Why All Good Recyclers are Exporters.

There are many good recyclers, and we are all exporters. 
The purpose of certification is to "out" the liars, not to debate the outliers. 

During the past week (blogs below), I've written several essays concerning marketing themes which are "attacking the category".
Negative campaigning, also known more colloquially as "mudslinging", is trying to win an advantage by referring to negative aspects of an opponent or of a policy rather than emphasizing one's own positive attributes or preferred policies. In the broadest sense, the term covers any rhetoric in which one refers to one's opponent in an ad hominem manner. [ wikipedia 2012.02.08]
Negative imagery of competitors' export practices probably accounts for "80% of advertising" for ewaste recyclers (a statistic I just manufactured... see how easy it is for Americans to make things - up?)

Export policy is important, it does matter.  Below are five distinct export categories, and the niches they serve.   How we manage and certify the first four will help us all to control the 5th (see post "Ewaste Travel in Scrap Metal" 2010).   Mixing CRT glass and mercury bulbs into bales of scrap metal is one dumping problem, but ship captains stranded with cargo refused at port is another cause of the same "export for dumping" problem.   Basically, there are five ways for your "e-waste" to get from Here to There.


1.  Export No Intact Unit Category:   Some of us feel safer exporting raw materials only, and market the "no intact unit" standard as an option.  These companies attract business from OEMs concerned with reuse (market cannabalization), counterfeiting, or the "grey markets" somewhere in between.  It's a legitimate recycling category.  These companies represent an excellent choice, for example, for an OEM with faulty parts taken back under warranty that they don't want redistributed.  These recyclers export bales of steel, plastic, copper, aluminum, and circuit boards, sold openly on the commodities market.  (slideshow of China's metal recycling companies, which buy shredded material for hand sorting - The Atlantic Monthly 2008)

2.  Export of Tested Working Category:   Some of us sell to retail markets, such as schools or direct retail shops, which are not in the repair business and are willing to pay more for something "fully functional" and "tested working".  The recyclers who sell to the direct-reuse market tend to wipe hard drives, reinstall MAR licenses, and do other things to ensure their exports are what the buyer ordered.  (Slideshow of Egyptian repair / direct reuse markets, 2008)

3.  Export for Repair and Refurbishing Category:   Within the remote corners (83% of the world), there are mind-blowing repair and remanufacturing companies.  Some of these began as contract manufacturers (e.g. CRT factories) and performed warranty repairs as well as assembly.  Some have turned to full-fledge cores refurbishers, creating thousands of jobs in emerging markets, taking back things like old CRT tubes or smallish LCDs and recutting and re-vamping them.  They make things like monitor-television-DVD combos, which are sold in vast quantities to people earning $3,000 per year, who cannot afford to buy all 3 separately.  They tend to be very picky, but not about things like 120 volt power supplies... whether the power supply works or not, it's getting replaced for sale in a 220 volt country.  It's a very legitimate category.  The fact they buy non-working power supplies as well as working power supplies is evidence that they are the opposite of primitive.  Slides of the factories I've visited are available here.

4.  Export for Recycling Category:  This is the export market that scares people.  Our Fair Trade counterparts in Europe want to avoid this export market entirely, they think that representing trade with this group is too much of a campaign to manage.  However, the fact exists that manual disassembly is a more environmentally sustainable alternative than shredding, if you can set up a system that guarantees against toxic recycling processes and practices (like wire burning).   It's fairly easy to get the recyclers exporting to the first three categories to agree on a negative campaign against recycling intact units overseas which are not for repair.

5.  Dumping:  The Basel Convention was signed to prevent dumping chemical drums and infectious waste on beaches.   The actual cases of this were usually shipping captains who were stranded with material and dumped it overboard.   The impassioned rhetoric over recycling has actually created cases where shippers were consigned legitimate product, but were banned from delivering it over a concern or report of "toxics", and the exporter had not enough money to take the delivery back.  Ocean dumping resulted.   Beach dumping is a small subset of ocean dumping.

Bans on imports of refurbishable monitors is an excellent case study for treating a symptom rather than a cause, with unintended consequences.   When the categories of baled plastic (1), working monitors (2), repairable computers (3), and legitimate recycling (4) are all labelled "toxic e-waste" by a dictatorship, a Mobro Barge of computers can result. When a ship captain cannot unload its cargo, the ship dumps the goods at sea.   They wash ashore, and the whole cycle starts anew.  The solid waste industry (Chaz Miller) makes a compelling case that "waste bans" on recyclables can do the same thing.

The problem with the apparent "consensus" against categories 4 and 5, the "lowest denominators", is that the non-OECD countries are themselves the generators of the waste being photographed in the landfills.   China, India, and now Africa have definitively shown, in exhaustive research, that six billion people are generating e-waste in massive quantities, comparable in aggragate to the waste generated by the wealthiest billion people.

Someone needs to set up recycling in those countries.  My advice, as a former Peace Corps volunteer, is to get their geeks (category 3) into the business of recycling, using profit on imports as an incentive to eliminate toxic processes.  Incentives on re-export of printed wiring board (to Umicore, for example) is good too.  But we don't need No Intact Unit policies in the room to negotiate those deals.  If #4 is legal, #5 will be rare.


Recyclers have been falling into category attack campaigns for the past 10 years.  People in the No Intact Unit niche are attacking people in the Repair niche.   Groups are trying to get No-Intacts and Tested-Working together to scapegoat Repair/Refurb.   Even Fair Trade groups think that it might create too big a stir to invite hand-disassembly operations, like Las Chicas Bravas, into the club "at this time".

University of Maryland Smith Business School has an excellent video and post, titled "The Potential Pitfalls of Attack Advertising:  When the gloves come off, the stakes get higher".
In the battle for market share, companies often try an aggressive approach when advertising their products. This kind of combative strategy often involves knocking the company’s chief competitors. But that may not get the results you want, warns Yogesh Joshi, assistant professor of marketing.
“The returns to combative advertising depend on how consumer preference is impacted,” says Joshi. “And consumers can either become more partisan or more indifferent when exposed to attack ads.”

During the past ten years, EPA, NGOs and Industry tried to come together to move the ewaste debate forward by creating "certification" programs, to bring more truth and transparency to the "anti-export" debate. EPA, NGOs, and Industry realized that "No Exports" was a mutually assured destruction, because we all export through at least one of the categories above.  The problem was transparency, misrepresentation, and certain poor recycling practices.   Certification was a way to augment environmental enforcement, increasing the inspections that can realistically be paid for from enforcement paid from government and its tax base.

Now these certifications are competing for a finite and limited scope of awareness among consumers.

R2, E-Stewards, WR3A, NAID, ISRI and other campaigns must resist the appeal of a negative campaign that crosses categories, embroiling the standards themselves in a derivative sort of marketing campaign.  The fact is, none of these certifications is going to be a "category killer" that obsoletes the other standards, and none of the export niches is going to be a category killer without interfering in the free market, which itself always leads to unintended consequences.

HR2284 legislation, for example, would draw a thick red line to say that billion dollar Taiwanese refurbishing factories are "bad" because they export (buy back) intact units for refurbishing.  Proponents make their case with pictures of African kids taking African-generated ewaste to a dumpsite where someone is burning 4-phase current wire.  It's marketed at people who care, but who are not experts in exports.  

As ISRI reported last week, Congressional Research Service confirms longstanding concerns about using the law to keep justice at bay.  HR2284 is a law which uses government to restrain trade categories,

Can negative campaigns effectively land a key client, and work in the short term?  Cognitive dissonance is the psychological study of how our limited amount of brain bandwidth can boil down facts, disproportionately, into a "short term" purchasing decision phenomena.

Assume that you have to move out surplus computers to create office space and liquidate inventory for accounting purposes.  You know they have value, but you also hear you might get sued, or an environmental organization might impugn your brand, or maybe the data will get stolen... decisions, decisions...  While negative campaigning doesn't work for long term commodity purchases like burgers (Burger King attacking McDs will depress sales of burgers), it can influence a limited and single decision (like a Vote in November).  For these reasons, many e-waste services salespeople are willing to put the "export gun" on the table.

A lot of war analogies come to mind. This recycling blog has demonstrated that the geeks of color could fire back ("Accidental Racist" and other allow-me-to-retorts).  The negative accusation can ricochet or backfire (as I pointed out in the critique of the Redemtech blog by Baroudi yesterday).  There is always "blowback" from negative advertising within a noble industry.  The recyclers who suffer the most public admonishment are usually the ones which have used the "no export" claim themselves, and are eventually caught.  Leading people into thinking "no export" is an answer is a double edged sword..

Environmentalists, taking wide acceptance of recycling for granted, may be tempted to target more than one of the five export segments within the Recycling category.  The environmental industry needs to learn that if windmills attack hydro, and electric cars attack hybrids, and eyeglass makers attack lasik surgeons, and AA attacks antabuse, and E-Stewards attacks R2, that cyncism results... you lose the audience.  Low voter turnout is ok for a single candidate in a one-time election campaign, but they are not good for the recycling economy.  They will only benefit waste disposal and mining.

Consumers have already gotten frustrated with the device and discarded it once...  We aren't really interested in "e-waste".  We are interested in people.  That's why photos of children at dumps are on the front page of every ewaste ad campaign.

However, as Joshi describes, a "non-profit fatigue" may set in.  For some "whether to care" is still in question.  A few may have the time to endlessly compare something besides price.   The idea of a "certification" was to make it easy for someone to check the 'recycle' box without creating a mess.  But keep in mind, people have already made a decision to discard, dump, trade in, sell, liquidate the item, whether it's surplus, donation, recycling, storage, or discard, and they can't care about the item much longer, and certainly not as much as you care about your profits within your export category.  When a surplus property manager keeps debating and analyzing the decision too long, I begin to suspect it's a job security issue - the waste is important because they don't have something more pressing do do.

The derivative attacks between certifications and fairly new standards are particularly tricky.  There are some less-than-sophisticated, eager newbies making a sophomoric choices on how to promote their brand.  One group says "E-Stewards is too expensive", another says "R2 poisons children..."  Neither e-scrap recycling company is thinking about service to customers.   Here is how e-waste recycling companies need to market themselves strategically (from a nice essay by Lars Perner, Ph.D at USC Marshall, CA).
The 4 Ps—product, place (distribution), promotion, and price—represent the variables that are within the control of the firm (at least in the medium to long run). In contrast, the firm is faced with uncertainty from the environment.
The 4Ps address the P4s (pentium 4, off lease category).  Perner's example tells how declining use of railroads is not going to be changed either by cutting cost of railroads or by negatively attacking UPS trucks.  Purchases are increasingly from wholesale warehouses to individual consumers, and people don't plan a "trip to the big city" to buy at big box stores as much as they used to.  If railroads try to scare people out of using light trucking, they are completely wasting their time and advertising (actually, the "buy local" campaigns in Vermont should beware the thin ice in this analogy).  The railroads at one time were big enough and profitable enough to have entered the highway trucking industry... but they chose not to compete there.  This is analagous to a P4 off lease e-waste company attacking the practices of a residential TV recycler, or a brand name OEM attacking refilled ink cartridges in a Chinese "good enough market" which cannot otherwise afford a 20 dollar ink cartridge.  Eliminate UPS and railroad use goes down... eliminate ink cartridges, and printers become less attractive.

If you provide e-waste recycling services well, and you have a certification of your transparent practices, and you sign a contract that guarantees your performance, and you do it affordably -- guess what?  You don't need to link to a small NGO's exaggerated photos of children and try to pin them on your e-waste recycling competition.  In fact, you can sell even better to the export markets, using the same principles.  Businesspeople overseas appreciate the same transparency and value.  Good Service + Good Product = Money.

If you don't perform basic services, quality, and communication well, and your e-scrap competitor exports more profitably than you can shred them, then he/she will eat your lunch.   In the next decade you will find it more and more difficult to make Simon Lin of Wistron look like a Scrap Boy in Agbogbloshie.  I saw many people attack SAMR (Supreme Computer Recycling) for their export practices when the fact was that they were providing really, really good logistics and services, and that had more to do with their success than their sales of dung-covered monitors to factory refurbishers.

The marketplace is pretty sophisticated, in the end.  People who ship lousy product tend to get fewer buyers.  People who exaggerate their value tend to get the CBS 60 Minutes or RIP treatment.  And saving energy and mining and other "lifecycle" costs tends to reflect in price.... Sometimes or often, cheaper is most sustainable, as sales of efficient cars are explaining to us.  Our species has evolved to trust price as an indicator, and nature didn't give us that evolution in order to commit earth-suicide.

Often stuff is cheaper because it's just made more efficiently.  Very, very often, the cheaper the product, the less energy it has consumed.   If you try to manufacture a CPU chip in your basement, it may be "local transportation", but you will produce an awful lot of carbon and pollution compared to the scale of CPU chip manufacturing in Taiwan.  If on the other hand, you cut a CPU chip off a a circuit board and put it into reuse, you will out-compete the Taiwanese.  THAT is what happens in Guiyu, and taking your eyes off the product is not the best way to address the byproduct.
Commoditization is the process by which goods that have economic value and are distinguishable in terms of attributes (uniqueness or brand) end up becoming simple commodities in the eyes of the market or consumers. It is the movement of a market from differentiated to undifferentiated price competition and from monopolistic to perfect competition. [wikipedia 2012.03.10]
Is Commoditization happening to "waste services"?  Or is it just happening to commodities that were commodities to begin with?   If the latter, expect it to be swift.

In the end, why attack someone else's certification?  The value of the CERTIFICATION is being willing to have a non-biased professional third party verify that you are doing what you say.  Civil law contracts and enforceable warranty are an even more powerful tool.  The problem is that they are boring.  That's my challenge in this blog, to make it interesting.  Humor, photos, creative analogies, and yes - a little bit of cage rattling - is my way of distracting people away from the insanity of prohibition.

The purpose of certification is to "out the liars, not to debate the outliers".   But spicing these up with pictures of children is going to lead to marketing fatigue, poster child syndrome, recyclers should pick their battles and attack fakes and phonies, not remakes and used telephones.

postscript:  I'd rather be negotiating with someone willing to compromise and listen, and to have improving standards.  But the Geeks of Color are getting unfairly judged, and reuseable goods are being obsoleted.  So an ad hominem campaign which results in commoditization makes sense.   If my friends overseas are being attacked by partisans, then a separate peace, where consumers become more indifferent as a result of competing attacks, may make the most sense.  When the perfect becomes the enemy of the good, it should assess the military assets of not just the good, but the so-so as well.

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