ERA EWASTE RECYCLING AUTHORITY: ERA Builds Structure for Mass SA E-Waste Recycling Scheme

South Africa already faces a major problem with electronic waste (e-waste) – one which is set to exacerbate without intervention. Research suggests that each South African generates 6.2 kg of e-waste annually, with less than 13% being recycled. Often comprising harmful materials that are toxic in the environment (lead, barium, lithium, cadmium, mercury, nickel and more), e-waste is also infamous for organic compounds such as flame retardants, chlorofluorocarbons, polycyclic aromatic hydrocarbons (PAHs), polybrominated diphenyl ethers (PBDEs), and polychlorinated dibenzo-p-dioxins and furans (PCDD/Fs). According to medical journal, The Lancet: “These environmental contaminants pose severe threats to both the health of human beings and the environment.”

The increasing nature of this challenge is dramatic. Volumes grew by 21% globally over the past five years, and as economies embrace more digital solutions and adopt more technology, electronic usage and therefore e-waste is rising quickly.

In South Africa, recycling is not popular and organisations still struggle to encourage recycling of traditional waste materials. E-waste is more difficult and more expensive, but there is opportunity. As well as harmful toxins, there are valuable materials found in electronics. Gold, silver, copper, platinum, palladium, iron and aluminium are all reasonably easy to recycle from phones, laptops, televisions and other electrical devices.

In 2014, the Department of Forestry, Fisheries and Environment (DFFE) formed a Steering Committee, from around 120 producer and recycler delegates, to consult with the sector in the formulation of a national Industry Waste Management Plan for the Electrical and Electronic Equipment (EEE) sector, and by 5 May 2021 Extended Producer Responsibility (EPR) regulations were finalised and published. Chair of the initial Steering Committee and CEO of ERA Ewaste Recycling Authority, Ashley du Plooy, tells Enterprise Africa that there is now clear legislation in place to encourage and enforce responsible e-waste recycling.

His frustration, however, is that few producers of electronic products have registered as EEE Producers with DFFE as required by the EPR Regulations or signed up for ERA membership, a situation that must change.

“We estimate that there are between 3000 and 6000 producers of EEE in the South African market. Technically, there should have been between 3000 and 6000 registrations. Currentlythere are only 129 registered producers, so the compliance rate is exceptionally low. There is a pipeline of 200-300 other producers that have since registered after the deadline date in November.”

By 2030, some industry experts expect that the world could produce around 75 metric tonnes of e-waste as this fast growing waste stream continues to snowball. Recognition of the problem is essential, and taking steps to address the issue is equally as important.

While somewhat complicated in terms of legal structure, the fundamental mission and process for ERA members is simple: become a member and register as a producer, join a producer responsibility organisation (PRO), collect and report your relevant market data, and pay your levy.

BUGBEAR

The payment of the EPR levy, which is higher for those that produce more, is one of many factors that have slowed membership uptake to date.

Since 2014, the government has been clear that collecting money to address e-wate, from somewhere in the value chain, would be inevitable. The first concept was to apply a ‘Producer Pays’ principle. “Simply, those producers who are responsible for certain waste streams would have to take care of the waste generated at the end of life of those products,” says du Plooy.

ERA lobbied hard to avoid a blanket-type levy application through a previously proposed Industry Waste Management Plan and instead encouraged government to adopt an appropriate system based on Section 18 framework of the National Environmental Management Waste Act 59/2008 which allows for producers to set their levy, collect, and apply the levy through a PRO.

Today, ERA has 38 registered members, made up of some of the largest electronic manufacturers in South Africa. The likes of Defy, Isuzu, Oracle, Smeg, Dell, Tarsus, Philips, Huawei, Brother and more are all active participants in the development of e-waste solutions. But even with some of the more prominent companies on side, there is much still to do.

“There is a big concern about who is complying and who is not. There is a concern that compliance among a small number of producers will create price distortions and make compliant producers non-competitive in the market,” says du Plooy.

“We are concerned that a lot of producers of EEE function in other markets where they understand the EPR initiative (the EU is very strong on this).

“We would like to get the message through to those in governance in companies trading in South Africa, and those in government trade missions where these companies are based, that they have the choice – take a disrespectful position towards the African continent and the SA government or comply.”

But paying a levy, despite legislation, is not easy. The economy in South Africa is shrinking again, posting a contraction of 0.7% in 2022’s second quarter. Public purchasing power is decreased as inflation bites, and manufacturers continue to be blighted by power outages. Often, a levy is unaffordable and unappealing despite forming fundamental parts of company ethos and a major part of product – and therefore a good value proposition – for others.

“The big bugbear for producers is handing over the large cheque,” admits du Plooy. “So the key hook on which producers hang their non-compliance is that there is no guarantee that free riders will be dealt with. Given the low uptake in the beginning of the first phase, there is a feeling that there are too many producers who are not compliant, and the prospect of a legal sanction or consequence is not very high.”

But this will change as time goes by. Penalties can include fines, cancellation of registration or even imprisonment. To date, the sector has been largely unorganised and, as more clarity is installed around responsibility and process, the prospect of reprimand becomes more real.

“Given the fact that there is now a pipeline of 200-300 producers who have registered late, there has been no indication as to whether there will be sanctions, but the government has stated that full levies must be paid by late registrants. Now, there is the question about the level of compliance. Those that have come forward and want to comply are feeling that those who have made absolutely no attempt should be the focus of corrective action,” says du Plooy.

BUILDING A PICTURE

The varying degrees of compliance, even among the ERA members, is a challenge for du Plooy and team. Within this relatively fresh concept, should there be a universal approach to non-compliance (and compliance)? How does ERA know which companies are acting responsibly, which are keen to work together, and which are actively avoiding the legislation altogether? The system must be wholly inclusive, and this brings new sets of challenges for producers in a business environment which often means operations are already stretched. This is why ERA is planning for the long-term.

“We want to build a sustainable base for extended producer responsibility over a decent period of time,” says du Plooy.

“After joining a PRO and participating in the planning of the scheme, producers must report their market data so that we can build a picture of the total electronic output. We can then set appropriate targets for wate collection and recycling.”

This is where companies face challenges. They must work their way through often large product portfolios, categorise, confirm weight, and collect all relevant data. Previously, government wanted producers to detail toxicity of materials, categorise by dimensions and more, but ERA opted for a streamlined approach in the early stages. Weight and existence of focus materials that require special treatment to recycle are the key focus points for now. All of this information feeds into the setting of levies and is of course under heavy scrutiny from members and industry observers.

“There are those that will come in and say they know they need to comply and ask what needs to be done, before doing it,” smiles du Plooy. “Then, there are some that have registered with us as a means of cover and they want to wait for everyone to be onboard before they work effectively. Then we have those that undertake constructive engagement with us. It is not easy for a lot of companies – sometimes they have listings of more than 6000 products which they then need to categorise into a basket of goods before detailing average weights of everything and classifying focus material.

“We are meant to set certain conditions for the incorporation of recycled materials into products and the recyclability of electronic products, but those are highly sophisticated metrics and for a sector that has never organised itself, it is virtually impossible at this stage.

We are at the beginning of a new dispensation in the management of electronic waste and, like most other PROs in our position, we are taking a very cautious approach to ensure we do not introduce distortions or perversions, which is easy to do when people are rushing to comply,” du Plooy explains.

“From an ERA point of view, when compared to the five registered EEE PROs, our governance, approach, and methodology, places us in a unique position. We have opened ourselves up to nominations for Board members from the sectors that we represent as required by the regulation. We are the only association to follow that process and, from the beginning of our consultation in 2021, we have put or plans and levies on the table. We have only been able to finalise our plan with any degree of certainty in the first quarter of 2022,” he says, adding that producers are beginning to offer significant feedback; taking various positions, suggesting tweaks to the framework, asking for a complete overhaul, and reversing the system to collect levy from consumers.

“It’s a mindset change and any change takes time, but we will get there. We want to install confidence in the market that we have the right governance in place, the right systems in place, and the financial ability to manage e-waste effectively,” du Plooy reassures.

REFINED METHODOLOGY

While the major impact of ERA will be felt over an extended period of time, there have already been strides forward. In Ghana, a thriving industry has been developed, where waste electronic gear is dismantled and upcycled, with previously discarded materials being given new life within a circular economy. South Africa could follow a similar path – a site has been established by the Uni of Johannesburg and Gauteng Department of e-Government (GDeG) in the province – but ensuring waste streams from commercial and public sources are managed correctly is the first step.

“We have refined our methodology and we now take a sectoral approach, linked to our focus on strong governance,” says du Plooy. “The legislation states that PROs like ERA should follow a consultative approach to formulating EPR Plans and setting EPR levies and we have taken a sectoral approach. We have a strong presence in the ICT sector where we have around 90% of the ICT distribution network within ERA. Through that, we have on our board the CCO of a listed company. Then we have a strong focus on the large domestic appliance sector where have the chairperson of the South African Domestic Appliances Association on the board. We also have a Director of one of the leading brands as a result of our approach – we tackle a sector, take a consultative approach in setting the levies, create an understanding around what needs to happen, and we then encourage that sector’s participation on our board.”

Importantly, ERA remains a non-profit organisation and this is vital in ensuring longevity and sustainability. Du Plooy is clear that this is status is essential to ensure that no conflict arises between its members’ commercial activities and the ERA work. “We see ourselves as a developing bureaucracy that will be able to ensure that we grow a legitimate and effective space for extended producer responsibility,” he says.

Johannesburg-based Kemtek Imaging Systems has started its journey with ERA. This advanced tech supplier works with electronic machinery from some of the world’s best manufacturers and supports a country-wide footprint. Registered as a member, the company is busy preparing its market data so that it can pay the levy, with the support of ERA.

For similar companies, and electronics producers around the country, the path forward is becoming clearer. Electronic waste is a growing problem that must be dealt with effectively. Producers have been identified as those that must pay levies to ensure waste is managed correctly. The message from ERA to its members and to the wider industry is clear: “Register as a producer, join a PRO, report your data, and pay your levy – these are the four steps that every producer of electronics must take,” states du Plooy.

The organisation has established its position between producer, collector, and recycler, and the consumer will soon have easy access to knowledge around those that are compliant. A 2021 study from Simon-Kucher & Partners (developed for the COP26 United Nations Climate Change Conference) showed that consumers purchasing decisions are driven, more than ever, by sustainability. Many, especially in younger generations, will pay more for goods from sellers with sustainable brands. Clearly, there is now a commercial driver of responsible practice around recycling. Those that are able to demonstrate to a keen public that they are part of the solution and are fully compliant, will undoubtedly reap rewards.

“Companies must invest, innovate and transform their business models now to protect their long-term profitability and viability. The rise of sustainable disruptors and increasing consumer awareness will all serve to drive the expectation for affordable sustainable alternatives,” said author of the study, Shikha Jain.

Eventually, ERA hopes to represent producers responsible for 50% of the electrical and electronic equipment in South Africa, and these companies will be sending a clear message to the market – WEEE must be correctly managed, we are willing to do so, and we are collectively investing in a cleaner and more sustainable South Africa.