WEEE directive may hurt IT budgets

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The beginning of this month marked the end of the 'grace period' for companies to adjust to their new obligations under the Waste Electrical and Electronic Equipment (WEEE) directive.

Now, non-compliance with WEEE will now result in serious penalties - financial, legal and in terms of reputation.

Enforcement of WEEE legislation - requiring manufacturers and distributors to reduce landfill waste disposal by recycling and reusing whenever possible and at whatever cost - has far reaching effects for the whole of the IT industry, from end-user organisations right up to global PC manufacturers.

However, despite knowing about the change in law since the subject was first bandied around a few years ago, the UK is almost two years late in fully adopting the WEEE directive (It was meant to kick-in in August 2005).

As a result many industry experts believe a number of unanswered question remain over how exactly things will pan out for industry stakeholders.

If manufacturers are now responsible for products for their entire lifecycle, including responsibly once the end user has decided they no longer want that piece of equipment, they will have to absorb increased costs and will struggle to plan and anticipate WEEE obligations, given that the lifespan of IT kit can vary wildly. The worry for IT and business decision makers is that these costs will be passed on to the consumer, both business and public customer, who in recent years have enjoyed the benefits of low prices and the low margins associated with competitive chip and PC price wars.

A survey conducted last year by legal IT specialists Eversheds revealed that three quarters of IT professionals believe that their business overheads will increase as a result of the WEEE directive's arrival.

Many other legal experts also concur with these research findings. "The take back element is something that organisations didn't have to factor into their supply chain previously. This means that for, say Dixons, selling a TV becomes a whole lot more expensive as they also have a future obligation," said Mark O'Conor a partner at law firm DLA Piper.

"Given the recent Live Earth concert etc this is far more in the public consciousness. Everyone is doing the green sell. In that context, if you're Comet, Panasonic, Toshiba and so on for example, you will get fined if you fail to implement the WEEE directive which is pretty devastating for market share and the future attractiveness of your products. Bad publicity is often the thing most companies worry about."

Alan Pratt, an associate at law firm Beachcroft, echoed O'Conor's concerns regarding increased costs for IT buyers and suggests that, if businesses are willing to pay extra, they must be careful to ensure they're increased costs are based on market standards.

Aside from worrying about whether the costs associated with the directive will hurt their IT budget, businesses should be able to rest easy that the majority of the responsibility lies with the vendors and many are now stipulating this requirement when they go out to tender, according to O'Conor.

"If you're an individual user or an IT department it shouldn't be your problem. You should be able to rely on the fact that the seller will meet their obligations. If you're a bank, for example, and you're buying a new IT system with a large systems integrator who might sub-contract it may well specify that they have to all ensure they're meeting the regulations," he said, adding that businesses must still do as much as they can in respect of wiping data pre take back.

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