Recyclers obey ban on toxic e-waste by selling it overseas

Recyclers obey ban on toxic e-waste by selling it overseas

December 7th, 2010 in News

By Tom Knudson

McClatchy Newspapers

SACRAMENTO, Calif. - In the soft morning light, the silver-gray mountain of electronic trash did not look especially hazardous. But it was.

Inside that massive rubble of technology, with its V-shaped canyons of printers and keyboards and its fin-like ridges of fax machines and coffee makers, was enough toxic material - including lead, cadmium and brominated flame retardants - to poison California watersheds for centuries and sow disease in humans.

"This is the problem," said Jim Taggart, president of ECS Refining in Santa Clara, Calif., where the e-waste was waiting to be safely recycled. "This is the material that most people are exporting. They'll get paid 5 to 10 cents a pound for shoving it in a container and shipping it overseas."

Five years after California launched an ambitious effort to control pollution from electronic waste, much of our e-waste is being shipped overseas, where it is contributing to a legacy of pollution and disease that would not be tolerated here, a McClatchy Newspapers investigation has found.

Domestically, California's program is doing just what officials intended: It has outlawed e-waste from landfills and jump-started a multimillion-dollar state industry to recycle televisions, computer monitors and other video display devices, paid for with public money.

But there is a blind spot: The program provides no money for anything else, meaning large volumes of low-value, hazardous electronic waste that are difficult to recycle at a profit in California are instead being exported, a consequence the state did not anticipate. Much of it is flowing to developing nations, where it is picked apart by workers exposed to a high-tech cocktail of contamination.

"Most people just don't know what's happening to their material when it's dropped off," said Taggart, one of the state's leading e-waste recyclers. "If they knew, they wouldn't be dropping it off."

Nearly all TVs and monitors are recycled - at least initially - in California. That is not true for the towering mountains of other electronic products sold in the state.

State records do not clearly reflect how much is exported, but industry officials put the number at 160 million to 210 million pounds a year. That is enough to fill more than 4,500 shipping containers which, placed end to end, would form a convoy about 35 miles long.

Little information about those exports reaches the public, though. Instead, Californians who donate electronics generally believe they are doing the right thing for the environment. And most do so amid a blizzard of eco-friendly claims from recyclers who in some cases have exported e-waste themselves.

"There is not an e-waste recycler out there who doesn't try to look as green as possible," said Janice Oldemeyer, president of Onsite Electronics Recycling in Stockton, Calif., and a recognized industry leader. "Yet the reality is most of them aren't."

In California, few recyclers tout their green credentials more prominently than John Shegerian, chairman of Electronics Recyclers International in Fresno, Calif., who has invested millions in environmental improvements over the past five years.

Shegerian told McClatchy Newspapers that e-waste exports are deplorable. "It's the last thing we want to be known for," he said. "It's just horrible on every level."

Yet documents show that as recently as 2008 even ERI was quietly selling large volumes of e-waste to a Los Angeles exporter who shipped it to Hong Kong. While legal, the sale violated a pledge the company signed with the nation's leading e-waste watchdog group, the Basel Action Network.

"I'm not at all happy that this took place," said Jim Puckett, executive director of the group. "If we had known about it at the time, we would have taken real serious action."

The toxic trade is flourishing at the crossroads of two well-intended state actions: a first-in-the-nation law that has paid about $400 million to collect and recycle almost a billion pounds of monitors and TVs since 2005, and separate bureaucratic regulations that ban all electronic devices from landfills - not just video display devices.

As a result, roughly half of what turns up at collection events and recycling facilities - everything from Apple iPods to Xbox game consoles, popcorn makers to alarm clocks - has no value under the state recycling law and is up for grabs to dozens of brokers and other companies that compete aggressively for it.

"What do you do with millions and millions of pounds of hair dryers and toaster ovens and razors and vacuum cleaners?" said Bob Erie, chief executive officer of E-World Recyclers north of San Diego. "There are plenty of brokers who are buying that material and exporting it all to China.

"I don't think the state thought that out very well," Erie said.

State officials are concerned but say their options are few, because e-waste exports, although controversial, are legal under federal law.

"This is where I think the federal government really needs to step up," said Jeff Hunts, manager of the TV and monitor recycling program at CalRecycle. "If the federal government today said, 'Electronic scrap shall not be exported without being treated to a certain level,' that would grow, frankly, a domestic industry."

Sue Laney, an assistant deputy director at the California Department of Toxic Substances Control, which banned e-waste from landfills, said solving the problem is not her agency's responsibility. "We're the enforcement arm," she said.

But in a follow-up statement, she said the department "is concerned that efforts to protect California's environment may mean that companies export their e-waste to countries that do not have the same stringent environmental standards."

"If (California's Electronic Waste Recycling Act) is amended to make it more attractive for businesses to recycle here, rather than export components abroad, DTSC will of course fulfill its mandate," she said.

None of the nearly two dozen states to pass e-waste laws since 2005 have adopted California's system, which is funded by a fee on the purchase of monitors and TVs. Instead, all made electronics manufacturers responsible for recycling their products at their own expense. And several define e-waste more broadly than TVs and monitors.

"It's critical we take the next step and require manufacturers to finance a system that properly recycles all of this material," said Mark Murray, executive director of Californians Against Waste, whose group sponsored the state e-waste law.

"We certainly are one of the largest e-waste exporters in the country, and maybe the world, because of the way we set up our system," said Taggart, referring to California.

He is one of several recyclers who are taking steps to ensure that none of the electronic devices they handle touch foreign soil, in part because that's what green-minded California residents and companies want.

"We can't be exporters and do business with companies like Oracle, Apple or Dell," Taggart said in Santa Clara.

His solution is classic Silicon Valley: high tech. Truckloads of microwaves, stereos, typewriters, coffee makers and other e-waste are fed into gigantic shredders that slice and dice everything into jagged, crinkly pieces of metal and plastic the size of potato chips.

Swept along on conveyor belts, those chips shimmy, swirl and dance as they are sorted by magnets, air currents and other means into glittering flecks of aluminum, steel, copper and other raw materials.

Eventually, much of that gets exported in a form acceptable to environmentalists: as feedstock for new products.

"It's not going out as mixed material," said Taggart. "It's going out as metal and plastic commodities. There's a huge difference.

"Most things get made overseas anyway. These are raw materials for those things."

In a gray building on the north side of Stockton, workers at Onsite Electronics Recycling tackle the same problem the old-fashioned way.

Bam! A rubber mallet crashes into a printer, sending pieces of milky-white plastic skittering across a workbench. Crack! A laborer pries open a radio with a screwdriver, exposing a forest of yellow, green and red wires and jade-green circuit boards.

Everything is saved and sorted by hand - from printer cartridges to hard drives to tiny fans yanked out of microwaves. All of it is tossed into boxes and bins and shipped to smelters, refiners and other facilities in Europe, Canada and Japan, where it is eventually reborn as everything from railroad ties to gold dental fillings.

"If it gets sent to China, we don't know how they dispose of it. I don't agree with that," said Antonio Vargas, a 43-year-old truck driver with a salt-and-pepper mustache and a gold earring.

Another worker, David Santos, added: "When I go home at night, I feel like I've done something good for the environment. That's important."

There is just one problem: money. While the state's CalRecycle pays $12 to $50 for every TV and monitor, depending on weight, it provides nothing for all other e-waste.

"If we're lucky, we break even on those items," said Oldemeyer, president at Onsite Electronics Recycling.

Others, though, cash in more easily by simply selling that e-waste - which is worth $2,500 to $3,500 per container load, depending on weight and commodity prices - overseas. They include brokers, e-waste collectors, scrap yards and well-established electronics recyclers such as John Chen, executive vice president of Tung Tai Group in San Jose, Calif.

"I don't think export is that bad," said Chen, whose company has shipped everything from copiers to computers to China over the years. "In Asia, they actually reuse more items.

"If you reuse a hard drive, that is much better than shredding it," Chen said. "A lot of the items - and I'm not saying everything - are being used in a way that is more environmentally sound than here."

And what about the contamination? "I'm sure it goes on," Chen said. "Absolutely. There is proof. There have been documentaries. But it's a small percentage and volume."

No one in America has done more to detail that pollution than Jim Puckett, founder of the Basel Action Network, whose 2002 report and documentary "Exporting Harm: The High-Tech Trashing of Asia" first awakened the country to the problem.

Last year, he returned to the Chinese village of Guiyu, where that documentary was reported with a crew from "Frontline," the PBS investigative news program. "It was like revisiting a nightmare," Puckett said. "It was so much worse than what I had imagined."

"The environment is just being completely trashed, primarily from the burning of components to liberate the metals," Puckett said. "When you do that you're creating dioxins and polycyclic aromatic hydrocarbons," two potent toxins linked to cancer, reproductive harm and other damage.

He saw villagers cooking circuit boards over coal-fired grills and dipping them into vats of acid to salvage precious metals, exposing themselves to a suite of poisons, including lead, which causes neurological damage.

Afterward, the acid and rubble from burning were simply dumped. "There were whole rivers of ash," he said.

Other investigations and studies have singled out Guiyu as one of the world's most toxic dumping grounds, a charred, forbidding landscape where eight of 10 children have elevated levels of lead in their blood and scientists have documented the highest levels of cancer-causing dioxin in the world.

Much of that pollution, Puckett said, continues to come from American e-waste. "This problem has not abated," he said.

"The whole country is turning a blind eye, but California is a hotbed of the export," Puckett said. "One of the things we have to do is get a ban at the federal level."

In California, the recycler most vocal in his support of such a ban is Shegerian at ERI. "Let's put some bite into it," he told McClatchy Newspapers. "Let's say someone is going to have to go to jail if they are caught doing this kind of stuff."

Since joining ERI five years ago, Shegerian has built it into a recycling dynamo by investing millions in green improvements and practices, including a new e-waste shredding facility installed in 2008. He calls his company America's leading recycler.

"Here's a dirty little secret," Shegerian said, walking through his facility. "About 10 percent of the people in the industry who say they are recycling are really recycling. About 90 percent are still packing and shipping.

"How people do it is they go, 'Oh, we're selling it abroad for reuse.' Wink. Wink. The resale of these things is such hooey, is such a fraudulent excuse," Shegerian said.

ERI's own shipping documents demonstrate just how difficult it is to determine which companies are green.

They show that ERI sold 6.9 million pounds of e-waste to a Los Angeles exporter in 2007 and 2008, much of it labeled consumer scrap and reusable electronics. The e-waste filled 189 sea containers, averaging more than 36,000 pounds each.

Asked about those transactions, Shegerian blamed former business partners for leaking the information in an attempt to discredit him, and said the shipments were environmentally responsible. "Everything was either working units or commodities that go to smelters," he said in August.

But Gordon Chiu, the broker who purchased the e-waste, said the containers were filled with a mishmash of items that were not dismantled into commodities and were largely nonworking.

Speaking by Skype from Egypt, Chiu said he looked inside some of the containers in Fresno and saw "printers, keyboards and junk stuff like that."

Chiu even wrote a letter to ERI in 2008 offering higher prices if the company would provide "electronic goods with over 30 percent working."

For his part, Puckett said the shipments violated a pledge ERI made to his organization, vowing not to export.

"If we had learned ... he was doing this, we would have been all over it," Puckett said. "We would have come to him and said, 'You have to stop this right now or you're out of the program.' "

Shegerian said the pledge is complex and that he did not realize the shipments - which are legal - posed a problem. But after speaking more recently with Puckett, he does. "Now I see the light," he said.

"We don't want any doubt in anyone's mind about how our product is ultimately handled," he said. "I'm not a perfect person. I don't run a perfect company. But every day we are trying to make the place better."

With no government oversight, the Basel Action Network has carved out a niche as chief e-waste watchdog over a highly competitive, secretive industry.

"We are trying to herd cats. It's not easy," said Puckett. "We're here to change the world and stop this kind of dumping."

Yet participation in the longtime pledge system is voluntary, and Puckett acknowledges enforcement has been light because "we don't have a stable full of auditors."

"There are no teeth to it," said Tom Hogye, director of business development at ECS Refining, who said he warned the network last year about California recyclers he felt were violating the group's pledge. He said the group failed to act.

"They asked me to be the police," Hogye said. "I said, 'That's not my job. That's your job.' "

"I fully support a certification effort that has some bite to it and significant punishment," Hogye said.

That's just what Puckett said Basel Action Network is building now, with a new third-party certification system called e-Stewards that will replace the pledge program. But because the effort is funded in part by donations from the industry - including $50,000 from ERI itself - Hogye is skeptical, saying it poses a potential pay-to-play conflict.

"If you pay enough money you can be certified for anything," said Hogye. "Quite frankly, this is a means of advertising."

Shegerian disagreed, saying the network needs financial support to be an industry watchdog. "If people who care don't fund it, it's just not going to exist," he said.

Support from ERI and other recyclers is not a problem, Puckett said, because scrutiny and inspections will be carried out by independent auditors not affiliated with his organization.

"We want to make sure we're not the ones that find the violations so nobody can claim we are in a conflict of interest," Puckett said.

And Shegerian, he added, deserves a second chance.

"The facts are the facts," Puckett said. "The fact is he screwed up. And the fact is, by all appearances, he is trying to do the right thing now. It isn't all just talk. I really believe he has embraced his business model of being the greenest guy on the block."