The commercialinterests in the EI-retur system in two periods

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Coordination within the El-retur system Physical flow

No coordination within the EI-retur system

Figure 6.7:Coordination of the transport function in the El-retur system

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^period

The reprocessing activities have not been changed to any extent in the second period. The geographical areas have been rearranged. The changes in the transport function have increased the possibility for higher volume to the reprocessing units.

6.3 The commercialinterests in the EI-retur system in two periods

In this section we present how the commercial interests in the El-retur system are organized during the two contract periods from 1999 to2002/2003, and from 2003 to 2006.

6.3.1 The commercial interests from 1999 - 200212003

The waste management companies use the concept El-retur to coordinate negotiation and discussion with the operators in the system. At the time the system was established , the tender was also issued in cooperation with RENAS AS. As such, the waste management companies were able to negotiate with larger volume towards operators (i.e. total volume from both Elektronikkretur AS and Hvitevareretur AS, and RENAS AS).

Three types of operators were invited to tender: collection sites, transport operators and reprocessing units. The waste management companies in the El-retur system decided to engage in contracts with transport operators and reprocessing units.

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Coordination of commercial interests in the collection system is achieved through the EE-Regulations and the contracts between the waste management companies, and the transport operators and reprocessing units. The Eli-Regulations direct. the activities of the end-consumers and the collection sites. The waste management companies defme the directions for the collection system, where the regulations are incorporated. The figure below illustrates the coordination of the commercial interests in the El-retur system during the first period:

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Commercial

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end-consumers consumers

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EE Regulation

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Retailers ^_".

Contracts with EI-retur Transport operators

• Elektronikkretur

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• Hvitevareretur

Reprocessing units

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Trading in secondary

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markets

Figure 6.8:The coordination o/the commercial interests in the El-retur system 1999-2002

The El-retur system based their collection on the municipalities and retailers according to the Eli-Regulations. These 4000 locations did not have a specific contract or agreement with the waste management companies in the El-retur system. Inaccordance with the regulations, the collection sites had to receive products from end-consumers and inform them about the system.Itwas reported that this task was challenging:

"The EE-Regulations are a huge pedagogical challenge within waste collection. There are a lot of people involved, and it is difficult to teach everyone what to do. We have daily contact with companies and consumers explaining the system to them. " ROAF Bøler

The collection sites explain that the lack of focus from the EE-companies contributed to the information challenges:

"The companies do not see the differences between the various reverse systems for EE-products at end-oJ-life and the municipal waste system. The customers that arrive at our site argue that they have paid a fee to deliver their products. The EE-industry is not sufficiently informed about the differences. " ROAF Bøler

The collection sites had an opinion that the waste management companies and the EE-companies needed to increase contribution with respect to communication and information:

"In our opinion there is a lack of interest and will from the Eli-industry to really face the challenges with the waste from EE-products at end-oj-life. " ROAF Bøler

"In our opinion there should have been some criteria inthe ISO certification of companies that are tied to whether they know how to handle waste. " ROAF Bøler

The waste management companies were obligated to provide information about the El-retur system to the community as a whole, and undertook information campaigns directly towards the end-consumers in order to increase their awareness of the collection system. A low attention rate of the information campaigns in national media led the El-retur system to try an alternative means in order to gain the consumers' attention and initiate the return of products to the collection sites. Ajoint collection project with another type ofwaste (hazardous waste) was one such alternative means. However, information was evaluated to be a challenge:

"There was a challenge with information, and wefelt that El-retur did not do enough. They sent information to the management of the companies. The information stopped in the corporations; it takes time for information to go from the directors to the front desk personnel. " Norsk Gjenvinning Oslo

Due to the legally separated units, the waste management companies had individual contracts with the operators in the systems. The contracts were identical:

"Elektronikkretur have a contract with the transport operator, and Hvitevareretur have one.

The contracts are identical. We pay a price per kilo, indifferent of type ofproduct. We also share the cost 50150, so the transport operators do not have to sort the products. The products are sorted at the reprocessing unit. The reprocessing cost varies strongly between products, and this cost is different for the waste management companies. " Elektronikkretur

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Case1:The EI-retur system

The contracts withthe four transport operators included the following:

• Angeographical area for operation

o Specification of which actors to cooperate with (collection sites and reprocessing units)

• Compensation (a price per tonne transported volume)

• Operating standards

o Investment in cages and containers is a condition in the contract.

o The service level towards the collection sites, i.e. collection facilities (cages and containers) and frequencies.

o Access to a regional collection site.

o Sort the products into the defmed categories.

The contracts withthe three reprocessing unitsincluded the following:

• Angeographical area for operation

o Specification ofwhich actors to cooperate with (transport operators)

• Compensation (a price per tonne per category ofwaste for dismantling)

• Operating standards

o Sorting into product categories, handling, report volumes o Environmental demands

o Report the disposition of products (both disposals and sales to the secondary markets)

The waste management companies were very concerned with documentation of the process, quality and the cost in the system:

"We have a very rigid reporting system, which the authorities are very satisfied with. Our system is the most rigid report system in Europe to be precise. Success is not only dependent on the economic dimension. We are a not-for-profit company and need to get the most of every Krone, but we are also an environmental company. We have to be able to trace everything we do. We have very strict criteria for this activity. " Hvitevareretur

However, there is a trade-off between reporting and cost efficiency. The operators explained that the reporting has not been in accordance with the operations:

"The products that are collected are separated in certain product groups, weighed and registered In El-retur there are6groups and24sub-groups. We need2-3 employees just to weigh and register the materials. The more detailed the sorting the more it costs. It is not

Case1:The El-retur system

possible for us to sort in more detail than at present. That will be too expensive."

Elektronikkgjenvinning

"We disagreed with the change in reporting that was made. They made a system to report volume from each collection site and between types of products. We disagreed strongly with what El-retur did. The volume was to be registered when delivered at the reprocessing unit.

Our opinion was that the registration had to be made at the collection site, in order to trace the volume. " Norsk Gjenvinning Oslo

"We delivered the products to the reprocessing unit, and they registered the volume. Then we had to divide the volume between the collection sites where it was collected based on the transport manifesto we had. It became very inaccurate, an in my opinion completely senseless. It became a pro forma account, which in our opinion was completely wrong. In our opinion we had to register the volume at the collection site to get it right. In case of deviation it was necessary to know where to place the costs. Alternatively, you had to guess where to place the costs. " Norsk Gjenvinning Oslo

The waste management companies were directly involved with the product flow, in the sense that any complaints from the operators (collection sites, transport operators or reprocessing units) about the other(s) were to be reported directly to them.

The waste management companies took advantage of an option in the contracts with the operators and continued the operations for one year. The reason for doing so was an expectation of coordinating with the Swedish market. Elektronikkretur and Hvitevareretur announced in the environmental report that they sought to cooperate with their Swedish counterparts" in the next contract period. The goal was to get positive synergies with respect to quality and prices for transport and reprocessing (larger volume). However, the Swedish actors wanted to wait until the ED's WEEE-directive was available before deciding on how to develop their systems. The waste management companies in the El-retur system saw Norway and Sweden as one market, and believed that such an opportunity could be realized in the future.

6.3.2 The commercial interests from 2003 - 2006

The coordination of the commercial interests in the collection system is basically the same as it was in the first period. The waste management companies argue the importance of acting as one unit:

48The companies have the same function, but there are no linkages with respect to ownership.

130

Case1:The El-retur system

"In the negotiations we operate as two parties together. We enter the contracts in the same meetings. We have agreed to act together. We agreed on that in 1999when we started, and we have done this for the following contract periods. It has a simple explanation. We have large volumes if we act together, and we get better prices and terms. With respect to both transport and reprocessing. " Elektronikkretur

There has been a change of contract-partners to the system in the second contract period. The waste management companies decided to change from three transport operators to six, which included exchanging one large operator for four smaller companies in order to get better local control. When the operators were evaluated, one of the actors from the first period did not perform to the waste management companies' satisfaction. They found their operator to be somewhat difficult to cooperate with. In addition, new actors had a better offering on price and quality:

"We have had a very good relation to our partners, except one. This actor had 70% of the volume in the first contract period We have had much back and forth with them. Now they are out. Their problem was both cultural and organizational. They have had a culture in running things their own way, be the market leader. The company is organized with a head office and operations in Oslo and local business units around the country. The problem has been that when the local business units have been instructed by the head-office how to do things, there has been a lack of ability to carry out the instructions. The structure has not been convenient for us in order to reach our goals. It concerns the effort we want to do locally. They have not had the power to see it through. It has been an everlasting discussion. "

Hvitevareretur

The waste management companies wanted to increase the number of actors in order to have a competitive situation (i.e. avoid a monopolistic one). The geographical areas were changed and adapted to. A larger number of transport operators were given a contract, but with smaller geographical areas to cover.

From the first to the second period, there has been an increased flexibility in the system, as the operators have been allowed to engage sub-suppliers. The sub-suppliers get paid for their services, and it has therefore been possible to compensate activities performed by waste companies external to the El-retur system:

"The companies that have been given a contract with El-retur have been encouraged to cooperate with the other companies in this business. In this case it is possible for us to become a sub-supplier to the system. This is positive. " Follo Truck Utleie

The transport operator reports that the system creates misunderstandings and difficulties. The combination of the geographical areas and planning has created a loss of efficiency in the

transport function. The transport operator would like to schedule the transport without consulting the collection site:

"The communication is directed between the collection site and our contract partner.

However, this creates a delay in the operation. The collection sites are filled too much by the time we get the information and are physically at the collection site. The operations create a lot of misunderstandings. I would like to plan the collection operations directly. " Haukedal Transport

The reprocessing units have been given the same type of contracts but have increased in number from four to five. The reprocessing units reports that the cooperation with the waste management companies is working very well:

"Our experience with El-retur is very good. But of course, it is because we have a large market share. Jf we lose our contract things would look different of course, but our cooperation with the waste management companies is working very well. " Stena Miljø

However, the reprocessing units have a limited coordination obligation and have to wait for deliveries from the transport operators:

"In the El-retur model there is nothing we can do to influence the levelofvolume. We have to await deliveries from the transport operators. We knew that we had 50 %of the market. "

Stena Miljø

Insummary, the El-retur system is coordinated in the same manner in the second period as in the first. The only difference is the increased number of transport operators, and the transport operators' ability to plan the transport in cooperation with waste companies external to the system.

In document Coordinated action in reverse distribution systems (sider 147-153)