As leadership changes, critics say most SMBs in the province don’t even know the Ontario Electronic Stewardship exists, even though it’s sitting on a $20 million surplus funded partly by eco fees consumers pay when they buy the latest devices.
The head of Ontario’s e-waste program has left the heavily scrutinizedagency for another job, a move that could give the program a cleanslate to make much needed changes, critics say.
Carol Hochu has stepped down as executive director of the OntarioElectronic Stewardship (OES) to become president and CEO oftheCanadian Plastics Industry Associationas of Jan. 3. OES financedirector Howard Morrison has taken over as interim executive directorwhile the OES searches for Hochu’s replacement.
For comment, ITBusiness contacted OES board chairman Nick Aubry, who isalso environmental director at Sony of Canada Ltd. In an e-mail reply,he said Hochu “has built a strong management team that will ensureongoing success into the future (and) did an exceptional job in leadingOES through its startup phase” from “a concept in a written plan to aprovince wide operation.”
Hochu also responded via e-mail to a request for an interview,writing: “I have much respect and affection for the (OES) staff, boardand other OES stakeholders, and for the great work that’s taken placeand that is still to come, but as I’m sure you can appreciate, my focusis squarely on my new role.”
Hochu’s departure comes nearly two years after the OES was launched in April 2009. It was created by the OntarioMinistry of the Environment as an arms length body to oversee thedisposal and recycling of electronic waste in the province.It was May 2010 when OES revealed it had collected andprocessed just 17,000 tonnes of e-waste, far short of its originallaunch target of 42,000 tonnes. The target was later lowered to 33,0000tonnes in mid-2009.
OES came under fire again last summer when it reported a $20-millionsurplus yet continued to collect so-called eco fees – levies onelectronic items charged by OES to hardware makers and importers, butpassed on to consumers who see the fees added to their bills at thecash register when they buy the latest devices.
the OES is poised to hit themilestone of 100,000 tonnes of e-waste collected sometime in the firstquarter of 2012, Hochu says. But critics say the program is still too complicated andcostly, especially for Ontario’s SMBs.
Under the guidelines, all OES stewards (i.e., OEMs and “first importers”of electronics into Canada) have to pay eco fees to the OES on eachdevice sold.
Although the fees are passed onto consumers at point of purchase, OEMsand importers still have to report and track all those fees for theOES. That’s not a big deal for large companies like Dell orHewlett-Packard, but it can be a cumbersome and costly process forsmaller OEMs and importers, says Plamen Petkov, Ontario director ofprovincial affairs at the Canadian Federation of Independent Business(CFIB).
“It’s really the reporting burden. For a computer mouse (the fee) couldbe five cents. So the business collects the five cents from the consumerbut the whole reporting process is a lot more costly than that,” Petkovsays.
‘A lot of hassle’
“It’s a lot of hassle. You have to make sure it’s on the receipt, thatyour cash register is set up for it. And every time (OES changes thefee) you have to change all this,” he adds.
SMBs overall don’t seem to be embracing the OES’s programs to recycleor dispose of their own e-waste. An OES survey released last fallshowedtwo-thirds of Ontario SMBs have no plan for disposing of IT castoffs.
The study also found Ontario SMBs are far less green than their largercounterparts: only 41 per cent of companies with 50 to 200 staff havean e-waste management plan versus 60 per cent of larger companies. Andsix per cent of SMBs with 50 to 200 employees dump their usedelectronics instead of reusing or recycling them, compared with onlyfour per cent of large firms.
“Awareness of (the OES) among small businesses is extremely low,”Petkov says. “If you’re not a steward, chances are you don’t even knowwho they are.”
SMBs aren’t using OES programs because there’s a lack of clearinformation available to them about how and where to dispose of e-waste,Petkov says. Many SMBs feel the program is just too cumbersome to use,he says.
“In the very small companies, it has to be the business owner who hasto actually gather up the stuff and drop it off, which most businessowners just don’t have the time to do. And finally, we find a smallpercentage of our members will say it’s just too complicated.”
Downturn partly to blame
One way to get more consumers – including SMBs who buy IT equipment –to recycle e-waste is to basically pay them for doing so, Petkovsuggests. The OES could do that by simply refunding all or part of theeco fees paid by consumers and businesses when they bring in items fordisposal and recycling, he says.
“There has to be a financial incentive. You can’t ask them to pay upfront (to buy electronics) and not get anything back for disposing ofit properly. That’s a bit too much to ask.”
But economic conditions, not lack of promotion or consumer incentives,are partly to blame for the OES not hitting its recycling targets, saysJo-Anne St. Godard, executive director of the RecyclingCouncil ofOntario.
“(One) thing (OES) struggled with was a recession,” St. Godard says.“There could have been people purchasing less electronics or holding onto them longer,” she says, leading to fewer used IT goods beingrecycled overall.
St. Godard also says OES has “reached out well” to existing recyclingprograms and stakeholders in the province during its startup phase,which was not an overnight task considering that “the list of (e-waste)products the Ontario environment ministry targeted in some cases wasthree times the amount of products targeted by other provinces.”
St. Godard would like to see the OES make a couple of changes under anew leader: to lower the eco fees it collects from stewards (which areultimately paid by consumers), and increase the amount OES pays to itslist of approved e-waste collectors and processors in order to boost OESprogram participation.
OES said none of its executives were available for a phone interviewbefore our deadline but responded to our request with the followinge-mailed points:
$20 million surplus:the OES’s 2011 and 2012 budgets “were set to rundeficits in order to offset prior year surpluses” including the $20million surplus from 2010; as a result, OES projects it will eliminatethe surplus “which will bring us more in line with the balance we needto achieve as a not-for-profit organization.”
Eco fees: asof Aug. 1, 2011 the fees were reduced, but mostly bylessthan $2 per electronic device; some of the fees are as high as $32 peritem.
SMB awareness andparticipation: OES points out a variety ofinformation on its programs has been made available in news releasesand on its Web site, adding: “We offer tools, resources and the supportof a steward services team to help SMBs determine if they are obligatedto participate in the program. Some SMBs in the electronics industrymay even have been contacted directly by a member of our stewardservices team and we are continuing this type of proactive outreach.”
Incentives paid tocollectors and processors: “When setting incentives it’simportant to achieve a balance that rewards approved partners that meetthe highest standards and protects the credibility of the network fromnon-approved players while impacting the marketplace in a fair manner.One of the greatest benefits of the program is that it is regulated,targeted and meets rigorous standards.”
OES performance:“In our first two years of operation, we had the task of establishingan infrastructure to collect and recycle end-of-life electronics inOntario. With our network up and running, we continue to evolve, review,and make changes and enhancements to the program.”