New Jersey Proposes E-Waste Regulations

Date: Aug 22, 2011

On August 15, 2011, almost three years after the enactment of the state's Electronic Waste Management Act ("Act"),[1] the New Jersey Department of Environmental Protection ("NJDEP") finally proposed implementing regulations.[2] The NJDEP is proposing to codify most of the requirements prescribed by the statute, but does propose critical clarifications to definitions and other provisions. The Department is accepting comments until October 14, 2011, on the proposed rule, including the following highlights:

Definitions: The NJDEP proposes definitions for several terms used but not defined by the Act. Notably, because the statute carves out collection obligations and exemptions that are specific to "television manufacturers," the NJDEP proposes to define the term and differentiate this class from manufacturers of covered electronic devices ("CEDs") other than televisions.

Annual Registration: Under the Act, manufacturers of CEDs and televisions must register annually with the NJDEP. The proposed rule would clarify that each annual registration package must include an annual registration form; a statutory registration renewal fee of $5,000; a current list of every brand under which the covered electronic devices manufactured by the manufacturer are sold, regardless of whether the manufacturer owns or licenses the brand; and a written certification as to both the veracity of the submitted information and the manufacturer's compliance with European Union Directive 2002/95/EC on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment as required by the Act. Toll manufacturing and private labeling relationships often are confidential. As the proposed regulation is silent on whether the NJDEP would agree to protect brand lists as confidential business information, commenters to the proposed rule certainly should raise this in their comments.

Curiously, the Act and regulations cite specifically to Directive 2002/95/EC and subsequent amendments, but that Directive has been "recast" (meaning that it has been repealed and replaced) by Directive 2011/65/EU, which went into effect on July 27, 2011. Thus, manufacturers would be certifying to a nullity. Presumably, the reference will be changed in the final rule. More problematic is the continuing practice by states to blithely reference EU and other extra-territorial laws or regulations without conducting appropriate due diligence on the potential implications.[3] Reference to the recast Directive should be a particular concern because it expands RoHS' scope to all electronic and electrical equipment (EEE) beginning in 2019. For now, the New Jersey CED definition should act to restrict the scope of the Act and the NJDEP regulations, but affected companies should remain vigilant over such references given the potential for mischief.

Annual Report: The proposed rule would require manufacturers to submit an annual report that includes the total weight of all CEDs collected for recycling in the previous year. The Act also requires television manufacturers to submit "annual" television sales data. As it is impossible to collect and process annual data encompassing the significant winter sales period through December 31, by the Act's January 1 deadline, NJDEP is proposing to modify the statutory deadline to February 1. Specific requirements for group submissions of an annual report also are proposed.

Collection Obligation: The Act requires NJDEP to set the collection obligations of covered CED manufacturers for each calendar year. For manufacturers of CEDs other than televisions, the collection obligation would be based on the manufacturer's share of CEDs that are returned for recycling. In contrast, the collection obligation of television manufacturers would be based on each manufacturer's share of television sales. (Presumably the rule means New Jersey sales, but is silent on this potentially important point.) Under the proposed rule, manufacturers would have an additional month to review and comment on their collection obligations as calculated by NJDEP (from March 1 to April 1). NJDEP also is proposing to push back the publication of its final collection obligation report from April 2nd to May 1st of every year, beginning in 2012.

Collection Plan: If the NJDEP determines in its final collection obligation report that a manufacturer has a collection obligation for a given year, the designated manufacturer would be required to file its collection plan by June 1st, beginning in 2012, rather than the Act's March 15 deadline. Pursuant to its statutory authority, NJDEP is proposing to require the submission of additional information in the collection plan, including detailed information on the methods and services that will be used to collect CEDs, the processes and methods that will be used to recycle collected CEDs, a description of the means used to publicize the service, a detailed explanation of how the manufacturer intends to fulfill its obligation, and the written certification discussed above. Manufacturers with a collection obligation would be required to implement their plans by January 1 of the following calendar year.

Fees for Carrying out the Plan: The Act prohibits manufacturers from charging fees or passing on the costs of compliance to consumers. The NJDEP is proposing an exemption to the "producer pays" principle for "premium services," e.g., collecting a CED from a consumer's residence, provided the NJDEP approves such a service as part of the manufacturer's collection plan.

Credit Trading Program: The Act also allows a manufacturer that collects more CEDs than its NJDEP-specified collection obligation to use the excess amount as a credit against its collection obligation for the next program year. NJDEP also is proposing to allow manufacturers to sell the credits to other manufacturers. The NJDEP is seeking public comment on how such a credit trading program should be structured under a separate notice of opportunity for public comment.

The Proposed Rule is open for public comment until October 14, 2011, and can be accessed at: http://www.nj.gov/dep/rules/proposals/081511a.pdf. Until the rule is finalized, manufacturers of covered CEDs must continue to rely on the NJDEP's "Guidance on Complying with New Jersey's Electronic Waste Management Act" (August 2010).

For more information on New Jersey's proposed rule or other state e-waste programs, contact JC Walker at 202 434-4181 or via e-mail at walker@khlaw.com.

[1] N.J.S.A. 13:1E-99.94, et seq.

[2] The rules would be codified in Title 7, Chapter 26A, subchapter 13 of the New Jersey Administrative Code, N.J.A.C. 7:26A-13.1, et seq.

[3] The lack of due diligence in this case is evidenced by the fact that the RoHS recast process has been under way for over two years, and the final recast was adopted by the EU Parliament on November 24, 2010.