The E-waste Saga of Developing States

Ms. Heather Katharine*

Ms. Deeksha Sharma & Mr. Tirtharaj Choudhary †

Abstract
The saga is still going on. About 90% of E-waste from industrialized countries is discarded in
developing states with low to no recycling schemes. This chapter discusses the challenges
facing developing nations, especially India, in their efforts to counter ever-increasing e-
waste. This is compounded by the fact that developed nations are moving their e-waste to
emerging countries with poor environmental controls, making it cheaper for them to dispose
of, or flouting the authority responsible. The authors also address the evolution of Indian law
on e-waste management and how India adopted the Extended Producer Liability concept,
along with the development of Producer Responsibility Organizations, to deal with
domestically manufactured e-waste, as well as with what is imported using loopholes in
existing legal provisions, or illegally. Another argument outlined in the chapter is the
distinction between the Used Electronics and Electrical Equipment and the Waste Electronics
and Electrical Equipment, which overcomes the Basel Convention barrier. Apart from the
suggestions for implementing changes in national laws, the chapter uses International Trade
Law, the Reverse Supply Chain, the Block Chain, Smart Contracts and the Convention on
International Sale of Goods for cross border trade of UEEE/WEEE and Carbon Taxes as
creative and efficient ways to counter this danger. In the end, the chapter discusses the
concept of a circular economy for India.

Keywords: UEEE/WEEE, Extended Producer Responsibility, Reverse Supply Chain, Indian

Law, International Trade Law, CISG, Smart Contracts, Block Chain, Carbon Taxation

*
An Associate Professor at Bifrost University, Iceland.
†
Fourth Year Law Graduates of Dr. Ram Manohar Lohiya National Law University, Lucknow.
 Introduction

E-waste ('EW') implies electronic devices that are unused, inoperative, or are no more of any
use. Electronic items include regular cell phones, laptops, televisions, copiers, and microwave
ovens, among others. The ongoing dilemma about what is the right way to dispose of outdated
and discarded gadgets is not a new one, although it goes back to the 1970s. Since then, while
much has improved, the process of handling such waste has been extremely difficult for
developing nations.

1. Why is e-waste a problem for developing countries?

The principal cross-border issue is the legitimacy of the transfer of toxic e-waste across
national boundaries. More than 90 % of the world’s hazardous waste is generated by developed
market economies, and as the law regulating hazardous waste disposal evolves in those
countries, individual businesses have sought cheaper disposal sites. It is estimated that one-fifth
of the world's total annual trade in such waste goes from developed countries to emerging
countries, most of which lack the infrastructure to track and dispose of incoming shipments
safely. These countries, especially the poorer countries of Africa, Central America, and Asia,
have been tempted to tolerate waste by providing considerable revenues. In a variety of cases,
this trade is unlawful.‡

Although it is not illegal to export reusable but discarded goods to other nations, if it is
possible to refurbish those goods, a lot of waste is sent to Africa or Asia under this disguise, says
Interpol.§ Most of it is branded as goods that can be refurbished, but in reality most of it is
neither in a functional state, nor can it be repaired. To reduce legitimate recycling charges, it is
mostly sold as used goods in the black market. Treatment is usually carried out in the informal
sector in these areas, posing serious risks to local populations in terms of environmental
pollution and health.**

2. How does EW end up in India?

Imports of EW for disposal are prohibited in India under the Hazardous and Other Wastes
(Management and Trans-boundary Movement) Regulations 2016, as huge quantities of EW
generated by other countries often end up in India. Even in the light of a recorded ban on imports
of EW, almost 70% of the EW processed in India is produced elsewhere. †† Loopholes in the law

‡
NidhiJamwal, Developing countries are dumpyards for e-waste, DOWNTOEARTH (Jun 7, 2015),
https://www.downtoearth.org.in/coverage/developing-countries-are-dumpyards-for-ewaste-13697
§
John Vidal, Toxic E-Waste Dumped in Poor Nations, Says United Nations,OUR WORLD (Dec 16, 2013),
https://ourworld.unu.edu/en/toxic-e-waste-dumped-in-poor-nations-says-united-nations.
**
V. Ranganathan, Health hazards caused by unorganised e-waste disposal, YOURSTORY(Jun28, 2018),
https://yourstory.com/2018/06/unorganised-e-waste-disposal-dangers
††
Rakesh Kumar, The Problem of Electronic Waste, THE TELEGRAPH ONLINE EDITION (Mar 26, 2018),
https://www.telegraphindia.com/opinion/the-problem-of-electronic-waste/cid/1465497.
make it easier to import illegal products. In addition to the acceptance of computers as gifts, the
country's export-import program permits imports of second-hand machines not older than 10
years. Moreover, the Custom Tariffs Act says a new computer can be imported into India for free
but remains silent about used computers. These policy requirements are unduly exploited by
reckless developed economies to recycle obsolete scrap throughout India. ‡‡ Border security
should be properly implemented to discourage the sale of electronic waste from developed
countries. This would be explored later in the chapter.

3. History of e-waste management (EWM) in India

Regulations on electronic waste are largely the jurisdiction of the Ministry of

Environment, Forests and Climate Change. Furthermore, the guidelines for ground level
application of the same are specified by the Central Pollution Control Board (CPCB) and the
State Pollution Control Board.§§

In India, the E-Waste (Management and Handling) Rules of 2011 were adopted in
addition to the Environmental Protection Act of 1986. These regulations stipulated that all
manufacturers and importers of electronic products had to set up a strategy to handle their EW by
arranging recycling centers or to incorporate recovery systems. Besides, electronic goods
vendors had to provide customers with instructions on how to dispose of equipment correctly so
that people don’t dump e-waste with domestic waste, and to make sure that the consumers know
of the hazardous chemicals used in the product they have bought. The rules laid down specific
obligations for the establishment, disposal, and control of EW for each group concerned.

The E-Waste (Management) Rules, 2016, replaced the 2011 regulations in October 2016.
These guidelines thoroughly clarified the responsibilities of the parties involved, put in place
stricter handling requirements, and clarified the basic definition of the EW, which is defined in
these rules as, “electrical and electronic equipment, discarded in whole or in part as waste by the
user or the user in bulk, as well as excluded from the production, refurbishment and repair
processes”. "Electrical and electronic equipment" (EEE) means, in particular, equipment which,
in order to be functional, is based on electrical current or electromagnetic fields. Talking of
product liability, the idea of Extended Producer Liability (EPR) is a core rule mentioned in these
laws that obliges producers to ensure that their EW is sent to licensed recyclers or
decommissioners. In addition, these Regulations identify and lay down specific obligations for
the production, disposal and management of EW for each party involved and set target date for
those organizations to substantially reduce their accumulation of EW.

The most recent changes to the E-Waste Management Regulations were introduced in
2018, which shows 10% of the EW recycling commitments for 2017-2018, 20% for 2018-2019,
‡‡
Tricks of the e-waste trade, DOWNTOEARTH (Jun 28, 2015), https://www.downtoearth.org.in/coverage/tricks-of-
the-ewaste-trade--325.
§§
E-Waste Management, CENTRAL POLLUTION CONTROL BOARD, http://www.cpcbbrms.nic.in/writeread/E-Waste
%20Management.pdf
30% for 2019-2020, and so on. This amendment further gives the power to the CPCB to position
electronic goods on the market unilaterally in order to control compliance with the regulations.
The financial expenses associated with these experiments were the responsibility of the
government, while the producer was previously responsible. Producer Responsibility
Organization (PRO) has been formed to further reinforce the EPR. *** PRO, a knowledgeable
organization, must be approved and funded jointly or independently by manufacturers to share
responsibility for the recycling and channeling of EW generated from end-of-life goods in order
to ensure that such EW is managed carefully without harming the environment.

In addition, the rule set a goal for producers which was absent from the 2012 regulations.
Manufacturers are also mandated to enable their goods to be sold back with recommended
processes. This law specifies that no pollutants such as lead, arsenic, cadmium, hexavalent
chromium, polybrominated biphenyls and polybrominateddiphenyl ethers in the new EEE and its
components or replacement parts are present in any manufacturer of EEE and its components or
accessories or sections in excess of the maximum design of the new EEE. Details of the
components of the product and its parts shall be given by each vendor, along with a statement of
compliance with the provisions of the RoHS (Restriction of Hazardous Substances) in the
customer report for the device. Just those who are in accordance with Rule 16(1) & 16(4) may be
imported or put on the market for new electrical and electronic equipment.†††

As per the legislation, manufacturers are required to create awareness in the community.
As part of the Digital India initiative, the Ministry of Electronics and Information Technology
has launhed an EW awareness-raising campaign since 2015 to make the common people aware
of the risks of EW being recycled by the unorganized sector and to educate them on alternative
processes of disposal of the EW. By giving their EW only to authorized recyclers, the general
public also can help in achieving 'Swachh Digital Bharat.' However, it tends to be unsuccessful
in the initial phase. Over the years, however, all MNCs should conform to the legislation and the
purpose of the EPR to avoid infringement and to preserve their international reputation.‡‡‡

If these regulations are not complied with, EW would rise at a compound annual growth
rate of around 30% in the world. In 2016, ASSOCHAM estimates the production of EW to be
1.8 million metric tonnes (MT) per year and to reach 5.2 million MT per year by 2020. §§§ The
country would end up producing a lot of such unregulated industrial centers as those in
Moradabad and Seelampur, where soil, water, and air are polluted beyond repair unless the
legislation is applied effectively. Strict implementation of the laws, production of sufficient
***
S.S. Rana& Co. Advocates, India: Producer Responsibility Organization, MONDAQ (Mar 1, 2019),
https://www.mondaq.com/india/waste-management/786196/producer-responsibility-organization
†††
Directive 2011/65/EU of the European Parliament and of the Council, EUR-LEX(Jun 8, 2011), https://eur-
lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:02011L0065-20140129&from=EN
‡‡‡
HarshiniVakkalanka, The A-Z of e-waste management,THE HINDU (Jun 19, 2018), https://www.thehindu.com/sci-
tech/energy-and-environment/what-about-e-waste/article24193081.ece.
§§§
JaideepShenoy, India’s e-waste to touch 5.2 MMT by 2020: ASSOCHAM-EY study, THE TIMES OF INDIA
BUSINESS (Mar 3, 2019), https://timesofindia.indiatimes.com/business/india-business/indias-e-waste-to-touch-5-2-
mmt-by-2020-assocham-ey-study/articleshow/68240340.cms
information, the teaching of suitable skills, and the availability of affordable technologies to the
informal sector will be life altering. In reality, there is a lack of upgrading of the informal sector
in order to comply with environmentally sustainable practices, and this is not part of the
legislation.

The Polluter pays principle remains profoundly rooted in regulatory systems, however,
the OECD expressly discussed it with environmental harm in the 1970s and 1980s. In India, this
idea was first applied using the tradition of judicial activism which later formed the base for EPR
regulation. The concept of Polluter Pays Principle was laid down by the court in Indian Council
for Enviro-Legal Action v. Union of India, wherein the court highlighted that the polluter pays
principle requires the manufacturer and not the government to cover the financial risks of
avoiding or remedying the harm caused by EW emissions, thus endorsing EPR.****

4. Suggestions that India can implement

1. First, despite being one of the biggest EW users in the world, generating 184
kilotons in 2016, Switzerland saves and recycles nearly 75% of this waste content,
with 134 kilotons recovered in 2015. The rate of successful recycling in 2018 was
as high as 95% as far as digital EW is concerned(e.g. mobile phones and other
devices). This is attributable to a simple but effective cooperative take-back
system, where people can take EW to a specified point of disposal for recycling or
to another electronic store that sells the same type of equipment nationally. †††† A
similar scheme, if introduced in India or any other developing nation, will
significantly contribute to the method of managing domestic EW.

2. Next, EW is a major environmental issue in China. China is the world's leading

EW importer and home to one of the biggest dumpsites in the world. ‡‡‡‡China
becomes home to about 70% of the global EW. §§§§ The Chinese Government has
published a range of environmental regulations and initiatives to regulate the
production of electronic devices and the EW management business. In 2008, the
Ministry of Environmental Protection introduced a set of regulatory rules
requiring all EW disposal undertakings to conduct an environmental risk review
and to obtain official licenses to resume operations.***** The Chinese State Council
****
1996 SCC (3) 212.
††††
How Switzerland is winning the battle against e-waste, ITU NEWS (Oct 11, 2019), https://news.itu.int/how-
switzerland-is-winning-the-battle-against-e-waste/.
‡‡‡‡
Tyrone Siu, World's largest electronics waste dump in China, THOMPSON REUTERS FOUNDATION NEWS (Jul 6,
2015, 10:30AM), https://news.trust.org/slideshow/?id=c03216ba-68ee-4558-a50f-b8f360d90d9b.
§§§§
70% of annual global e-waste dumped in China, CHINA.ORG.CN (May 24, 2012),
http://www.china.org.cn/environment/2012-05/24/content_25461996.htm.
*****
Chenyu Lu, Lin Zhang, YongguangZhong, WanxiaRen, Mario Tobias, Zhilin Mu, Zhixiao Ma, Yong Geng&
Bing Xue, An overview of e-waste management in China, SPRINGER LINK (Dec 1, 2015),
https://link.springer.com/article/10.1007%2Fs10163-014-0256-8.
 has required consumer electronics recycling and has requested that all other
unused products discarded during the manufacturing period be recycled as well.
In 2011, national specifications for the EWM industry were strengthened by the
Waste Collection and Treatment Decree on EEE, requiring minimum annual
disposal capacity for existing EWM companies. Throughout the whole disposal
process, this new package of regulations required treatment plants to follow the
standards of pollution reduction in order to minimize adverse environmental
impacts. India still needs to lay down and require certain specific business
legislation to ensure that the EPR is properly enforced.†††††

3. Third, municipalities need to take an active step in the handling of EW. The
Indian Constitution also provides for the management of hazardous waste mainly
as the responsibility of the municipalities. Article 243-W authorizes the
governments of the Member States to set down rules on EWM. The Hon’ble
Supreme Court of India in Almitra H. Patel v. Union of India, though referring to
the appalling state of Delhi, rebuked the Municipal Corporation of Delhi for
failing to make sure that the residents have access to a healthy environment. ‡‡‡‡‡
They also revealed systematic lacuna in the management of municipalities in
multiple states. India should take a cue from Spain, where local authorities are
responsible for collecting and storing waste EEE from households in communities
with more than 5000 inhabitants before it is collected or stored and handled by the
vendor or their joint agency.

4. Lastly, there should be a systematic model for the handling of EW prior to

recycling, as there prevails a lack of awareness of the proper management of EW
in countries such as India and a large part of the substance ends up as waste.
Present regulations cover the production, handling, transport, and disposal of
waste, but fails to mention a structured collection scheme.

As the authors discussed the flaws in India's existing legal system and made suggestions,
this chapter will now discuss how international law might be used to rescue the country.

 International Treaties regulating e-waste

†††††
What India knows about E-waste,TOXICS LINK (Sep 2016), http://toxicslink.org/docs/What-India-knows-about-
e-waste.pdf,
‡‡‡‡‡
(1998) 2 SCC 416.
 When hazardous EW produced in one country is disposed of in another country, trans-
boundary issues arise. Parallel to the Basel Convention §§§§§, numerous Climate Intervention
Projects covering the past 30 years have influenced the way the EU treats its waste. Legislation
in regard to waste disposal Legislation and Guidelines such as Waste Electrical and Electronic
Equipment (WEEE) is only one of a range of instruments used by the European Union to test and
control particular waste sources. Others like the RoHS Directive and the Licensing, Assessment,
Authorization, and Restriction of Chemicals (REACH) Regulations. As a result of the wording
of the EU's founding treaties on which law is made, current legislation in these areas has been
broadly understood among Member States. This has contributed to a wide variety of activities
around the EU and a patchy execution of the directives. The end result was weak collection rates,
low enforcement and illegal exports to developing countries.******

The trade in used electrical and electronic equipment (UEEE) serves as a the main point for
the trans-boundary disposal of WEEE referred to as EW. The Basel Convention does not forbid
the trans-boundary movement of used goods, as a shipment of used technological goods to a
developing country explicitly planned for use implicitly takes place beyond the scope of the
Basel Convention.†††††† There is no provision to confirm if the shipment is capable of being
reused in its original condition.

The emphasis of this chapter will therefore be on mandatory rules and frameworks under the
International Trade Law, International Contract Law, and Taxes to counter this danger.

 How can International Trade Law control this ‘dumping’?

1. Certification Requirement

A technical regulation under the Technical Barriers to trade agreement may be used for
rescue purposes. In the EC-Asbestos Case ‡‡‡‡‡‡, the panel took a unique method in the study of
whether a trade measure constitutes a 'technical regulation' because the measure in question
refers to a recognizable product or category of goods, it points out one or more features of the
product and it is necessary to comply with them.

A mandatory certification requirement, for UEEE, laying down some characteristics

becomes a technical regulation under TBT. For instance, thee-stewards certification scheme was

§§§§§
Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal
(adopted 22 March 1989, entered into force 5 May 1992) 1673 UNTS 126, preambularpara 6, art 4(1).
******
Noah Sachs, Planning the Funeral at the Birth: Extended Producer Responsibility in the European Union and the
United States, 30 Harv. Envtl. L. Rev. 51 (2006).
††††††
Batstone R., Smith J.E., and Wilson D. (Eds.), The safe disposal of hazardous wastes. the special needs and
problems of developing countries, vol. i - iii, world bank, Washington D.C. (1989).
‡‡‡‡‡‡
WTO Appellate Body, ‘European Communities – Measures Affecting Asbestos and Asbestos-Containing
Products’ Report (2001) WT/DS135/AB/R DSR 2001:VII 3243 para 70.
created by technological specialists collaborating with the Basel Action Network (BAN), an
NGO focusing on prohibiting the trans-boundary movement of EW to developing countries.
Certification as e-stewards shall be given for achieving various output criteria, including
ensuring the sale of hazardous electronic waste to developing nations, the use of gaol labor and
no disposal of radioactive products in urban landfills, in consonance with the three essentials
highlighted above.§§§§§§

Nonetheless, certification requirement could be set by different governments as well.

Moreover, we need to check the validity of this certification requirement with the TBT
Agreement and the GATT.

2. Article 2.1, TBT

Starting with the TBT Agreement, the chapter highlights its validity with Article 2.1
which says:

“Members shall ensure that in respect of technical regulations, products imported from
the territory of any Member shall be accorded treatment no less favorable than that accorded to
like products of national origin and to like products originating in any other country.”

Dealing the issue of EW in developing countries would need strong management and
regulation of trade in the UEEE. Before grappling with actions that may be taken under
International trade law, the chapter will deal with if UEEE and E-waste represent "like" goods
under the Article 2.1 TBT. This is necessary to discuss whether separate sanctions on UEEE and
WEEE will constitute a breach of law. According to the WTO, no country can distinguish
between “like” goods.

1) Product Characteristics and End-use

It is important to explore the ordinary sense of the word “characteristics” to

properly grasp this concept. This is described as 'a distinguishing feature, nature, or
property.'******* A comprehensive view of likeness was given by the Dispute Resolution
Panel (hereinafter ‘panel’) in Japan-Taxes on Alcoholic Beverages.†††††††It described a
priori correlation in terms of one or a combination of the features of the commodity, its
end-use, and tariff classification and uses it as a measure to decipher “likeness” between
products. The Appellate Body (AB) in EC-Asbestos‡‡‡‡‡‡‡found out that 'likeness' applies
to an area of 'inevitable subjective judgment' and that the properties, consistency, essence
of the goods, their end-uses, user tastes and preferences are all considered. Whilst UEEE
might arguably work for a couple of years, WEEE is pure junk and cannot be reused
§§§§§§
See generally, The e-Stewards Story’ accessed 23 September 2020.
*******
Merriam Webster online dictionary accessed 23 September 2020.
†††††††
WTO Appellate Body, ‘Japan – Taxes on Alcoholic Beverages II’ Report (1996) WT/DS8/AB/R
WT/DS10/AB/R WT/DS11/AB/R DSR 1996:I, 97, 113.
‡‡‡‡‡‡‡
Id. at 4.
 further and thus the end-uses considerably vary. They differ in terms of characteristics
like battery life, OS life which constitute important properties as well as a distinguishing
feature with WEEE.

2) Environmental and Health effects

Some domestic environmental policies distinguish goods which may be identical

in their face or application but may have distinct health and environmental effects as used
and disposed of. The Panel in EC- Asbestos§§§§§§§ whilst interpreting the word like goods
highlighted the importance of understanding it in the light of the aim and purpose of the
provision at issue. The panel in the US-Clove Cigarettes******** recognized the value of
considering the health purpose of trade regulations in the study of “likeness” between
products.

Unlike trade in the UEEE, transboundary trade in WEEE forms a particular

challenge to the health and biodiversity of developed countries. It is much more likely
that more WEEE exported to developing countries will be inadequately disposed of as a
result of the informal industries operating in this region, as stated earlier in this chapter.

3. Article 2.2, TBT

Article 2.2, which serves as a necessity measure in the TBT Agreement, attempts to find
a balance between two conflicting goals: the liberalization of international commerce, and
protection of environment, thereby allowing WTO members to enforce clear constraints in order
to achieve their legitimate policy objectives. In Korea – Beef††††††††, the AB divided the necessity
test into a two-pronged appraoch: first, a condition in which an argument is made that the
measure is necessary and, secondly, a condition in which the measure is justified even in the
existence of other alternative measures. That being said, if India could show that, if not for an
embargo/certification requirement, India would have to surrender its commitment to climate
change by 2030, which could also make a certification condition justifiably appropriate even in
the face of other alternate steps such as alerts or price adjustments. However, further discussion
is beyond the realms of this chapter.

Now that this chapter has analyzed "likeness," let’s continue with the related GATT
clause. If these goods, as discussed above, conform to the principle of likeness, import controls,
in particular on EW, will not constitute a breach of international trade law. However, if it is
otherwise proven, let us explain how a trade embargo on WEEE does not constitute a breach of
international trade law.

4. Import Restrictions
§§§§§§§
Id.
********
WTO ‘United States – Measures Affecting the Production and Sale of Clove Cigarette’ Panel Report
WT/DS406/R, as modified by Appellate Body Report WT/DS406/AB/R.
††††††††
WTO, ‘Korea – Various Measures on Beef’ WT/DS161/AB/R WT/DS169/AB/R para 137.
 While the freedom to limit imports of hazardous e-waste is governed by the International
Trade Law, as explained above the Basel Convention also allows it. Import Restriction is
governed by Article XI of GATT. A government action that serves as a ban on imports or
exports is forbidden by Article XI.‡‡‡‡‡‡‡‡ WTO committees have regularly defined 'discretionary'
licensing conditions as forbidden quantitative constraints. The panel in China – Raw
Materials§§§§§§§§suggested that a restriction could be inconsistent with Article XI if it lays down
vague licensing conditions, granting the licensing authority unfettered discretion to grant a
warrant/license. Moreover, in Japan – Semi Conductors *********, the panel ruled that a lengthy
approval process is considered a violation of Article XI.

This also means that, even though the first measure of “likeness” might fail, a thoroughly
drawn-out limitation, with probable explanations, would be regarded as legitimate under Article
XI whilst conferring the least discretionary power to the authorities.

5. Article XX, GATT

In the end, Article XX, GATT, and Article 2.2 TBT provide certain public policy
exceptions for countries to violate the terms of International Trade Law. The AB in EC –
Hormones Case†††††††††affirmed that each WTO Member State has a right to protect its
environment and the well-being of its citizens under this provision.

The AB in US-Gasoline‡‡‡‡‡‡‡‡‡held that the GATT Agreement cannot be viewed in

isolation from public international law and the same lies for Article XX. Such arguments may
find that they are consistent with the rules of international environmental law as was done in the
Trail Smelter case§§§§§§§§§ and the Lake Lanoux case**********. There are landmark rulings that
speak of trans-boundary damages and consider preventing such practices. Additionally, in beef
hormones††††††††††, the EU made use of the precautionary principle under Article XX (b) (for
protecting human life or health) because it considered the available scientific evidence as
inconclusive. It was held that 'temporary' constraints are allowed on health grounds in the
absence of adequate scientific evidence.

 From negotiations to coding: Block-Chain, Smart contracts, and EWM

‡‡‡‡‡‡‡‡
See Panel Report, Brazil – Tyres, supra footnote 15, at ¶ 7.371
§§§§§§§§
Panel Report, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/R (July 5,
2011).
*********
Report of the Panel, Japan – Trade in Semi-Conductors (May 4, 1988) GATT B.I.S.D. (35th Supp.), 31.
†††††††††
WTO Appellate Body, ‘EC Measures Concerning Meat and Meat Products (Hormones)’ Report (1998)
WT/DS26/AB/R, WT/DS48/ AB/R DSR 1998:I 135 para 187
‡‡‡‡‡‡‡‡‡
U.S. – Standards for Reformulated and Conventional Gasoline, 22, WT/DS2/AB/R (April 29, 1996).
§§§§§§§§§
Trail Smelter Arbitration, U.S.-Canada, Trail Smelter Arbitral Tribunal, Aug. 16, 1938, Reports of
International Arbitral Awards, Vol. 3 1911-1937.
**********
Lake Lanoux Case (France-Spain), 8 U.S.C.A. p. 1185.
††††††††††
Id. at 14.
 The EPR principle imbibed in the Indian legislation gives rise to the Reverse Supply
Chain mechanism. According to Blackburn‡‡‡‡‡‡‡‡‡‡, reverse supply chains are structured to
handle operations related to the procurement of used goods, transportation to recycling facilities,
inspection, storage, and disposal. However, the lack of transparency, (as previously discussed) in
the movement of e-waste lessens the investment in EWM.§§§§§§§§§§Additionally, there are further
hurdles to the Reverse Supply Chain process/EPR in India:***********

1. Inadequate Information
2. Poor Infrastructure
3. Producers shirking off their responsibility
4. A toothless law

Thus, the authors clarify how the legal landscape surrounding block chain and smart
contracts could help to control the movement of UEEE and WEEE not only within India but also
across boundaries. In their article, Neha Gupta and Punam Bedi†††††††††††explain the economic and
IT mechanism required for the use of block chain and smart e-waste management contracts in
India. The legal regulation of Smart contracts in India is although at a very nascent stage right
now and debatable, but nonetheless there are fragmented provisions that govern this. Section 4, 5
of the Indian IT Act, 2000 states that, under either statute, if the record or information given is
authenticated using affixing of signatures, it shall be considered to have been satisfied. Perhaps,
allowing smart contracts and digital signatures in India.

This paper will now address the use of smart contracts for cross-border trade of UEEE
products under the CISG Regulations. Firstly, let’s understand block chain and smart contracts.
Block chain operates on a peer-to-peer distributed ledger-based structure. This ensures that the
information submitted to the ledger is processed and stored on every operating system that is part
of the network. Moreover, smart Contracts are smart as they run on the execution of specified
commands under regulatory compliance, eliminating space for human interference. The protocol
works on the If-Then principle, and hundreds of individuals participating with the block-chain
will watch the exchange and become witnesses to the deal. Although smart contracts are in
pursuance of the Indian Contract Act, the 2018 RBI notification on crypto-currency bans the use
of digital currencies. However, the decision of the Hon'ble Supreme Court of India in Internet
and Mobile Association of India v RBI‡‡‡‡‡‡‡‡‡‡‡ concerning the cancellation of the RBI 2018

‡‡‡‡‡‡‡‡‡‡
Blackburn, J. D., Guide, V. D. R., Souza, G. C., & Van Wassenhove, L. N. (2004). Reverse supply chains for
commercial returns. California Management Review, 46(2), 6–22.
§§§§§§§§§§
A. K. Awasthi, M. Wang, Z. Wang, M. K. Awasthi and J. Li, ""E-waste management in India: A mini-
review."," Waste Management & Research, vol. 36, no. 5, pp. 408-414, 2018.
***********
Gandhi, D. (2015) India, a Victim of E-waste Crime, 15 May [online]
http://www.thehindu.com/sci-tech/energy-and-environment/india-a-victim-of-ewaste-crime/ article7202265.ece
(accessed 26 September 2020).
†††††††††††
Gupta, Neha&Bedi, Punam. (2018). E-waste Management Using Blockchain based Smart Contracts. 915-
921. 10.1109/ICACCI.2018.8554912.)
‡‡‡‡‡‡‡‡‡‡‡
W.P. (Civil) No. 528 of 2018.
Circular states that, while RBI has the authority to control these currencies, the prohibition
enforced in disproportionate and ultra vires Article 19(1)(g) of the Indian Constitution.

The UN Convention on the Use of Electronic Communications governs the use of smart
contracts for cross border transactions. Article 12 of the convention states that contracts formed
as a result of electronic correspondence are legally binding and enforceable. However, there is no
legal clause that contains any proof of responsibility in an electronic contract and from which
relief could be offered to the affected party. §§§§§§§§§§§ The authors propose the filling up of this
lacuna through CISG and UNCITRAL Model Law on Electronic Commerce (MLEC).

CISG (Convention on the International Sale of Goods) is a multilateral treaty that forms a
framework for international commerce. A range of products as varied as art objects,
pharmaceuticals, live animals, and used goods are covered under this convention.************

Firstly, in the case of distant contracts, consumers are often entitled to privileges that need to be
enforced in smart contracts too. The most relevant privilege is the right of customers to withdraw
from a distance deal within a span of 14 days using already established codes in smart
contracts.††††††††††††

Next, with respect to EW, the durability of the UEEE product, the lifespan of its essential
hardware and software, operating system and motherboard (for PCs), could be some examples of
conformity to start with. Any claim on non-conformity and mixing of UEEE with WEEE could
come under the ambit of CISG as follows‡‡‡‡‡‡‡‡‡‡‡‡:

1. Article 35(1) state that any divergence from the contracted description of the goods shall
constitute a violation of the contract.
2. Article 35(2) and Article 467(1) and (3) specify that the goods do not comply with the
contract unless they are appropriate for the purpose for which the goods of the same
nature will usually be used, provided that they have been explicitly or indirectly made
known to the seller.

Giving an example, in the Frigaliment case§§§§§§§§§§§§, revolving around the definition of

“chicken”, could have plainly been solved, had the buyer and seller agreed to specify precisely
when the chicken would be considered conforming to the agreement in a smart contract, in other
words, the measurable characteristics of the goods. Or, in determining its consistency and
conformity, a certain chemical raw material can be accurately assessed in terms of its chemical

§§§§§§§§§§§
Sara Hourani, Cross Border Smart Contracts,
https://www.uncitral.org/pdf/english/congress/Papers_for_Programme/11-HOURANI-Cross-
Border_Smart_Contracts.pdf.
************
See also, https://www.asil.org/sites/default/files/benchbook/saleofgoods.pdf
††††††††††††
Article 9 Consumer Rights Directive 2011/83/EU.
‡‡‡‡‡‡‡‡‡‡‡‡
Schlechtriem, P., Schwenzer, I, Commentary on the UN Convention on the International Sale of Goods
(CISG), 3rd Ed. (2010).
§§§§§§§§§§§§
Frigaliment Importing Co. v. B.N.S. International Sales Corp, f. supp. 116 (s.d.n.y. 1960).
structure and length.In addition, the block chain can boost sustainability by educating customers
about the sources of goods, making assurances on sustainability and validity and offering a
framework to implement claims through the smart contract feature of the block
chain.*************The blockchain "dispersed verification" method or the authentication of the
timely and complete submission of environmental data would be the key to ensuring compliance
for environmental projects in the process. It may also become a key for the user to check the
status of his UEEE. That is, it could result in more public speculation and enforcement oversight
of the law.†††††††††††††

Additionally, the MLEC‡‡‡‡‡‡‡‡‡‡‡‡‡provides that data messages described as "all types of

messages that are essentially paperless" and produced automatically by any machine should be
treated as "originating" by the legal entity controlling the machine. Perhaps a completely coded
agreement may be distributed to a single individual by e-mail or a block chain. Prerequisites such
as amount, price and the proposal of the offeror under Article 8 must, however, be met. Along
with this, acceptance could be conveyed by supplying a private key to the smart contract, there
are several examples.§§§§§§§§§§§§§

Lastly, the assessment of the price of the products is necessary for the establishment of a
contract under CISG, Article 14.**************As previously mentioned, consideration of a smart
contract is in the form of crypto currencies. While this is unclear whether it is appropriate under
CISG, the Dutch Court has nonetheless listed cryptocurrency as a "transferable value" with the
characteristics of a "property right".†††††††††††††† Even the US State of Illinois passed the Block
chain Technology Act making block chain smart contracts legally admissible in a
court.‡‡‡‡‡‡‡‡‡‡‡‡‡‡

 Carbon Taxation

Although the introduction of the EPR principle is a very effective step initself, several
researchers point to the introduction of taxes with EPR as an effective strategy to curb this

*************
Nikolakis, W.; John, L.; Krishnan, H. How Blockchain Can Shape Sustainable Global Value Chains: An
Evidence, Verifiability, and Enforceability (EVE) Framework. Sustainability 2018, 10, 3926.
†††††††††††††
Eric Biber, The Problem of Environmental Monitoring, 83 U. COLO. L. REV. 1, 10 (2011).
‡‡‡‡‡‡‡‡‡‡‡‡‡
The UNCITRAL Model Law on Electronic Commerce with Guide to Enactment 1996. Available
at: https://www.uncitral.org/pdf/english/texts/electcom/05-89450_Ebook.pdf , p. 26-27 (last visited: 27.9.2020).
§§§§§§§§§§§§§
Schlechtriem, P., Schwenzer, I, Commentary on the UN Convention on the International Sale of Goods
(CISG), 3rd Ed. (2010), p. 258.
**************
Id.
††††††††††††††
De rechtspraak, https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBAMS:2018:869.
‡‡‡‡‡‡‡‡‡‡‡‡‡‡
Coin Rivet, Ilinois recognizes Blockchain smart contracts, (Jan 10, 2020), https://coinrivet.com/illinois-
recognises-blockchain-smart-contracts-as-admissible-in-court/#:~:text=The%20US%20state%20of%20Illinois
%20has%20officially%20passed%20the%20'Blockchain,electronic%20records%20admissible%20in
%20court.&text=The%20bill%2C%20proposed%20by%20Representative,their%20immutable%20blockchain
%2Dbased%20nature.
menace.§§§§§§§§§§§§§§ More than 17 tonnes of EW is collected annually to avoid the emission of
carbon dioxide and other greenhouse gases as EW which cannot be recycled amounts to around
4.25% of greenhouse emissions.*************** Thus, to avoid this, this chapter introduces the
concept of Carbon Taxation on EW.

The point for implementing a carbon tax is to decrease negative and adverse levels of carbon
dioxide emissions, so as to reduce the rate of climate change and its harmful effects. †††††††††††††††A
price-based market structure, such as the imposition of a carbon tax, gives polluters incentives to
curb emissions in the event that the cost of mitigating emission is smaller than the cost of paying
taxes, meaning that the government has fixed overall pollution quotas, but allows each polluter a
free hand in determining how much to clean up and what technologies to use. ‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡This is a
type of Pigouvian Tax, taxes that attempt to make the private corporations feel the social and
environmental burden of their actions. In our case, this would mean a cautious estimate of the
sum of greenhouse gas emissions from every informally recycled commodity of any
manufacturer which would add to its overall carbon budget.§§§§§§§§§§§§§§§ This will press the maker
to put in place effective methods to recycle the product.

But, how would we be able to have a good estimate of this? This can be done with the help of
a business carbon footprint certificate ****************of a company. This monitors direct and indirect
greenhouse gas emissions from all operations of every company. The border carbon tax
adjustment (taxes only on imports and not exports) should be combined with this. This would
mean (keeping the certificate into consideration) that the goods would be taxed in the place of
consumption rather than production, on the basis of the carbon content certificate. The WTO
rules (GATT Article 3: National Treatment) make it possible to change certain forms of internal
border taxation under certain circumstances and to tax all producers other than certain selective
countries.This would also help us overcome the shortcomings of the Kyoto Protocol, where

§§§§§§§§§§§§§§
Calcott, P., Walls, M. (2000). Can downstream waste disposal policies encourage upstream ‘design for
environment’? American Economic Review, 90(2), 233–237.
***************
UNFCCC, E-Waste: From Toxic to Green, UNFCCC, https://unfccc.int/climate-action/momentum-for-
change/lighthouse-activities/e-waste-from-toxic-to-green#:~:text=More%20than%2017%20tonnes
%20of,4.25%25%20of%20the%20greenhouse%20emissions.
†††††††††††††††
Nordhaus, William, D. (2012). Carbon Taxes to Move toward Fiscal Sustainability. The Economists'
Voice 2.0: The Financial Crisis, Health Care Reform, and More, Edited by Aaron S. Edlin et al., Columbia
University Press, 2012, pp. 208–214, www.jstor.org/stable/10.7312/edli16014.29.
‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡
Bansal N.K., Sectorial energy demands and MARKAL allocations of energy resources in India,
International Journal of Global Energy Issues, 18(2-4), 315- 335, (2002)
§§§§§§§§§§§§§§§
Choi Inho, Global Climate Change and the Use of Economic Approaches Nat. Resources J. 45, 865-873,
(2005)
****************
See generally, https://www.carbontrust.com/what-we-do/assurance-and-certification/the-carbon-trust-
standard?kw=%20carbon-%20certificates-Broad.
taxing only the industrialized countries meant a lack of interest by them thereon. ††††††††††††††††This
method exerts pressure on the manufacturer rather than the final consumer.

Lastly, the GST cess on electronic goods in India is mostly 18%. However, this does not
cover a cess on the carbon emissions of each manufacturer. If an additional supplementary cess,
only covering carbon emissions (as discussed above) is levied on each electronic manufacturer in
India, it would add to government’s revenues to contribute this money to recycling of electronic
goods. This should be linked to manufacturer with no formal recycling units that reduce
emissions. However, the chapter is not much in favor of this, as the cost would ultimately fall on
the final consumer.‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡

 Conclusion

In the end the chapter recommends the idea of a circular economy for India. A lot of
academics are calling for a circular economy, one that seeks to keep goods and all their
components in circulation at their peak value all the time. Using the example of cell phones,
Kersten-Johnston explained§§§§§§§§§§§§§§§§ how the electronics industry could transition towards a
circular economy. According to him, once a cell phone is old, it loses its value, and one cannot
get any value for it. But what it that smart phone had value and you could get that
exchanged/recycled. That’s a distant dream but only successful application of the EPR can help
us accomplish that goal.

This chapter has introduced smart contracts for EWM in India. However, as previously
mentioned, the legal environment in India is not at present apt to endorse such contracts. The
authors thus assume that the environmental issues of the states of the 21st Century will pave the
way for their inclusion in India. In addition, we need stronger trade policies in India to sustain
the EWM and our climate. It's time for developing countries to speak up for themselves.

††††††††††††††††
See JUAN-CARLOS ALTAMIANO-CABRERA ET AL., A GLOBAL CARBON TAX TO
COMPENSATE DAMAGE AND ADAPTATION COSTS 1 (2008), available at http://
gemini-e3.epfl.ch/webdav/site/gemini-e3/shared/A%/ 20global%20carbon / 20 tax%20to%20compensate
%20damage%20and% o2Oadaptation%20costs.
‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡
See generally, https://shaktifoundation.in/wp-content/uploads/2018/07/Discussion-Paper-on-Carbon-
Tax-Structure-for-India-Full-Report.pdf.
§§§§§§§§§§§§§§§§
SIPA, Columbia, The Circular Economy, (October 3, 2020),
https://sipa.campusgroups.com/eco/rsvp_boot?id=600766.