Computer Recycling Regulations - A Discussion

Initial thoughts on the 250 page International Trade Commission report on used electronic product exports

The United States International Trade Commission released a report on March 8, 2013 titled “Used Electronic Products: An Examination of U.S. Exports.”  (see http://www.usitc.gov/publications/332/pub4379.pdf).  This 250 page report details the process the commission took to collect information from organizations involved in the industry (through surveys, public hearings, facility tours and interviews) and also through a review of Customs records of exports of IT devices, which they term “Used Electronic Products” or “UEPs.” It then presents findings from their research. 

This is an important body of work that contributes to the overall discussion about the scale of the electronics recycling industry, its contribution to “clean” and “dirty” exports, and what we should do to improve the industry overall. 

That being said, the report is honest about the limitations of its data collection methodology to provide an authoritative set of conclusions about the UED industry and exports.  For example, the report stated, “Relying on survey data presented several  challenges to the Commission’s findings. The results of the Commission’s questionnaire have been aggregated and weighted to provide estimates about a broader population, with results that may be skewed towards nonexporters or responsible exporters  that responded to the questionnaire, as well as to larger firms, since very small firms were not surveyed.” (Page 1-8).  

There are many other instances where the report questions its own veracity and acknowledges biases in its methodology.  As a result, readers should be careful about drawing certain conclusions from the report.  Anyone who claims that the report says exports of untested or unprocessed UEDs are not a problem did not read the full report.  The report states, “Informal and unregulated recycling of exported UEPs remains a concern within the industry. No quantitative data on this segment of the industry are available, but some descriptive information is included in this report.” (p. xviii)

In general, I believe the industry should carefully consider the findings of report, while concurring with the authors that the report has limitations in its ability to ascertain the true amount of export of untested, non-working and hazardous e-waste to developing countries. The report makes some very important findings:

1. The amount of exports of used electronic products (UEPs) is significant and Congress should take notice.  The report finds that 757,721 tons of UEPs were exported by the US in 2011. (p. 5-2).  That number may even be under-reported. That’s a lot of electronics!
2. There are a large number of firms engaged in this enterprise.  The survey included responses from 2,670 organizations out of a total of 4,701 qualified U.S. firms.  Again, this is clearly a significant U.S. industry.  They did not even include firms with less than 10 employees in this group.
3. The study commented on the Responsible Electronics Recycling Act (RERA) and said, “However, [if RERA were enacted into law] the product mix [of export] would likely change to reflect more tested and refurbished products and fewer end-of-life products [exported]. Conversely, exports of commodity-grade material would likely increase, as more recycling activity would take place in the United States and UEP-derived commodities would be exported to manufacturing centers in non-OECD countries.” (p. 6-8).  This is a great argument in support of RERA.
4. The testimony from business owners captured in this report who oppose outright bans on the export of electronics to developing countries also admit to exporting tested, working equipment abroad.  This activity is actually supported in RERA,  since it does not ban the export of tested, working equipment.   We need to clear up this myth because a law like RERA actually helps protect and encourage this export of tested, working, and clean processed commodities and would be good for their business.
5. The study makes numerous references to the concern from businesses, NGOs and others about the export of electronics to the informal sector in developing countries.  It recognizes that e-waste export concerns are not relegated to a fringe group, but are shared by a wide range of businesses.
6. ITC recognized that the veracity of respondents to the survey may be questioned and that people may not want to report illegal shipments of electronics overseas, so the findings should recognize that bias. 

There are many interesting points made throughout the report that warrant discussion and debate.  That’s a good thing.  But we also need to be careful to not claim this report draws conclusions that just aren’t there. 

Building a Sustainable ICT Economy - Part 1

I am honored to be involved in the Sustainable Electronics Forum hosted at the Wingspread Conference Center by the US EPA.  About 30 representatives from industry, government, and academia are grappling with how to define what a sustainable IT economy would look like in 2030.  Here are some of the questions I'm expecting we will consider over the next couple of days:

• What will be the material composition of products and can we sustainably source these materials through recycling and recovery processes, renewables, biobased materials, or some other new innovation?  Can we continue to innovate and generate new products without depleting non-renewable resources?
• Electronics require energy to operate.  Can we generate that energy through more sustainable processes, including kinetic, solar, etc.? 
• How can we improve stored energy issues?  Batteries need to be improved in order to support portable devices.  How can we extend their lives, reduce their toxicity and make them safe to handle and dispose?
• There will be electronic products we will be using 20 years from now that cannot be predicted.  Smartphones did not exist 10 years ago.  How do we define the future when it’s difficult to predict the basic tools we’ll use?
• The drive to innovate encourages the rapid development of new technologies and products, which promote rapid obsolescence of legacy products.  If consumers want to always get the latest gadget, the disposal of electronics will continue to accelerate.  How can we innovate in “durables” without making them “disposables”?
• The world will continue to become more interconnected.  Consumer technology is spreading quickly across the globe.  Emerging markets are adopting technology at a significant pace, and they have a good infrastructure to support it.  How do we account for these trends?
• People want so much – we want access to information at fast speeds, reliably.  The drive to meet these demands can run counter to environmental goals which require us to set limits.  Do we need to change people’s expectations for electronic products in order to achieve a sustainable electronics industry?
• We need to understand marketing and consumer psychology. What is it that consumers want and how can we provide attractive products to them that are sustainable?

I'm sure many other questions will arise during this process, and I hope a roadmap and action plan to proactively prepare for the future will develop.  I'll let you know how it goes.

 

Is EPA listening to processors about voluntary electronics recycling standards?

I'm participating in a listening session hosted by US EPA and the GSA to get input on the voluntary electronics recycling standards (e-Stewards and R2). EPA is trying to make sure these standards, and any other standard that might throw itself into the ring, meet a set of minimum environmental requirements to be used by federal government agencies when disposing of electronics assets.

The stated purpose of today's listening session is to, "investigate the implementation of current electronics reycling certification programs, including the following: vigorousness of facility and downstream audits; consistency and frequency of audits; auditor training; documentation of exports, internet sales; and, real world outcomes of certification processes."

The EPA and GSA are embarking on a two phase study. First, they are conducting research by gathering input from ANAB, certifying bodies, the certification programs, and through listening sessions. Then, they plan to perform witness audits at electronics recycling firms to see for themselves how effective the
programs are.

Their goal is to make recommendations, as appropriate, for potential improvement to the certification process.

It appears EPA wants to find out, as a potential user of processors, whether the R2 and e-Stewards certifications meet an as yet undefined set of environmental standards. This seems like reasonable due diligence to protect the government (and ultimately us American citizens) from disposing of hazardous e-waste in an irresponsible and illegal manner. A lot is riding on this evaluation.

With more than 275 firms certified to the R2 or e-Stewards standard, there are clearly a lot of options for the federal government to recycle according to its current stated selection process. But is that a sufficient guide?

I am hopeful this EPA study will recognize the differences between the two standards, differences among certifying bodies auditing to these standards, and differences among processors holding each standard. I suspect EPA will find significant disparities within each of these areas.

There were several processors in the listening session who shared their experience with e-Stewards being more rigorous than R2. No one said R2 was more rigorous than e-Stewards. Through this process, I expect EPA will come to witness this difference. But will they finally report this finding and say that e-Stewards sets a higher bar than R2?

Would EPA say that R2 is good enough or will it realize that R2 contains loopholes to give pause to federal agencies who might be liable for the malicious acts of a certified processor that could lead to illegal dumping or export of equipment with sensitive federal data?

Also, how will EPA treat the variation in auditing processes and the implementation of standards at processors? Within the group of companies certified to each standard, some are definitely better than others. EPA's unconditional endorsement of either or both standards would lead to a race to the bottom for each standard's requirements because there would be no market based incentive to do more (it's not like a company would get more federal work by being more responsible).

Many private companies see 3rd party certifications as a minimum threshold for selecting processors for work. Then, they look specifically at the company (which often includes their own on-site audits) to ensure the processor is effectively meeting its own requirements prior to engaging in service. The federal government, through the GSA, should do that as well if it wants to be a leader in environmentally responsible asset disposition.

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.