Equipment disposal law threatens to hike IT prices

Equipment disposal law threatens to hike IT prices


The DTI plans to impose new responsibilities on equipment vendors next year

The latest round of informal industry consultation for the implementation of the European Waste Electrical and Electronic Equipment (WEEE) directive in the UK will end tomorrow with the Department of Trade and Industry (DTI) predicting that the controversial rules will finally be incorporated into domestic law next year.

A DTI spokeswoman said a final round of formal consultation will take place later this summer with the government "strongly recommending" that its existing implementation plan is supported. "We can't pre-empt the final consultation," she added. "But we will be pushing [the plan currently] on the table and hope to have [the final bill] before Parliament by the end of the year."

Many experts claim the proposed legislation is still too complex and some stakeholders are expected to lobby for further amendments during the final consultation period. But if the DTI can stick to its timeline the bill should pass into law in mid-2007 – almost two years after the original European Union deadline.

Under the legislation producers of IT equipment will have to safely dispose of a proportion of kit at the end of its life to reflect their market share. This concept of "producer responsibility" means there should be little direct impact on IT directors, and the DTI claimed there will be "no additional reporting requirements placed on business end-users".

However, some experts warned that the legislation would increase hardware prices as manufacturers pass the cost of WEEE compliance onto customers.

Eric Karofsky of analyst firm AMR Research predicted a "substantial" increase in the cost of IT equipment as a result of the directive. "[WEEE] is still dramatically complex and I've spoken to [IT] manufacturers who still don't know if they are going to have to set up reverse logistics system [to comply] or instead use government [disposal] initiatives," he explained. "The cost [of any changes manufacturers have to make] will get rolled onto the customers."

However, Derek Morgan of IT asset management specialist CKS Group claimed fears of price inflation were unwarranted. "The rate of price deflation for new technologies is significantly higher than the cost of safely disposing of IT equipment," he claimed.