Most UK companies need better asset management if they are to comply with the WEEE Directive

The Waste electrical and electronic equipment (WEEE) directive may be touted as a cost for suppliers, but unless organisations get their asset registers in order, it will also create a significant cost for UK business.

The WEEE directive aims to increase reuse and recycling of electrical and electronic goods, reducing the amount of WEEE going to landfill and therefore environmental damage. Producers are responsible for financing the collections, treatment and disposal of WEEE, allowing consumers to be green for free.

But such policies assume a level of asset management far beyond that achieved by the majority of UK business. Unless supplying a like-for-like replacement, suppliers will only remove and dispose of equipment they have delivered initially. How many UK businesses can accurately identify the location of their WEEE equipment within the organisation and confirm when it was purchased and from whom? Without such information, just which company do they expect to handle the free disposal?

Lost assets:

In the majority of UK businesses a full physical audit reveals that at least 10 per cent of assets recorded on the register no longer exist and only 40 per cent can be easily identified. The rest have been moved and/ or upgraded without any record being made.

And the figures are far worse for WEEE. Few individual items reach the typical £1000-£1500 minimum capitalisation threshold, so are not required to be held individually on the asset register. Finance departments opt to consolidate such purchases into one single entry, which for depreciation purposes is fine, but not for WEEE legislation.

Without knowledge of Individual asset numbers and proof of original supplier, the liability will be on the organisation to arrange and pay for WEEE compliant disposal.

Asset Management:

Producers, distributors and operators can face a £5,000fine per offence in the Magistrates Court or an unlimited fine in the Crown Court. Company Directors and managers can also be prosecuted, in addition to the company itself, if they consent to, or participate in the offence, or if their neglect led to an offence committed by the company.

It is likely that any company conducting a full audit during 2007 to identify any "missing" assets will have been disposed of without following proper procedures since the company will have no valid certificate. The finance director will have to admit the company has no accurate picture of its own assets or accept a fine.

Organisations need to implement sound asset disposal procedures. Linking the asset register to a document management system will ensure a scanned WEEE certificate is linked to a disposed asset, providing the required audit trail. Each asset can be recorded alongside the supplier's name and email address, enabling swift supplier contact when disposal is due.

Compliance Overload:

UK business is already complaining about excessive red tape, perhaps why the WEEE Directive introduction in July 2007 was so downplayed. But a belief that the onus of WEEE is firmly on equipment suppliers could be and expensive mistake.

Source: www.microscope.co.uk