, or IV
                                                                                                   standards.
              that participates in the Infrastructure, or the convenience of service provided.
              These measures should be consistent with the methodology used in the NEPSI           Deleted: A measure s
              Performance Goals, though the amounts or rates may differ.(Not clear what this       Deleted: achieving Tier I through IV b
              last sentence means the NEPSI Performance Goals do not set out                       Deleted: p
              methodology. Do you mean that the Measures should be designed to meet                Deleted: being
              NEPSI Performance Goals? Do we have Performance Goals for the Interim
                                                                                                   Deleted: being
              Period?).

              Communities located within states that have an established advanced recycling
              fee for recycling of electronics would not receive priority financial support from
              the National Coordinating Entity.

               TIER I COMMUNITIES (The document uses states and communities
       interchangeably, which do you want to use esp. in this section).

              These states (Communities) will receive all available subsidies from
              participating Consumer Electronics Manufacturers, including transportation costs
              from consolidation points. Collection costs and costs for transportation to
              consolidation points must be covered by other methods. To qualify as a Tier I
              Community a Community must meet the following criteria:

              1. have either a disposal ban in place or executive branch authority to
                 implement a ban or to divert all NEPSI Products from the waste stream;
              2. meet a defined performance measure (for example, show that at least 3% of
                 the community population has recycled a NEPSI Product in the past 12
                 months); and
              3. use recyclers that meet the criteria noted below.

              TIER II COMMUNITIES


                                             42
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
               These states will receive available subsidies from participating manufacturers for
               recycling costs. All other costs must be covered through other methods. To
               qualify as a Tier II Community a Community must meet the following criteria:

               1. provide regular collection services for NEPSI Products, at least once a year;
               2. meet a defined performance measure less than Tier I (for example,
                  demonstrate that at least 1% of the state population has recycled a NEPSI
                  Product in the past 12 months through these events) and
               3. Use recyclers that meet the criteria established by the government and
                  industry as mentioned above.

               TIER III COMMUNITIES

               These states will receive available subsidies from participating manufacturers for
               recycling costs. All other costs must be covered through other methods. To
               qualify as a Tier III Community a Community must meet the following criteria:

               1. provide collection services for NEPSI Products using recyclers that meet the
                  criteria established by the government and industry as described above and
               2. meet a defined performance measure less than that for Tier II (for example,
                  demonstrate that at least 0.5% of the state population has recycled a NEPSI
                  Product in the past 12 months through the events.)

               TIER IV COMMUNITIES

               These communities may receive subsidies from participating manufacturers at
               the manufacturer’s discretion for recycling costs. All Communities not falling       Formatted: Highlight
               into Tier I- III shall be deemed Tier IV Communities and must meet a                 Formatted: Highlight
               performance measure at some level less then Tier III.                                Deleted: ¶
                                                                                                    Must meet a defined performance
II.    ORGANIZATION                                                                                 measure less than Tier III.

       A. National Coordinating Entity (NCE) should be created to play a central role in
          coordinating the infrastructure development activities during the interim
          period. The NCE could be a predecessor in interest to the TPO.
           1. The NCE would be tasked with the following activities:
                                                                                                    Deleted: Products collected
       •   Set goals and measure progress for volumes of end-of-life NEPSI Products collected
           and recycled during the Interim Period.
                                                                                                    Formatted: Highlight
       •   Gather and analyze collection data on NEPSI Products from all collection activities
                                                                                                    Deleted: from all parties who
           regardless of the party that undertakes said collection. The NEC should work with        collected/recycled products and analyze
           other stakeholder as necessary to verify the accuracy of the data and resulting          data working with other stakeholders
           assumptions (such as fee amount, quantity recycled, % of orphans, etc.) that might be    Formatted: Highlight
           used in the future NEPSI System. These data collection and analysis activities will
                                                                                                    Deleted: in ARF or other models
           cut across different public and private sector collection/recycling programs and will
           likely provide the base data for implementation of the NEPSI System by providing         Deleted: the transition process

           answers to questions such as “what is the volume is out there to be collected?” “how     Deleted: how much
           much does a collection/processing system really costing?” and “how much variation        Deleted: is this
           is there across regions?”. The data should also be used to monitor progress towards      Deleted: as well as for monitoring
           achievement of Interim Program Goals set by the NCE.
                                                                                                    Deleted: System



                                              43
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
       •    Identify and make readily available environmentally sound management (ESM)
            recycling guidance to help prevent sham recycling. ESM guidance provided by the
            NCE will use the MEPSI ESM Guidance Document as well as OECD (What does
            OECD stand for???)and industry standards are establishing interim ESM guidelines.
                                                                                                      Deleted: industry standards
            The NCE may also adopt, endorse or implement a system for qualifying
                                                                                                      Deleted: as guides in addition to the
            reuse/recycling vendors.                                                                  NEPSI ESM recommendations.
       •    Identify a “typical” recycling cost for identified geographic areas (???) (to identify
            “gougers” and “lowballers”).
       •    Develop and provide national promotional/educational materials
       •    Develop and promote standards for consumer educational materials for use by
            participating Consumer Electronics Manufacturers and retailers. These materials
            may include web site message formats, product package inserts and labels, etc.
       •    Provide a clearinghouse of “how-to” documents, such as sample contracts, collection
            models, etc.
       •    Provide networking resource for stakeholders looking to develop or strengthen             Deleted: strengthen current
            current infrastructure (i.e. catalogue of existing manufacturer programs and benefits     Deleted: benefits of
            of various programs such as those offered as part of Plug In to eCycling).
       •    Support in enacting any state/community specific legislation or regulations that are
            needed to implement the Interim Program in a given community, including disposal
            bans, etc
       •    Support in promoting End of Life (EOL) programs including integration of national
            educational materials with local promotion efforts.

       2.       Subject to the availability of additional resources, the following activities
                will also be performed by the NCE:

       •    Prioritize available recycling funds from participating Consumer Electronics
            Manufacturers, including transportation from consolidation points and recycling of
            their NEPSI Products
       •    Develop a pre-qualified recycling vendor lists
       •    Negotiate national pricing for transportation and processing of NEPSI Products
       •    Provide access to national contracts for transportation and processing of NEPSI
            Products

       B. Benefits to participation in the Interim Program

            •   Prioritization of available subsidies from participating Consumer Electronics
                Manufacturers, for transportation from consolidation points and recycling of          Deleted: including
                NEPSI Products manufactured by participating Consumer Electronics
                Manufacturers (see criteria for prioritized Tiers in Section I) – i.e. catalogue of   Deleted: their products
                existing manufacturer programs and benefits (such as those offered as part of         Deleted: ation above
                Plug In to eCycling).
            •   Full access to support resources developed by the NCE, including:
                • Analyzed data on collection programs
                • ESM criteria and, if reasonable, a system for qualifying reuse/recycling
                    vendors
                • National educational materials


                                                 44
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
                •   “How-to" documents
                •   Support in enacting any state/community specific legislation or regulations
                    that are needed to implement the Interim Program in a given community
                    including disposal bans, etc
                •   Support in promoting EOL programs including integration of national
                    educational materials with local promotion efforts.
                •   The NCE may develop or otherwise make available other benefits and
                    services [suggestions to be further explored].
                •   Pre-qualified recycling vendor lists
                •   Negotiated national pricing for transportation and processing of NEPSI
                    Products
                •   Access to national contracts for transportation and processing of NEPSI
                    Products.
III.    IMPLEMENTATION OPTIONS

        A.      National Coordination

        Implementing the Interim Program will necessitate national coordination of a number of
        functions including but not limited to:
         1.      collecting and managing financial contributions from participating Consumer
                Electronics Manufacturers.
         2.     Creating and disseminating educational materials about the Interim Program
         3.      Collecting and analyzing data generated during the Interim Program; and
         4.     Defining and implementing ESM standards for the management of NEPSI
                Products collected during the interim system. These and other functions in
                Section II would be transferred to the TPO when the NEPSI System is
                implemented.                                                                         Deleted: he goal is for these and other
                                                                                                     functions listed under “Organization” to
                                                                                                     transition to a TPO created under the
B. Responsibilities of Other Interim Program Participants.                                           front-end financed system.
                                                                                                     Deleted: creation of a TPO to manage
Pending implementation of the NEPSI System a public-private partnership of government,               the front-end financed system,
Consumer Electronics Manufacturer, Processors and Recyclers, Retailers and others would fulfill
a number of the Interim Program needs as articulated in this section. Some of the Interim System     Deleted: and the private sector could
functions could be assisted by EPA, depending on resources (e.g., outreach and data analysis,        fulfill these needs.

providing seed funding to establish a non-profit to oversee other functions). Others (e.g.,          Deleted: above
collecting and managing manufacturer contributions, contracting for recycling, due diligence on
recycler practices, etc.) could not be managed by government and would be best carried another
entity or partnership.

        1.       The Polymer Alliance Zone could assist in convening one or more meetings of
                interested stakeholders to discuss how to administer the Interim Program and
                how to create the NCE and other appropriate entities to carry out the functions of
                the Interim Program, taking into account the limitations on EPA’s capabilities as
                well as those of industry (e.g., antitrust concerns, manpower and financial
                limitations).

        2.      Stakeholders should provide funding for operations as needed and other sources
                such as grants, appropriations, etc should be utilized to the extent possible.




                                               45
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
IV.       DEFINITIONS AND PARTICIPANTS

                                                                                                     Deleted: NEPSI Stakeholders – refers
  Community - is, any jurisdictional area such as a state, municipality, or county over which a      to the stakeholder groups represented in
  disposal ban, collection network, etc. can be provided.                                            the NEPSI Dialogue.

  Consumer sees definition of Consumer in Exhibit 1 section e
                                                                                                     Deleted: Consumers/Users – person
  Government – at end-of-life, generally refers to state and local, but can apply to federal         who purchased and/or is using the
  government (e.g. rebates and tax credits).                                                         product just prior to the end of its life.¶

  Consumer Electronics Manufacturer see definition of Consumer Electronics Manufacturer in
  Exhibit 1 section g.                                                                               Deleted: Industry – refers to product
                                                                                                     manufacturers, their sales companies, and
  NGO’s – non-Governmental Organizations, specifically groups representing individual citizens       their trade associations
  or citizen action groups.
  Collectors – any entity, including retailers, charities, OEMs, recyclers, governments and any
  other stakeholder group or interested party that provides collection services of any type,
  including drop-off, events, curbside, mail-back, or other services.
  Recyclers/Reuse Organizations – entities and their trade association that repair and/or recycle
  and whose actions meet specific criteria.
  Retailers – entities that sell electronic products to individual household purchasers including
  “small businesses” and their trade associations. Retailers can include internet, catalogue, and
  other non-“walk-in” type of sales.
V.        ROLES AND RESPONSIBILITIES FOR PARTICIPANTS

  1. All NEPSI Participants

      •    Support and, as appropriate, participate in the establishment of the NCE.
      •    Support, enact and enforce disposal bans for NEPSI Products only when the                 Deleted: CRT containing devices and
                                                                                                     CPUs
           infrastructure, reasonable financing mechanisms, and market development are in place
           to handle the material in an environmentally responsible manner.
      •    By signing the NEPSI MOU, stakeholders agree to support the actions in this Interim
           Program. See Agenda for Portland Meeting)
      •    As appropriate, use information, program and services of NCE.

  2. Consumers

      •    Participate in the program through incentives (both carrots and sticks).
      •    Learn about the costs and issues related to end-of-life- electronics.

  3. Government

      •    Support and, as appropriate, participate in the establishment of the NCE
      •    Promote existing EOL programs that meet the criteria for the Interim Program (e.g.
           IBM, HP, manufacturer-sponsored collection events).
      •    Provide incentives for participation in the Interim Program, especially for older
           products (e.g. Energy Star rebate, tax credit, tax-free days, etc.).
      •    Work to ensure that at least one collection opportunity is available for NEPSI Products
           within a reasonable distance for citizens within a given Community. Collection


                                                 46
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
             opportunities can be provided by any interested party (municipalities, manufacturers,
             retailers, etc.) and can be for-free or for an end-of-life fee.
     •       Promote and educate consumers about existing programs for the collection and proper
             handling of NEPSI Products and related issues by using government web sites,
             brochures, information lines and other means.

 4. Consumer Electronics Manufacturers should participate in one or more of the
    following activities:

              Support and participate in the NEC.
         •    Provide incentives for participation (rebates, discounts, raffles, etc.).
         •    Promote and educate Consumers about existing programs and scheduled events by
              utilizing company and industry web sites, product operation manuals, or other items
              typically used, kept and read by Consumers. Assist in developing, and utilize,
              Consumer information standards.
         •    Work with retailers on promotion, education, and data collection to identify the
              elements needed for a market-based solution.
         •    Work with other stakeholders to analyze data and verify accuracy of assumptions in
              ARF and other models.
         •    Work with recyclers to minimize recycling challenges in a manner that does not
              impact product function and reliability.
         •    Voluntarily support and/or sponsor collection activities by retailers, charities,
              governments, etc.

 5. Collectors

     •       Support and, as appropriate, participate in the establishment of the NEC
     •       Ensure that NEPSI Products are collected and handled in an environmentally sound
             manner, as outlined by the NEC.
     •       Thoroughly document costs and results of collection events and submit to the
             standardized forms.
     •       Experiment with collection models to test various approaches, methods, partnerships,
             and charges, including models that could be employed in the NEPSI System. Document
             findings and submit to the NEC.

 6. NGO’s

     •       Promote and educate Consumers about end-of-life issues, options, programs and
             events.
     •       Support and, as appropriate, participate in the establishment of the NEC
     •       Work with other Stakeholders and the NEC to analyze data and verify accuracy of
             assumptions for the NEPSI System.

 7. Recyclers/Reuse Organizations

     •       Work with communities to meet reuse/recycling criteria at minimum cost, develop
             infrastructure, and meet reuse/recycling collection goals for NEPSI Products.
     •       Collect and report reuse/recycling data to the NEC and assist in analysis.



                                                 47
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.
     •   Work with Consumer Electronics Manufacturers to identify and minimize
         reuse/recycling challenges.

 8. Retailers

     •   Support and, as appropriate, participate in the establishment of the NEC
     •   Provide incentives for participation (rebates, discounts, raffles, etc.) in the Interim
         Program.
     •   Promote and educate consumers about existing programs and scheduled events for the
         collection of NEPSI Products using company and trade association web sites, and in-
         store information.
     •   Work with other stakeholders and the NEC to analyze data and verify accuracy of
         assumptions of the NEPSI System.
     •   Work to develop infrastructure, and assist in meeting recycling goals, by voluntarily
         sponsoring collection activities for NEPSI Products when and where needed.
     •   Collect and report recycling data to the NEC and assist in analysis of same.




                                              48
This is a draft NEPSI document, last reviewed by the NEPSI stakeholders on February
10-11, 2004. It has not been agreed upon by the full NEPSI membership.

EXHIBIT 12: NEPSI                ARF       PRODUCTS            &     CONSUMER
ELECTRONICS




                                         50