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Scrap Supply Agreement

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					               New State
                E-Scrap
               Programs:
                  A Business
               Opportunity Or A
               Business Bust For
                 Processors?




E-SCRAP 2007
         Overview
• NCER Overview
• State Laws
• Comparison of Key Elements
  –   Reporting/Registration Requirements
  –   Financial/Operational Requirements – Who Pays?
  –   ESM Guidelines
  –   Timelines
• Key Considerations
          About Us
• Non-profit 501c3
• Located in Parkersburg, WV area
   • MARCEE Project, NERIC
• NCER’s Mission: Dedicated to the development and
enhancement of a national infrastructure for the recycling of
used electronics in the U.S. through:
 1)   The coordination of initiatives targeting the recycling of used
      electronics
 2)   Participation in pilot projects to advance and encourage
      electronics recycling
 3)   The development of programs that reduce the burden of
      government through private management of electronics recycling
      systems
States with
Mandated
Programs
    •   California (2003)
    •   Maine (2004)
    •   Maryland (2005)
    •   Washington State (2006)
    •   Minnesota (2007)
    •   Oregon (2007)
    •   Texas (2007)
    •   North Carolina (2007)
REGISTRATION
               Key
               Elements
               Comparison
 Registration
 Requirements
• CA: Yes, need to become registered collector,
      recycler or both
• CT: Yes, need to be approved recycler
• ME: Yes, consolidator approval process, or work as
      consolidator’s recycler
• MD: No
• MN: Yes, registration form for collectors and recyclers
Registration
Requirements
• NC: No, but may be included in manufacturer plans
• OR: No
• WA: Yes for collectors and processors,
      must be “in compliance”
• TX: No
ESM REQUIREMENTS   Key
                   Elements
                   Comparison
Specific ESM
Guidelines
• CA:   Yes, need to follow DTSC UW handler regs
• CT:   TBD by DEP, EPA Plug-In is baseline
• ME:   Yes, must give sworn statement
• MD:   No
• MN:   No, but must certify downstream follows
        applicable law
Specific ESM
Guidelines
•OR: Yes
•NC: No, but must be described only in
manufacturer plans
•TX: Yes, DEQ to adopt ISRI or other standards
•WA: Yes
FINANCIAL   Key
            Elements
            Comparison
Who Pays &
Other Financials
• CA: State pays $.20/lb collection, $.28/lb
      processing, extensive documentation
• CT: must bill each manufacturer actual count, rates
      approved by state
• ME: must bill each manufacturer actual count +
      orphan*, rates approved by state
      2006: 115 manufacturers received bills from 3 consolidators
• MN: must get manufacturer/s contract, rates set in
      contract or via bid
Who Pays &
Other Financials
• NC: Unclear, “collectors” to have costs covered
• OR: State DEQ via “contractor program” or
      individual/joint manufacturer plans,; rates via bids
• WA: Authority board or its designee; or independent
      plan, rates via bid
• TX: manufacturer pay chosen recyclers via contractual
      agreement or bids
RESTRICTIONS
 RECYCLING     Key
               Elements
               Comparison
Restrictions
 • CA: “cancellation” in state, export
       notifications
 • CT: Follow Plug-in at minimum, no export for
       disposal
 • ME: no energy recovery/combustion, export
       documentation as part of ESM requirements
 • MN: no incineration, no prison labor
Restrictions
• NC: none
• OR: no incineration/energy recovery
      (smelting allowed)
• WA: no incineration/energy recovery
      (smelting allowed), no prison labor
• TX: none, indirect prison labor ban
 Timelines/
 Deadlines
• July 1, 2007: Pounds “recycled” in MN
  can count toward manufacturer yearly goal
• January 1, 2008: Manufacturers (including TV
  manufacturers) must pay registration fee in MD
• January 1, 2008: Manufacturers must declare standard
  or independent plan participation status in WA
• January 1, 2008: Standard and Independent Plans due
  in WA
 Timelines/
 Deadlines
• June 30, 2007: Pounds recycled in MN after this date
  do not count on FY 07-08 manufacturer
• September 1, 2008: Manufacturers file 07-08 registration
  forms, including penalty for not meeting goal
• September 1, 2008: TX requirements can be enforced
• And the BIG Deadline ….
    Timelines/
    Deadlines
January 1, 2009
•   Plans must be fully operational in WA
•   Plans must be fully operational in OR
•   Manufacturers start paying for CT returns
•   Manufacturer start paying collectors in NC
  Impact &
Considerations
Jumping In?
E-Scrap News Survey:
90-100 recyclers surveyed
• 29.16% of respondents currently operate in CA or ME
• 54.08% of respondents say they have plans to operate in one or
more of the states that have passed e-scrap legislation.

Buyer Beware:
   • Some registered CA recyclers have dropped out,
   • In ME only 3 of 6 consolidators were operational in 2006
   (with one taking over 95%)
   • In MN, existing contracts with locals do not guarantee
   payment/contracts from manufacturers
Producer
Managed or
Just Paid?
• Exception is CA: ARF system managed by state gov’t
• Producer Paid: ME and CT, possibly NC
• Manufacturers don’t direct collection flows or choose
  recyclers
• Producer Managed: MN, OR, TX, and WA
• Manufacturers can choose collectors/recyclers and
their volume, set prices via bid
Processing Price
Pressure
     • A driving consideration in
     producer-managed systems like
     Minnesota, Washington
     • Less of an issue in systems where
     prices are set or regulated by the state
     like California, Maine, Connecticut
   Get Out Your Oars!
• Prepare for significant float on invoices!
• CA currently down to 26 days to approve claim
• ME delays in getting approved vendor status with
  manufacturer accounting departments
•     With desktops, CT adds numerous new
      manufacturers to receive and unknown number of
      recyclers to send bills
• Should be less concern with direct manufacturer/
group contracts
The
Collector
Squeeze
• Collectors in CA are becoming
more sophisticated in making arrangements w/ recyclers
   Drive among recyclers is getting supply, and collectors control
   much of the supply in California
• Concern about collection costs is driving
  manufacturers to make direct arrangements with
  collectors in Minnesota, Washington
State-based
Limitations
• California’s “cancellation” requirement means
  recyclers have to be in state
   Allows State Gov’t audits
• In general, states can’t audit out of state entity
   Workarounds to require certification from
    manufacturer/plan
• No similar requirements in any other states
   WA encourages use of local infrastructure
   Interstate commerce Clause issues
• Export management options limited
Characteristics of
Producer Managed
Systems
• Price pressures are strong on recyclers and collectors
• Recyclers must be auditable and have transparent
  operations
• Probably facilitates recycler consolidation
   Manufacturers say “the smaller the recycler the bigger my
    auditing costs”
   Smaller recyclers will not be on most manufacturer radar
    screens for systems like Texas, North Carolina
Characteristics of
Producer Managed
Systems (cont)
• A new niche service industry is developing rapidly to
  service manufacturers subject to these new mandates
• Is *not* developing as non-profit, trade assn model
• Roles in new industry overlap, trajectory still unclear
   Manufacturer owned and operated?
       Electronic Manufacturers Recycling Management Company, LLC
        (Panasonic, Toshiba, Sharp)
   Managed by traditional processor?
       Sony/Waste Management initiative
   Managed by specialty service provider?
       Product Ecology LLC (Alcorn Consulting, Strategic Counsel LLC,
        NCER)
Characteristics of All
State Legislated
Systems
• Reuse is an uncomfortable fit in state-mandated
  recycling systems
   Desired and encouraged, but not paid for
• Non-covered devices will be there, what to do?
   Within guidelines, do you accept or reject?
• Trend is toward making producers pay, if not giving
  operational responsibility
• Requirements are different in every state
    Thank You!
Jason Linnell, NCER
Phone: (304) 699-1008
jlinnell@electronicsrecycling.org

Visit us on the web:
www.ncerwv.org
& www.ecyclingresource.org

				
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