Air condition manufacturer Johnson Controls-Hitachi, now owned by the Bosch group in India, has allowed bids from recyclers far below the government-mandated floor price for e-waste, copies of internal records seen by Newslaundry show.
Under the e-waste rules, the Central Pollution of Control Board mandates a floor price of Rs 22 per kg for recycling of consumer electrical and electronics waste (CEEW). But during a reverse e-auction through a digital procurement platform earlier this month, the company allowed bids far below this price – at least one recycler quoted as low as Rs 5.9 per kg.
As per government pricing, the company would have to give at least Rs 30.04 crore to recyclers to meet its annual recycling obligation for this pile of e-waste, which stood at 13,655 metric tonnes and was for the current financial year. But the total bidding amount for this e-auction went as low as around Rs 10 crore, internal records show. Though it’s not clear what the lowest bid was during the e-auction that lasted nearly 30 minutes and saw at least 36 bids.
Did Johnson Controls-Hitachi accept the lowest bid as is usual business practice, saving crores? Newslaundry sent a questionnaire to the company asking them the closing price and the total number of bidders. This report will be updated if they respond.
The CPCB, under the Ministry of Environment, Forests and Climate Change, has been informed about the alleged violation of rules, two sources told Newslaundry. However, it’s not clear if it has taken any action against the company.
These bids were taken to help the company meet its recycling obligation through extended producer responsibility certificates, which are akin to carbon credits. Each electronics firm is legally bound to meet their recycling targets under the E-waste Management Rules, 2022. For this, in September last year, the CPCB fixed the minimum and maximum prices for recycling for seven categories of e-waste.
Electronics giants, including Johnson Controls-Hitachi, had last year filed a petition in the Delhi High Court, challenging a higher payout to recyclers. They argued that market forces should decide the price discovery for recycling as was the case until the September guidelines. Hitachi later withdrew the petition. Other petitioners include South Korea’s LG and Samsung, Japan’s Daikin, Tata-owned Voltas, Havells and Blue Star. The case is still pending in the court.
Newslaundry also reached out to the Bosch communications department. This report will be updated if a response is received.
Bids at Rs 5.90
On June 6, Johnson Controls-Hitachi used an online procurement platform to open a reverse e-auction – a process in which the lowest bidder gets the contract – to meet its recycling targets.
Seven minutes before it wrapped up, a Rs 5.9 bid was ranked 17th in the descending order of quotations, meaning that there were at least 16 more bids lower than that. This recycler’s total bid was valued at Rs 10.46 crore. As the auction progressed, a recycler who bid Rs 22 saw its ranking go down. In the beginning it was among the top 10 lowest bidders, then in the top 30 and later in the top 40.
‘How can the company expect this price?’
In a questionnaire to CPCB’s chairman Vir Vikram Yadav, member secretary Bharat Kumar Sharma and e-waste division head Youthika Puri, Newslaundry asked if they have received any complaint against the company and if any action has been taken. The questions have remained unanswered.
Newslaundry spoke to three recyclers who were privy to the e-auction.
One of them said that the operational cost for recycling electronic waste is at least Rs 12 to Rs 16 per kg. “How can Hitachi expect recyclers to sell EPR certificates to them at Rs 5-6 per kg? This is also in violation of CPCB’s guidelines of Rs 22 per kg,” they said.
Another claimed they did not actively participate in the auction as the price was very low. “I have already told manufacturers that I am not going to sell EPR certificates for less than Rs 22 even if this means no business,” they said.
In September last year, CPCB fixed the floor and ceiling prices at which EPR certificates could be sold to manufacturers. The minimum price was higher than what manufacturers used to pay to recyclers. At the time, CPCB had argued that higher payout to recyclers would incentivise recyclers and ensure scientific processing of e-waste.
“Establishing floor price for EPR certificate is very crucial as it incentivises investments in collection and transportation networks, making collection and logistics costs economically viable and protects recyclers from the risks of fluctuating commodity prices, ensuring their sustainability and helps legitimate recyclers compete against the informal sector,” read the guidelines.
If you liked this report, power our investigative series on the broken e-waste system in India.
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