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Tuesday, April 17, 2001

Co-op undercuts pricey new recycling law

Staff writer

OSAKA -- A group of garbage collectors and recycling firms in Osaka Prefecture claim that the Electrical Appliance Recycle Law that went into effect earlier this month deprives them of income they have relied on for years, and to combat this, the group has undercut the fees set by the law.

Workers at a recycling plant in Sakai, Osaka Prefecture, remove motors from refrigerators before they are put through a crushing machine.

The law forces manufacturers, retailers and consumers to share the burden of recycling four basic types of home electrical appliances.

The Osaka Recycle Cooperation, a union of some 140 garbage collection and recycling firms in the prefecture, claims it can recycle a refrigerator for 3,450 yen, a TV and washing machine for 2,400 yen each, and an air conditioner for 2,750 yen, all including the transportation fee.

"We provide the same service as the manufacturers at less cost by using the existing network of garbage collectors and firms as we have been doing for the last 15 years. The new law is awful because consumers have to pay more for recycling while the garbage firms that handled the discarded home appliances until March 31 are forced out of work," said co-op executive director Makoto Komatsu.

Although manufacturers are allowed to set their own price for recycling appliances, all major makers have adopted uniform prices that follow the example set by Matsushita Electric Industrial Co. These are 2,700 yen for a TV, 3,500 yen for an air conditioner, 2,400 yen for a washing machine and 4,600 yen for a refrigerator. But these figures don't include transportation fees that retailers charge.

An Osaka-based appliance retail chain, for example, charges 1,000 yen to ship any one of such appliances to the manufacturers' storage sites. However, that price applies only to customers who buy a new appliance at the chain.

For a consumer who is not buying a new machine and only wants to dispose of, say, an old refrigerator, the shop would charge 4,500 yen for collecting and transporting the appliance. Add the recycling fee and it costs 9,100 yen to get rid of the appliance.

Katsuhiro Obayashi, a member of the co-op who runs a recycling plant in Sakai, said his business has been seriously hurt by the new law.

"We handled some 200,000 discarded home appliances annually, of which about 70 percent were the four types of appliances (covered by the new law)," Obayashi said.

Last month, Obayashi saw a flood of used appliances arriving at his plant that were obviously last-minute discards by people trying to get in before the new law's debut.

The volume of appliances arriving at his plant has dwindled to about 20 percent since the law took effect. "It's going to be a tough year," he said.

Obayashi's firm used to earn 1,000 yen for collecting a discarded appliance from retailers. Refrigerators, for example, were broken into pieces by a smashing machine after the motor and plastic parts were removed. The machine then sorted out the pieces into steel, nonsteel metal and other parts.

He sold the motors, plastics, steel and nonsteel metals to other firms specializing in each item. Now he is faced with having to rely on other appliances, like fans or toasters, and with the job of shipping the discarded appliances on behalf of retailers, he said.

While the move by the co-op poses no legal problems in itself, retailers could face penalties if they ship used appliances to firms other than the manufacturers. In such a case, the retailers face a maximum fine of 500,000 yen.

According to the co-op, however, some 35 retailers have already joined its recycling service.

Junichi Matsumoto of the Economy, Trade and Industry Ministry's Kinki Bureau said the bureau has told the co-op that such activity could be illegal and it would take appropriate measures if such cases were reported.

He said the law makes manufacturers responsible for recycling the appliances and it is up to them to decide which recycling firms do the job.

The co-op has approached Matsushita Electric in the hope of recycling some of the products, but has so far failed to win a contract.

Komatsu also claims the law ignores resolutions adopted at Diet committees that recommended that existing garbage collectors and their plants be utilized.

He said that if authorities intervened to penalize retailers, he would allow the retailers to terminate the contract with the co-op because he does not want them to be punished. But the co-op itself will not back off.

"In such a case, we would sue the government, claiming the new law disrupts our business because it ignored the resolutions," he said.

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