3 is a winner: Indonesian waste law, product responsibility & green marketing

Every day, with a ching and a smile, tens of thousands of laptops, light bulbs, juicers and electric fans change hands from retailers to consumers across Indonesia. Now fast forward to a few years later, when these electric appliances burn out, and end up decorating landfills, polluting rivers or torn apart by street kids to recycle components and sell them back. So if you’re the manufacturer, what do you do?

Option 1: You look the other way. I mean come on–things are hard enough trying to stay profitable in these tough times, making sure your products adhere to safety standards, and trying to reduce waste at your production site. How on earth are you going to keep track of your products after they have been sold and used? (That’s when you start grumbling about environmentalists and how they’re never satisfied with efforts made by businesses to reduce their environmental impact.)

Option 2: You come to terms with the fact that you have a liability on your hands. If you’re producing batteries, how badly do you want to see them scooped up by school kids during a clean up operation in a natural reserve (say Muara Angke in Jakarta for example)? Or photographed in the hands of a woman in rags trying to pry them open to salvage their components?

(If you are manufacturing and selling products in Indonesia, just consider the legal implications of having your products littering the country. Law 18/2008 on waste management could not be clearer; producers are required to manage their packaging and/or products that do not degrade naturally (source here). For those of you who like fancy terms, this is called Extended Producer Responsibility. According to The Economist, 31 of America’s 50 states have product-specific EPR laws. The European Union requires manufacturers to dispose of packaging, electronics and vehicles. Canada and Japan also have EPR laws.)

Option 2+: You do something about it. While some companies will squirm and stick to option 1, enlightened companies  will see here an opportunity to build customer loyalty. Look at US firm Staples for example, which sells office supplies–the company has rolled out a take-back programme for used items such as computer monitors, compact fluorescent light bulbs and batteries.

Is it a cost? You bet it is. But consider how Donny comes back to your store with a used item he wants recycled, and he gets to exchange it with one of your newer products at a discounted price. In one neat move, you have showed the world that you are taking responsibility for your products, you have offered your customer a service to rid him of a now useless device so that you can dispose of it safely, and now you have sold him a new one while making him feel good about it.

If none of this sounds convincing to you, consider this. In Java, the heart of Indonesia’s manufacturing sector, environmental capacity is already at critical level. That means the island cannot accommodate any more environmental abuse, whether pollution or infrastructure development (with more than 60 million people, this is hardly surprising).

Time to start thinking about how your business operation can avoid contributing to this disaster in the making.

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