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4 Current Whiteware Product Stewardship in New Zealand

This section describes the two noteworthy whiteware product stewardship schemes currently underway in New Zealand ie Fisher & Paykel's and Electrolux's. A range of views, opinions, concerns, expectations and perspectives are also presented. These are based on meetings and phone discussions with the whiteware sector group established by the Ministry for the Environment as part of the conduct of the study. Relevant content from publicly available literature published by Fisher & Paykel and Electrolux is also covered.

Whiteware product stewardship activities currently underway in New Zealand are primarily limited to the activities of Fisher & Paykel. This is to be expected given the company's national significance as a manufacturer and exporter of whiteware. At a much smaller scale but potentially expanding, Electrolux Home Products (a division of Electrolux NZ Ltd) appears to be providing some consumers with a disposal and recycling service as part of its home-delivery process.

Beyond the activities of these two companies, there is no significant or compelling evidence or widely promoted information that any other whiteware importers or suppliers are proactively pursuing a product stewardship approach to the life-cycle management of the products they supply in New Zealand. Some retailers are involved in whiteware collection and recycling as part of the Fisher & Paykel scheme, while other non-Fisher & Paykel aligned retailers also offer consumers disposal and recycling of old whiteware as a result of a new product purchase. This is an observation (of the current situation) offered by the consultants and should not necessarily be viewed as an implicit criticism of importers and retailers not operating schemes similar to Fisher & Paykel or Electrolux.

While there is evidence of DfE related environmental improvements in imported whiteware, as well as environmental management systems in their off-shore production facilities, there does not seem to be any information about any end-of-life waste avoidance and resource recovery schemes operating in New Zealand. In short, Fisher & Paykel characterises how product stewardship principles and approaches are being implemented in New Zealand.

4.1 Product stewardship at Fisher & Paykel Appliances Ltd

"Commitment to energy efficiency and preservation of the environment as corporate guidelines and an integral part of the culture of Fisher & Paykel Appliances." (Fisher & Paykel website: www.fp.co.nz)

The meaning and application of product stewardship at Fisher & Paykel permeates all operations of the business and features across the complete product life cycle. Consistent with the definition of product stewardship outlined in the Ministry for the Environment discussion document, Fisher & Paykel has embraced life-cycle thinking and understands the environmental, economic and social value of being a responsible corporate citizen.

Fisher & Paykel's view of product stewardship is in harmony with the theory and conceptual origins of product stewardship ie life-cycle focus, collaboration and cooperation with other stakeholders, balancing environmental responsibility and protection with sensible economic management, and so on. The company is beyond more simplistic product stewardship responses, which limit themselves to solely upstream DfE objectives or predominantly end-of-life recycling activities. While the term product stewardship might not be always used at Fisher & Paykel, the meaning and concept are given life in reality.

The single most significant distinguishing factor which helps to describe product stewardship at Fisher & Paykel is the geography of ownership and production. Fisher & Paykel is a New Zealand-owned company with substantial production facilities in Auckland/East Tamaki and Dunedin. The company also has manufacturing sites in Australia and the USA. It is the only company manufacturing domestic whiteware in New Zealand. These factors mark a major point of difference between Fisher & Paykel and all other suppliers in the New Zealand whiteware market.

What are the practical realities of product stewardship at Fisher & Paykel in relation to New Zealand?

Product design and materials selection

A diverse range of DfE measures have been implemented at Fisher & Paykel, including new methods that are being trialled and evaluated. A sample DfE and materials-related initiatives includes:

  • avoiding the use of scarce resources in products wherever possible;
  • setting goals to eliminate brominated flame retardants;
  • changing grades of ABS (a type of engineering plastic) to reduce styrene monomers during processing;
  • trialling lead-free soldering of printed circuit boards;
  • apart from one minor component, previously eliminating PVC injection mouldings;
  • effectively eliminating cadmium several years ago;
  • working towards the phase out of hexavalent chromium systems in pre-treatment processes;
  • where practicable, avoiding construction techniques that combine incompatible materials that make end-of-life disassembly and recycling difficult;
  • marking of plastic components to enable easier identification, sorting and recycling at end-of-life.

Manufacturing technologies and cleaner production

Cleaner production techniques combined with leading manufacturing methods and equipment enables Fisher & Paykel to maximise efficiencies and outputs while also reducing emissions, waste and costs. Some of the cleaner production achievements in recent years include:

  • eliminated production paint shops which inefficiently painted large empty white boxes with high solvent wet paint. This involved a transition to powder coating, which eliminated solvents, and then to prepainted galvanised steel which is produced in a dedicated facility equipped to deal with volatile organic compounds;
  • all factories operate 'on-line' manufacturing which results in reduced waste and less inventory;
  • the electronics facility is working to eliminate hot air levelling of solder after the soldering process with a view to reducing energy consumption;
  • Fisher & Paykel recycling personnel are actively engaged in investigating the waste stream from the Auckland facilities and diverting all materials that can be recycled. This has resulted in a 40% reduction of material going to landfill;
  • most injection moulding rejects and sprues are recycled in-house with the rest being recycled through Astron;
  • circuit board assembly process has eliminated the use of CFCs in cleaning (and avoided the use of HCFCs).

Packaging

At Fisher & Paykel, the waste hierarchy is applied in a pragmatic manner with a view to maximising product protection while also facilitating relatively high levels of reuse and resource recovery. For example:

  • all packaging is either returned or reused where freight distances make this viable (New Zealand only);
  • packaging comprises cardboard which largely uses renewable resources from plantation forests;
  • the Auckland recycling centre takes back expanded polystyrene (EPS) for recycling by a local EPS component recycler ie all EPS is diverted from landfill.

Energy and water efficiency

Fisher & Paykel acknowledges the need to maximise energy efficiency during the use phase of the whiteware life cycle as a key imperative in whiteware design and development worldwide. By designing and producing energy efficient products, the company is helping to reduce greenhouse gas emissions associated with energy production and the associated consumer demand. A sample of product-based achievements and outcomes include:

  • Fisher & Paykel has a fundamental commitment to design intelligent appliances that can react to usage patterns thus saving energy and ultimately money;
  • all key product platforms - Active Smart Refrigeration, Smart Drive Washing Machines and DishDrawer Dishwashers - are intelligent appliances ie if the power is not needed, it is not used;
  • the Active Smart Refrigeration System, which saves 40% of the power of previous refrigeration models, is on all refrigerator/freezers above 300 litres, and accounts for 67% of the Australian market;
  • an average household does eight full washes per week; using an Intuitive Eco instead of a traditional top loader will save the household approximately 500 kWh of electricity consumption per annum;
  • Fisher & Paykel continues to be actively involved with numerous regulatory bodies in an effort to raise the profile of energy efficient appliances, and also assist in the setting of testing standards;
  • the Fisher & Paykel autowasher (Eco Smart / Intuitive Eco) is the highest-rated top loader energy efficient washer in the USA;
  • Smart Drive won the Rutherford Award in New Zealand for minimised environmental impact, the 2001 Galaxy Star Award for commitment to energy efficiency and the environment and the 2006 highly commended EECA award for meeting the new tight MEPS levels for refrigerators and freezers without increasing prices. This was with an average reduction of 156 kWh a year or to less than three quarters of the previous levels.

Waste reduction and end-of-life whiteware recycling

Fisher & Paykel's work on recovering and recycling end-of-life whiteware represents a pioneering approach to product stewardship and producer responsibility in the Southern Hemisphere, if not globally. The company's take-back and recycling scheme demonstrates what can be achieved on a voluntary basis under the right circumstances. The following description explains some of the specifics behind the Fisher & Paykel recycling scheme. (Also refer to Appendix 1 for a schematic overview.)

  • Fisher & Paykel commenced taking back end-of-life whiteware from retailers in 1993 as a pilot project.
  • Several Fisher & Paykel personnel are currently employed in the recycling centre and deal with approximately 30,000 end-of-life whiteware units per year. Other personnel are involved nationwide through Fisher & Paykel's use of contractors and specialised service providers.
  • The majority of whiteware recycled each year is the result of retailers trading in an old appliance for a new one.
  • The recycling service goes beyond the appliance itself, with packaging also being returned to Fisher & Paykel for reuse and/or recycling if the customer has no need for it. If the packaging is in good condition it is reused for packing another new product. Slightly damaged cartons are sold onto the second-hand carton market while the most damaged cartons are recycled for pulp.

The parameters of Fisher & Paykel's whiteware recycling activities are relatively clear and very much connected to arrangements with retailers. The trade-in and replacement process covers the following aspects.

  • Fisher & Paykel encourages its service centres across New Zealand as well as its dealer organisations to make end-of-life whiteware available for collection.
  • In the greater Auckland area (representing about a quarter of the population of New Zealand), these are then collected for fisher & Paykel and returned to the Auckland/East Tamaki Recycling Centre (for other parts of New Zealand this whiteware is collected and processed as below).
  • Fisher & Paykel offers a service to its retailers for the collection of returned whiteware. Fisher & Paykel charges the retailer a small fee for this service. Almost all of the EDA retailers use this service.
  • The delivery and installation service available for new whiteware purchases provides the consumer with a free collection service for unwanted and/or end-of-life products (also available through inorganic kerbside collections).
  • Free drop-off of end-of-life and/or unwanted whiteware is available to the general public at the East Tamaki site and this information is available through the local council.

While the Fisher & Paykel scheme is most advanced in the North Island and the Greater Auckland area, Fisher & Paykel also coordinates a more streamlined collection and recycling service in major South Island centres in collaboration with Sims Pacific Metals - its steel recycling partner. Other than the Greater Auckland region, the appliances are collected by contractor trucks on four routes for the North Island (Northland, Coromandel - Bay of Plenty - Waikato - West Coat, East Coast) and taken directly to Sims collection points. In the South Island, take back is done in Christchurch and Dunedin where there are Sims collection points. Fisher & Paykel has expressed interest in extending the service to Nelson and Invercargill, however freight costs are very high at this point in time.

The physical presence of Fisher & Paykel's main production facility in Auckland is a major factor in substantially underpinning the overall success of the recycling centre and the recycling service for end-of-life whiteware.

The proximity of the production facility enables Fisher & Paykel to combine revenues from production waste as well as materials recovered from end-of-life whiteware. The pivotal role of the Fisher & Paykel's factories being in the country and on the North Island should not be under-estimated. The cost savings associated with landfill diversion possible through efficient and effective post-industrial (ie factory off-cuts and scrap) recycling at Fisher & Paykel's Auckland facility may be the single most critical factor in what is currently making end-of-life whiteware recycling possible and viable.

4.2 Product stewardship at Electrolux (NZ) Ltd

"Consumers are concerned about a resource-stressed planet. Through our products we aim to raise quality of life while addressing those concerns." (Electrolux Sustainability Report 2004: 11)

Electrolux New Zealand Ltd is part of the Electrolux Group, "the world's largest producer of powered appliances for kitchen, cleaning and outdoor use". The company's presence in New Zealand is purely distribution and retail and does not involve any local manufacturing. Whiteware is sourced from Electrolux's Australian production facilities and other overseas locations.

At a global level, the Electrolux Group demonstrates an advanced level of knowledge, understanding and action on environmental matters. Indeed, like many global corporates, the Electrolux Group is increasingly describing its environmental activities under the broader context of 'sustainability' thus encompassing social, environmental, cultural and economic considerations in a more holistic and integrated manner. This is a worldwide trend among global companies as well as smaller more progressive enterprises, be they manufacturers, service providers or primary industries.

The 2004 Electrolux Sustainability Report presents a comprehensive picture of what the company is doing on environmental sustainability from product design and innovation, through to manufacturing, environmental management systems, producer responsibility, public reporting and socially responsible investment. The systems, programmes, standards and internal guidance manuals represent a substantial and impressive collection of tools and approaches underpinned by considerable environmental commitment.

What are the practical realities of product stewardship at Electrolux (NZ) in relation to New Zealand?

Design and innovation

The Electrolux Group has developed EcoDesign handbooks to guide the development of most product lines: "These are used during our Integrated Product Development Process as tools to assure that the right concerns are addressed and the appropriate factors considered during each step of the product development process". Electrolux also use LCA methodologies to assist in the product development process and identify priority environmental impacts and design improvement opportunities. These types of approaches enable Electrolux to design products that address relevant product stewardship aspects related to design for disassembly and recyclability.

EcoDesign guidelines have also contributed to the development of products with a strong focus on sustainability, several of which are featured in the 2004 Sustainability Report. These include attention to energy efficiency, cadmium and PVC-free products, biodegradable materials, recyclability and the elimination of hazardous and toxic substances. Attention to waste reduction in packaging design is also described. The Electrolux Group is also a participant in the Future-Proofed Building™ initiative which aims to educate the market on the importance of buildings to accommodate the demands of tomorrow's lifestyles as well as today's, thus promoting improved building practices and environmental management. In particular, Electrolux's support for Future-Proofed Building™ aims to encourage a change in thinking from cost-based purchases to one that considers wider environmental factors covered by the initiative: energy efficiency, space management, sound control, quality control, life-cycle costing, health and safety, security and automation and resource responsibility. Of these, aspects such as resource responsibility, life-cycle costing, quality assurance and energy efficiency, directly and indirectly relate to product stewardship.

Sustainable application of materials

While Electrolux is undertaking numerous materials-related initiatives to improve environmental performance, the company has clearly noted that the EU's Directive on Restriction of Hazardous Substances (RoHS) is one of most significant, sustainability related issues facing the company. In response to the RoHS Directive, Electrolux is modifying virtually all its products to ensure the elimination of lead, mercury, cadmium, hexavalent chromium and brominated flame retardants. The company is also working towards ensuring effective compliance in similar regulations emerging in China, Japan and the USA.

Electrolux has also developed a Restricted Materials List which serves to define which substances and chemicals are banned and/or restricted from use in Electrolux manufacturing facilities as well as the overall supply chain. It is assumed that some of the design decisions concerning restricted materials may flow on to product entering New Zealand, however regulatory compliance is likely to be a key driver.

Manufacturing

As with most global manufacturing companies, the Electrolux Group has an environmental management system in place for most of its production facilities. By the end of 2004, 92% of the Group's total manufacturing area was ISO140001-certified (this corresponds to 71 production units or 90% of the total number of units requiring certification). All Electrolux Group production facilities pursue the generic targets including the reduction of energy and water consumption, high use rates for materials and components, minimizing waste and managing hazardous materials.

Energy and water efficiency

The Electrolux Group acknowledges that maximising energy and water efficiency in products during their use stage is one of the company's highest environmental priorities. Its own work on LCA, as well as that from other companies and producers worldwide, clearly recognises the greatest environmental impact occurs during the operation or use stage of the whiteware product life cycle. At a global level and in many individual countries, the Electrolux Group has developed and launched numerous highly energy efficient products including refrigerators and freezers.

Electrolux recently released the new Westinghouse ovens, which are 'best in class' in terms of capacity, cooking result and energy efficiency. In the absence of energy star rating in Australasia for cooking products, Electrolux applied the European Standard Energy test to these ovens, achieving the highest rating for the category. The new oven technology is to be progressively rolled out to all Electrolux, Westinghouse and Simpson ovens manufactured in Australia.

The forthcoming release of the Electrolux-branded front-load washing machine also demonstrates the company's commitment to water efficiency and resource use efficiency. This range of washers is all 5A rated under the water efficiency labelling scheme.

Many of these whiteware products have been recognised with awards, ecolabels and commendations. These products are the result of voluntary efforts by the company as well as the need to ensure regulatory and labelling compliance.

Waste reduction and end-of-life whiteware recycling

At a global level, the Electrolux Group position on minimising end-of-life waste from whiteware is clear and impressive. The company is explicit about its commitment to producers playing a greater role in managing the total product life cycle:

"Electrolux is an early advocate of producer responsibility. We were among the first in our industry to identify the business case for recycling and lobby actively for individual responsibility."

In its annual 2004 Sustainability Report, the company notes its engagement with the EU's WEEE (waste electrical and electronic equipment) Directive and the need to find appropriate solutions. It appears that a key element in how the Electrolux Group effectively addresses end-of-life whiteware (in the EU at least) will depend on its collaboration with Sony, Hewlett Packard and Braun, as part of the European Recycling Platform. This collective approach by Electrolux represents a potential solution to how each of the participating producers will manage end-of-life products, be they whiteware, small appliances or IT equipment.

It is worth noting that as an exporter of whiteware to the EU, Fisher & Paykel also complies with relevant directives, legislation and regulations and is a member of REPIC and WEEE Ireland (producer responsibility type organisations who manage end-of-life recovery and processing of whiteware on behalf of Fisher & Paykel).

There is a major difference between how Electrolux deals with EU requirements on electrical and electronic waste equipment versus what the company does in New Zealand with end-of-life whiteware. With the exception of Electrolux New Zealand's nascent home delivery service offering disposal and recycling options, there is limited information or data about product stewardship or producer responsibility activities being offered by Electrolux New Zealand. Clearly there are major differences between the two regions (and jurisdictions) ie producers in the EU are required to comply with mandatory laws compared to no regulation whatsoever in New Zealand.

Electrolux New Zealand reports that Global CEO Hans Straberg was recently in New Zealand and stated, that in terms of recycling and product stewardship, "Electrolux New Zealand should leverage off the techniques and processes established in Europe and use this to enhance Electrolux's position as a market leader". Straberg identified care for the environment to be a core responsibility of the company.

The current Electrolux New Zealand collection and recycling service covers the following:

  • all materials returned to Electrolux through the home delivery service are recycled ie cardboard, polystyrene, plastic shrink-wrap, strapping and the appliance. This allows for direct delivery to customer, removal of all packaging and old appliances;
  • Electrolux is expanding the home delivery service to a nationwide service over the next year;
  • end-of-life appliances collected during the home delivery service are delivered to Sims Metal Recycling to reclaim metal. The Warehouse has also indicated the possibility of such a service;
  • refrigerators with R12 and R134A collected through the trade-in process are degassed. Data collection on how degassing is actually performed is not available;
  • the Electrolux home delivery service is being rolled out through main centres at this time.

Electrolux New Zealand notes that the main drivers for its collection and recycling activities relate to customer benefit and the convenience of having Electrolux dispose of the old appliance: "... if customers know we can take away old product they are more likely to buy one of our products".

4.3 The role of design for environment in product stewardship

Worldwide research and applied commercial activity on DfE recognises the critical importance of DfE in helping improve the life-cycle environmental performance of whiteware, and manufactured goods in general. The body of knowledge on DfE, EcoDesign and Sustainable Product Development is extensive, comprehensive and constantly being updated. It is generally underpinned by the use of life-cycle thinking and the use of LCA software and methodologies.

Much of this work is being done by research institutions as well as producers such as Electrolux, Fisher & Paykel, HP, Sony, Philips and much of the automotive sector including the BMW Group, Toyota, and Daimler Chrysler. Noteworthy outcomes associated with DfE include:

  • design to eliminate or reduce hazardous and/or toxic substances eg EU RoHS Directive;
  • design to improve energy and water efficiency eg compliance and labelling requirements and bonus schemes worldwide;
  • design for durability and extended product life eg contributes to materials efficiency and waste avoidance;
  • design for reuse, refurbishment and remanufacturing eg Fuji Xerox leasing model for copiers, Herman Miller model for commercial furniture initiatives;
  • design for disassembly and recyclability eg contributes to cost-effective and more viable materials identification, sorting and processing.

Both Electrolux and Fisher & Paykel, to varying degrees, have adopted what can be described as pragmatic DfE strategies. Both companies also highlight the role of design innovation as a way of identifying and implanting product-based environmental improvements. Electrolux pursues a 'best in class' approach and aims to ensure each new product release is an improvement on the previous model.

While DfE is an essential strategy for any producer selling product worldwide, the role of mandatory requirements and compliance is a key driver. With regard to waste-related product stewardship objectives, the EU directives on WEEE and RoHS have the potential to effectively become the default drivers globally. In addition to the EU, other countries and regions are also strengthening (and mandating) their environmental laws on restricted materials. In particular China, Japan and various US states are moving forward on EU RoHS-type requirements. These countries represent significant global markets and thus compliance becomes an essential part of doing business in order to operate.

In other words, any sector-wide attempt to stimulate and increase measurable DfE-type initiatives (such as RoHS) for whiteware in New Zealand is very unlikely to be successful or enduring within a voluntary framework. While it can be argued that, over time, most whiteware imported into New Zealand will be RoHS-compliant in some way, this cannot be guaranteed or automatically assumed. It could also be realistically argued that New Zealand could become a dumping ground for pre-RoHS (ie non-compliant) whiteware stock or designs that continue to be manufactured. Similarly, these arguments could apply to New Zealand-based producers.

It should be noted that Electrolux's commitment to RoHS compliance extends to product entering New Zealand. Electrolux reports that it will not allow non-RoHS compliant product to be shipped to New Zealand.

It is the consultants' view that any type of non-mandatory DfE-type requirements in New Zealand will fail to engage overseas producers and provide an effective signal. This view is comprehensively substantiated by the worldwide stampede by producers, brand owners and component suppliers to ensure effective compliance with each stage of the EU RoHS Directive dealing with lead, mercury, cadmium, hexavalent chromium and brominated flame retardants. There may, however, be exceptions. For example, The Warehouse is confident that, if not currently in all cases, it could readily ensure its whiteware sourcing practices comply with either a regulatory or voluntary DfE code. The Warehouse also indicated that its source factories also manufacture international brands to EU RoHS, thus its compliance standards could be readily aligned to a regulatory framework which was harmonised with emerging international norms.

An obvious New Zealand policy response includes the development of legislation and regulations that mirror the RoHS Directive. This would serve to both eliminate inappropriate dumping of non-EU RoHS-compliant product on the New Zealand market as well as directly improving the environmental performance of New Zealand manufacturers. The economic impact on New Zealand industry of such worldwide policy harmonisation would need to be very carefully assessed.


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