Examination of Witnesses (Questions 81
- 99)
MONDAY 4 MARCH 2002
MS LESLEY
SMITH, MR
GEOFF BELLINGHAM
AND MS
VIVIEN WILLIAMS
Chairman
81. Can I welcome Dixons to the Committee. For
the record, we have got Lesley Smith, Group Director Corporate
Affairs. So you are the public voice of Dixons?
(Ms Smith) For want of a better expression.
82. For want of a better expression. And Geoff
Bellingham, the Technical Director, and Vivien Williams, the Environmental
Co-ordinater—all splendid titles. In your evidence at paragraph
6 you said Dixons' technical officers sought clarification of
what the requirements of the regulations would be from DETR from
2000 onwards. What made you twitch to the extent that you thought,
"We had better find out what all this means from DETR"?
What caused you to focus on this?
(Ms Smith) We were already in meetings discussing
the future implementation of the regulation on waste end of life
electrical products (WEEE). In the course of those we had raised
on a number of occasions our concern that this Regulation would
prevent, firstly, the export of products containing foam and then
the disposal of products containing foam.
83. Just in terms of timescale, you have given
me the impression that you have been talking about the Electrical
Waste Directive but you also had this one which was a parallel
universe and something you thought was a problem. When did it
crystallise in your minds from your knowledge of this particular
new regulation? When did it first suggest itself?
(Ms Smith) That was autumn 2000 because the regulations
were published on 29 September 2000 in the OJEC Journal and they
made it clear that would prevent either the export or the disposal
of products containing CFC foam.
84. So that was the first time that you formally,
as Dixons, got sight of this to the extent that you said "oh,
this could mean something to us"?
(Ms Williams) I think in October 2000 when there were
issues with exports and a ban on exports was introduced, we had
a call from one of our sub-contractors who had been exporting
to say that there were several containers of fridges and freezers
that they could not export and they were backing up at Tilbury.
At that point there was a meeting then with Customs and Excise,
DETR and DTI to talk about that particular problem relating to
exports. We went along to that meeting on 16 November 2000. That
was when we read through the guidance and realised that there
was an issue with exports and then disposal moving forward.
85. So going back to the fact that this thing
had been discussed in Europe for the previous two years, it had
not registered on the Dixons' Richter scale at all really as an
issue that might eventually affect you?
(Ms Smith) We have a relationship with DEFRA and Customs
and Excise on these things and we would expect—They published
guidance, which was released to us in November, following the
publication of the regulations at the end of September, so we
would expect to be able to follow their guidance. In this case
the guidance was unclear because the guidance note refers to disposal
"if practicable" under Article 16. Retailers and disposal
contractors asked what "if practicable" meant and then,
in fact, when we looked at the actual document from the Official
Journal of the European Commission it did not say "if practicable",
it just said "controlled substances contained in domestic
refrigerators and freezers shall be recovered and dealt with as
provided for after 31 December 2001".
86. Did you think that was entirely clear language
and would have left you in no doubt as to what that meant?
(Ms Smith) We thought that the regulation as published
in the Official Journal was clear and we thought that it meant
that you could neither export nor dispose of CFC foam containing
products and that is why we wrote to Michael Meacher at the end
of November 2000 in that case specifically to say did they understand
what the effect of the ban on exports would have and could it
be raised at the Council of Ministers that was going to discuss
it at that point. We raised specifically the issue of foam there
because the Official Journal seemed to us to be fairly clear.
87. You are used to dealing with the complexities
in the world of business, you have to deal with a lot of complex
things, and you have said with absolute clarity you thought paragraph
two in Article 16 was clear, you knew what it meant, you have
told us what it meant. Did you wonder why Government was having
difficulty in understanding it? Did any official ever say to you
"we are not clear?" because one of the things I have
struggled to understand is why the Government found it so difficult
to understand something that you have told us you saw as crystal
clear in terms of its meaning?
(Ms Smith) It seemed clear to us but then, with all
due respect, we do not spend every day of our working lives interpreting
European regulations.
Paddy Tipping
88. Thank God!
(Ms Smith) Quite. So we did rely on the guidance of
officials to give us their interpretation of what they felt it
meant. They are also dealing with more than one company, they
are dealing with lots of companies, lots of disposal contractors
and lots of local authorities, so—
Chairman
89. In terms of the feedback you got from officials,
did you get any flavour as to why the Government was struggling
to understand this?
(Ms Smith) No.
90. What kind of a reply did you get from the
Government when you posted formally your concerns? Did they write
back to you, did they telephone you, what did they do?
(Ms Smith) There were several different letters issued.
The letter on 21 November from the DETR Global Atmosphere Division—
Mr Mitchell
91. This is 2001?
(Ms Smith) No, 2000. After the meeting which my colleague,
Vivien, attended, there was a letter issued on 21 November, which
I can pass the Committee a copy of—
Chairman
92. That would be very helpful.
(Ms Smith) There were three letters. The first letter
said "We recommend to any prospective exporter that they
should satisfy themselves that any equipment to be exported contains
no CFCs or other substances listed above. They should be aware
that if they export a refrigerator, the form or refrigerant of
which contains CFCs, they will be in breach of Article 11 of the
2000 Regulation. There may be legal action as a consequence."
That letter was received on 21 November 2000 and refers to the
foam and the refrigerant. Just for clarity, the refrigerant and
the foam are separate things, both of which contain CFCs. The
first letter we received referred to the foam and the refrigerant,
so we took that to mean you could not dispose of either. We then
wrote in response to that letter, and indeed this meeting, and
we received a second letter on 1 December 2000, again from the
Global Atmosphere Division, and that repeated the prohibition
on the export of products containing CFCs but it referred only
to CFC refrigerants and omitted any reference to foam and said
that "Article 16 of the Regulation obliges all CFC refrigerants
to be recovered safely for destruction." We were a mite confused
because basically the reference to foam had been dropped in the
space of about a fortnight. Then on 8 December we got a fax from
Customs and Excise International Restrictions Team which said
"....with effect from 8 January 2001 the export of pre-1996
refrigeration equipment must have a declaration that all CFC refrigerant
gases have been removed", ie that is the liquid gas in the
compressor not necessarily the foam. Again, the reference as to
the foam had disappeared. Meetings continued over the next nine
months or so and it was not until 9 August 2001 that a letter
from the DTI confirmed that the European Commission had clarified
that Article 16(2) of the regulation applies to insulating foam
in domestic fridges, so then foam had reappeared again.
Mr Mitchell
93. Can we just clarify that because you are
talking there essentially about export, are you not, export of
reconditioned fridges or whatever?
(Ms Smith) Yes.
94. There are two problems, one is the export
and the other is the treatment of fridges in this country to remove
the coolant and foam to deal with that. So all your awareness
was focused on exports up to late in—
(Ms Smith) No, it was not, because in fact the first
letter on 21 November 2000, which was in the section I have just
handed you, refers to Article 11, which is about export, the second
letter in 2000 referred to Article 16, which is about disposal,
and then basically thereafter the letters referred to Article
16.
95. Did they bring up the issue of the foam
and the insulation?
(Ms Smith) The second letter dropped the reference
to foam. There was some ambiguity because basically foam had been
in there in the first place, which is what had thrown us into
a panic, but thereafter the reference to foam was dropped.
96. Right, so foam—?
(Ms Smith) We still thought that foam was affected
so from thereon we were in a position where we thought foam was
affected and the Regulation was clear and the Department was seeking
guidance to see if that was correct.
97. So the Department is lumbering around trying
to clarify things with the European Commission but Dixons were
aware that the foam was an issue and would have to be disposed
of. The foam meant that you could not export and the foam also
meant that you could not dispose of it in this country. Dixons
were aware of that in 2000?
(Ms Smith) That was our interpretation. I wish we
were aware. Bear in mind as well that we ourselves neither export
nor dispose of—that is done by third party contractors.
The point I would like to make in reference to the LGA's comment
is that we did not walk away from providing the service voluntarily
nor did we run away because it cost money. We had to withdraw
the service because that service was withdrawn from us by the
contractors who no longer had the legal means of disposal. It
is a service that we very much wanted to continue and indeed still
want to continue and wish to reinstate.
98. I accept that but what you are saying essentially
is that Dixons in the year 2000 were smarter than the average
Environment Minister?
(Ms Smith) I would not have said that.
99. Hang on, you said that you did not find
a reference to "as practicable as possible" in 16 (2).
We were told in Brussels that this was the nub of the argument,
was it practicable to dispose of the foam? You are saying, as
you interpreted it in 2000, that it did not say "if practicable".
(Ms Smith) It does say "if practicable".
That is in point 3. Point 1 of Article 16 deals with controlled
substances in refrigeration, air-conditioning and heat pumps,
except domestic refrigerators and freezers, which I take to mean
commercial units basically. Point 2 is domestic refrigerators.
Point 3 seems to be all those other than in points 1 or 2. That
is where the phrase "if practicable" creeps in. It is
not in the previous two points. It may be that the argument hinged
around did that "if practicable" cover all those points,
although it is only in point 3. Geoff?
(Mr Bellingham) We thought the balance of probability
was the "if practicable" statement in item 3 referred
to only those things covered in item 3. Point 1 meant all of commercial,
point 2 meant all of domestic products, point 3 meant none of
the above, but included everything else.
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