Publications

the New Illinois E-Waste Reuse and Recycling Law - October 2008

In the electronic age, many of us rely heavily on electronic equipment.  But our electronic devices quickly become obsolete and we rush out to get the latest computer, smart phone, or television.  Much of our out-dated stuff often contains hazardous materials such as lead, mercury, cadmium, and hexavalent chromium.  And it ends up in local landfills or gets shipped oversees to poor and developing nations like Nigeria, China, India and Pakistan.  Laurie J. Flynn, Poor Nations Are Littered With Old PC’s, Report Says, N.Y. Times, October 24, 2005.[1]  A recently passed Illinois law attempts to reduce e-waste by requiring manufacturers and retailers of certain electronic equipment to manage the recycling and reuse of those products when they become obsolete.  This program is to be paid for by the manufacturers and retailers.  The new law also creates standards for recycling and reuses facilities that will accept the obsolete electronic equipment from residential users.

Illinois E-Waste Law (September 17, 2008)

In response to the growing E-Waste problem, Illinois enacted the Electronic Products Recycling and Reuse Act (E-waste Act) on September 17, 2008.  2008 Ill. Legis. Serv. P.A. 95-959 (S.B. 2313) (West).  The E-Waste Act is effective immediately.  It requires manufacturers to establish facilities to accept e-waste from consumers.  The statute applies to computers, televisions, cell phones, PDAs, printers, fax machines, game consoles, VCRs, DVD players, iPods, and other devices (excluding calculators and typewriters).  On a rolling basis over the next few years the recycling requirements will kick in and by 2012, disposal of certain e-waste in municipal waste and sanitary landfills and at incinerators will be prohibited.  The E-Waste Act only applies to electronic equipment taken out of use from residences, but it affects many of the businesses involved in the stream of electronic commerce.  And it carries a civil penalty of up to $10,000 for each day of violation.

Affected Businesses

Manufacturers.  Comprehensive requirements apply to manufactures, including those outside of Illinois whose products are sold in Illinois.  Basically, manufacturers must either accept the obsolete equipment at their facility or partner with an off-site recycler or refurbisher that will accept the equipment.  The cost of recycling or refurbishing is to be borne by the manufacturer.  Local governments may augment this program, but the onus is primarily on the manufacturers.  The law prohibits the manufacturer from charging consumers for transferring obsolete equipment to Collectors (described below).  However, it does not explicitly prohibit a surcharge at the time of sale.

In particular, the new E-Waste Act requires that any manufacturer whose computers, printers, monitors, and televisions are sold for residential use (a person’s home) in Illinois must register with the Agency by April 1, 2009.  On the registration form, the manufacturer must list the brands being sold and whether certain hazardous chemicals are present in the equipment above standards set by the European Union’s RoHS Directive, which restricts the use of certain hazardous substances in electrical and electronic equipment.  Additionally, the manufacturer must pay the Agency an annual registration fee.  In the first year, the fee is $5,000 and due on July 1, 2009; it will increase in subsequent years.

Furthermore, the E-Waste Act holds manufacturers of televisions, monitors, computers, and printers collectively responsible for recycling or reusing a certain amount of this electronic equipment each year.  This collective total is based on the weight of the material recycled and is calculated using a simple formula set out in the statute.  The E-Waste Act then assigns a certain percentage of this total to each manufacturer based on their market share.  To satisfy their individual annual recycling requirement, the manufacturer can either accept the obsolete equipment from individuals or partner with recyclers or refurbishers.  The E-Waste Act allows the manufacturer to accept other electronic equipment such as cell phones, PDAs, VCRs, and DVD players to satisfy the weight threshold.  Additionally, the E-Waste Act provides incentives for manufacturers to meet their individual recycling requirement.  For example, for purposes of meeting this goal, the total weight of electrical equipment given to schools or non-profits for reuse is tripled and the total weight of electrical equipment collected from downstate areas is doubled.

Significantly, to ensure compliance, the E-Waste Act requires manufacturers to hire an independent third-party to conduct quarterly audits of its recycling program.  No later than 30 days from the end of the quarter, the manufacturer must submit the auditor’s report to the Agency.  The E-Waste Act does not include qualifications for the auditors, but does detail what must be in the report.  Another issue to consider regarding the auditors reports is privilege.  While the final reports are public upon submission to the Agency, it is possible that one or more privileges would apply to the drafts of these reports, including notes and other preliminary work.

Retailers.  Any person that sells, rents, or leases computers, monitors, televisions, or printers for delivery in Illinois is considered a retailer and must comply with the E-Waste Law.  Whether the company is a big box store like Best Buy or Circuit City located in Illinois, or the company only offers its products to Illinois residents through the internet or a catalogue, Retailers must provide each residential consumer who purchases a computer, monitor, television, or printer with information from the Agency’s website about where to recycle.  Keep in mind that a manufacturer may also be considered a Retailer if they sell their product directly to residential users in Illinois.  For example, Dell would be a manufacturer and a retailer.  By operation of statute, the requirement to provide recycling information is currently in effect.  Additionally, retailers must report to the manufacturers the number of televisions it sold by model.  At first, the reporting period is six months and began on October 1 with a report deadline of July 1, 2009.  Beginning on February 15, 2011, the reporting period is changed from 6 months to a year. 

Another significant restriction takes effect on January 1, 2010.  As of that date, no retailer may sell computers, monitors, televisions, or printers in Illinois unless the product is permanently labeled with its brand name and the manufacturer is registered with the Agency and has paid the registration fee.  With this in mind, retailers will be well served to institute internal procedures to ensure compliance.

Recyclers and Refurbishers.  Under the E-Waste Act, a recycler is a person who uses a process, method, or technique to collect, separate, or process the electrical equipment and return raw materials or products into the economic mainstream.  A refurbisher is a party who processes the electrical equipment for reuse.  Phone or cell phone carriers and manufacturers with existing recycling programs are excluded from this group.  The recyclers and refurbishes must register with the Agency prior to January 1, 2010, and prior to January 1 of every year thereafter.  The registrant must provide basic information about each location that manages and accepts the electrical equipment.  The registration fee for 2010 is $2,000 and it increases annually based on inflation.  The E-Waste Act subjects these entities to a whole host of recordkeeping and environmental and safety standards, including an annual audit of these standards by a qualified professional.  Additionally, companies that choose to recycle or refurbish the electronic equipment covered by the E-Waste Act must procure commercial general liability and pollution legal liability insurance with minimum limits as set forth in the statute. 

Collectors.  Persons that receive the used electrical equipment directly from a residence for recycling or processing for reuse are defined by the E-Waste Act as collectors.  Manufacturers, recyclers and refurbishers who receive the equipment directly from the public are also considered collectors.  Prior to January 1, 2010 and prior to January 1 of every year thereafter, collectors must register with Agency and identify where the electrical equipment is received.  If manufacturers, recyclers and refurbishers are also acting as collectors, they must notify the Agency on their registration form and do not need to file a separate Collector registration.  There is no registration fee for collectors, but there is an annual reporting obligation to the Agency.  The report must include the total weight of computers, monitors, televisions, and other electronic equipment collected or received for each manufacturer.  The report must also include information about the recyclers and refurbishers.

 Who Else? The suppliers of the raw materials and/or component parts to the manufacturers are not covered by the E-Waste law.  However, suppliers may feel the effects of the E-Waste Act as the manufacturers’ costs increase to comply with the law.  The manufacturers may seek to renegotiate contracts or look for less expensive suppliers. 

Conclusion 

            The Illinois legislature passed the E-Waste law to address the ever increasing problem of electronic waste by mandating the reuse and/or recycling of certain types of electronic equipment.  Generally, most of us would agree that recycling and reuse is beneficial to the environment and may help a manufacturer decrease costs through reuse of raw materials.  A corporation may also benefit from a more positive image that could result from an aggressively marketed recycling campaign.  However, one of the negative consequences of this new law is more red tape and compliance costs that drain a corporation’s bottom line.  Given that the law is only a couple of weeks old, it is unclear whether its goal of decreasing e-waste will be achieved.  One thing is clear, however.  Companies falling within the purview of the new law would be well served to become familiar with its contents and begin implementing the required management of covered electronic equipment.