New E-Waste Law Poses Threat to Electronics Industry in State, Companies Say; Industry Coalition Pledges Efforts to Fix Problems With Legislation.

SEATTLE -- A group of electronics manufacturers today waived a yellow caution flag to their peers about the business climate facing their industry in Washington State.

The Electronics Manufacturers Coalition for Responsible Recycling (EMCRR) is sharing its concerns with members of the Consumer Electronics Association (CEA) and the Electronics Industry Association (EIA) because of new electronic waste legislation (SB6428) signed into law by Governor Chris Gregoire.

"While we appreciate the Governor's direction that the state Department of Ecology work to address additional problems with the bill, we remain very concerned about the serious negative impacts of this legislation on our industry," explained David Thompson, Director, Corporate Environmental Department for Panasonic Corporation of North America.

"Our coalition strongly supports recycling of electronic products," Thompson continued. "Unfortunately, the Washington law will result in a costly and ineffective recycling system for state residents while increasing costs for environmentally responsible manufacturers doing business here. Until we finally had an opportunity to meet with the Governor, our efforts to share these concerns were rebuffed along the way."

Manufacturers argue that the Washington legislation will not provide all of the environmental benefits claimed by supporters. For example, the legislation does little to encourage improved design of products, and in some instances, could actually encourage poor design practices. A laptop manufacturer, for instance, will pay more for using easily recycled metal in its designs instead of more difficult to recycle, but lighter, plastics. "This is a disincentive for environmentally sensitive design," Thompson noted.

Manufacturers also charge that, absent changes to the new law in the 2007 legislative session, they will be forced to pick up the tab for less reputable competitors that cease operations or simply refuse to comply with the new state rules.

"This would put responsible manufacturers at a competitive disadvantage," Thompson said. "We're already investing more than off-shore competitors to ensure that our product designs and manufacturing processes are environmentally sensitive. Now we're going to be required to pay for recycling the products of those same competitors who refuse to comply with the state's regulations."

"In a brutally competitive global market like the one facing our Washington operations, any incremental expense is significant," concluded Thompson, whose firm was recently forced to reduce employment at its Vancouver-area operations by about 100 jobs.

Coalition member Frank Marella, Corporate Environmental Affairs Manager for Sharp Electronics Corporation, added, "One of the most disturbing problems with this new law is that it was imposed without any analysis of the economic impacts." He noted that the Department of Ecology so far has ignored manufacturers' requests for this analysis.

"This says to us that some in Washington aren't seriously interested in the health of our industry. For a state whose economy depends so heavily on healthy technology and trade sectors, this is hard to understand," concluded Marella.

Members of the EMCRR employ 4500 people in the state and ship more than 25,000 truckloads of products through Washington ports annually. The broader CEA industry group represents companies with more than 28,000 Washington employees.

The electronics manufacturers noted that the new regulations conflict with the strong recommendations of the National Electronic Products Stewardship Initiative (NEPSI), a national, multi-year public-private study effort that included manufacturers, environmentalists and regulators including some from Washington.

The bill also ignores the benefits of different recycling systems already effectively operating in other jurisdictions ranging from California to Canada. Instead, manufacturers and the state will spend the next two and a half years creating a complicated new system with multiple collection and recycling processes established by individual manufacturers. "It's going to be confusing to consumers and will impair recycling rates," said Sharp's Marella.

The EMCRR is made up of some of the leading electronics manufacturers in the world: Canon USA Inc., Epson America Inc., Hitachi America, IBM Corporation, JVC America Corporation, LG Electronics Inc. USA, Mitsubishi Digital Electronics America, Thomson (RCA), Panasonic Corporation of America, Philips Consumer Electronics NA, Pioneer, Samsung Electronics America, Sanyo Fisher Company, Sharp Electronics Corporation, Sony Electronics Inc. and Toshiba America Consumer Products.