Now that the Companies Bill 2012 has finally become a law after receiving approval from the Rajya Sabha, environmental sustainability will get a much needed boost in the country. The key aspect of the new law is that it makes it mandatory for corporations to spend 2% of the net profits on CSR (Corporate Social Responsibility) activities. With the official nod to the Companies Bill from the Upper House, India might very well become the first country to mandate CSR spending through statutory provision. As a country reeling under overwhelming pressure from electronic waste, once the new Companies Bill is approved by the President, it could prove to be quite an effective push for environmentally sustainable e-waste management in India. According to the latest ASSOCHAM study titled “E-waste in India by 2015”, the Delhi-NCR region alone receives 85% of the e-waste generated in developed nations. The new Companies Bill’s mandatory spend on CSR activities could very well boost more effective e-waste management. Let’s take a look at the key highlights of the new bill and how it can help boost sustainable and environmentally responsible e-waste recycling.

Corporate Social Responsibility and the New Companies Bill: Key Highlights

The new Companies Bill seeks to enhance corporate governance and increase transparency, accountability and conformity with international business standards. The concept behind the bill is to promote equitable and sustainable growth in the country. Under the new legislation, organizations meeting a particular set of criteria must spend a minimum of 2% of their profits over the last three years towards CSR activities. The legislation has defined nine activities that meet the CSR requirement – one of these nine is ‘ensuring environmental sustainability’. One of the ways companies can work towards environmental sustainability is through environmentally responsible e-waste recycling, by ensuring that they recycle and dispose their old computers and other broken down or outdated electronics and equipment with registered recyclers who have the technology to process e-waste responsibly. Let’s take a look at the key aspects of what the new Companies Bill holds in store:

The Criteria: Clause 135 (the CSR Clause) of the Companies Bill mentions the criteria for the companies that need to spend on CSR activities. The criteria are as follows:

  1. Companies worth over Rs 500 crores or more
  2. Companies with a turnover of Rs 1,000 crore or more
  3. Companies with a net profit of Rs 5 crore or more in a given financial year

It is mandatory for companies that meet any one of these criteria must spend 2% of their average profits over the last three years on CSR activities. The companies are required to be audited every year for these activities and will face penalties in the event of non-compliance.

The Penalty: As the CSR spend is mandatory, companies that fail to conform to the new CSR rule, will have to explain why they failed in the annual board to report in order to prevent being penalized. However, failing to provide an explanation will result in the company being penalized with a fine of not less than Rs 50,000 (about USD $900) and up to Rs 25 lakh (USD $46,000). Also, officials who default on the reporting provision could be subject to imprisonment of up to 3 years and/or a fine of no less than Rs 50,000 and as high as Rs 5 lakh (USD $9,200).

Other key highlights of the amended law include rules pertaining to board members auditors. These rules include mandate the set up of a CSR committee in each organization, which will be responsible for formulating CSR policies and activities that are to be undertaken by the organization and to monitor the policies periodically. The rules pertaining to auditors limit the number of companies an auditor can serve. Also, organizations need to rotate auditors every five years and an audit firm cannot serve for over two terms of five consecutive years. The aim is to bring more clarity on criminal liability of auditors if they recklessly or knowingly ignore certain information from their reports.

E-waste and The New Companies Bill – A Much Needed Push

The recent ASSOCHAM study titled ‘E-waste in India by 2015’ has painted a very grim picture for the e-waste scenario in India. According to the study, every day 8,500 mobile handsets, 3,000 PCs and 5,500 televisions are trashed every day. The Delhi-NCR region is all set to become the e-waste dumping capital, generating an estimated 50,000 metric tons of e-waste by 2015. According to another report by global management consulting firm, TechSci Research, only 5% of the total electronic waste in India is recycled; the remaining e-waste ends up in landfills and pollutes the environment. The problem lies in the fact that e-waste contains toxic components that need to be recycled and disposed in an environmentally responsible and safe manner to render them harmless to the environment.

The introduction of the new Companies Bill can help in curbing the hazards posed by electronic waste. Organizations and companies who deploy and/or regularly upgrade their computer systems and electronic appliances as well as manufacturers in the CDIT industry can now aim their CSR activities under the new Companies Bill towards e-waste recycling. Companies in the IT sector and manufacturers of consumer durable electronics can play a major role, as they are the largest producers of electronic waste, and as part of the mandatory CSR activities, these companies can ensure that any form of e-waste emanating from their organizations is recycled in a proper and safe manner. Recycling electronic e-waste in an environmentally safe manner would ensure that all toxic electronic components are treated carefully, and recycled and reused without causing any harm to the environment. While the earlier E-waste (Handling and Management) Rules 2011 had made some progress in this respect, the introduction of the new legislation can give e-waste recycling in India a much needed boost through its mandatory CSR provision.

How can Organizations Ensure Eco-friendly E-waste Recycling as CSR

There are many aspects that organizations and companies looking to recycle their e-waste as part of their CSR initiative to comply with the new Companies Bill, need to take into consideration. Recycling e-waste with just about any recycler doesn’t solve the purpose. The e-waste recycling sector in India is divided into two categories, the organized and the unorganized sector. The problem lies in the fact that 95% of the e-waste is handled by the informal recycling sector, which lacks the technology to process e-waste in a responsible manner and ends up polluting the environment. In order to ensure that an organization’s e-waste recycling initiative complies with its CSR objectives, it must make sure that they recycle their e-waste with authorized and registered e-waste recyclers who are equipped with the technology to process and handle e-waste in an environmentally friendly manner.

One of the pioneers of e-waste recycling solutions and NASA recognized technology innovator, Attero has developed patent pending technology for recycling and processing e-waste in an eco-friendly manner. As India’s largest electronic asset management company, Attero offers end to end integrated recycling of e-waste and provides customized solutions for data security and electronic asset management, and is the only company with the capability to extract pure metals from e-waste by processing it in an environmentally responsible manner. As part of its e-waste recycling solutions, the recycler offers end to end real time online tracking of e-waste right from the source to its state of the art recycling facility in Roorkee.

Attero is also the only company to be registered with the United Nations Framework Convention on Climate Change (UNFCCC) and award Carbon Credits to organizations for recycling their e-waste with Attero. Attero has also launched the Clean E-India Initiative in collaboration with the International Finance Corporation (IFC), a World Bank entity, to help raise public awareness about the hazards of e-waste and set up an efficient e-waste take back model by working together with all stakeholders involved in the electronics life cycle, including the unorganized sector. Attero has also tied up with over 21 of the world’s top electronics brands and OEMs including Wipro, Samsung, HCL and Acer to ensure eco-friendly e-waste recycling.