Tricks of the e-waste trade

New rules offer no help to informal operators. They ignore reality and are likely to be toothless

Illegally imported e-waste reaches the Seelampur market every second day, said a 35-year-old trader in Delhi’s Nehru Place market. He runs a showroom of laptops and stores secondhand computers in the basement. “I know importing waste is illegal. But as long as ships come in, so do profits. My business of about 40,000 tonnes per annum of old computers is a trickle in the import of secondhand electronics market,” he said, requesting his identity be protected.

However, as per the estimates of the Directorate General of Foreign Trade, illegal import of e-waste in the country stands at about 50,000 tonnes annually.

Loopholes in laws facilitate illegal import. The country’s exim (export-import) policy allows import of secondhand computers not more than 10 years old, besides letting in computers as donations. “These provisions in the exim policy are unduly utilized by irresponsible developed economies to dump obsolete computers and computer scrap in our country,” said Gopal Krishna, convener of environmental non-profit Toxics Watch in Delhi.

Then there is the Customs Tariff Act that says new computers can be imported in India for free, but it does not mention anything on used computers. “Non-existence of classified categories does not imply that their trade is not allowed in India,” said the e-waste trader in Nehru Place.

“Both secondhand and new computers are placed under one head in the Indian Customs Tariff Act and therefore traders mix new computers with the old ones when they export,” he added. About 5 per cent of the old computers get damaged to the extent that they cannot be refurbished. These are auctioned to e-waste traders in Seelampur, he explained.

If a consignment of secondhand computers is found without a licence, traders manage to get the material by paying a penalty. “It is rare that such goods are confiscated,” an e-waste trader said. There is a chance, though, that the goods of repeat offenders are confiscated. But there are ways to avoid that, too—change the company’s name for instance.

“We pay a chartered accountant Rs 10,000 every month to register a new name for our company. That way, there is little chance that the computers we import are confiscated,” the trader said.

It is also easy to import “donated computers”. The Foreign Trade (Development and Regulation) Act of 1992 provides for donation of computers and its peripherals from zones that have been set up primarily for export at zero customs duty. Such donations can be made to recongnized non-commercial educational institutions, registered charitable hospitals, public libraries, public-funded research and development establishments and government bodies.

In reality, some traders procure old computers in the name of a donation to a school to get tax benefits. “I can get a registration for school under the Society Act of 1968 without actually establishing such a school,” said a trader in Delhi. But, if the new rules on e-waste are implemented he cannot do it anymore. The rules do not allow import of electronics under the category of donation.

Not quite there
The proposed rules, however, do not recognize the magnitude of transboundary movement of e-waste under different categories, said Aashish Chaturvedi, programme manager of gtz. “It only declares imports for charity illegal. What about the other ways through which e-waste is imported? For example, under the pretext of metal scrap and secondhand electrical appliances. Electronics can now be imported for refurbishing and repair,” he added.

The proposed rules, for the first time in India, bring in the concept of extended producer responsibility, making manufacturers liable for safe disposal of electronic goods. It requires manufacturers to take back the products after their life is exhausted and devise discount schemes for consumers who return the products.

The rules aim to promote green designs that limit the use of hazardous chemicals like lead and mercury in their products. “The essence of the proposed rules lies in the responsibilities assigned to manufacturers,” said Lakshmi Raghupathy, former director at the environment ministry. She is now part of the e-waste recyclers’ association.

But the rules do not detail the business model for collection of e-waste from consumers, said Vinnie Mehta, executive director of mait.

The draft also proposes to centralize e-waste management by describing the roles of dismantlers, refurbishers and recyclers by getting them registered. Chaturvedi, who is working on an EU-funded project to help organize the informal sector, said organizations in the sector should be given preference for getting registererd with the Central Pollution Control Board.

“Existing rules target the informal sector because their ways are risky and they cause pollution, but their role must be recognized. They should be helped in geting organized,” he added. Government establishments, though, are unfriendly, said informal associations that are trying to or have got registered.

A company called e-wardd got itself registered in March this year. It used to be an informal association of recyclers in Karnataka.

“It took us four years of training and fulfilling government mandates to get registered with cpcb,” said Asif Pasha of e-wardd. “The government did not offer us help in securing loans or getting land,” added Pasha who applied for the registration after training under gtz. He raised Rs 16 lakh to get the facility registered. Difficulties in the process will only deter other associations that have also been trained by gtz to apply for registration, Pasha said. Besides, they are yet to get a recycling contract because “big companies look down on them”.

Another such outfit, the Harit Recyclers Union, has registered as a society to begin the process of formalizing. Its member Shashi Pandit said the process would be difficult given the lack of government assistance.

The law currently does not provide for any plan to rehabilitate those involved in informal recycling, said a senior environment ministry official.

Switch possible?
The Department of Industrial Research, which studied the status and potential for e-waste in India in February 2009, said a symbiotic relationship between the formal and the informal sector was crucial. “The informal sector’s role in collection, segregation and dismantling e-waste needs to be nurtured to complement the formal recyclers as supply chain partners. They should take on the higher technology recycling processes,” the study said.

Efforts to integrate the two did not yield results, said Nitin Gupta, ceo of Attero. He said he was in talks with formal recyclers to get them to sell their printed circuit boards to Attero, but they have not agreed on a price yet. An association of informal recyclers in Seelampur also rejected Attero’s proposal because they could not agree on the price, members told Down To Earth.

Down To Earth