Investigating reuse markets: recyclers hope to strengthen export markets through a new electronics association

Recycling Today, Jan, 2005 by Robin Ingenthron

Electronics recycling is one of the most talked about businesses in the scrap industry, but estimates of how much scrap is out there vary widely. The National Safety Council published a study in 2000 that assumes the average lifespan of a computer is three years and that calculates tonnage based on that figure.

While it has been useful as a tool to gear up the electronics recycling industry, no one responding to the National Safety Council study survey ever purchased a used or refurbished computer.

This study's methodology, if applied to automobile scrap (surveying only new car buyers), would obviously capture the entire used car business in the "discarded" weight.

Is the PC reuse and refurbishment market real or just anecdotal? For one component of the computer--used monitors-demand is very strong indeed.

Since it was established in October 2004, the World Reuse, Repair and Recycling Association (WR3A, www.wr3a.org) has received purchase offers for more than 130,000 used monitors per month. The monitors being solicited cannot be broken or scratched, cannot have letters burned into their screens, cannot be monochrome or fail several other tests (such as Apple or Sony models that are excluded because of their certain screen curvatures).

Prices in the purchase orders average more than $5 per monitor. Clearly, the unit does not contain enough copper for that price to be based on scrap value; and if they were being sold for scrap, the "bad" monitors would be just as acceptable.

There are, however, allegations and evidence that some "sham" companies charge a full recycling and destruction fee just to export junk.

The "Pledge of True Stewardship," developed by the international environmental group Basel Action Network (BAN, www.ban.org), Seattle, and the Silicon Valley Toxics Coalition, San Jose, Calif., displays a list of companies promising never to export any scrap computers. BAN's Jim Puckett says that such exports are illegal.

LEGALITIES. Which monitors are safe and legal to export? The answer varies. If recyclers export everything, including junk TVs and obsolete monitors, they are shipping "toxics along for the ride." Just as clearly, if recyclers forgo revenue from working and repairable monitors and destroy everything, they are making recycling more expensive here and computers more expensive in countries like India (which has the fastest growing software industry worldwide). How do recyclers determine which markets are legitimate?

"While re-use and bridging the digital divide are very worthy goals, we must not allow these excellent motivations to be used as an excuse for further perpetuating the 'digital dump,'" Puckett says. "In accordance with the Basel Convention obligations and decisions, prior to export, used electronics from developed to developing countries should be tested and certified as either being fully functional or requiring only repairs that will not entail discarding a hazardous component, such as a CRT or circuit board."

Robert Tonetti of the U.S. EPA recognizes the limits of jurisdiction when it comes to reselling commodities for their "continued intended use." He says there may be questions about how much refurbishment is necessary, but in general he agrees that a monitor sold for positive revenue does not resemble waste.

In the spring of 2005, EPA will issue a new "CRT Rule" addressing criticism that the export market is being used as a "digital dump." He says that the EPA's new CRT ruling will clarify what documentation is expected of exporters, and he expects the EPA to tighten standards for export in the coming months.

Overseas, many of the "bans" on importation announced in the past, particularly in China, were not related to waste at all, but addressed "dumping" in a below-cost sense of the term.

Despite occasional tariff and non-tariff barriers in regions where an OEM market is "protected," the Basel Convention's Annex 9 explicitly allows export to less developed countries for the purpose of reuse and repair. However, steps should be taken to make sure that those shipments are legitimate and not a "sham" program designed to avoid disposal costs.

For its part, the WR3A plans to develop rules for members to follow when they ship monitors overseas and will revisit and improve those rules based on actual experience. Membership in the cooperative marketing program will require buyers and sellers to meet several safeguards, such as pre-and post-shipment inspections, agreement to third party dispute resolution and proof of capacity to manage "bad" material, i.e. employment of the CRT Glass Test (demonstrating shipments of bad CRTs for domestic recycling) developed by American Retroworks. Perhaps most importantly, WR3A will not be "membership-fee dependent" and will immediately kick out any bad actors from its cooperative marketing scheme.

OPPORTUNISTS. The increasing demand for good tubes, and the increasing quality of tubes turned in for asset recovery, has created more opportunities for recyclers. (In 2004, more than 100 new computer recycling companies listed themselves on the Internet.) But it also has created an opportunity for sham recyclers as well and an excuse for new equipment manufacturers to crack down on refurbishing competition.