Leading e-recycling business Sircel has warned of industry-wide risks associated with a potential new Federal government scheme to manage the e-recycling sector.

In a submission to a draft product stewardship scheme for small electrical and electronic equipment and solar photovoltaic (PV) systems, the company warns creating competition to win contracts from Network Operators could create a “race to the bottom” scenario between recyclers forced to offer the cheapest rates rather than the best service.

According to Sircel’s CEO, Anthony Karam, “Running a high-quality service at a low cost is almost mutually exclusive in the e-waste recycling sector as acquiring and running the technology, plant and equipment in a compliant and safe environment to address the problem at scale requires significant capital investment. Creating a sense of scarcity and uncertainty surrounding contracts could negatively impact the industry by stretching resources thin and impacting the service delivery.”

In its overall submission to the government, there are other areas of concern such as the powerful role of the Network Operators.

Mr Karam said he fears some Network Operators could control industry revenue flows by favouring some recyclers over others, creating virtual monopolies favouring lower-cost alternatives that, history shows, will ultimately fail.

Mr Karam said, “Clients who are currently accessing recycling services from specific recycling providers could essentially be cut off from that provider and have to go through the Network Operator for an approved contract. For example, Sircel currently works with multiple Councils and large corporations, with whom we have longstanding relationships. We plan to work with those clients for the foreseeable future to achieve a set of ever-improving outcomes, which we have developed in collaboration with those clients. The Scheme, as proposed, could potentially jeopardise those plans .”

He added, “What one recycler might be able to offer a client might go beyond what the Scheme/Network Operator approved recycler might be able to offer in terms of service and reporting. With the single Scheme Administrator body and geographical Network Operators managing contracts for e-waste recycling, there’s potential for an administrative bottleneck to occur that results in longer lead times and an increasing e-waste stockpile.”

In its submission, Sircel has raised several key areas for review, including:

1. The role of the Scheme Administrator: The Scheme Administrator should be an independent body focused on identifying liable parties, setting the standard of reporting, auditing recyclers, and providing annual reviews and recommendations to keep the industry accountable. The Scheme Administrator should not be setting the recycling fee as the recyclers need to be able to set this based on their unique running cost and service offerings.

2. The role of Network Operators: If recyclers are allowed to be Network Operators, there must be measures in place to ensure contracts are awarded fairly across the industry. The scheme needs to ensure that contracts awarded by the Network Operators are done so based on best quality recycling, not the lowest price point, to encourage industry innovation and best practice.

3. The definition of “recycling”: The current definition of “recycling” is not fit-for-purpose to mandate maximum recovery of e-waste materials. The definition needs to be redefined to hold service providers to the highest standards of recycling methods to ensure all materials are being kept out of landfill, not just the most valuable ones.

Mr Karam said it’s important for the government to get this right as the scheme plays an important role in reducing electronic waste in landfill.

“In our view, we believe the Scheme Administrator should be a public authority that is aligned with actual policymakers, not outsourced. We are glad the government is seeking feedback as it’s critical that the scheme supports recyclers so we can properly address this rapidly growing e-waste problem.”

Government submissions close this Sunday 23^rd July 2023. And more information can be found here gov website