E-Scrap Recycling Certification Economic, Environmental and Ethical Considerations Robin Ingenthron American Retrowor

1. E-Scrap Recycling Certification Economic, Environmental and Ethical Considerations Robin Ingenthron American Retroworks Inc. Middlebury, Vermont www.wr3a.org San Francisco, May 7, 2006

2. World Reuse, Repair and Recycling Association Goals: • Find what the export market really needs • 2) Develop standards and purchase orders • Sign up USA recyclers able to meet those orders • Get institutions like colleges and gov’t surplus property offices to contract those USA companies • Enforce the standards under CIVIL CONTRACT LAW

3. American repair and reuse is collapsing 100,000 TV repairmen in 1990 39,000 in 1999 19,000 projected in 2010 TV= $100 CRT + $10 tuner board + $2 copper wire + $0.50 cents molded plastic Average life of CRT = 15 years Average life of CPU = 3-4 years Est 80,000 used CRTs from USA purchased monthly for refurbishment ($1,000,000 per month) CRTs and the Export Market

4. Virgin CRT Factories are GIANT investments China CP owns a new CRT company USA put a 40% tariff on China CRTs China Responds with ban on “grey market” Result: “Triangle Trade” – Used CRTs are sent through middlemen who take the old CRTs and strip and re-label them to get them into China “Traffic”

5. Triangle Trade – CA before SB20 5% domestic California Suppliers 100,000 Brokers 100,000 Strippers 30% TAR Factory remanufacturing 70,000 SKD / month 5% failure

6. Triangle Trade – CA after SB20 95% domestic California Suppliers 5,000 EAST COAST Brokers 75,000 Strippers 30% TAR 70,000 40,000 30,000 Factory remanufacturing 70,000 SKD / month 5% failure

7. WR3A Model Trade 30% domestic California Suppliers 70,000 Brokers Strippers 70K 30% TAR WR3A Factory remanufacturing 70,000 SKD / month 5% failure

8. Breaking CRTs is by far the most expensive activity at a USA recycling plant (labor, insurance, can’t be shredded) State and federal EPA regulates CRT lead disposal, end markets exceedingly difficult Avoided disposal cost of bad CRT + resale value = $20 unit, enough to cover ocean shipping IF the buyer is duped. Result: 1/3 of all CRTs shipped are junk, or Toxics Along for the Ride (TAR) The farther the supplier is from the manufacturer in the chain, the more abuse Marketplace Fundamentals

9. 1/3 of all PCs sold in USA are “white box” (no-brand) units, mostly from refurbished cases, power supplies, etc 1/3 of all disposable cameras, toner cartridges Entire factories devoted to refurbishing power supplies, FDDs, TVs. But they have high standards, very picky, don’t want the TAR Metals recycling is harder in general to pinpoint, since the TAR has gold and “sweetens” rather than lowers the value Similar story with other ReUse items

10. Malaysia junk loads

11. 80/20 Rule • Recyclers are different. Curbside collectors are different than one-day event collectors, plant infrastructure to manage public school PCs is different from bank PCs • Export markets are different. Ghana bazaar is different from Indonesian OEM takeback, CRT glass manufacturer is different from a copper wire burning yard. • Generators are different. Some will pay to see a P4 destroyed, others will insist their Mac Plus works “as good as the day they bought it.” Some are afraid of reuse, some are afraid of waste.

12. Recycler A will take copper with a little bit of aluminum included, for $40 per ton • Recycler B will take copper with NO aluminum impurity, for $100 per ton • The aluminum is not easily processed at the smelter. It’s a “tramp element”, or waste

13. What’s the best Export scenario? The controversy: Is there a de minimus quanitity of material, and where is it safe to manage it? Smashing the copper off of a 15 lb lead CRT Vs Upgrading 64meg RAM to 256 RAM in the country (Singapore) where the RAM is made

14. So what kind of export standards do we have so far? 3 x 3 Export Questions • DOMESTIC, OECD, Non-OECD? • REUSE, RECYCLE, DISPOSE? • Efficienct? Legal? Economical?

15. Generation - The eye of the beholder 1) Pristine takeouts for auction, clean scrap - you can deal with anyone directly 2) Junk - you should insist on domestic processing 3) “I dunno”…- you should deal with a USA company with capacity to separate, process, market, document This is always the one-day event

16. “Averaging” Nothing new – even virgin material value has TAR • Pure mined copper: 1% copper • Cell phone: 18% copper * • Copper concentrates: 25% copper • Blister copper (primary smelter finished product): 98.5% copper • Recycled copper cable 30-90% copper • Stripped copper wire is the highest purity USGS: Printed circuit boards contain 40 to 800 times the amount of gold as mined ore, and 30-40 times the amount of copper as mined copper. So the “scrap metal” exemption is not far fetched.

17. CRT Glass Test Good Point: Actual OEM loadContainer No = TCKU xxxxxx8 1128 Used Monitors 15-03-2006 95.3% acceptable load, 91.4% repeat order

18. Possibility 1: No Exports Advantages: • Demonstrates Generator and Collector caution (international law, most cautious interpretation) • More control over possible mis-routing • Handlers of Toxic substrata operate under some control of domestic regulators Disadvantages: • No repair and reuse market in USA • Overseas markets go without legitimate reuse • More pollution (through mining) overseas to produce goods

19. Possibility 2: All Exports Advantages: • High reuse revenue • Easy (everything goes in one container) • Externalize cost of toxics • More materials are ultimately recycled Disadvantages: • Poor countries just dump the toxics • Undermines economy of proper recycling • Shipping bottleneck – everything gets sent to the same port, or hundreds of containers

20. Possibility 3: Qualified Exports Advantages: • Overseas gets benefit of recycling, avoids mining • Revenue of legitimate reuse offsets cost of toxics management • In the best case, a “win-win” scenario Disadvantages: • A “mixed message”, difficult to market • Requires enforcement and monitoring • Difficult to document the end-markets

21. What’s your final answer? It’s better to meet demand than not to. That said, sleazy exports threaten recycling, and are worse than not recycling at all. REALITY: If USA exports everything, we send 1/3 reusables, 1/3 recyclables, and 1/3 Toxics Along for the Ride. REALITY: if USA exports nothing, we destroy reuseables (and they cannot afford new); they mine to replace the recycled metals, and mining produces even more toxic harm than recycling. SOLUTION: Setting a Higher Standard. USA processing, limited exports (tested equipment, copper scrap), simple tests (like CRT Glass Test); market development to promote best practices; (funded) state processing contracts with restrictions and incentives; etc.

22. 4 Simple Due Diligence Tests Ideally, your state or cooperative marketing organization has already established a statewide contract and performed due diligence and vendor selection. If not, there are limits to the amount of information you can justify collecting (or understanding) for a One Day Event. • LEADED GLASS recycling records • GOLD BEARING SCRAP markets • SAMPLE EXPORT manifests • EMPLOYEES PER TON

23. 1. CRT Lead Glass Test – Lead CRT glass is the most expensive item to recycle domestically, and the biggest source of toxics. • Ask vendor these 2 questions: • “How many tons of leaded glass did you send to lead smelters or glass furnaces last year?” • - (divide by) “How many total tons of electronics did you collect last year?” • (Ask for the lead glass end market to verify the shipments.) After reuse, lead glass is 42% of material. Reuse will lower this figure, but not EVERYTHING can be reused.

24. Printed Circuit Board (PCB) Gold Test – • Not every PC can be refurbished. When sold for metal content, most of the pollution comes from extracting the gold circuit boards. Ask your vendor to provide documentation of markets for printed circuit board recycling. If there is no documentation, ask whether they are shipping computers intact to foreign markets. Asia is the #1 consumer of gold PER CAPITA BAN: chinese circuit board / gold recycler

25. 3. Truthful Manifest Test - Ask for RECENT shipping papers (sensitive market info can be blocked out). Legitimate bill of lading shows make/model/voltage/COO/condition. “40,000 lbs. scrap metal” “1030 pcs. Tested Working Monitors 95-99”

26. 4. Employment / Capacity Test How many pounds per 5 employees? Limited Demanufacturing and repair 1M 3M Automated shredding 10M Whole-lotta Wholesaling going on… Average is somewhere around five employees per million pounds of electronics. If it’s outsourced, insist on end market documentation!!

27. Would it be easier to just shred everything to be sure? Economic cost of lost reuse triples cost of e-waste recycling – could be sent saving orangutans? Efficiency cost of lost metals = more rain forest mining, fewer orangutans Repair and Recycling jobs in Indonesia, India, and China are EXACTLY the type of technology and jobs we are trying to create here.

28. E-Scrap is 300% richer in copper and other metals than mined ore • Recycling produces a fraction of the pollution from mining. Hard rock mining produces 45% of all toxics produced by all USA industries. • Gorilla and orangutan extinction is arguably driven by electrics metal mining. • USGS – At 1990 rate of consumption, copper reserves will be exhausted this century: Ocean mining will be the primary source of copper in our lifetimes. • USA Model? 95% from federal lands, $5/acre, 14/15 largest Superfund sites Gold miningreleases more mercuryinto the environment than mercury production and disposal combined!!! Mining nightmares in Borneo, Chile, Congo, Philippines, Turkey, etc.

29. USA Mercury Emissions by Industry(Rank #2-#7 - w/o GOLD Mining) Source: http://www.epa.gov/region09/toxic/tri/report/01/mercury.pdf

30. USA Mercury Emissions by Industry(Rank #1-#7) Source: http://www.epa.gov/region09/toxic/tri/report/01/mercury.pdf

31. Draft e-Certification program in “beta” at WR3A.org - generator enters age and type of equipment - processors qualify themselves to handle various types - will allow “preferred” criteria as well as “bottom line” - WR3A members will get procurement, inspection and due diligence services Presentation by Robin Ingenthron of WR3A.org • Full presentation with photos is available at www.wr3a.org