Examination of Witnesses (Questions 340-354)
Dr Kirstie McIntyre, Mr Andrew Clack, Professor Ab
Stevels and Mr Peter Evans
29 JANUARY 2008
Q340 Baroness Platt of Writtle: How
effective has the implementation of IPR in Japan been at encouraging
communication between designers and recyclers, and, as you have
obviously gathered this morning, how can the United Kingdom encourage
such communication because we are here to find out what will work
for the UK?
Mr Evans: The issue in Japan has been that the
producers have established the recyclers themselves and the recycling
companies are the electronics companies themselves, purely and
simply because they are the material stream producers, so the
TV companies have set up TV recycling facilities because all they
are responsible for is that, and I think that has helped the communication
in those terms. Sony, Panasonic, Hitachi are all responsible for
certain areas and have their own facilities. The reason it will
not work in the UK is because there is so much mixed material
coming back that it just does not make sense that someone like
Sony, which does not produce all the types of equipment, should
be responsible for recycling all of the separate materials. If
there is a more reduced material stream, if we can get producers
involved in that and take responsibility for setting up their
own recycling facilities, that would help the communication between
the recyclers and the companies themselves.
Dr McIntyre: I think it comes back to part of
the question that was asked earlier about what can we do to make
this better. Some of it comes down to the incentives within law,
and at the moment the way the WEEE law is set up in the UK and
in many countries it really is a very end-of-pipe type solution.
It is just looking at "Let us get electronics out of landfill
sites". That is a very worthy aim in its own right but it
does not solve any of this closed loop recycling, increasing recycling
rates and getting those old materials into new products that we
have been talking about today. How do we help the Government to
generate a UK solution? As I have said, some of us manufacturers
are working with universities and with the NGOs to come up with
a practical solution which we hope will work for Europe. It is
a bit of a slow burn, unfortunately, as these things tend to be.
We have to be a bit more patient than we would like to be on these
things. In addition to that BERR recently set up their WEEE Advisory
Board, of which I am a member, and there are many stakeholders
on that group and one of our particular subject areas to look
at this year is individual producer responsibility and how we
implement that for the UK.
Q341 Chairman: Can I ask, and I think
Mr Evans and Mr Clack might wish to come in here, do your companies
in other parts of the world offer, say, a £10 or $20 reduction
if you hand back your old Sony or your old Panasonic and get a
new one?
Mr Evans: Absolutely not. There are no incentive
schemes for any consumer electronic products that I am aware of.
However, in the United States we do have a free take-back and
our slogan in the United States is, "We made it; we'll take
it".
Q342 Baroness Platt of Writtle: Would
that come up against this anti-competitive law you have talked
about on several occasions?
Dr McIntyre: Yes. We do the same thing in the
US but we cannot offer that system in Europe because of the competition
laws.
Q343 Lord Lewis of Newnham: I want
to get rid of, say, a refrigerator or a television set. If I have
to do this I go to my local authority who then charge me £25
to have it picked up and taken away. What happens to it when it
goes away? Is it just put into a major pile or is there some mechanism
whereby, since they now have selected these different things,
they can recycle them in a more effective manner?
Dr McIntyre: Yes. The way it works in the UK
is that manufacturers like ourselves join compliance schemes to
comply with the WEEE directive, and those compliance schemes make
arrangements with local authorities. Various compliance schemes
have different arrangements with different authorities and what
they do is work out what is best for both, but, of course, different
sites have different capacity requirements. You would like to
put maybe ten different containers in there; they only have room
for three, so you have to work around those sorts of restrictions,
and they will look for what is best for the value of the members.
There are also increasing environmental standards. There are at
least four separate containers. Fridges will be in one container
because they are required to be de-gassed. You will have televisions
and monitors in another container because they are required to
be treated separately and distinctly from everything else. You
will have light bulbs in another one, and then you will have a
mixed bag of pretty much everything else. There are white goods
as well, which tend to go into the metals fraction because they
have a much higher metals content than the range of products that
we make.
Q344 Lord May of Oxford: How significant
would it be if public procurement imposed more stringent environmental
standards on things they purchase?
Mr Clack: Depending on product stream, I guess
that certainly for the IT technologies it would have a significant
impact.
Dr McIntyre: Huge, yes.
Mr Clack: It would probably be less so in consumer
electronics because of the nature of public procurement, but generally
it is very effective.
Dr McIntyre: What we have been finding up until
now is that over the last couple of years public green standards,
or whatever you like to call them, in public procurement are now
really beginning to put pressure on our sales people. Up until
recently it has been very much a tick-box type of exercise. They
ask the questions, we answer the questions, the box is ticked
and we move on. Now what we are finding is that the questions
are getting increasingly difficult to answer, which is good and
we welcome that, because, as I said before, what legislation creates
is a lowest common denominator. What the market needs to create
is the rewards for the innovators, whether they are large companies
or small companies. Public procurement is a massive market for
us and if it is recognised within public procurement that "We
are making efforts and therefore we will buy your products over
these other products because you have raised standards within
public procurement", that suits us very well indeed. We think
that is exactly the way it should work.
Q345 Lord May of Oxford: An alternative
way of achieving the same sort of end, provided there was enough
social change to be concerned about it, would be to have a fairly
stringently enforced set of eco-labels, as it were, and that would
then go beyond public procurement. On the other hand, again, it
is my impression that the attempt to put labels on food about
nutrition and give red, orange, green and so on has met with quite
a lot of resistance from the industry because it is one more thing
to deal with. How do you feel about eco-labels?
Dr McIntyre: Eco-labels serve their purpose
very well, but the problem is that there is a proliferation of
eco-labels across Europe. I think in Europe we deal with something
in the region of 50 different eco-labels.
Q346 Lord May of Oxford: Would it
get across the uncompetitive laws to have a common eco-label?
Dr McIntyre: It would be very nice and that
is why in our submission we referred to self-declaration. In the
Nordic region, particularly within the IT sector, we have worked
very much with the Nordic governments in generating what is called
the IT Eco Declaration. What that does is take the best of breed
of all of the eco-labels and puts them all together with a set
of general customer frequently-asked questions, because we find
the same questions come up again and again from public procurement.
It all goes in one document and you can then self-certify your
product against that document. The advantage of self-certification
over going through third party verification or an eco-label in
that way is that it does not affect your time to market. If there
was one eco-label standard for Europe and there was one third
party verification body you can imagine the backlog that could
be created if a lot of us came to market with new products all
in the same time frame, which we quite frequently do, such as
before Christmas and at other times of the year when we know our
customers have budgets to spend, and so what that does is that
it gets around that and then the manufacturers pay for a spot-check
audit. You do not know when it is going to happen to you but you
put money into a fund and they can turn up at any point and say,
"You have got a self-declaration for this product. Demonstrate
it to us now".
Q347 Chairman: Can you send us a
note on that?
Dr McIntyre: I could, certainly.
Q348 Chairman: You have gone through
it quite lucidly but I think it would be helpful to get that.
Dr McIntyre: Yes. It has been exceedingly powerful
with public procurement in the Nordic region.
Mr Evans: Eco-labels have some merit but in
reality it is very difficult to compare apples and pears. Eco-labelling
will focus on a particular issue and in many instances it will
be power consumption or energy efficiency, but in terms of energy
efficiency what is energy efficiency? Is it the lowest power consumption
or is it the best use of the power because you are using extra
facilities? We have always opposed the eco-labelling or the A-G
labelling of televisions because there are so many different functions.
You have got 100 Hz, you have got 50 Hz, you have got stereo quality
sound, you have got various other functions that have an impact
on energy consumption, and the issue we have is that to be able
to compare all those and contrast them and make a reasonable level
that says, "This is accurate", is very difficult. Also,
keeping pace with the technology as we issue new products is very
difficult.
Q349 Lord May of Oxford: There is
a delicate line between those valid considerations and the fact
that people simply worry about the message that is conveyed. If
you go back to the food industry, the red/orange/green theme,
the basic problem is that you worry because you do not want people
seeing red on anything but you transpose that into a technical
discussion of the meaning and so I hear what you say and it has
validity, but—
Mr Evans: The research done by EST has shown
that the extreme opposite of that. Currently with items such as
televisions, the consumer is not concerned about energy efficiency
whatsoever and that is one of the key issues we need to address.
Q350 Lord May of Oxford: That is
a real problem.
Mr Evans: It is a real problem. It is not just
the function of being able to watch television; it is a piece
of furniture, it is something to be proud of. It is a bit like
an "Intel inside" label.
Mr Clack: In all the time of my involvement
with Panasonic I can hardly remember one customer query about
energy efficiency.
Q351 Chairman: Do you think that
is a consequence of the inadequacy of the metering system we have
in the UK for our electrical consumption? There are things that
you can buy apparently—you guys probably make them—that
can tell you how much you are consuming and so you can say to
your children, "When you are playing with whatever it is
you are playing with that is the amount of electricity you are
using. Would you mind switching it off?". What you are telling
us at the moment is true and I do not doubt it is true but in
the future people might become more sensitive to consumption.
Mr Evans: If you take an analogy with cars,
if you look at the A-G label for cars I do not believe it has
had any impact on the buying decision of whether you buy an A
or a G car. If someone wants to buy a 4 x 4, just because it has
a G label is not stopping them buying a 4 x 4, and I think the
same argument is there with televisions.
Q352 Lord Lewis of Newnham: We will
do that by taxation.
Mr Evans: Yes.
Q353 Baroness Platt of Writtle: Could
a third party facilitate communication between Government and
manufacturers to encourage sustainable procurement? You have talked
about voluntary organisations and I think they are rather a good
idea but what other forms of dialogue may be needed to improve
Government and local government procurement?
Dr McIntyre: It is a very difficult question.
Certainly when you look at some of the Government's initiatives,
for example, that the Office of Government Commerce is making
with their Quick Wins, they send them out for consultation and
we have all commented on them where appropriate. It comes into
the IT sector more than it does with consumer electronics. We
are more than happy to contribute to those sorts of things and
help Government but at the end of the day what has to happen is
that best value must not be prioritised over total cost of ownership.
We were saying before that consumers are not interested in energy
costs. Certainly our business customers are exceedingly interested
in energy costs, particularly when they are buying a service for
a new data centre, for example, and the Government needs to start
thinking in that same way. They need to start linking the people
who make the purchase decision with the people who pay the energy
bills. What we are seeing with our private commercial customers
is that those links are being made very carefully. The IT manager
is talking to the facilities manager when he is specifying new
servers, new printers, new IT, but what we are seeing in Government
is that those links are not quite there yet. They are better in
central government than they are in local government but they
have some way to go before those linkages are made. We are quite
happy to put the technical data forward to demonstrate why these
linkages should be made. 50 per cent of the power that goes into
a data centre is used by air conditioning and cooling, not by
the equipment doing the piece of work itself. Therefore, if you
are smart with your specification of the equipment you can cut
down on the power and cooling that goes into that data centre.
Q354 Chairman: In the banking centre
of Edinburgh where I come from more electricity is consumed in
the summer than in the winter because in the clean rooms the air
conditioning requirements are higher in the summer than they are
in the winter.
Dr McIntyre: We had a City of London customer
who came to us very recently saying, "I would like to buy
some new servers but I cannot pull any more power off the grid
where I am at the moment". The power capacity of the cables
feeding some of the areas of the City of London are at capacity
and they cannot fit any more equipment in there, and so they came
to us and said, "Help us to get smarter with our use of energy".
Chairman: We had better not go down that route
at the moment. Some of us will have to declare interests and things
like that. You have been extremely frank and fulsome in your replies.
It may be that when you see the printed copies of the evidence
there are things you would like to add to what you have said and
we would be happy to receive them, and I suspect that when we
go through the evidence there will be gaps that we would like
to fill. This has been extremely helpful, so can I thank you all,
in particular Professor Stevels, who I had not appreciated came
from the Netherlands this morning or last night for this meeting.
At one stage we were thinking of going to Japan. At other stages
we were thinking of going to the States and we are going to do
a bit in the Low Countries, but although I do not think we agreed
with everything you said we are here to try and get the evidence
as well as having an argument, which with some things can be good
fun. May I just thank you very much for your help this morning.
It has been quite a long session for the four of you and we are
very grateful.
| 
