China Market Intelligence: Electronic Waste Rules, China Business Review, May-june 2009

China Market Intelligence

Electronic Waste Rules China recently approved long-awaited electronic-waste rules, but a product catalogue is pending

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he State Council in early March released long-awaited rules governing the recycling and disposal of waste electrical and electronic equipment (WEEE). The new regulations, which take effect January 1, 2011, contain several new requirements for producers and importers, including new label and management requirements for producers. They also require producers to contribute to a special fund designed to offset costs of WEEE disposal and recycling. Though the State Council approved the rules in August 2008, Premier Wen Jiabao did not sign them until February 25, 2009. The long delay was likely due to the economic downturn and concern about the additional requirements that these new regulations place on WEEE manufacturers. These new rules are not China’s first to address the disposal and environmental pollution of electronic products. In September 2007, the PRC State Environmental Protection Administration, precursor to the Ministry of Environmental Protection (MEP), released measures designed to prevent and control environmental pollution caused by the use and disposal of electronic waste. Regulations governing WEEE show China’s efforts to establish a framework for controlling the use and disposal of products to prevent environmental pollution, a framework first launched with the PRC Administrative Measures on the Control of Pollution Caused by Electronic Information Products in 2007. China’s developing regime for these products has many parallels with the European Union’s rules for handling WEEE and restrictions on hazardous substances. Full details of China’s WEEE regime will not be finalized, however, until the release of the WEEE catalogue. Companies that produce, import, or use WEEE products should monitor the lead agencies involved for indications of the drafting or release of product catalogues.

WEEE requirements China’s new rules further delineate agency responsibilities and coordination, outline recycling and disposal requirements, add new labeling requirements, create a companycontributed disposal and recycling subsidy fund, and specify noncompliance penalties for WEEE. ■ PRC agency responsibilities Three PRC ministries will take primary responsibility for drafting and supervising the 12 May-June 2009 chinabusinessreview.com

implementation of WEEE-related regulations: the National Development and Reform Commission (NDRC), MEP, and Ministry of Industry and Information Technology (MIIT). The Ministry of Commerce will manage other WEEE recycling work. Several other PRC agencies, such as the General Administration of Customs and the Administration of Quality Supervision, Inspection, and Quarantine, will handle work related to their areas of jurisdiction. ■ WEEE catalogue WEEE requirements will apply only to products listed in a catalogue, which the State Council, MEP, and MIIT will jointly release. The details and timing of the catalogue’s release, and whether it will be open for comment, remain unclear. ■ WEEE fund The regulations authorize the establishment of a fund that subsidizes WEEE recycling costs with contributions from producers and recipients of imported goods. The Ministry of Finance, along with NDRC, MEP, and MIIT, will draft concrete measures for the levy, use, and management of this fund. ■ Labeling and reporting Producers and importers of WEEE products must label products with information about harmful materials content and suggested recycling or disposal means. Companies involved in WEEE disposal are required to report regularly to municipal-level environmental protection agencies and must maintain data and reports for at least three years. ■ Qualification for enterprises that handle WEEE Only enterprises that receive municipal-level environmental protection agency approval—based on prerequisites and timelines outlined in the new rules—will be able to carry out WEEE disposal and recycling. ■ Penalties The regulations establish penalties for illegal WEEE-related activities, including failing to label products (fines of up to ¥50,000 [$7,315]), carrying out WEEE disposal without proper qualifications (fines of between ¥50,000 and ¥500,000 [$73,154] and possible confiscation of proceeds from WEEE disposal), and failing to report to local authorities (fines of up to ¥50,000). This article is adapted from a report that first appeared in China Market Intelligence, the US-China Business Council’s (USCBC) members-only newsletter. To find out more about USCBC member company benefits, see www.uschina.org/benefits.html.