February 23, 2021
In a hard hitting submission to the UK governments Department for Business, Energy & Industrial Strategy (BEIS), regarding the Industry Voluntary Agreement to Improve the Environmental Performance of Imaging Equipment and Consumables. UKCRA highlights concerns that the negative effects in the proposed VA would have on UK businesses and consequently a loss of UK jobs.
Top of the UKCRA, (United Kingdom Cartridge Remanufacturers Association) concerns is the “lack of transparency in the negotiations leading up to the submission of the proposal.” UKCRA concerns include: “The anticompetitive barriers to entry to become a Supporting Signatory” and the “exceptions provided for the Original Equipment Manufacturers (OEM) to continue practices that are harmful to businesses and consumers.”
UKCRA is concerned about the requirements for a Supporting Signatory to have a “substantial operational establishment within the EU” and for “Remanufactured Cartridges, Refilled Cartridges, Remanufactured Containers and Refilled Containers must make up at least 80% of all Cartridge and Container units produced or made available by a Supporting Signatory”.
UKCRA commented: “The definition of the term of a “substantial operational establishment in the EU” remains obscure, with possibilities ranging across revenue-based and physical establishment requirements, illuminating the subjectivity and discriminatory nature of the criteria. With the UK leaving the EU, if this provision is interpreted to require a physical presence in the EU, it will block UK remanufacturers from becoming Supporting Signatories carte blanche. Such a requirement bears no reasonable relationship to the purported environmental purpose of the VA and only enhances the exclusionary practices of a few large remanufacturers located within the EU.
UKCRA also challenged the requirement for 80% remanufactured or refilled consumables of the Supporting Signatories range. Commenting “most smaller remanufacturers sell components and new build cartridges to fill out their product range. Such a restrictive condition to become a Supporting Signatory of the VA effectively excludes a large number of remanufacturers who are active on the EU markets for printer consumables, as well as upstream components suppliers, significantly impeding their ability to compete within the EU. This distorts competition in favour of the OEMs and the small subset of non-OEM suppliers who were directly involved in the elaboration of the VA.”
UKCRA also questions the way the negotiations leading up to the proposal were not sufficiently transparent and that the proposal itself distorts competition in the markets for printer consumables as well in the upstream markets for components.
According to UKCRA if a remanufacturer is not a Supporting Signatory and does not have a BA with an OEM, then that remanufacturer is prevented from fairly competing with Supporting Signatories. The proposal does not include targets for OEMs to reach agreements with Supporting Signatories and for entering into BAs. The association is concerned that there is no enforcement mechanism should the OEMs not meet the targets for BAs.
On the question of firmware updates, the VA commits OEM signatories to avoid using techniques that prevent printing with remanufactured and refilled cartridges provided such cartridges use the ‘original electronic circuitry’.
UKCRA has significant concerns about this restrictive definition, which would mean that only a very small subset of remanufactured consumables would in practice be covered by the provisions of the VA. The deployment of firmware updates by the OEMs, building from about 2015, continues to play a significant role in the challenges faced by the UK remanufacturing sector and its customers.
“The cartridge remanufacturing industry and customers who purchase remanufactured products remain under threat from firmware updates and this means that the important capabilities that the remanufacturing industry brings to the UK at this critical time, particularly with the surge in home working due to the COVID-19 outbreak, are at risk. The failure of the VA to properly address the harm being caused to consumers by firmware updates runs directly counter to the new Circular Economy Action Plan which aims to empower consumers and public buyers,” UKCRA said.
“Over the years UKCRA has continued to argue that voluntary measures for industry have proved to be a disincentive to remanufacturing. Self-regulation has resulted in significant detrimental impact on the remanufacturing industry and the critical role it plays in nurturing the circular economy and value retention.”
In UKCRA’s view, only a mandatory approach can bring tangible and enforceable progress towards a circular economy, because only a regulation is applicable to all market players. Wasting more time on a VA is likely to lead to further reductions in the numbers of companies, increased job losses, and associated reductions in UK tax revenues and National Insurance.
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