Computer Recycling Regulations - A Discussion

Is restricted trade in e-waste "protectionist?"

I've heard opponents to the Responsible Electronics Recycling Act claim that is is just another protectionist trade policy that hurts US business.  Regulation can always impact businesses, but the companies that adapt to comply with these new requirements will succeed.  The purpose of government regulation should not be to hurt or help business, it should be to protect the common good of the people who enact it. 

Our country has historically restricted the trade of hazardous waste and the export of products/information that pose a threat to national security.   That’s what this bill will do. 

E-waste is generally considered a hazardous wastesince TCLP tests demonstrate that most electronics with circuit boards, fluorescent lamps, CRT screens and batteries contain sufficient concentrations of hazardous materials to classify them as a hazardous waste.  In addition, there are documented cases of sensitive and classified information found on recovered media from unprocessed electronic equipment shipped from the US to developing countries.  This represents a real national security risk.  In the past, Commerce has restricted trade of information technology equipment to certain countries who are enemies of America.

It’s also important to recognize that in no way does the bill enact a wholesale ban on the trade of electronics or e-waste.   There is a restriction on what can be exported to developing countries, but any electronic product or e-waste can be exported to other OECD countries where it is more likely there is a sound process for managing this waste and protecting our secrets.

I believe tested, working electronic products should be freely traded, and this practice is preserved by the bill.  I also believe processed commodities that do not contain “restricted electronic waste” should be freely traded. 

A concerned and an informed citizenry must restrict the wholesale export of untested, non-working e-waste to developing countries.  It is just the right thing to do.  Businesses will adapt.

Can a domestic e-waste industry build capacity effectively if exports were banned?

I was surprised when I was again asked by government officials in Washington, DC about whether the American electronics recycling industry can ramp up capacity fast enough to absorb the onslaught of unprocessed electronics that will no longer be allowed to be exported to developing countries if the Responsible Electroncis Recycling Act passes Congress.

First of all, the export ban in the proposed legislation goes into effect 2 years after its enactment.  This affords the industry sufficient time to develop plans, make investments, install equipment, hire staff, and essentially grow to meet the expected increase demands from this change. 

In addition, industry representatives from the Coalition for American Electronics Recycling report that they all currently have significant excess capacity and can add work shifts (employing more people) and increase processing equipment utilization without additional capital outlays. 

Third, the same concern was raised earlier about the industry developing a collection infrastructure to respond to state landfill bans of e-waste.  But this problem (lack of capacity) never materialized because firms were able to quickly set up or grow appropriate resources to meet the new demand.  In California, hundreds of companies registered as Collectors for that state’s e-waste recycling program within two years of its enactment.

In the business world, growing capacity to meet increased demand for products or services is a challenge we are more than happy to solve.  Government officials have no reason to be concerned about whether business wants to make investments, create jobs and boost profits by ramping up capacity to meet increased demand for services.

Launch of website for Coalition for American Electronics Recycling

A new website for a business group of electronics recyclers was just launched today at www.americanerecycling.org.  The website contains a wealth of information about the proposed Responsible Electronics Recycling Act (HR 2284 / S1270) now in front of Congress. 

The Coalition for American Electronics Recycling represents U.S. companies that believe electronics recycling should be performed securely and sustainably, for the benefit of the American economy. It is committed to growing an American industry with the capacity to manage the volume of e-waste generated within our borders, creating good jobs and expanded trade.

The Coalition of independent businesses was formed in the summer of 2011 to demonstrate to Congress that businesses do support the passage of the Responsible Electronics Recycling Act.  Cascade Asset Management is one of the companies directly involved in this campaign.

Mixed reations to the Federal Task Force on Electronics Stewardship

After a proclamation by President Obama on November 15, 2010, an Interagency Task Force, comprised of the GSA, EPA, and Council on Environmental Quality, was charged with developing an electronics stewarship initiative.   On Wednesday, July 20, they released their report.  Details are available on the EP A website at: http://www.epa.gov/epawaste/conserve/materials/ecycling/taskforce/index.htm

While the proposals from the Task Force are not everything the environmental community hoped for, I wouldn't want to dismiss the progress made with this announcement, and also the responsibility for all of us to hold the government accountable to its established plan. 

I am worried that the strong reactions of frustration by some in the environmental community to the Task Force recommendations will not help the cause.

Here are some of my thoughts.  First of all, I strongly support the e-Stewards certification program, and my IT Asset Disposition company has been certified to this standard.  It is important to recognize that US EPA made it clear that they have no preference of R2 over e-Stewards through this announcement, which is significant given their past involvement in the funding and facilitation of R2 development activities.  That at least raises the bar over the status quo. 

Also, GSA was questioned during the conference call announcement on 7/20 about whether they will require certified recyclers to process their equipment throughout its disposition process.  The federal government disposes of significant volumes of surplus computers through its Computers for Learning donation program and GSAXcess surplus property disposal program.  While these programs can provide great benefits to recipients of surplus property and generate some income for the federal government, they also allow the government to wash its hands of responsibility for the final recycling and disposition of the equipment when the recipient/buyer no longer wants it.  What I heard during the call was that the GSA would re-write its contracts and update its disposal practices to ensure its hardware is properly recycled no matter who is the final user.  I’m not sure how they expect to do this, but we must hold them accountable to this commitment.

On the issue of the US government funding overseas e-waste recycling processes . . . I have personally been involved in the development of sustainable e-waste refurbishing and demanufacturing processing in Ethiopia over the past four years in partnership with the Ethiopian government, World Bank, the International Business Leaders Forum and well respected environmental organizations.  The center was visited in February, 2011 by EPA Administrator Lisa Jackson, who offered the EPA’s commitment to fund the completion of the center and continued technical support.  (See YouTube video about this project: http://www.youtube.com/watch?v=UGN8-S4_nFU).  

I do not agree with Mr. Hershkowitz in his recent blog that by providing a minimal amount of funding in overseas responsible recycling, we are creating an unfettered open channel for cheap US exports of e-waste to developing countries.  The purpose of this program in Ethiopia is to develop domestic capacity for responsible recycling within its border for the e-waste it generates from the use of computers in its country.  It will also help to manage the end of life of used electronics shipped into the country.  Why should the US help with this funding when we have a budget crisis at home?  Because our lack of export restrictions over the years has led to us contributing to the problem of e-waste being dumped abroad.  (Plus, these investments are infinitesimal compared to any other Washington spending.)  Just as we must take responsibility for domestic e-waste processing in the US and must prevent further toxic exports, we must also clean up the mess we’ve made abroad.  Wouldn’t that be novel for our country to do and perhaps go a long way to building bridges with the world?

The government made some good commitments in this Task Force report.  They also seem to express a positive momentum to improve over the status quo.  I fear that a strong backlash against these efforts may erode the opportunity to work together, or to give us the chance to help set the framework for positive solutions on this front. 

Electronics recycling firm denied environmental certification

The announcement yesterday (July 5, 2011) that Intercon Solutions of Chicago, IL was “delisted” from R2 Certification and denied an e-Stewards Certification demonstrates that these third party audit programs actually have some teeth in them.  The grounds for denial are that Intercon exported containers of electronics to Hong Kong in violation of the “e-Stewards standard and it is likely also to violate the importation laws of Hong Kong, the U.S. Federal Resource Conservation and Recovery Act (RCRA) and Illinois state law governing the conduct of registered electronics recyclers,” claims the Basel Action Network (BAN) – the host of e-Stewards. 

Intercon released a statement shortly thereafter purporting it “does not export hazardous waste.”  Depending on how one defines hazardous waste, Intercon might be right, but it can also be the case that they violated the commonly acceptable limitations on e-waste export codified by the e-Stewards and R2 standards.

I know that the e-Stewards review process, in coordination with the certifying body conducting the audit, is required to hear appeals to its decisions.  Jim Puckett of BAN states that they presented clear evidence of the export trail (which anyone can do by tracking container numbers from a generator site to the final destination, see: http://www.track-trace.com/container) and Intercon continued to deny the claim.  Now that government authorities are getting involved, and lawyers have been hired, more information will come to light.

It is clear there is a vast amount of used electronic equipment and parts shipped around the world for commerce, treatment, or cheap dumping.  Some of these exports are for legitimate commerce while others are exported to avoid the proper treatment and recycling that may cost more.  With the recent re-introduction of federal legislation on e-waste exports, the U.S. government can have more resources at its disposal to prevent institutions from externalizing its cost for proper management of e-waste. 

Until that legislation gets enacted (which is low on the priority list of Congress), watchdog groups, the media, social networks, and certifying bodies will be the ones patrolling the industry.  So far, they have exposed companies who claim to be doing the right thing when, in fact, they are not.  Still, there are many companies operating outside of the radar screen who are happy to profit from cheap exports.  It will be interesting to see when they are exposed and what the reaction will be.

Producer Responsibility is contrary to the local sustainability movement

What are we trading for the convenience of Producer Responsibility legislation? I believe one of the main intents of making the manufacturers of products responsible for the life cycle impacts of their products (from production through disposal) is to internalize costs that are transferred to society as a whole.  Producer responsibility is supposed to shift environmental costs related to disposal of their products back on to the manufacturer.  Ideally, a manufacturer will try to reduce their products' lifecycle costs (and negative environmental impacts) in order to reduce their operating costs and increase profits.

In the e-waste industy, this goal is not being achieved with the current set of Producer Responsibility legislation enacted in various states.  These e-waste laws have successfully shifted some of the cost of e-waste recycling from taxpayer supported programs (or individual consumers who paid recycling fees)  to manufacturers who must now manage e-waste collection and recycling programs or pay penalties to states. 

But these inititatives create no incentives for manufacturers to design more easily recyclable electronics.  There is no relationship between what Dell pays to recycle some other brand of monitor and what it chooses to design into its new monitors.  New product designs are built on market demand, design requirements, and profit margins.  If our society wants manufacturers to design more environmentally friendly products, then we need to create the demand for them (through programs like EPEAT) or set design requirements that apply across the board (through regulations like RoHS).  Engineers will then use their ingenuity to create products to meet these requirements and make their companies the most money.

What now concerns me about Producer Responsibility programs related to e-waste and electronics recycling is that these new state laws are stiffling innovation and new business development in the recycling sector.  It's also giving more power to multi-national organizations to make decisions on recycling in an effort to increase efficiencies and reduce costs. 

Typically, recycling and waste management decisions are made on a local basis, because of the significant expense to transport low valued products any significant distance.  But it is not efficient for manufacturers to contract with dozens, or possibly hundreds of local based e-waste recyclers to manage their recycling obligations in the 26 plus states now requiring some type of e-waste recycling program.  Instead, they have selected a small group of larger processors who can service their needs across the country. It's costly to contract with multiple vendors, so a handful have emerged to capture a large amount of market share in this industry.  We always knew consolidation would take place in this industry, and the proliferation of state producer responsibility laws has accelerated this trend.

As a result, it's nearly impossible for a new company to emerge to serve the consumer sector in states where producers are "responsible" for the e-waste program.  They can't get a contract with a manufacturer - they won't even get a call back. 

It's not necessarily the case that the big e-waste firms are not responsible.  In fact, it's more likely that they have the resources to better protect the environment and worker health and safety than emerging firms bootstrapping their growth.

But what concerns me is a trend I see developing in the e-waste industry that scares sustainability advocates in another sector of the economy.  America's small family farm economy has been overwhelmed by factory farms that operate at a significantly larger scale.  Desicions on how to farm are driven more by yield and cost, then by flavor and long-term sustainability.  Regions develop monocultures of produce and ship them around the world at a great "external" expense to our carbon footprint, soil health, worker exposure to pesticides, water use, etc.  Environmental advocates have recognized the assualt on our land from these agricultural ventures, and have pushed a local food movement in response.  These local farmers may not be as efficient, but they employ more individuals, have an interest in the long term health of their land, and produce food that sure tastes a lot better.

I'm not sure where this Producer Responsibility legislation will take us, but I don't think it's the end-all for environmentalists and economists.  I see some of the unintended consequences taking shape that should be corrected soon.  Our society shouldn't absolve ourselves from any responsibility related to the management of life cycle impacts of consumer products by expecting Producer Responsibility laws to solve all of our problems.  These laws aren't the reason manufacturers will create environmentally friendly products.  It also won't internalize any external costs transferred to the rest of our society.  Worse than that, it's giving manufacturers more power in deciding how to recycle electronics.  Do we want them to make these decisions for us?  Will we end up with something worse than what we have now?

Federal bill to ban the export of E-waste, suffers from a big loophole

Earlier, I supported a US House Resolution to ban the export of toxic e-waste to developing countries. That resolution was turned into a bill by Rep Greene that I can now no longer support. I understand this bill will be introduced this Friday, May 22. I urge our legislators to NOT co-sponsor this legislation and instead ask Rep. Greene and the other co-authors to strengthen the bill to match the intent of the original resolution – to stop the dumping of toxic e-waste on developing countries not equipped to safely and sustainably handle this material.

The main issue I have with the bill is the last exception to the ban on exports of used electronic equipment or parts. It essentially creates a huge loophole that allows anyone who claims the e-waste they ship to developing countries is “intended” for repair and reuse.  I know of many companies in the industry who ship equipment to China where it is clear there is no chance the majority of this equipment would actually get repaired and refurbished. Instead, it pollutes countries that are powerless to stop the tide of these toxins.

This bill also negatively impacts a thriving industry in the United States. Hundreds of domestic IT asset retirement firms create sustainable jobs by engaging in the valuable refurbishing and remarketing of reusable electronics and responsible domestic recycling of unusable equipment. It is nearly impossible to compete on price, especially in this economic climate, with low wage, unregulated processing firms from abroad.

The bill could be corrected to ensure that legitimate reuse and repair happens both in the United States and in developing countries where these jobs are also needed and these repaired products do have a place in the market.

But let’s not kid ourselves.  Unscrupulous processors will use the bill in its current form to legitimize the dumping of unrepairable electronic scrap into Third World countries.  The general public will be duped once again, until another 60 Minutes report exposes the fallacy of our good “intentions.”

Comments on the Newest Wisconsin E-Waste Proposed Regulation

It's time for another try . . . Senator Mark Miller, and a large number of bi-partisan supporters, have put forth another iteration of an electronics recycling law for Wisconsin (SB 107).  A lot of stakeholder input has gone into this legislation, and I believe it's something everyone from the state should get behind.

This legislation is important because (1) it will increase access to responsible recycling for individuals; (2) it bans households from disposing the same toxic electronics that businesses have been restricted from landfilling for decades; (3) it protects the state from unscrupulous recyclers, and; (4) it shifts the burden of recycling from the taxpayer to the manufacturer and the consumer.  I’d like to speak to each of these points briefly.

(1)  Previously, there was a concern about the availability of an infrastructure to meet the growing demand for electronics recycling.  In the past several years, a significant number of new companies have emerged in the state and region to increase recycling capacity.  Trade groups and certifying bodies provide useful guidance and tools to aid in the development and expansion of e-scrap businesses. 

The nature of this industry is one in which capacity is often limited by staffing for production and not by large capital equipment.  By passing this legislation, you will foster investment and growth of businesses in Wisconsin as we prepare for the known increase in volumes of electronics to recycle.  In every other state where electronics legislation has passed, collectors and processors have increased the availability and choice to individuals looking to recycle.  Today, more than ever, we need to create more jobs and develop new markets for Wisconsin commodities – and this legislation will foster this type of growth in relatively short order.

(2)  This legislation also makes Wisconsin’s disposal policy fair.  Under federal hazardous waste rules, businesses were not allowed to dispose of most electronics in Wisconsin landfills for decades.  The lead solder on circuit boards, mercury lamps in laptops, and cadmium in video phosphor powders turn electronics into a hazardous waste when disposed.  But individuals have been allowed to throw these same toxic elements into our dumps. 

By enacting an across the board landfill ban on specific electronic devices, we treat all hazardous waste the same.  We also help to clarify what can and cannot be recycled, which will reduce ambiguity around this issue and improve recovery rates.

(3)  I am very pleased to see this round of legislation including some additional requirements of recyclers.  As a member of this industry, it is important to me that all recyclers who offer services to the state meet basic standards that protect the health of their workers, reduce liability and risk to the customers they serve, and promote a healthy environment.  While I think these standards could go further, they are an important first step. 

One important requirement in the legislation that should not go unnoticed in this day and age is the need to have a financial assurance program in place in the event a recycling firm closes.  When the economy took a nose dive last fall, recyclable commodity prices dropped precipitously.  I am aware of several large recyclers that went bankrupt or shuttered their doors and left warehouses of unprocessed electronics for their state to deal with.  If Wisconsin is to endorse the use of certain recyclers through this program, it must ensure protections are established so that the state is not liable for recyclers who go out of business, pollute the environment, harm their workers, or dump electronics improperly.  Adequate funding and support of the DNR to provide continual monitoring of recyclers and their protection programs is essential to the long term viability of this program.

(4)  Finally, this legislation helps to ease taxpayer subsidies which pay for recycling programs and electronic waste clean-up that should be borne by the manufacturer of those products and the consumers who purchase those products.  We’ve seen in Madison, where people are asked to pay to recycle their own electronics, that consumers are willing to pay to ensure their computers and TVs are disposed properly.  But the pay as you throw model limits the opportunity for capturing electronics from the general public.  There are free riders in this system.  Those people enjoy their electronic gadgets and toss them in the trash with little regard for the externalized costs of their action.  By essentially embedding recycling costs in the purchase price of consumer electronics, this legislation will fairly distribute the total life cycle cost to the consumer of that product while creating incentives for manufacturers to improve the environmental performance of their product.  People take greater care of their goods when they bear the full extent of their costs.

In closing, Senate Bill 107 is good for Wisconsin.  It protects the environment, supports business growth, and reduces taxpayer costs.  The bill has evolved over the years and has been improved by understanding the impact of other state e-scrap laws.  My company, and I personally, strongly encourage your support of this bill a so that we can get working with our industry colleagues, manufacturers, municipalities and the DNR to successfully implement this law.  

 

Testimony in support of Wisconsin’s Electronic Recycling Bill: Senate Bill 397

Senator Miller, thank you for this opportunity to speak to this committee in support of electronics recycling.  By enacting this legislation, Wisconsin will accelerate the safe and sustainable recycling of electronic equipment to help protect our environment and generate recoverable resources.  It will also directly reduce taxpayer subsidies of electronics disposal and create lasting, valuable service and manufacturing jobs in the state.

As the owner of Cascade Asset Management, an electronic equipment reuse and recycling company in Madison, I have a keen interest in any legislation related to electronics recycling.  Cascade has collected and processed for reuse or remarketing more than 37 million pounds of old electronics since 1999.  We are a part of a growing number of responsible processors converting computer cast-offs into valuable resources.

Unfortunately, relatively few people and institutions seek out legitimate recovery operations because of the lack of access to collection programs, the relatively high cost of recycling, and the absence of a landfill ban pertaining to household electronics.   The US EPA estimates that in 2005, of the approximately 2 million tons of unwanted electronics generated each year, only about 350,000 tons (or 17.5%) is recycled.  The rest are either landfilled, passed onto others, or stored in basements and closets to be dealt with another day.

This bill helps to address this deficiency in our electronics recycling infrastructure by creating a sustainable financing mechanism to pay for the collection and responsible processing of unwanted electronic equipment.  It does this by shifting the burden of infrastructure development from the taxpayer, the current source of financing in the absence of better alternatives, to the manufacturers and their consumers – the people who directly benefit from the use of this technology.

This legislation also promotes sustainable economic development in Wisconsin.  The Institute for Local Self Reliance indicated that recycling operations promote ten times more jobs than if items were landfilled or incinerated.  But this is even more the case in the electronics recycling industry.  This same organization indicated that computer reuse activities generate 296 jobs for every 10,000 tons of equipment processed per year, compared to only 1 job required to landfill the same amount of waste.

No where do I see these data more true to life than in my own business.  Eight years ago, the three founders of Cascade were responsible for all aspects of our operation.  Now, Cascade Asset Management employs over 80 individuals to collect and process approximately 10 million pounds of equipment each year.  In addition, we generate more than 150,000 pounds of clean cathode ray tubes each month to be processed by a Wisconsin recycler, who in turns employs numerous individuals to manage our material.  Scrap metal is shredded and sorted by a Wisconsin auto shredder and broker and then sold on global markets.  Plastic has been sent to an Oshkosh extruder who can manufacture value added, co-injection molded consumer products for a Wisconsin based firm that sells these products globally.  Reusable printer components are sold to one of several Madison printer refurbishers who rebuild housings and install new fusers for thousands of customers around the world.  Cascade itself sends 80% of its usable computer equipment overseas where demand for low cost, but reliable technological equipment is strong.

In addition, all of these businesses purchase services and equipment from other Wisconsin firms and generate millions of dollars of tax revenue for the state.  The web of job creation throughout Wisconsin from the relatively small amount of computer equipment passing through Cascade’s doors is impressive.

Senate Bill 397 will help to accelerate this economic growth by favoring responsible, local processing over sham recycling from overseas brokers.  It will stimulate job growth in the transportation, recycling, and manufacturing sectors.  It will allow us to harvest raw materials from within our state to create new products marketed around the world.

We know responsible recycling can work.  A basic infrastructure for electronics recovery has been developed to support the business community in Wisconsin, which is already restricted from disposing of e-waste in landfills.  A computer monitor from a home contains just as many toxic elements and valuable resources as one from Harley-Davidson.  By including household electronics in a landfill ban, we will vastly expand the amount of electronics entering recovery markets, and can do so at a reduced taxpayer expense.  In turn, the electronics recycling industry will continue to innovate and create efficiencies to drive down costs for all involved, both businesses and individuals.

In summary, this legislation will provide true environmental benefit, a growth in clean technology jobs, reduced taxpayer subsidies, and a stronger manufacturing sector.  I encourage you to pass this bill, so we can get to work for you.

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Note: Additional details and fact sheets on the legislation are now available on Senator Miller's Web Site.

Listening and learning - the opportunity for Wisconsin is now

Wisconsin is due to see an computer and electronics recycling law introduced into the legislature this month - and all stakeholders have a great opportunity to help shape the language of this text.  I'm impressed to hear that the lead author of the bill, Senator Mark Miller, is actively engaging with other legislators, business groups, environmental organizations, processors, municipalities and other states with similar laws on the books to solicit their ideas and get reactions to the proposed language in the bill.

It's clear there's a much stronger interest to get this bill passed this session.  During the previous two sessions that Senator Miller brought forth this issue, it barely garnered a small time slot at an Assembly hearing.  Things are different this time.  It's a workable piece of legislation modeled after successful efforts at other states to expand the opportunities for households to responsibly recycle some of their unwanted electronics at reduced taxpayer expense.

I believe we need to recognize this bill for what it really is - shared responsibility among a large number of stakeholders to provide a solution to the electronics disposal problem.  Manufacturers (and their consumers) cover much of the cost of the program.  The DNR educates and enforces the law.  Municipalities, retailers and other organizations may (though they are not required) to aid in the collection of old electronics from households.  Processors and recyclers invest in best practices and independent audits to ensure equipment is handled properly.  Individuals bring their old electronics to a collection depot and start the recycling process.

With so many groups involved in the potential implementation of this new program, they ought to get involved in what it entails.  We have that opportunity now - but we must act.  Tell Senator Miller and your own legislators what you think about banning certain electronics from Wisconsin's landfills and setting up a new system for no/low cost responsible recycling of electronics.  We're involved in the conversation and we hope to hear you, as well.