R2 to charge annual fee
By Editorial Staff, Resource Recycling
R2:2013 will include an annual fee to maintain certification status, according to R2 Solutions.
Beginning July 1 of this year, R2 certified companies will be charged an annual fee of $1,500 per facility, which will be levied when facilities are certified or have a surveillance audit. In addition to other existing revenue sources, the new fees will support the hiring of additional R2 Solutions staff and support personnel — currently, the organization has only one full-time employee, its executive director — as well as fund additional marketing, quality assurance and international growth.
The number of R2 facilities has grown rapidly with 100 additional facilities now added approximately every six months. At the end of April, 389 facilities worldwide were certified to R2, which under the new fee structure, would equate to $583,500 in annual revenue for R2 Solutions. The R2 Solutions Board of Directors has estimated the organization needs annual income of $750,000 to perform all the quality assurance, training, standard maintenance and other necessary functions to grow the R2 certification program. To date, the organization has existed on an annual budget of less than $250,000.
"The R2 Solutions Board of Directors has thought long and hard about the question of fees. It's a really tough one," said R2 Solutions executive director John Lingelbach, speaking with E-Scrap News. "R2 Solutions has existed by the good graces of a relatively small number of recyclers and customers of recyclers that want to see the R2 program succeed. Many of them have made it clear that they will not continue their support unless we put in place a strategy to share the costs of running R2 Solutions among all those benefitting from the R2 certification. So much of what R2 Solutions will be doing with the proceeds from this new revenue stream will be the same things we have been doing to date, though more thoroughly. And we will add to our education, outreach and marketing activities."
Lingelbach added that while he doesn't anticipate a slowing of the growth of the R2 certification as a result of the new fee structure, he understands that for many smaller firms the annual fee represents a significant cost.
The costs of certification and compliance will be discussed further at this fall's E-Scrap Conference, with a panel of representatives from R2 Solutions, the Basel Action Network and auditing firm GreenEye Partners.