Recommended Actions
Our recommendations arising from review of international practices and the current/proposed cell phone take-back schemes in New Zealand are listed as follows. These recommendations do not include any regulatory or fiscal intervention by the Ministry for the Environment into the existing or proposed cell phone product stewardship initiatives. The results of this evaluation clearly show that the industry (in this case, Vodafone and Telecom) are working through and resolving issues and barriers to effective phone take-back schemes and no fiscal or regulatory intervention is required from government (with the exception of some specific changes to the Secondhand Dealers and Pawnbrokers Act).
We do not recommend any proposal to investigate a joint Vodafone and Telecom phone take-back scheme. Both organisations are proceeding with well designed individual schemes and there are unique properties in each of their markets (for example the GSM vs CDMA technologies) that will hinder the effectiveness of any joint proposal.
We believe that this situation will not change significantly in the future. Even if the return from refurbished phones decreases and details of the commercial "case" alter, the fundamental driver behind the existing schemes is to do with company environmental and social responsibility and also customer service. Neither of these two drivers are expected to change with relatively minor changes in the cost dynamics of the specific schemes.
Any formal government, either fiscal or regulatory, intervention into the currently proposed or future schemes, for example mandatory scheme development or targets for phones to be diverted from landfills, would impact adversely on the schemes. Administrative costs would increase and the organisations could be tied to unachievable performance targets. This situation bears the risk of impacting on what we assume is still a very early, and potentially vulnerable, high-level support for these schemes within both Vodafone and Telecom.
1. The Ministry for the Environment and also the regional and local councils support Vodafone and Telecom in their efforts to educate consumers regarding the benefits of bring back cell phones.
Education of the public is an important factor and one of the biggest challenges to product stewardship. A key focus of the Government's programme should therefore be appropriate advertising and publicity aimed at educating the public and raising the profile of the options for taking back phones so that consumers recognise its importance and companies in the industry are not left to carry this cost individually.
2. The Ministry for the Environment establish a multi-disciplinary cross-sector Product Responsibility Authority, potentially as an extension to Environmental Choice, to act as a facilitator and educator regarding potential product stewardship related initiatives.
There is significant "common ground" between the issues and lessons learnt within the cell phone sector product stewardship schemes and other sector schemes. An "umbrella" type product responsibility authority could:
- identify and, where appropriate, implement product-related environmental objectives (for example, overall targets to divert e-waste from landfills);
- act as an exchange of information/learning/experiences that will foster and promote best practice in terms of overall product stewardship initiatives and more specific waste management schemes;
- potentially implement and enforce any proposed sector-specific regulatory or fiscal interventions (not required for the cell phone sector).
Before forming a separate entity, the Ministry for the Environment should seriously investigate the possibility of expanding the existing Environmental Choice organisation to fulfil the requirements of this organisation.
3. The Ministry for the Environment should consider a requirement for both Vodafone and Telecom to report back to government on scheme performance.
4. The Ministry for the Environment work with the overall e-waste sector to investigate the potential for an e-waste product stewardship scheme or accord, including targets and mechanisms for diversion of e-waste from landfills in line with overseas practices.
As described in this report, we believe that cell phones do not, at this stage, constitute a significant environmental waste disposal issue in New Zealand. Across the entire electrical and electronic equipment sector, however, there is a significant issue. The Ministry for the Environment are well placed to work consultatively (potentially through the product responsibility authority or expanded Environmental Choice described in recommendation 2) with this sector to develop targets and mechanisms to achieve these.
5. The Ministry for the Environment continue with work on revising the Secondhand Dealers and Pawnbrokers Act to ensure that it is not a barrier to cost-effective product recovery schemes, such as that proposed by Vodafone.
As described in this evaluation, the Ministry for the Environment is currently and we understand, will continue, to work to ensure that the existing and proposed product responsibility schemes (for cell phones and other products) are not hindered unnecessarily by this legislation.
6. The Ministry for the Environment support the business case for environmentally responsible practices, such as phone take-back schemes, by including these in considerations for government procurement through the Govt3 programme.
7. The Ministry for the Environment work actively with both Telecom and Vodafone to promote phone take-back schemes through charities, youth groups and schools.
On the basis of our initial research into what is happening overseas, some of the most successful cell phone take back schemes are those which are set up as charity fundraising initiatives. We understand that Vodafone are considering trialling this approach with a number of pilot schools. Such a scheme would not need to be developed separate to the existing service provider-led schemes but could be fully integrated within these, primarily as a way of increasing the number of phones being returned.
8. The Ministry for the Environment work with youth groups, Telecom and Vodafone to further develop ideas and initiatives targeted at the youth market and encouraging youth to return phones.
On the basis of our initial overseas research, successful phone take-back schemes are targeted at youth. There is scope for the Ministry for the Environment and the service providers to work with different youth groups to develop schemes, such as RIPMobile in the United States, that are targeted at youth and encourage phone return. Again these schemes could be built on existing initiatives by Vodafone and Telecom.
9. The Ministry for the Environment encourage local councils to consider implementing collection points for phones, for example covered bins at refuse transfer stations.
10. Vodafone, through its international market size and influence, continues to encourage manufacturers to increasingly consider environmental considerations in product design. (Note that this recommendation relates more directly to the manufacturers themselves but these have not been involved in this study.)
For environmental reasons, it could be argued that handset manufacturers have an ongoing responsibility to manufacture long lasting products.
However, the nature of the telecommunications market and the ever-advancing technology in this industry means that many consumers choose to upgrade their phone before the end of its life. As a result, there is currently little consumer-driver (and therefore business case) for long lasting cell phone products. This situation may change as communities and governments recognise that the volume of discarded cell phones (as consumers upgrade every 1.5 years) is not sustainable. The German Blue Angel Ecolabel for cell phones, for example, includes specifications for longevity and these are implemented through consumer guarantee provisions.
In addition to longevity there is still scope for some design improvement, for example to ensure that components are easily disassembled, batteries are cadmium free and there is as little packaging as possible.
11. Vodafone and Telecom investigate the feasibility of lease options for cell phones that would ensure much greater phone return figures.
The option of leasing arrangements was discussed during this study. On the positive side, a leasing arrangement will ensure that old phones are returned to be replaced by a newer model. The leasing business model is, however, problematic for high turnaround consumer items such as cell phones. The problem lies in the significant additional administrative costs for Vodafone or Telecom to manage their phone stock as compared with the existing business model where the phones are sold, and some responsibility for take-back is being initiated.
12. Further consideration is given (for example through the proposed Producer Responsibility Authority or an expanded Environmental Choice programme) to the role of retailers in take-back schemes for cell phones and other products.
13. That the Ministry for the Environment consider a further evaluation of both the proposed Telecom and Vodafone schemes in approximately 12 months' time, once the schemes have been functional for a period.
