On February 25, 2009, the State Council of the PRC issued Rules on the Administration of the Recovery and Disposal of Waste Electronics and Electrical Products which will take effect on January 1, 2011. The WEEE Rules assign responsibilities to various parties with respect to the treatment and recycling of waste electronics and electrical equipment (WEEE).  

The WEEE Rules do not provide a clear definition of WEEE. However, the National Development and Reform Commission, the Ministry of Environmental Protection (MEP) and the Ministry of Industry and Information Technology plan to compile a catalogue of products to be covered by the WEEE Rules, entitled the Catalogue for the Disposal of Waste Electronics and Electrical Products (the Catalogue).  

The WEEE Rules impose significant obligations on the manufacturers and importers of the covered products and their agents, as well as other entities involved in WEEE recycling and treatment. For example, under the WEEE Rules, manufacturers and importers of the covered products and their agents must abide by the following requirements:  

  1. Comply with relevant pollution control regulations;
  2. Adopt product designs that are favorable to recycling and the conservation of nature resources;
  3. Use non-hazardous or low-hazard materials in their products; (4) disclose information about any hazardous materials that their products may contain; and
  4. issue treatment and recycling instructions for their product materials.  

Manufacturers are also encouraged to recycle WEEE, whether on their own or with assistance from their distributors, repair staff, after-sales service providers or WEEE operators. In addition, the WEEE Rules stipulate that the manufacturers and importers of the covered products or their agents make contributions to a fund established by the government to subsidize the costs of WEEE disposal.  

All products covered by the WEEE Rules must be treated and recycled by disposal enterprises (Disposal Enterprises) specially approved by MEP’s offices at the level of municipalities that have districts under their governance. Disposal Enterprises must treat and dispose of WEEE in a manner that fully complies with relevant policies and requirements relating to resource utilization, environmental protection, labor security and public health, and in no way utilize outdated or substandard technology. In addition, Disposal Enterprises are required to maintain data management systems and submit their basic data on WEEE treatment and disposal to local authorities. Disposal Enterprises must retain such basic data for at least three years.  

Failure to comply with the WEEE Rules may trigger administrative penalties. For example, manufacturers and importers of the covered products and their agents may face fines of up to RMB50,000, in addition to orders for corrective action and remediation, for failure to comply with labeling requirements. Similarly, Disposal Enterprises that fail to obtain proper permits may face fines of RMB50,000 to RMB500,000, as well as termination of their businesses and confiscation of illegal earnings. Moreover, if a Disposal Enterprise fails to comply with the record-keeping and reporting requirements, it may be fined up to RMB50,000.  

The WEEE Rules reflect the Chinese government’s larger efforts to construct a legal framework supportive of environmentally-friendly, sustainable economic growth. Nonetheless, the Chinese government tried to postpone the implementation of the WEEE Rules until 2011 for two reasons: first, because the WEEE Rules will impose additional costs on the domestic electronics industry, which has already suffered great losses due to the global economic crisis; and second, because the Disposal Enterprises owned or supported by local governments are not ready to upgrade their technology to satisfy the higher requirements under the WEEE Rules. This conflict of interests introduces some uncertainty with respect to the exact impact that the WEEE Rules will have on the supply chain of multinational electronics manufacturers. The true impact remains to be seen in the years following 2011.