Evaluation

Environmental gains

Note - "environmental gains" is discussed under environmental and social criteria.

Effective and efficient - stable, widespread uptake, minimal risks, benefits outweigh costs, company and public participation

The current schemes could not be defined as "efficient". Firstly, consumers are not motivated to return phones and hence there is no widespread uptake. Secondly, there is no current recycling option available. The limited number of phones that are returned are therefore being stockpiled so the benefits will not be outweighing the costs. This situation is not sustainable.

The proposed new Telecom and Vodafone schemes may be efficient, effective and stable but it is too early to draw any conclusions on this as they are not yet launched. There is also the risk, discussed in Section 2.1, that the stability of the service-provider led phone take-back schemes will be dependent on the ongoing business case to continue (benefits vs costs).

Publicly reported performance measures

The schemes do not contain publicly reported performance measures. There may be some public reporting of performance through both Telecom and Vodafone's annual reports. The Ministry for the Environment should therefore consider a requirement for both service providers to report back to government on scheme performance.

Transparent

The schemes are not transparent. Details of each scheme are held within the respective organisations. Again there may be some public reporting on the schemes within the Vodafone and Telecom public reports. The Ministry for the Environment should therefore consider a requirement for both service providers to report back to government on scheme performance.

Do not reduce market competition

The schemes do not currently influence market competition. If consumer environmental awareness increases, there is a possibility that an effectively running and widely promoted recycle scheme, which positively reflects either Vodafone or Telecom's commitment to environmental performance, may increase their market share. If this was the case, the schemes would enhance, rather than reduce, market competition.

An effectively operating phone recycling scheme could affect competition as Vodafone handsets may be purchased from a range of suppliers and hence Vodafone is subject to competition from parallel importers. Telecom handsets must be imported from a specific US based supplier and Telecom does not face any competition from parallel importers.

Safe standards for collection and handling

No details on standards for collection and handling have been provided to URS. We anticipate that given the challenges of gaining consumer buy-in and identifying an economically viable end-use option, the issue of safe handling and collection will not yet have been addressed.

Provides a forum for communication

The existing schemes are very internal to Vodafone and Telecom, and there is limited opportunity for industry-wide communication. The Ministry for the Environment should consider the development of an across-sector product responsibility organisation that could act as a disseminator of information regarding phone and other product take-back schemes.

Includes public information and education

There is some educational component in both schemes. Both Telecom and Vodafone are seeking to raise public awareness and therefore encourage people to recycle their phones. The Ministry for the Environment should consider the development of an across-sector product responsibility organisation that could act as a disseminator of information regarding phone and other product take-back schemes.

Includes monitoring and reporting on effectiveness

Both schemes will have a monitoring component so the individual organisations can track the scheme performance. These exist within the organisation and there is no public reporting of the scheme effectiveness.

Compares favourably with international best practice

Both schemes are initial attempts to introduce phone recycling and have not been resourced to the extent occurring overseas.

Is compliant with international trade agreements

Both schemes are being designed to be compliant with trade agreements and also international conventions, for example, the Basel Conventions on Transboundary Movement of Hazardous Materials.

Costs of enforcement and management of free-riders

Not applicable at this stage - both schemes are fully private sector independent initiatives. There are, however, significant costs in supporting the schemes and these do generate a risk for ongoing viability of the schemes.

Internalises waste management costs

Both schemes are based on full funding internally. There is no cost being explicitly passed on to the consumer.

More efficient use of resources and increased resources recovered

Not currently being achieved, as phones are stockpiled. Proposed schemes will allow for more efficient use of resources.

Effects on biodiversity

Not applicable.

Transport costs

Transport costs are relatively high and are not offset by financial or environmental gains.

Human health effects

Human health impacts have not been evaluated.

Soil resources and water quality

The small volumes of phones being diverted from landfill will not be sufficient to significantly impact on landfill leachate quality.

Relationship with Maori

Unknown, but probably not applicable. There is some evidence [Ministry for the Environment/UMR Research. January 2006.Electronic and Electrical equipment Survey. A quantitative report.] that Maori may have a lower awareness of opportunities for the return of electronic goods, including cell phones.

Community benefits through reuse of product

Proposed schemes provide a significant opportunity in supplying refurbished phones to those that may not otherwise be able to afford a phone.

Community business opportunities

Potential, but not being realised as schemes are internal to Vodafone and Telecom only.

User support and buy-in

Currently very poor.

Local and regional economic wellbeing

Potential but not being realised.

Economic security implications

Not applicable.

Branding and reputation

Significant potential to enhance brand and reputation through an effectively operating scheme.

Enhanced product design

Potential for Vodafone globally to influence product design (including easy disassembly, minimal packaging). Less potential for Telecom who are not a large enough customer to influence product design.

Competitiveness/market differentiation

Discussed above (Government policy section).

Business support - company participation

Both schemes have full internal support. There is a significant cost to maintaining internal awareness and buy-in from staff to support the schemes.

Business risks

Risks arise from significant investment required (in particular both community and internal education) to operate an effective scheme. The return on this investment must offset the cost.

There is also risk of significant technological advances capable of rendering the returned phones obsolete. The incentive for refurbishing and on-selling would therefore be affected.

There may also be risks in other network providers entering the New Zealand market.

Administration costs

Administration costs are high, as phones need to be collected from a large number of points. Tracking systems need to be developed.

Impact on imports

Current schemes could decrease Vodafone competitiveness and therefore increase number of phones being imported by parallel importers.

Implications for trade agreements

Proposed schemes are being developed to be fully compliant.

Safe collection

Discussed above (environmental and social section)