The Challenges in Management of Used Electronics

The ever growing demand to use and own electronic gadgets of all kinds has created a global problem that needs to be addressed. Discarded electronics are one of the fastest growing segments of our nations waste stream, already accounting for 5% of the total waste volume nationally. Electronic waste, commonly known as e-waste or e-scrap, is not nearly as innocuous as it may appear on the surface. E-scrap poses challenges distinct from many other types of waste due to its content of hazardous materials. Most electronics contain antimony, arsenic, cadmium, chromium, cobalt, lead, mercury, selenium, beryllium, and brominated flame retardants (BFRs). As a result, there are risks to human health and the environment associated with placing such products into landfills or incinerators. Improper recycling practices that have been well documented in the media are also problematic. E-scrap can additionally contain substantial quantities of precious metals such as gold, silver, and platinum. These substances are included in the products for important performance characteristics, but due to their increasing market value can cause problems if the products are not properly managed at the end of life by reputable businesses. The precious metals content in e-scrap has attracted many players into the world market for the recycling of these increasingly valuable commodities. The concentration of gold in a circuit board may be 40 to 800 times greater than that found in natural gold ore. This alone makes the mining of e- scrap more cost effective than mining ore. There have been numerous cases in the US recently of recyclers offering take-back programs as fund raisers or offers to businesses to pay for the escrap. In many cases, the high value components are skimmed off the top and the remainder is then either abandoned or shipped overseas. Significant quantities of e-scrap are exported to areas of the world with lax environmental, health and safety controls, where the cost required to manually dismantle components is extremely low. Some U.S. based groups have estimated that over 75% of the e-scrap collected for recycling has been exported for processing, often in violation of domestic and international laws and treaties. The disposition of e-scrap poses very serious risks to a business today. The principal risks to a business are two-fold; Regulatory Scrutiny and Brand Image. The regulatory scrutiny can come from violations at your vendors facility or from being named as a potentially responsible party for a Comprehensive Environmental Response Compensation and Liability Act (CERCLA aka, Superfund) Site. The Brand Image risks could include public relations issues such as the business association with a vendor that has been issued violations for improper handling of waste, or most extreme, the images of children in a foreign country manually disassembling items with your logo or property tag on them.

What Actions Can I Take to Protect My Business From These Threats? The minimization of risk exposure is the result of proper management of the waste streams. Development of Best Management Practices (BMPs) at your business and the standard operating procedure (SOP) for your vendors to follow the established BMPs is the simplest form of reducing risk exposure. The scrap industry is a fast moving commodity-based market and the downstream outlets for the materials as recyclable materials are in a constant state of flux. Therefore, Ninyo & Moore recommends that a business follow the hierarchy of control methods discussed below:

1. Auditing to ensure selected vendors would have the means to meet the business SOP; 2. Inclusion of contractual language that binds the vendor to meeting the requirements; and

3. Using third-party certified vendors.

Ninyo & Moore recommends a combination of these methods to minimize your business risk exposure. This would eliminate the risk of a downstream vendor changing during a certification cycle, which would open the business to liability. Just using one of the above-mentioned methods still leaves your firm open to CERLA Liability, unless the Superfund Recycling Equity Act due diligence standards are demonstrated. A quality vendor audit will meet all the requirements for due diligence in one report.

What Are the Regulations and Industry Guidelines?

E-waste recycling systems now exist in many locations worldwide and the amount of related legislation continues to increase. The US does not yet have national e-waste / e-scrap legislation, but a patchwork of legislation exists at the state level. Seventy-nine (79) pieces of ewaste legislation were introduced in 33 states in 2007, compared with 54 bills introduced in 27 states in 2006. Thus, the amount of state level activity appears to be rapidly increasing. Numerous approaches to e- scrap management have been proposed in legislation including landfill bans, extended producer responsibility (EPR) and consumer advance recovery fee (ARF) recycling systems. Third Party Certification of vendors was initiated in 2007 by the e-waste industry, NonGovernmental Organizations (NGOs), and the United State Environmental Protection Agency in response to the problems created when e-waste is illegally exported to countries that do not have adequate environmental protections and infrastructure in place to safely handle this waste stream. These groups have been working to fill the regulatory void with consensus standards that are third party certified for the management of e-waste. There are currently two certifications for vendors of e-waste / e-scrap management services; e-stewards and responsible recycling (R2). Each of these systems has their benefits and both provide some assurance that the materials are handled in an appropriate manner. This certification is vital to the management of risk to your firm. Several Fortune 500 firms, including the Original Equipment Manufacturers (OEMs) internal risk policies, require the use of third party certified firms and a program of on-site audits and desk reviews to mitigate the risks.