Executive Summary
URS New Zealand has been contracted by the Ministry for the Environment to carry out this End-of-life Cell Phones Product Stewardship study. The study is designed to assist policy development in regards to product stewardship and has the following objectives.
- Under guidance of a sector group, study the issues associated with the recovery of end-of-life cell phones, case study any existing product stewardship schemes to address this and establish what assistance a national product stewardship policy could offer.
- Develop a process that results in a policy well matched to the needs of industry and assists industry groups in understanding what the implications are, if any, of that policy proposal for existing scheme
A fully-fledged product stewardship scheme for cell phones would be directed at improving environmental performance across all components of the cell phone life-cycle - manufacture, distribution, use, collection and disposal. Manufacturers would be encouraged to investigate better Design for Environment options (such as increasing lifespan and more effective disassembly) and there would be some evaluation on means to minimise distribution distances. Consumers would be educated regarding the most environmentally responsible use of cell phones (such as increasing lifespan and reducing energy consumption). The focus of this evaluation, however, is only on issues arising from the disposal of cell phones.
Internationally, disposal of old cell phones is rapidly becoming a significant environmental and social issue. Approximately 1.7 billion people use cell phones as their main form of communication. Every second, 23 mobile phones are manufactured. Globally, in 2003, 470 million cell phones, equating to 61,000 tonnes, were discarded. Based on research in Australia, New Zealand and the United Kingdom only about 10-15% of "discarded" cell phones are sent to landfill. The remainder are either passed on to friends and family or stored in drawers.
Initial information collection for this study has been completed through research and one-on-one discussions with sector group members, such as network providers Vodafone and Telecom and broader stakeholder groups. An evaluation framework was then developed to help with analysis. An initial evaluation report was prepared and circulated to the two Cell Phone Sector Group participants - Vodafone and Telecom - to obtain their input and feedback. The report was also reviewed by the Ministry for the Environment and our independent peer reviewer for the project - Susie Wood.
The key findings from our review of the cell phone sector in New Zealand, and specifically the currently proposed phone take-back scheme, are listed as follows.
- It is not possible to evaluate effectiveness and stability of the proposed schemes until they been fully functional for a period of time.
- The proposed schemes should significantly increase the numbers of end-of-life cell phones being recovered by Telecom and Vodafone - and hence contribute to an environmentally related objective of resource recovery and diversion of waste from landfill. The schemes do not, however, fulfil the government policy objectives of transparency, communication and education. This was anticipated as they have not been specifically designed to fulfil central government requirements.
- The proposed schemes are being put in place to improve the environmental and social performance of Vodafone and Telecom. Indirect benefits are closely linked to customer service and company reputation.
- The proposed schemes would not be affected by the Ministry for the Environment's preferred product stewardship policy mix, assuming that neither a formal product stewardship agreement nor regulatory intervention was applied to the cell phone sector. On the basis of overseas initiatives, an e-waste accord could however be developed, and this could potentially enhance the currently proposed schemes.
The issues and barriers associated with recovering more end-of-life cell phones are not considered insurmountable and have been used as a basis for recommendations. The issues that have been addressed include:
- the costs of educating consumers to bring back cell phones;
- cell phone waste volume as a proportion of the overall e-waste;
- available markets for refurbished phones;
- the need to adjust the Secondhand Dealers and Pawnbrokers Act;
- the implications of EU initiatives;
- the potential role of manufacturers and service providers;
- the need for target setting in New Zealand.
Our 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 without the need for fiscal or regulatory intervention from government (with the exception of some specific changes to the Secondhand Dealers and Pawnbrokers Act).
It is difficult to envisage how this type of regulation would operate in this sector as the phone tack-back rates have, to date, been very low and are highly dependent on the existence of significant awareness programmes educating consumers about the need to return phones. Some form of financial incentive would be required and this money would need to be built into the price of the phone. The only "upside" would be ensuring all operators within the cell phone market, including parallel importers, would take responsibility for phone tack-back. This is not considered a significant gain as both Vodafone and Telecom have no specific concerns regarding parallel importers as "free-riders" in the sector.
We do not recommend any proposal to investigate a joint Vodafone/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 different network 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 the economics of the business case alter, the fundamental driver behind the existing schemes is to do with company environmental and social responsibility and customer service. Neither of these two drivers are expected to be affected by relatively minor changes in the cost dynamics of the specific schemes.
The analysis carried out during this case study supports the conclusion that cell phones do not constitute a significant waste management issue in New Zealand at this point. This situation could change, however, as a growing number of cell phones are disposed of at landfills.
There are significant "costs" associated with developing and implementing sector-specific targets. These include consultation to agree on the target and ongoing monitoring and enforcement. These costs need to be balanced against the benefits of such a target - not only in terms of perhaps diverting more cell phones from landfills but, probably more importantly, raising general awareness of the issue and providing an opportunity for the private sector to "celebrate" as targets are reached.
Given the fledgling nature of the current Vodafone and Telecom phone take-back schemes and the current relatively small volume of cell phones going to landfills, we do not believe specific targets should be developed for cell phones. The tentative business case model for these schemes (that is tangible costs and non-tangible, though nevertheless worthwhile, benefits) mean that a prescriptive government approach to targets could detract from, rather than assist, responsible waste management for cell phones. This recommendation should be revisited in a year's time, once the existing proposed take-back schemes are established.
The volume of e-waste, of which cell phones form a component, does constitute an issue for landfill space and the generation of hazardous leachate. We believe that, at this stage, any initiative to develop targets (for example diversion from landfills) should therefore apply to all of the e-waste products and not specifically to cell phones. The recommendation to set targets for minimising electronic waste per household (as opposed to specific cell phone targets) is consistent with the trends overseas for electronic waste.
If a target for e-waste is developed in the first instance, the situation for cell phones specifically could be continually monitored. If there is a growing concern that cell phones are creating unacceptable impacts at landfills, either from a space or a leachate contamination perspective, the need for a specific cell phone target could be revisited.
Any further developments on plans for target setting should refer to the lessons being learnt from the Packaging Accord where different organisations and sectors are contributing to the successful development and implementation of targets.
Our recommendations are as follows.
- The Ministry for the Environment, regional councils and local councils support Vodafone and Telecom in their efforts to educate consumers regarding the benefits of bringing back cell phones.
- 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.
- The Ministry for the Environment should consider a requirement for both Vodafone and Telecom to report back to government on scheme performance.
- The Ministry for the Environment work with the entire 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.
- 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.
- 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.
- The Ministry for the Environment work actively with both Telecom and Vodafone to promote phone take-back schemes through charities, youth groups and schools.
- The Ministry for the Environment work with youth groups, Telecom and Vodafone to further develop initiatives targeted at the youth market and encouraging youth to return phones.
- The Ministry for the Environment encourage local councils to consider implementing collection points for phones, for example covered bins at refuse transfer stations.
- 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.)
- Vodafone and Telecom investigate the feasibility of lease options for cell phones that would ensure much greater phone return figures.
- 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.
- 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.
