LG, Samsung sue Modi government over electronic-waste pricing policy

New Delhi: South Korea's LG and Samsung have sued India's government to quash a policy which increases payouts to electronic-waste recyclers, court filings show, joining other major companies in contesting the country's environmental rules citing business impact. The lawsuits, set to be heard on Tuesday with other challenges, mark an escalation of a standoff involving foreign companies' and Prime Minister Narendra Modi's government over its stance towards waste management practices.

LG and Samsung did not respond to Reuters' requests for comment. India's Environment Ministry also did not respond.

India is the third-biggest e-waste generator behind China and the U.S., but the government says only 43 per cent of the country's e-waste last year was recycled and at least 80 per cent of the sector comprises informal scrap dealers. Daikin, India's Havells and Tata's Voltas have already sued Modi's administration.

Samsung and LG had lobbied against a decision to fix a floor price payable to recyclers, which New Delhi says is needed to get more formal players into the sector and boost investment in e-waste recycling.

LG's filing in the Delhi High Court, which is not public but was reviewed by Reuters on Monday, said the pricing rules "fail to take into consideration that merely by fleecing companies and taxing them in the name of the 'polluter pays principle', the (government) objectives sought to be achieved cannot be achieved."

"(If) the authorities have not been able to regulate the informal sector, then it is an enforcement failure," the 550-page court filing from April 16 showed.

Samsung in its 345-page filing, seen by Reuters, said: "The regulation of prices does not inherently serve the purposes of environmental protection," and said this was "expected to cause substantial financial impact."

India's new rules mandate a minimum payment of 22 rupees (25 US cents) per kilogram to recycle consumer electronics. Electronics companies say that will roughly triple their costs and benefit recyclers at their expense.

LG's court filing showed it wrote to the Indian government in August saying the proposed rates were "very high and should be reduced" and the government should let market forces determine the prices.

Samsung wrote to Modi's office last year, the company's court filing showed, saying the new pricing was "5-15 times the price currently paid."

Research firm Redseer said India's recycling rates were still low compared with the US, where they are up to five times higher, and China, where they at least 1.5 times higher.

Indian air conditioner maker, Blue Star, has also filed a lawsuit challenging the rules, citing compliance burdens, its court filings, seen by Reuters, showed.

Johnson Controls-Hitachi has moved to withdraw its lawsuit in recent days without giving reasons, based on court filings seen by Reuters.