ISRI: Federal Export Ban Legislation Unnecessary for Maturing E-Scrap Industry

The 2013 E-Scrap Conference in Orlando concluded yesterday with a debate between ISRI’s Eric Harris and Neil Peters-Michaud of CAER over the legitimacy of HR 2791 (RERA), introduced in the House of Representatives recently by Congressman Gene Green of Texas.

Harris made a compelling case against the legislation arguing that the market conditions don’t support the need for such extreme trade restrictions.  He cited a March 2013 report on the export of UEPs by the U.S. International Trade Commission (ITC), the International Data Corporation survey, as well as a green paper issued by the United Nations University, which all discuss the significant positive changes in both U.S. and foreign practices involving electronics recycling and exports – including new recycling technologies, environmental, health and safety certification standards, new regulations and greater enforcement. The ITC found that only 5.1 percent of all used electronics products (UEPs) collected each year in the U.S. are currently at risk for improper recycling and disposal.  The U.S. market is recycling over 80 of all the UEPs being collected.  And the vast majority of exports are either shipped as commodity grade materials or tested fully functioning devices.

ISRI’s government relations department has been actively meeting with members of Congress over the issue, and according to Harris, “When [members of Congress] looked at the issue, they said, ‘What’s the problem?’” The bill is currently not on any legislative calendars.  In the unlikely event the bill were to pass, Harris made the case that it would violate a number of U.S. trade obligations by discriminating against developing countries and economies in transition and move the industry into hazardous waste management.  Peters-Michaud argued the potential regulations is necessary to put domestic processors on a level playing field with less sophisticated overseas processors.  Harris challenged the assertion asking, is this about protecting the environment or about protecting certain commercial interests?  Many are starting to suspect that it is the latter.

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ISRI to State the Case Why RERA is Not the Solution

The 2013 E-Scrap Conference will close later today with Institute of Scrap Recycling Industry’s Eric Harris laying out the facts as to why the “Responsible Electronics Recycling Act” (RERA) is not the solution. Despite its misleading name, Harris will point to a body of evidence showing the legislation is quite the opposite of responsible.

H.R. 2791, introduced this summer by Rep. Gene  Green (TX-29) will negatively influence recycling efforts by undermining existing policies and initiatives, such as those proposed by the Obama Administration and the Interagency Task Force on Federal Electronics Stewardship, and will also violate  international trade laws by unilaterally and arbitrarily banning exports to certain countries.

“The recycling industry applauds the Coalition for American Electronics Recycling (CAER) and Congressman Green for introducing legislation with the goal of advancing responsible electronics recycling, but like H.R. 2791’s predecessors, the bill is fatally flawed,” said Robin Wiener, president of ISRI. “This bill will do nothing to end irresponsible recycling, and further, will limit any opportunity to promote environmentally sound electronics recycling standards in other countries by perpetuating the outdated approach of identifying environmental risk based simply on geographic location rather than responsible operating practices.

“The determination of whether one can export UEPs to a given recycler or refurbisher should turn upon the basis of the receiving facilities’ qualifications to handle the material in an environmentally-sound and safe manner, not the arbitrary happenstance of whether the facility happens to be located in an OECD country, the EU or Lichtenstein.”

The recycling industry supports efforts that contribute to responsible recycling globally and job creation within the U.S.  The best way to accomplish this is through strict enforcement of current laws – domestic and international; restrictions (such as notification, recordkeeping and due diligence requirements) on the export of unprocessed, non-working UEPs to any country for the purpose of recycling, reuse or refurbishment; a ban on the export of UEPs for landfill or incineration for disposal; and the promotion of global trade in tested, working UEPs for reuse and commodity grade e-scrap for recycling by industrial consumers worldwide.

“We support shutting down bad actors that refuse to recycle responsibly, but we fundamentally disagree with the approach of H.R. 2971 and do not believe that onerous regulations based on misinformation, as clearly stated in the U.S. ITC report, will address the problem,” said Lane Epperson, president and co-founder of HiTech Assets, Inc., an IT asset disposition provider in Oklahoma City, OK, and Memphis, TN.

A March 2013 report on the export of UEPs by the U.S. International Trade Commission, as well as a recent green paper issued by the United Nations University, both discuss the significant positive changes in both U.S. and foreign practices involving electronics recycling and exports – including new recycling technologies, environmental, health and safety certification standards, and new regulations and greater enforcement – since the initial NGO anecdotes on the informal sector were released more than 10 years ago, and should have never been relied upon.

Unfortunately, H.R. 2791 does just that – it relies upon the false premise that up to 80 percent of UEPs collected in the U.S. are exported and dumped in non-OECD countries located outside the EU – a statistic unchanged and put forward by CAER and the Basel Action Network repeatedly before the earliest versions of H.R. 2791 were introduced back in 2009.  In contrast, the ITC found that only 5.1 percent of all UEPs collected each year in the U.S. are currently at risk for improper recycling and disposal.

“The legislation relies on an outdated, disproven model that fails to reflect the reality of the present or future global market,” said Joe Pickard, ISRI’s chief economist. “Moreover, supporters of this bill are trying to fabricate jobs out of a market that simply does not exist. In reality, H.R. 2791will actually reduce domestic competition and lead to job losses.  Even the ITC makes it clear throughout its recently completed report that the export of refurbished UEPs for reuse as well as for commodity materials from recycling plays a very positive role both for the U.S. and the importing countries.”

According to the report, “Assessment of Efforts to Restrict the Trade of Electronic Scrap on Electronic Scrap Recycling Industry Jobs and Exports,” by John Dunham and Associates, many smaller firms would be forced out of business and workers let go should H.R. 2791 pass. As the findings state, a ban “will crowd out small existing businesses and inhibit the entry of newer businesses.”

The session takes place from 1 – 2:30 p.m. in the National Ballrooms C-D.

U.S. ITC Study of Electronics recycling, reuse and exports underway

The U.S. International Trade Commission is in the midst of its study of the American electronics recycling industry. This study, expected to take about a year, includes a survey of the American east scrap industry and seeks to determine the level of exports each year by these firms.

The U.S. ITC recently sent out a survey mandatory for those firms that received it, and is asking for those firms to respond. The questionnaire was mailed to randomly selected firms in the e-scrap industry. The survey was due back to the survey was due back to the governmental organization by July 25.

The purpose of the study is to prepare a report that will estimate US exports of used electronics, the share of exports in the overall US electronic products industry and the overseas destination of those products.

Data gathered from the survey and questionnaires will be aggregated and will not identify individual businesses or the responses of any organization the. The Institute of scrap recycling industries encourages all of its members who receive the questionnaire to take part in the study.

“This study will produce valuable data for our industry,” said Eric Harris, legal counsel for ISRI. “This will once and for all put to rest exorbitant claims about the irresponsibility of the U.S. e-scrap industry.”

When complete, the commission’s report will be released to the public.

The report is USITC investigation no. 332-528, Used Electronic Products: An Examination of U.S. Exports. It was requested by the United States Trade Representative under section 332(g) of the Tariff Act of 1930 (19 U.S.C. 1332(g)). More information on the investigation can be found Here

Questions or comments may be directed to

Andrea Boron, Deputy Project Leader, andrea.boron@usitc.gov; or Laura Bloodgood, project Leader, laura.bloodgood@usitc.gov

 

 

Electronics recycling and the myth of the 90 percent

What is a myth? Taking a look at Merrriam-Webster’s dictionary, a ‘myth’ is a tale widely accepted as true developed to explain a particular belief or practice; the dictionary entry is followed up by calling myths ‘a popular belief or notion’ and ‘an unfounded or false notion.’

In the world of electronics recycling, the prevailing myth is the idea that 90 percent of all end-of-life electronics generated in the U.S. are illegally shipped to Ghana and China, only to be dumped there where local residents live in toxic squalor.

Where is this 90% figure coming from? Most news articles don’t source their ‘fact’ of 90 percent of all U.S. electronics being exported. Companies and organizations making this claim throw it out there and don’t back up their facts with statistical, non-partisan reports or analysis. News agencies sometimes are generous with a number given of “50-80 percent”. Scholarly papers are sometimes more generous with “estimates” of “up to 50%” of e-scrap being exported illegally.

Where is this number coming from? And why such a wide range? With more than half of the U.S. population covered by states electronics recycling laws that require stringent certifications – with controls on exports a common theme in all certifications recognized by the laws – it’s highly unlikely such a massive swindle of the American public could occur.

A common source for many of these articles, claims and facts is a 2002 report, “Exporting Harm.”

In this document we see the smoking gun, so to speak, displayed in large bold type on page 12 – “Industry insiders have indicated that around 80% of what comes through their doors will be exported offshore to Asia and 90% of that will go to China.”

Even in this document, which serves as the starting point and basis for so many scandalous exposes and stringent laws, doesn’t cite its source. “Industry insiders” is given. No names, no official titles or organizations, just a blanket statement from “industry insiders.” An examination of the report’s source page reveals two interviews with electronics recyclers, both of which expressed support for the activism group opposed to export which published the report. Also on the source sheet are listings for academic sources, magazine editors, articles in trade and national press and public bodies and advocacy groups.

Which of these groups of sources is qualified to make such a broad statement? There are no comprehensive reports or studies cited in the paper that determine exactly how much of the e-scrap generated in the U.S. is exported – and where it goes.

Answering that question is at the top of every e-recycler’s mind.  A study commissioned by the Institute of Scrap Recycling Industries presents a completely different picture of reality for electronics recyclers. At least two non-partisan, non-industry investigations are underway right now to answer that very question: a joint effort by the United Nations University and the U.S. EPA and another by the U.S. International Trade Commission.

Let’s look at the closest thing to real-world numbers we have. The EPA, on its website, estimates that in 2009, 2.37 million tons of electronics were ready for end-of-life management.

Today, reuse is an enormous part of electronics recycling – ISRI’s IDC study suggests 60% of the volumes collected by recyclers were set aside for repair and reuse.

When electronics are exported for reuse or recycling, it is usually because the electronics recycler cannot process or repair the e-scrap cheaply or effectively on their own. Companies that own shredders have no incentive to export electronics for recycling – electronics recycling shredders, even small ones, are expensive to acquire and maintain. They require enormous volumes of e-scrap to remain profitable operations. At the end, however, the electronics recycler has become a manufacturer of raw commodities, and can sell the shredded and separated circuit boards, copper wire, plastics and other metals for far greater prices than they could for a load of raw mixed e-scrap that has not been sorted, shredded or otherwise processed.

The trade magazine “Recycling Today” publishes a yearly list of the 20 largest electronics recycling firms in the U.S., by volume processed. Of these firms, most have electronics recycling shredders listed in their services, and many have certifications or have made public commitments that prevent them from dumping electronics in third-world villages. According to the magazine’s research, in 2009 the 16 largest U.S based companies who had their own shredders and who publicly disavow exports processed 945.2 million pounds of electronics – 472,600 tons. That means of the 2.37 million tons the U.S. EPA said were recycled in 2009, these 16 companies combined to recycle 20% of it – already our myth of “90% is exported and dumped overseas” is wearing thin.

This study only counts the 20 largest recyclers – and there are hundreds and hundreds of companies, most of them ethical and responsible recyclers. Also, since the 2002 “Exporting Harm” report, electronics recycling has grown in leaps and bounds. With them, more and more states are putting in laws to require Responsible Recycling and other certifications – all of which prohibit the dumping of electronics in developing nations.

At one point, the “90 percent” myth may have held some basis in reality – but now, it is an antiquated and outdated notion that needs to be retired.

Industry leaders testify at U.S. ITC electronics reuse hearing

Representatives from across different segments of the U.S. and international electronics recycling and reuse industry testified before the U.S. International Trade Commission in Washington May 15.

Early next year, the U.S. International Trade Commission hopes to produce a definitive, unbiased report on how much electronics recyclers are exporting to foreign markets for reuse and recycling.

The U.S. ITC is a bi-partisan, independent federal commission, created in the 1916, which operates in part as a think tank for Congress and the U.S. Trade Representative on trade-related issues. The major operations of the ITC include conducting anti-dumping investigations, studying performance and global competitiveness of U.S. industries and the impact changes in trade policy might have, trade information services and trade policy support. The office plays no role in the development of trade policy and makes no recommendations on policy, only studies the impact policies have or might have for the federal government.

The U.S. ITC is seeking information on:

-the type, volume and value of, and foreign markets of significance for, exports of used U.S. electronic products.

– the forms and activities, with respect to used electronic products, enterprises receiving U.S> exporters shipments; most common end uses of exports in the foreign market; and the extent of cross-border, intra-firm shipments by U.S. exporters;

– the characteristics of used electronic products exported from the U.S. including product condition, composition of shipments and the extent to which exports are processed before export; and

– the forms, activities and characteristics of U.S. exporting enterprises.

If possible, the U.S. ITC is also trying to determine volumes of used electronic products from U.S. companies that are sold for export, sold to U.S. firms, processed by exporting companies and disposed of by exporters.

To see the charge given the U.S. ITC, click Here: http://www.usitc.gov/research_and_analysis/ongoing/request_letter_332-528.pdf

One thing Laura Bloodgood of the U.S. ITC says researchers have observed is a dichotomy in the industry between those who think exports should be encouraged and those who do not.

“At the ITC, we’ve always been geared towards the idea that exporting, international trade is good,” Bloodgood says. However, in the electronics recycling industry, “It does seem to us that people who do want to repair computers, and do want to refurbish them for resale, are very strongly communicating the idea that there are lots of good reasons to export. More than one person has told us U.S. electronics and access to used phones and computers contributed to the Arab Spring.”

For a full list of testimony at the hearing, click HERE.

During the May 15 hearing, Joseph Pickard of the Institute of Scrap Recycling Industries testified on the global nature of scrap trade and how electronic scrap fit into that picture.
“The demand for scrap as feedstock by industrial consumers and manufacturers is truly global in nature. In 2011, the U.S. scrap industry exported scrap to more than 160 countries worldwide while generating nearly $40 billion in export sales and positively contributing to our balance of trade in the amount of almost $33 billion. Taken as a whole, scrap exports were among the top five exports by value from the U.S. last year,” he said.

HiTech Assets reported, that reuse comprises 91% of its annual revenue, and that 595,000 pounds of electronics were exported in 2011.

The top market for its exports was China, which generated 52% of the company’s resale income. Another 28% was generated by Africa and the Middle East, with 9% of the company’s resale income generated from North and South America.

Epperson testified that the company’s electronics sold for reuse are sold in fully working and documented condition.

Willie Cade, of PC Rebuilders and Recyclers, testified that his company has observed electronics deemed ‘unusable’ in the U.S. are still highly useful elsewhere in the globe.

“PCs in the United States are underutilized and well made,” he wrote to the U.S. ITC. According to his company’s internal tracking, sampling more than 15,000 units, “25% of the PCs are used less than 500 hours when they are categorized as “End of Use.”

PCs made for the United States market are known to have significantly higher quality than other markets. This is due principally to the preference given by U.S. buyers to high quality brands.”

Cade also said he felt much of the negative attention on recycling and reuse of electronics overseas is outdated.

“Much progress has been made recently to assure that this equipment is sent for reuse and/or material recovery within formal operations both within and outside the U.S. These formal operations are far more likely to responsibly process these materials notwithstanding  the state of the country’s  economy.  One of a number of factors that has lead me to this conclusion is that there are 202 facilities that are certified to the new R2 or Responsible Recycler Standard as of this writing.  Most of the negative press reports have come from the informal processing of “End of Life” electronics also known as “back yard recyclers.”

Pickard added that exporting used electronics for reuse is ethically sound.

“There is an increasing presence of reuse markets in developing countries, especially Asia, Africa, and South America, where the majority of the population simply cannot afford to purchase the latest available technology. It is both environmentally and socially responsible to help bridge the existing digital divide and continue to export these viable products that make basic technologies and communications available where they would otherwise potentially not be,” he said. “It is critical that the responsible, legitimate trade of commodity grade scrap generated from the recycling of electronics, as well as the trade in functioning, reusable electronic equipment be differentiated from illegal exports to informal recycling sectors.”

He added, “In addition to promoting legitimate international trade, the focus must be to promote responsible recycling globally and concentrate efforts towards enhancing and promoting environmentally capable facilities that will receive and properly handle recycled materials anywhere in the world.”

Witnesses at ITC hearing:

FOR-PROFIT RECYCLERS:

HiTech Assets, Inc., Oklahoma City, Okla., Lane Epperson, President and CEO

Forever Green By Way of Recycling, Inc., Chantilly, Va., Gordon F. Scott, Owner

LifeSpan Technology Recycling, Boston, Ma., Dag Adamson, President

Regency Technologies, Twinsburg, Ohio, Jim Levine, President

Sims Recycling Solutions, Roseville, Ca., Renee St. Denis, Vice President of Business Development

REFURBISHERS/EXPORTERS:

TechSoup Global, San Francisco, Ca., Jim Lynch, Director of GreenTech & Electronics Recycling & Reuse Programs

InterConnection.org, Seattle, Wash., Charles Brennick, Director

American Retroworks, Inc., Middlebury, Vt., Robin Ingenthron, President

PCRR Rebuilders & Recyclers, Chicago, Willie Cade, Owner

iFixit ,  Atascadero, Ca., Kyle Wiens, CEO

GLOBAL COMPANIES, ASSOCIATIONS, AND NGOs:

Umicore USA Inc., Raleigh, N.C., Holly A. Chapell, Director of Governmental Affairs

International Precious Metals Institute, Cheshire, Ct., John Bullock, Chair, Environmental and Regulatory

Affairs Committee

Coalition of American Electronics Recycling, New York City, Wendy Neu, Executive Vice President, Hugo

Neu Corporation

National Center for Electronics Recycling, Parkersburg, W.Va., Jason Linnell, Executive Director

Institute of Scrap Recycling Industries, Inc., Washington, D.C., Joseph Pickard, Chief Economist and Director of Commodities

Pledges don’t keep electronics out of developing areas

Pledging to keep your company’s electronic products out of informal or environmentally lax recycling systems in the developing world does not mean they are all handled properly.

International journalist Adam Minter, who spoke last week at the Institute of Scrap Recycling Industry’s annual conference in Las Vegas, says he’s observed boxes and boxes of electronic products from companies like Panasonic, HP and Samsung being discarded in Guiyu, China. In the media, Guiyu – rightly or wrongly – is known as the international dumping ground for hazardous electronic waste.

In his blog, ShanghaiScrap.com, Minter publishes images he took on a trip to Guiyu – images of new electronic products, still in factory packaging, from companies that have pledged to keep their products out of the developing world.

Many of the products were marked with manufacturers’ bar codes or with tags stating they were “out of warranty.” Minter contacted the companies whose products he found discarded in the Chinese city, especially those who publicly pledged to prevent the export of their products to places like Guiyu and Ghana.

“Let me be clear: I have no evidence that Samsung directly exported the material I found in Guiyu. It’s quite likely that one of their customers exported the material, or – perhaps – Samsung sold the material to a recycling company that claims green standards, and then turns around and exports to Guiyu,” Minter writes.

The companies did not respond to his questions seeking comment and explanation on how their products ended up in Guiyu.

Minter said his travels revealed that not only is electronics recycling in Guiyu very different from public perception, but the source of the electronics being recycled is very different from what it once was. While splashy documentaries have shown container loads of broken TVs and computers arriving from the U.S. and Europe being dumped willy nilly in Chinese countrysides and rivers, Minter said the majority of electronics in the area are sourced from China and Asia.

Also, there is evidence of wide-scale organization and extensive reuse, Minter says.

“This is not taking place down by the river,” he reported last week in Las Vegas. He saw evidence of sophisticated sorting and reuse of nearly every usable electronic component, he says, including circuits, batteries, chips and other materials. While some materials, notably circuit boards, may not be handled in methods up to Western standards, conditions are improving, he says.

Instead of manufacturers pledging ineffectually to use ethical recyclers – and then not following through on the downstream – we should be focusing instead on helping recyclers in developing countries move out of the informal sector and into the formal, certified, recycling center, where audits ensure compliance with international standards.  For example, R2 Solutions has issued the Responsible Recycler certification to a company in China, TES-AMM in Shanghai.

That a China-based company could achieve not only R2 certification, but also ISO 14001 and OHSAS 18001 challenges the notion that people in areas outside Europe and North America are incapable of proper environmental management. We should be supporting the expansion of certified companies overseas, not cutting off their supply by banning export.