On the subject of raw materials policy, it has become popular to refer to manufacturer takeback as "cradle to cradle".
The manufacturer is more like a high school teacher than it is a midwife.
The cradle of materials is the mine, or the forest, where the material is harvested. The harvesting of raw materials is so completely impactful, polluting, and devastating, that no matter how high the yields, it cannot be done in proximity to cities. Copper mines in Chile must bus employees from 30 miles away because the drinking water in all the adjoining towns is poisoned by the mining. Even secondary, or recycled, metal refining is toxic. While less toxic by far than primary mining and nuking ores with cyanide, all the secondary copper smelters in the USA (7 as of 1960) were closed down because the pollution was too much for residential cohabitation.
The cradle, the maternity ward of raw materials, is where the trees are cut down to either produce cellulose fiber, or to make room for heavy armament bulldozers which will scrap bare the mountaintop.
Sending copper, or plastic polymers, or other raw materials too far back is "negative yardage". You can turn HDPE plastics into petroleum, but you wouldn't want to, because the petroleum then has to be re-refined back upfield into HDPE. You don't want to send pure electric grade copper back to a blister-copper smelter. You don't want to grind a working PC power supply back into steel to be made back into a PC power supply.
So, "cradle to cradle" in one context means back to the one-yard-line in a football game, so you don't necessarily want to go back to the cradle. But if you did, for the record, the "cradle" is where the raw material is harvested from the earth.
The manufacturer in USA-Speak is a marketer who puts their brand on the face of equipment assembled from 18 other products. Dell is closer to Walmart than it is to Palmer and Dodge copper mining. Dell is probably closer to Walmart in its practices than it is to Intel or Corsair. That is not a criticism (I think Walmart is a consumer union on steroids).
I guess the landfill or incinerator really is the grave. Except that USGS.gov says that based on the economically harvestable raw materials (by economically, far enough away from people for society to accept the environmental costs of the mining) identified for mining, that landfills will be richer in copper and other metals than viable mines in 50 years. So for those of you who insist on throwing your computer away, Recycling Man says "see you later."
Fair Trade "E-waste" Recycling = USA JOBS!
This weekend in Tucson, Arizona, our women partners, Las Chicas Bravas, are holding a TV and computer recycling "event". The ladies will supervise the unloading of TVs from cars to bring back into Mexico, to be repaired and resold if possible, in a "Cash for Clunkers" program sponsored by EPA and Mexico's EPA (SEMARAT). The ones that are not worth reusing will be torn down into copper, plastic, steel, aluminum and lead silica for proper recycling.
"Blackbird singing in the dead of the night, take these broken wings and learn to fly..."
The Mexico facility is in an OECD country, and we are going to certify the factory to R2 standards. Always expecting criticism, I was not surprised to hear the argument that exporting electronics for legitimate repair and reuse is "exporting jobs" from the USA. Jim Puckett made the point to me at the EScrap show in Orlando, and now I heard it at NERC, so let's look at the facts.
At Good Point Recycling, our export-for-reuse program increases jobs, and the quality of jobs, in Middlebury. Inspecting each monitor to see if it can be reused, and testing it for functional parts, creates a better and higher paid job than leaving it with the rest to be torn apart.
I do admit that if anyone in the USA is actually reassembling and refurbishing monitors and repairing them in the USA, that would create more jobs than Good Point is creating. But no one is doing that! (Video Display Corp. of Tucker GA and Lexington KY used to, now they only do it for specialized CRTs, not ordinary computer monitors).
Instead, the "recycling jobs for America" argument is being made on behalf of "crush-shred-recycle" operations, big black boxes which grind the monitors up into plastic, silica and lead. Fair Trade Recycling works arm-in-arm and supports this practice, because we can only export for reuse 22.5% of the product. By exporting it, we lower our margins by 50%, which allows us to get more product for domestic recycling. Good Point Recycling also uses manual disassembly of the CRT monitors, either at our own warehouse or at ERI in Garnder (a BAN supporting "eSteward" which, unfortunately, will not allow us to export their monitors for reuse - but they are a good place to send our bad 78%).
Big crushing machines don't employ many Americans to begin with, but my point is that reuse creates jobs side-by-side with domestic processing. We hire staff to screen and inspect each monitor, create inventory, market, re-price, and test for non-functional CRTs. Taking 22% out of the stack of bad monitors and TVs employs 80% more people per ton than leaving the 22% in with the others to be smashed apart. (Warning, this video is noisy)
In Vermont, the money we bring in by properly selling the good monitors also helps us pay people more than we could with a "no intact unit" export policy. It also goes towards lower fees for our clients, which brings in more material -- probably exceeding the 22% we divert to reuse. The lower the costs, the more we bring in of ALL e-waste... the folks who take stuff apart get more stuff to take apart, and the employees who test for repair specifications get more stuff to sort, inspect, test, record and ship.
Reuse and repair is a win-win scenario when it comes to jobs. It creates more and better jobs in both the USA and in the overseas "BSFs" (Big Secret Factories). Japan, Korea, Taiwan, Singapore and south China got their economies started with refurbishment and re-manufacturing, and we sell a lot more American cars and trucks to those countries than we would have by keeping them "barefoot and pregnant".
Again, if Video Display Corp or a USA TV repair factory wants to criticize us for "exporting American jobs", I will listen. But when I hear it from companies who don't repair the CRTs, I got to say it's a pretty lame argument, and I'm quite sure we create more and better jobs sorting and screening electronics for refurbishment than we would create lumping it all into a big demanufacturing machine.
The companies which specialize in tearing down the 78% bad need to partner up with the companies that reuse and repair surplus electronics. Our common enemies are hire just enough illegals to fill sea containers of unscreened junk and TAR. Three down, four to go. You guys know who you are.
Creating jobs for Mexicans in Mexico is good. Reuse is good. Let's drop our buckets where they are and lift them as we climb.
aquí viene el sol ! Here is a link to a cool recycling stop-motion film made in Peru. Not good enough quality to embed though. So here instead is Here Comes the Sun played in Spain.
"Blackbird singing in the dead of the night, take these broken wings and learn to fly..."
The Mexico facility is in an OECD country, and we are going to certify the factory to R2 standards. Always expecting criticism, I was not surprised to hear the argument that exporting electronics for legitimate repair and reuse is "exporting jobs" from the USA. Jim Puckett made the point to me at the EScrap show in Orlando, and now I heard it at NERC, so let's look at the facts.
At Good Point Recycling, our export-for-reuse program increases jobs, and the quality of jobs, in Middlebury. Inspecting each monitor to see if it can be reused, and testing it for functional parts, creates a better and higher paid job than leaving it with the rest to be torn apart.
I do admit that if anyone in the USA is actually reassembling and refurbishing monitors and repairing them in the USA, that would create more jobs than Good Point is creating. But no one is doing that! (Video Display Corp. of Tucker GA and Lexington KY used to, now they only do it for specialized CRTs, not ordinary computer monitors).
Instead, the "recycling jobs for America" argument is being made on behalf of "crush-shred-recycle" operations, big black boxes which grind the monitors up into plastic, silica and lead. Fair Trade Recycling works arm-in-arm and supports this practice, because we can only export for reuse 22.5% of the product. By exporting it, we lower our margins by 50%, which allows us to get more product for domestic recycling. Good Point Recycling also uses manual disassembly of the CRT monitors, either at our own warehouse or at ERI in Garnder (a BAN supporting "eSteward" which, unfortunately, will not allow us to export their monitors for reuse - but they are a good place to send our bad 78%).
Big crushing machines don't employ many Americans to begin with, but my point is that reuse creates jobs side-by-side with domestic processing. We hire staff to screen and inspect each monitor, create inventory, market, re-price, and test for non-functional CRTs. Taking 22% out of the stack of bad monitors and TVs employs 80% more people per ton than leaving the 22% in with the others to be smashed apart. (Warning, this video is noisy)
In Vermont, the money we bring in by properly selling the good monitors also helps us pay people more than we could with a "no intact unit" export policy. It also goes towards lower fees for our clients, which brings in more material -- probably exceeding the 22% we divert to reuse. The lower the costs, the more we bring in of ALL e-waste... the folks who take stuff apart get more stuff to take apart, and the employees who test for repair specifications get more stuff to sort, inspect, test, record and ship.
Reuse and repair is a win-win scenario when it comes to jobs. It creates more and better jobs in both the USA and in the overseas "BSFs" (Big Secret Factories). Japan, Korea, Taiwan, Singapore and south China got their economies started with refurbishment and re-manufacturing, and we sell a lot more American cars and trucks to those countries than we would have by keeping them "barefoot and pregnant".
Again, if Video Display Corp or a USA TV repair factory wants to criticize us for "exporting American jobs", I will listen. But when I hear it from companies who don't repair the CRTs, I got to say it's a pretty lame argument, and I'm quite sure we create more and better jobs sorting and screening electronics for refurbishment than we would create lumping it all into a big demanufacturing machine.
The companies which specialize in tearing down the 78% bad need to partner up with the companies that reuse and repair surplus electronics. Our common enemies are hire just enough illegals to fill sea containers of unscreened junk and TAR. Three down, four to go. You guys know who you are.
Creating jobs for Mexicans in Mexico is good. Reuse is good. Let's drop our buckets where they are and lift them as we climb.
aquí viene el sol ! Here is a link to a cool recycling stop-motion film made in Peru. Not good enough quality to embed though. So here instead is Here Comes the Sun played in Spain.
Pre Vetting Your E-Waste Recycler
Certification and EPA enforcement may turn out to be the holy rain that washes away the sins of the recycling industry and brings the world into happy and holy compliance with the environment.
In the meantime, as a former environmental regulatory official, let me offer a couple of mud boots.
1) Civil Law: Get your e-waste recycler under contract. Better yet, use an existing state contract, enforceable by your state Attorney General, and incorporate your contracts by reference. Better than that, get your state officials to hire WR3A to help them write their state contract.
2) Due Diligence: We recyclers get 40 page RFPs (request for proposals) to do one day events on a Saturday at the parking lot of the suburban such and such. It is a lot of work to fill out a whole proposal for a one-day event, and a lot of work for the Suburban Recycling Coordinator to write and actually vet such a document. So here is a reminder of a tried and true formula for culling the herd of ewaste service providers:
- CRT Glass Test. Bad CRTs remain the bulk of the weight, the bulk of the cost, and the bulk of the toxics in all used electronics. The wicked savings by NOT hiring a guy to NOT inspect the monitor or TV and to NOT pack it carefully to reduct damage and NOT get environmental insurance to NOT properly break and recycle CRT glass and NOT transport it to a lead silica furnace, usually at least a quarter the way around the globe and often halfway... Well, the savings are wicked.
- Printed Circuit Board Test. If you claim that all the PCs are "functional" and "repairable", then you didn't need to hire anyone to disassemble the PCs and remove the boards. Ca-ching.
- Employees per ton. Not hiring people to inspect and remove the non-repairable and obsolete equipment? No demanufacturing? No department of labor worries.
- Sea Containers per ton. Baled, demanufactured, clean scrap takes a LOT less space than loose used electronics. And obviously, the less bad electronics you remove from the sea containers, the more sea containers you need.
WR3A now has a vetting program (click "find a recycler") which automates these tests, and with funding we will be able to check the data via at least 4 sources, one for each "test". Our experience so far? Falsely submitted data shows up funny on the scattergram, and at least one external source "outs" the liars... but usually the companies we are pretty sure are exporting everything don't click to pay $350. They see where this is going.
If we get the "Certification Scholarship" underway, we will have tens of thousands of dollars to pay auditors to get even deeper into the walls of the recyclers. The 4 tests might be retired. But until then, remember to ask "where's the beef?" Simple questions are best left answered.
More to come. Stay tuned.
CRTGlassTest_RetroworksDueDiligence
In the meantime, as a former environmental regulatory official, let me offer a couple of mud boots.
1) Civil Law: Get your e-waste recycler under contract. Better yet, use an existing state contract, enforceable by your state Attorney General, and incorporate your contracts by reference. Better than that, get your state officials to hire WR3A to help them write their state contract.
2) Due Diligence: We recyclers get 40 page RFPs (request for proposals) to do one day events on a Saturday at the parking lot of the suburban such and such. It is a lot of work to fill out a whole proposal for a one-day event, and a lot of work for the Suburban Recycling Coordinator to write and actually vet such a document. So here is a reminder of a tried and true formula for culling the herd of ewaste service providers:
- CRT Glass Test. Bad CRTs remain the bulk of the weight, the bulk of the cost, and the bulk of the toxics in all used electronics. The wicked savings by NOT hiring a guy to NOT inspect the monitor or TV and to NOT pack it carefully to reduct damage and NOT get environmental insurance to NOT properly break and recycle CRT glass and NOT transport it to a lead silica furnace, usually at least a quarter the way around the globe and often halfway... Well, the savings are wicked.
- Printed Circuit Board Test. If you claim that all the PCs are "functional" and "repairable", then you didn't need to hire anyone to disassemble the PCs and remove the boards. Ca-ching.
- Employees per ton. Not hiring people to inspect and remove the non-repairable and obsolete equipment? No demanufacturing? No department of labor worries.
- Sea Containers per ton. Baled, demanufactured, clean scrap takes a LOT less space than loose used electronics. And obviously, the less bad electronics you remove from the sea containers, the more sea containers you need.
WR3A now has a vetting program (click "find a recycler") which automates these tests, and with funding we will be able to check the data via at least 4 sources, one for each "test". Our experience so far? Falsely submitted data shows up funny on the scattergram, and at least one external source "outs" the liars... but usually the companies we are pretty sure are exporting everything don't click to pay $350. They see where this is going.
If we get the "Certification Scholarship" underway, we will have tens of thousands of dollars to pay auditors to get even deeper into the walls of the recyclers. The 4 tests might be retired. But until then, remember to ask "where's the beef?" Simple questions are best left answered.
More to come. Stay tuned.
CRTGlassTest_RetroworksDueDiligence
WR3A Surveys Returned Peace Corps Volunteers (RPCVs) on "E-Waste"
Here is a survey WR3A has posted for Returned Peace Corps Volunteers, looking for their insights on the "E-Waste" vs. "Digital Divide" debate.
Click Here to take survey
We are collecting this through Peace Corps volunteer links at Fair Trade Recycling (Facebook), Twitter, LinkedIn, and other online RPCV communities.
Survey results will be published here over the course of the next few months.
Click Here to take survey
We are collecting this through Peace Corps volunteer links at Fair Trade Recycling (Facebook), Twitter, LinkedIn, and other online RPCV communities.
Survey results will be published here over the course of the next few months.
Jarkarta Post: fair and balanced reporting
Article explaining both sides of the "e-waste", "reuse", "repair" and "dumping" story in today's Jakarta Post
E-waste the new gold in the city of scattered garbage
The Jakarta Post , Jakarta | Fri, 10/23/2009 12:22 PM | City
In a city where administration officials can only daydream about a sophisticated waste management system, one man’s pile of electronics waste, or e-waste, might be another’s gold mine.
"I guess that's just Jakarta. You can sell anything," said Wellman H.S.T, a scrap collector who operates in Tebet, South Jakarta.
Wellman has been involved in the scrap buying and selling business for six months. He said he usually earned between Rp 6 million (US$638) and Rp 15 million a month.
Across from the small pick up truck in which he sat was a small "office", where different kinds of garbage were weighed and sorted according to their materials.
Sacks of plastic bottles and piles of flattened cardboard boxes filled the back of the truck while more waited in the "office".
Sometimes, amid the piles of bottles and cardboards, one could discover a broken computer mouse, scratched compact discs, and even more sophisticated electronics such as laptops.
"The electronics are dissected into several parts, such as plastic and copper, then those parts go to different places," Wellman said.
The plastic parts, for example, usually went to a factory in Durensawit, East Jakarta, where they would be recycled into plastic grains that can be molded into new things.
"The metal parts usually go to another factory in Pulogadung *East Jakarta*," he said.
Wellman's business is just the first step in the lengthy recycle process for the city's electronics.
The whole journey proves that in the capital even the most allegedly useless, or even hazardous, things, are marketable.
At a dump site not far from Wellman's truck, scavengers were busy unloading the day's picks, which they collected from the houses in the neighborhood.
"Sometimes the cart people *second-hand items collectors* come to look for things that they can sell again," a garbage man said..
House owners often call them to come to their houses when they have goods that they no longer use, including electronic equipments.
Occasionally, they also look for those goods in garbage bins or dump sites.
They are then likely to offer those goods to others who can profit from them, such as the vendors at a flea market in the Jatinegara area, East Jakarta.
In Jatinegara, one can find the most bizarre things sold by these vendors, from broken speakers, ancient joysticks for video games, and other obscure electronic components.
"Sometimes I buy things from the cart people, or sometimes people come here to sell their used goods," said Arifin, a vendor.
That day he displayed a broken computer mouse, a dusty doll, and old pairs of shoes.
When asked about whether the mouse was still working, he said he wasn't sure.
"When people sell me electronics, I ask them if the goods are still working or not and I believe what they say," he said.
"When a buyer asks me if the goods are still working or not, I just tell them I don't know."
The mouse would usually be sold for Rp 5,000, if people do not bargain, he said.
Arifin said some people bought broken electronic wares, to use the components to fix other electronics.
"There's a man in Bekasi who specializes in buying broken television sets to repair them and sell those repaired units to others."
Not all vendors paid scant attention to the functioning status of the electronic goods.
Abdul Latief, who sells his wares near Arifin's spot, said that all his goods - which included printers and land telephones, were still usable.
"I always test them... I even check whether the printers can still connect to computers properly," he said.
A few meters from Arifin and Abdul Latief were rows of vendors selling used cellular phones.
Unlike the sets sold in most vendors in trade centers such as the ITC Mangga Dua, West Jakarta, or Roxy, West Jakarta, these sets were stripped to the essentials without any packaging or even charging units.
Buying cellular phones in that condition might be a risky step to take, but still, many flocked to these roadside vendors.
"Why would anyone go to Roxy to buy or sell their cellular phones? It's too far, and unlike here, the prices are higher and the trade is less flexible," said Irfan Sofyan, a cellular phone vendor.
Even when the cellular phones are broken, some people will still find a use for them, Arifin said.
"Some people use them to learn how to repair broken phones."
Electronic goods that fail to end up in flea markets will likely be dissected and end up in places like Wellman's rusty scale to be priced before being taken to the recycling factories.
Thus, everyone in the electronic waste chain benefits, if not necessarily from gold taken from circuit boards.
"Almost nothing is actually thrown away," Wellman said.
Maryanto, from the non-profit organization Friends of the Environment, warned that the city's methods of re-using and recycling were unhealthy.
"The cart people and others in the informal sector who are working in the field *of selling garbage* base their choices *on what to keep or throw away* on the value of the goods, not the level of hazard that might come with those goods," he said. (dis)
Fuji Vs Jazz Camera: Judiciating Obsolescence
I couldn't find my references to this on the blog search, so I thought I'd post again what is perhaps the clearest possible case of "Obsolescence in Hindsight". Fuji makes a "disposable camera". Environmentalists complain that it is making "waste". But the waste never shows up in the landfill, because an entrepreneur sticks new film and lenses in the cameras and resells them for millions of dollars. Fuji
The USA Supreme Court, as well as international courts, were pulled in to answer the following question:
The money Fuji (and other "friends") spent chasing this to the Supreme Court (to lose) would be funny except that they won in other countries, and in fact they won in the USA Court of Appeals for the Federal Circuit.
What's next, a EULA license to use a wrench? "before opening the package with this hammer, check the box that you agree you won't resell the hammer"?
Spooky.
Refurbishing and Recycling should go together, complement each other. Can't we all get along?
The USA Supreme Court, as well as international courts, were pulled in to answer the following question:
QUESTION PRESENTED
Whether it is a permissible "repair" of a patented invention to refurbish it once the invention has completed its function and been voluntarily destroyed.
In the Supreme Court of the United States
No. 01-1376
FUJI PHOTO FILM CO., LTD., CROSS-PETITIONER
v.
JAZZ PHOTO CORPORATION, ET AL.
If someone invents something disposable, and you don't dispose of it, have you violated a patent? If you fix your Ford, can Ford sue you for copyright infringement if it was "not Ford's intent" that you fix it?The money Fuji (and other "friends") spent chasing this to the Supreme Court (to lose) would be funny except that they won in other countries, and in fact they won in the USA Court of Appeals for the Federal Circuit.
What's next, a EULA license to use a wrench? "before opening the package with this hammer, check the box that you agree you won't resell the hammer"?
Spooky.
Refurbishing and Recycling should go together, complement each other. Can't we all get along?
| From Mexico 2009 May |
| From Big Secret Monitor Factories - Legitimate Reuse vs. "E-waste" |
EWASTE R2 ESTEWARD SCHOLARSHIP
You have a recycling company, you really want to be accredited, you want people to have 3rd Party Assurance that you are "doing the right thing".
Today, you have two choices, both of which you can file under "Guinea Pig". You pay approximately about $50k for certification (to be renewed annually?) for BAN.org's E-Steward Certification. Or you pay $35Kish for ISRI's R2 (EPA Standard) Certification.
Either certification costs you a certified, ratified, undeniable, most reliable, professional 3rd Party certifier consultant, who promises you anonymity (which I don't doubt).
I guess, for all I know, there are 200 certifications which have taken place, and the companies all failed, and the failure is confidential. Like the flight of a female mosquito, we hear nothing.
More likely, other companies are like mine, and A) don't want to be an "early adapter" for a program with unproven payback, and B) don't have $35-$50k in their hip pockets. We'd all like to have a snapshot next to our E-Waste Certificate Award. But the big egos will have to till the soil.
My initial response is that our company, Good Point Recycling, would be the 16th company to start certification. That's based on our competition in the field, our ability to leverage value (by delivering material TO certified companies), and the uncertainty over whether this will all fare better than IAER Certification back in 2005. Oh, and the risk they won't certify us, but the cost is still due.
Here is my proposal: A competitive Certification Scholarship. WR3A (if I can get the Board aboard) could announce that it will buy 20 certifications for 20 companies willing to go through our "vetting" or Pre-Verification Audit.
That audit takes the 20% of info that exposes 80% of the bad actors, the "poor man's audit".
1) CRT Glass Test
2) Printed Circuit Board Test
3) Employees per Ton
4) Sea Containers per Year
These four data, along with the denominator of total annual tonnage, pretty much tell the story to any spittin' cowboy handling consumer ewaste. There are hard drive certification programs (like NAID) and there are ISOs for health and environmental measurement, but nothing beats the simplicity of calling a recyclers purported end market ("Hello, Mr. Dlubak?") and asking whether someone did in fact deliver 40% of their annual tonnage for CRT recycling ("That rat bastard said WHAT???!"). You can take the test online via "find a recycler" at WR3A.org
Now, for full certification scholarship, a company will have to take this test for $350 to pre-qualify for the scholarship payment of the full R2/RIOS or BAN E-Steward Audit. We have invited Jerry Powell's crew at EScrap to vet the vetting process.
If we get 20 companies to sign up, one of two things will happen. Either a big pocketed sponsor like ISRI or Sony or MRM will pay a portion of the certification for those companies, or they will get a value just by bulking up. If you are a "certification agent" and you have a chance to bid on 20 companies audits at once, you are a fool not to discount them by 50%. The simple coop principle may bring down the cost by itself.
If the OEMs pay, they have certain added advantages. The marketing value of sponsoring the Scholarships, the ability to put clauses for "most favored nation" (if you accept our sponsorship, you must accept our material at the best available price at your facility), the ability to push the auditors (who also do ISO audits for all your other subcontractors) for even further value.
I have given two weeks of my time to pitch this privately, but I'm not the best pitchman. The idea is sound. If 20 companies pass the pre-vetting process at WR3A.org, we will steamroll this ourselves. But the best ideas should be available to all, so if another shop jumps on the idea...
Well, one in a million ideas in a 7 billion person world, there are thousands of em.
E-waste Recycling Policy
I like "Product Stewardship" as a concept, and I like the folks promoting it. But some of them (ahem, I've heard) have a fatwah out on me. When legislation gets momentum and is close to passage, there are usually a few of us who have carried the ball and being this close to the end zone, success becomes paramount.
As someone who has invested his kids college fund into trucks and balers and demanufacturing equipment, I also have carried a ball and have self-interest in the topic (though probably passage of S.77 in Vermont would be survivable now that I've been able to invest in new brand management systems). But while we can roll with S.77 and other manufacturer-takeback bills (can't beat em, join em) I think anyone can see that there are some myths being promoted about Product Stewardship, and that it is in the end a municipal funding bill. I can be Johnny Damon batting leadoff for the Yankees in that game. A new team, a practical measure. But let me keep my long hair when it comes to Product Stewardship as an "environmental paradigm". It's being promoted on some myths that need to go on record for what they are.
What are the myths? Example: When I hear people say that I am getting thousands of cassette tape players because of unenlightened engineering, I am always dumbfounded. What exactly could Sanyo have done differently when they were designing these three decades ago? They work fine, but they are "buggy whips", obsoleted by the CD media. An export buyer wants them only for the copper and maybe the plastic, and exporting them "for reuse" is a lie.
The same export market - where internet is dial-up at best - loves CD Players. I am getting lots of CD players, too. They look to the sorting staff a lot like the obsolete VHS and cassette tape players. But if we export the CD players, and we mix in cassette players, we may be transshipping waste ("TAR" or Toxics Along for the Ride). But, if we destroy CD players we are sabotaging reuse hierarchy, we are creating waste, and we are telling most of the world (those still waiting for broadband) to "eat cake".
The electronics reuse, recycling, and waste business.... its about the media. Cassette, CD, MP3, which is accessible and to who. In Africa, those with broadband access burn the music and videos onto CDs, which are bought used and played on used TVs and CD stereos imported from Europe. But when I explain this, some eyes gloss over... it's really difficult to be a good communicator when you are explaining the key differences between two gray electronic boxes in a gaylord.
Cassette and VHS: Export Bad (not for reuse)
CD and DVD: Export Good (for reuse - at least for now)
Leapfrog to Pandora.com = Let them eat cake
But putting aside the mundane free market trivia (DVD players have less copper than VHS players but sold in the 2nd Quarter 2009 for 356% more), what about advocacy, feelings, passion and mission? The earth is cooking, gorillas are dying, we have to do something.
Perhaps my real frustration is that "I sound like my parents" (whoa, my conservative republican dad was listening to Cat Stevens play "Father and Son" - cue to video below if you have internet bandwidth, insert CD if you are in a developing country, or insert cassette if you are a Luddite).
"When I was your age...." I was in the "non-profit" side (an obsolete philosophy itself, as demonstrated by Kiva.org), championing reform of the General Mining Act of 1872, since High School. Before I left (for Carleton College, where I'd study International Relations), I typed a letter (white out and all) to Arkansas Senator Dale Bumpers, asking that the Bureau of Land Management and raw material policy put conservation at the forefront, and that recycling should be the raw material supply chain with subsidies, not virgin material extraction. I learned a decade later that my letter had an effect on Senator Bumpers, who became one of the only advocates for reform of the General Mining Act of 1872.
I continued to fight against raw material subsidies, especially with Bush Administration cronies Lynn Scarlett and Jack Abramoff. I seemed to get traction by publishing the Retroworks Mining Factsheet in 2003. But I could not even get National Recycling Coalition to discuss mining and forestry. Grrrr!
Having run the ball 99 yards, I felt like the recycling community was walking off the field, saying "It's been 135+ years, it's hopeless". Right when the mining reform bill has passed the House of Representatives! Right when it's in Senate Committee! Aaaarrrrrrrrrgghhh!!!!!!!!!!
This reform is very close to passage, and is being promoted in part as a federal revenues bill (royalties on mining). That's kind of like Electronics Product Stewardship, which is actually going to pass based on municipal and state budget demands. So really, really - I identify with the folks pushing S.77.
I am limited by running 2 businesses and leading 2 nonprofits and need effective advocates like "Computer Takeback" campaigners to put the whole lifecycle chain into focus. Brand names, manufacturing, assembly, media production, and product marketing are much more complex than raw material management.
Odd how much gray hair is on both sides of the aisle. I hope some future Carleton College or Middlebury College or Williams or Anherst or Rice or MIT student is able to cut across the paradigms and connect media to mining and international supply and demand chain reform. I hear a lot of people say they don't know what I'm talking about, that I'm a poor communicator. But I keep writing, hoping some reporter or student comes along and sees that the Free Market makes money. That involves conservation. But if you give the mining away for free, in 1872 dollars, you enable all kinds of waste. Stewarding the Product is nice end-of-pipe management, and I don't blame municipalities for grabbing the revenue. So I can back a bill while criticizing the philosophy, but am happier doing so if I can get some General Mining Act yardage in return. We are closer to the goal line on Federal mining legislation than we are on ewaste export, e-waste stewardship financing, or any other solution.
We need fresh legs. 1872 to 1972..
Reuse, RE-use, RE: ReuseAlliance.org
Just on my way back from the "Reuse Summit" at Devens Massachusetts, where WR3A.org sponsored a dinner of reuse advocates. Reuse was a track of the conference, held by Grass Roots Recycling Network, generally a "Zero Waste" group of hard-core former National Recycling Coalition members. It was great to catch up with folks like Jack De Bell, Ric Anthony, and the CRRA California crowd. (Didn't get to talk to Julie Muir, buy Hiii!)
Anyway, Good Point Recycling sponsored the dinner conversation in the name of WR3A, it was moderated by MaryEllen Etienne. About 30 attendees, most of them well known in the recycling field.
I shared the challenges of the World Reuse, Repair and Recycling Association, which at certain points of fantasy aspired to represent all types of reuse. We wound up specializing in electronics, and there, mostly as a speed bump on the road to stopping all reuse exports.
We got traction by publishing useful data on one page, the "Mining Factsheet" of 2003 (mostly designed to point out that if exports are curtailed so much that the products we buy result in mining, then the perfect has become the enemy of the good). With the hits on that page, we attracted people with a similar mission. The first grant came three years later. Two weeks ago, to be precise. I am working on a press release. It's fantastic. Stay tuned.
The temptation is to start a directory of all reuse businesses. I think Craigslist has that covered. They can go to secondary research, from Dept of Commerce and places like Rochester Institute of Technology (Dr. Nasr is a remanufacturing guru there), and try to distill a "Factsheet". If the facts draw people, they have an audience ("Hey! That describes MY business!") and businesses will link to it or refer people to it. That can become a mailing list.
We'll stay in touch. We have revamped the Certification Tool page at WR3A.org. More on that, too, will come later.
Anyway, Good Point Recycling sponsored the dinner conversation in the name of WR3A, it was moderated by MaryEllen Etienne. About 30 attendees, most of them well known in the recycling field.
I shared the challenges of the World Reuse, Repair and Recycling Association, which at certain points of fantasy aspired to represent all types of reuse. We wound up specializing in electronics, and there, mostly as a speed bump on the road to stopping all reuse exports.
We got traction by publishing useful data on one page, the "Mining Factsheet" of 2003 (mostly designed to point out that if exports are curtailed so much that the products we buy result in mining, then the perfect has become the enemy of the good). With the hits on that page, we attracted people with a similar mission. The first grant came three years later. Two weeks ago, to be precise. I am working on a press release. It's fantastic. Stay tuned.
The temptation is to start a directory of all reuse businesses. I think Craigslist has that covered. They can go to secondary research, from Dept of Commerce and places like Rochester Institute of Technology (Dr. Nasr is a remanufacturing guru there), and try to distill a "Factsheet". If the facts draw people, they have an audience ("Hey! That describes MY business!") and businesses will link to it or refer people to it. That can become a mailing list.
We'll stay in touch. We have revamped the Certification Tool page at WR3A.org. More on that, too, will come later.
Grandpa raised a recycling man
My grandfather, Clarence Fisher, was a wry old Ozarks subsistence-farmer who grew up cutting cedar saplings to sell as fenceposts to other poor farmers.
He built just about every house he ever lived in, and since he had to live in it, he did it right, dad burn it. He learned by doing, and became quite a good engineer, taking major roles in building a good portion of the College of the Ozarks, aka "Hard Work U".
I remember, when I visited for weeks over the summers, how much time he spent repairing his own cars. Over the years he'd fight and puzzle over how they made the spark plugs harder and harder to get to, to the point where he'd have to buy $200 in special equipment just to do the points or replace the plugs. He was trying to teach me how to repair the engine, as he'd trained his own son, but was getting curve balls as the cars got newer.
Later, when I began travelling the globe, I learned how Africans have preference for certain older cars, because they could maintain them. I read about the same thing in Cuba.
When Grandpa Fisher passed away, at 91 years old, he left no debt, and most probably a bigger inheritance than I will leave, with my fancy MBA. He made things last, and he taught me that people without a college degree are smarter than we might think they are. When I came back from Peace Corps in Cameroon, he and I had more in common than we had before I left. Only then had I killed my own chicken before I ate it.
An infamous Taney County politician, a known rascal, running for a judgeship saw my Grandpa on the street, and knowing Grandpa was an influential and regular churchgoer (who helped build the Church as a volunteer architect, by the way) came up to him in front of some other people, and figured if he could show he was in good with Clarence Fisher, he might pick up a few more votes.
He put his arm around the shoulder of my Grandpa, and said in a voice loud enough for all to hear, that he and Clarence Fisher had something important in common:
"Clarence, you and I both want the same thing. At the end of our lives, we want a place to rejoice with the Lord our Father in heaven."
Without skipping a beat, my Grandpa replied,
"Pete, you and I both know, if you was to die today, you'd split hell wide open. And I reckon I'd be there too. For killing you."
Well, Judge Pete lived, and if I'm sure of anything, nothing is more certain to me than that Grandpa didn't wind up there. Nor Huck Finn, neither.
He built just about every house he ever lived in, and since he had to live in it, he did it right, dad burn it. He learned by doing, and became quite a good engineer, taking major roles in building a good portion of the College of the Ozarks, aka "Hard Work U".
I remember, when I visited for weeks over the summers, how much time he spent repairing his own cars. Over the years he'd fight and puzzle over how they made the spark plugs harder and harder to get to, to the point where he'd have to buy $200 in special equipment just to do the points or replace the plugs. He was trying to teach me how to repair the engine, as he'd trained his own son, but was getting curve balls as the cars got newer.
Later, when I began travelling the globe, I learned how Africans have preference for certain older cars, because they could maintain them. I read about the same thing in Cuba.
When Grandpa Fisher passed away, at 91 years old, he left no debt, and most probably a bigger inheritance than I will leave, with my fancy MBA. He made things last, and he taught me that people without a college degree are smarter than we might think they are. When I came back from Peace Corps in Cameroon, he and I had more in common than we had before I left. Only then had I killed my own chicken before I ate it.
An infamous Taney County politician, a known rascal, running for a judgeship saw my Grandpa on the street, and knowing Grandpa was an influential and regular churchgoer (who helped build the Church as a volunteer architect, by the way) came up to him in front of some other people, and figured if he could show he was in good with Clarence Fisher, he might pick up a few more votes.
He put his arm around the shoulder of my Grandpa, and said in a voice loud enough for all to hear, that he and Clarence Fisher had something important in common:
"Clarence, you and I both want the same thing. At the end of our lives, we want a place to rejoice with the Lord our Father in heaven."
Without skipping a beat, my Grandpa replied,
"Pete, you and I both know, if you was to die today, you'd split hell wide open. And I reckon I'd be there too. For killing you."
Well, Judge Pete lived, and if I'm sure of anything, nothing is more certain to me than that Grandpa didn't wind up there. Nor Huck Finn, neither.
OEM "obsolescence in hindsight" creates e-waste
I own a really nice HP Blackbird 002, a very high end gaming machine which I treated myself to for Christmas one year ago (not the full $5600 machine, but the #2-3K newegg version). I haven't had much luck with it, had to send it back for a power supply issue (it's about 75 lbs, ugh) after six months. This morning there is no power again, arrgh, no led light on the power supply, I eliminated possibilities of bad cable or current etc.
Then I googled around looking for repair advice on power supply issues, and found this "helpul" advice page for recyclers provided by Hewlett Packard "Product-End-of-Life Disassembly Instructions".
"This document is intended for end-of-life recyclers or treatment facilities. It provides the basic instructions for the disassembly of HP Products to remove components and materials requiring selective treatment, as defined by EU Directive 2002/96/EC, Waste Electrical and Electronic Equipment (WEEE)".
Ok, sounds legal.
Now, keeping in mind Friday's post about how a PC is composed of parts made by a dozen different electronics manufacturing companies, mostly overseas outsourcers, and how little a brand has to do with power supply, motherboard, chip, RAM, case, etc., explain these instructions for "proper" recycling:
"Using wire cutters, cut the clamp that secures the wires to the power supply cover"
"Using wire cutter, cut all cables connected to the PCA in the power supply"
Keep in mind, all of these cables have quick pinch and release connectors, shown in the diagram... but the recycler is instructed to cut them with wire cutters.
Then, get this:
"Cut 12 Capacitors from PCA,
as shown in Figure 7."
!!! Well, that's interesting !!!
In HP's defense, one likely issue they are trying to deal with in the power supply shown in the diagram is "fraudulent warranty" returns. Unscrupulous repairers may diagnose a power supply under warranty as "faulty" and then resell the (good) power supply. If HP is paying for a warranty replacement, they have every right to demand DOS (Destroy on Site).
However, this document is about WEEE. The implication is that if HP has anything to do with paying the recycling fee, HP can execute "obsolescence" or DOS requirements.
What is the likelihood that someone who gives me an HP Blackbird had a power supply problem? Based on my experience this year, plenty. The power supply should be tested for reuse, and if it's faulty, it may have had bad capacitors, which should be either replaced and recycled.
But what is the likelihood that all 12 of the the capacitors, including those on the motherboard, video cards, sound cards, etc. all failed? Virtually ZERO.
That means that this document is virtually 100% certain to be instructing the recycler to destroy over $2000 in parts and components. A cost to be passed down to the consumer, a lost job to the repairer and refurbisher, and a lost computer to someone who could not have afforded a brand new HP Blackbird 002.
Of course, any repairman in Egypt could tell you for 100% certain whether those capacitors were bad or not. They could tell you the likihood that the capacitor is bad without looking at the machine, just as soon as you told them the make, model, etc. of each component. They could tell me, on my Blackbird, which of the different component manufacturers they have had to replace capacitors for. But they will remove the capacitors with a soldering gun, not wire cutters, because they will replace those capacitors.
And a single HP Blackbird 002 is, coincidentally, the same value as an average year's wages in Egypt.
Now, contrast the instructions for "end of life" with HP's similar document for a product still under warranty, called "Troubleshooting Power Supply Issues". The pains they go through to make, extra, extra sure the power supply is indeed the problem! The emphasis on several other possible issues, the process of elimination you need to do before the power supply is deemed faulty! This is actually the more correct document - I know, because it is through this trial-and-error process that Good Point Recycling gets good computers, which we resell (with a 99+% satisfaction rate). The manufacturers will say to take all these steps to eliminate software conflicts, loose cables, switches, home wiring, etc. because fairly often the components are still good.
In neither document, the "end-of-life" nor the "troubleshooting", does HP commit any sin except to protect its shareholders. This is not a diatribe against the manufacturers, they are doing their job producing returns for investors. Heck, my IRA may have a big chunk of HP stock, and I'm not complaining about them making money. But this is another wake up call to the "environmentalists" who believe that current computer manufacture extended responsibility laws bring us closer to cradle-to-cradle eco-nirvana. The OEMs have a conflict of interest when it comes to making electronics recycling more affordable. A single refurbished HP Blackbird could pay for the cost of recycling 20 large TV sets. But if you cut off all 12 capacitors, per the "end of life" instructions, you instead have one more piece of junk on top of the 20 TVs.
The end-of-life document for the HP Blackbird reads like a set of instructions for a hospital to embalm first, heal second. If the HP Blackbird 002 was not "end-of-life" before the instructions were followed, it will be now. Wake up, Product Stewardship advocates.
Then I googled around looking for repair advice on power supply issues, and found this "helpul" advice page for recyclers provided by Hewlett Packard "Product-End-of-Life Disassembly Instructions".
"This document is intended for end-of-life recyclers or treatment facilities. It provides the basic instructions for the disassembly of HP Products to remove components and materials requiring selective treatment, as defined by EU Directive 2002/96/EC, Waste Electrical and Electronic Equipment (WEEE)".
Ok, sounds legal.
Now, keeping in mind Friday's post about how a PC is composed of parts made by a dozen different electronics manufacturing companies, mostly overseas outsourcers, and how little a brand has to do with power supply, motherboard, chip, RAM, case, etc., explain these instructions for "proper" recycling:"Using wire cutters, cut the clamp that secures the wires to the power supply cover"
"Using wire cutter, cut all cables connected to the PCA in the power supply"
Keep in mind, all of these cables have quick pinch and release connectors, shown in the diagram... but the recycler is instructed to cut them with wire cutters.
Then, get this:
"Cut 12 Capacitors from PCA,
as shown in Figure 7."
!!! Well, that's interesting !!!
In HP's defense, one likely issue they are trying to deal with in the power supply shown in the diagram is "fraudulent warranty" returns. Unscrupulous repairers may diagnose a power supply under warranty as "faulty" and then resell the (good) power supply. If HP is paying for a warranty replacement, they have every right to demand DOS (Destroy on Site).
However, this document is about WEEE. The implication is that if HP has anything to do with paying the recycling fee, HP can execute "obsolescence" or DOS requirements.
What is the likelihood that someone who gives me an HP Blackbird had a power supply problem? Based on my experience this year, plenty. The power supply should be tested for reuse, and if it's faulty, it may have had bad capacitors, which should be either replaced and recycled.
But what is the likelihood that all 12 of the the capacitors, including those on the motherboard, video cards, sound cards, etc. all failed? Virtually ZERO.
That means that this document is virtually 100% certain to be instructing the recycler to destroy over $2000 in parts and components. A cost to be passed down to the consumer, a lost job to the repairer and refurbisher, and a lost computer to someone who could not have afforded a brand new HP Blackbird 002.
Of course, any repairman in Egypt could tell you for 100% certain whether those capacitors were bad or not. They could tell you the likihood that the capacitor is bad without looking at the machine, just as soon as you told them the make, model, etc. of each component. They could tell me, on my Blackbird, which of the different component manufacturers they have had to replace capacitors for. But they will remove the capacitors with a soldering gun, not wire cutters, because they will replace those capacitors.
And a single HP Blackbird 002 is, coincidentally, the same value as an average year's wages in Egypt.
Now, contrast the instructions for "end of life" with HP's similar document for a product still under warranty, called "Troubleshooting Power Supply Issues". The pains they go through to make, extra, extra sure the power supply is indeed the problem! The emphasis on several other possible issues, the process of elimination you need to do before the power supply is deemed faulty! This is actually the more correct document - I know, because it is through this trial-and-error process that Good Point Recycling gets good computers, which we resell (with a 99+% satisfaction rate). The manufacturers will say to take all these steps to eliminate software conflicts, loose cables, switches, home wiring, etc. because fairly often the components are still good.
In neither document, the "end-of-life" nor the "troubleshooting", does HP commit any sin except to protect its shareholders. This is not a diatribe against the manufacturers, they are doing their job producing returns for investors. Heck, my IRA may have a big chunk of HP stock, and I'm not complaining about them making money. But this is another wake up call to the "environmentalists" who believe that current computer manufacture extended responsibility laws bring us closer to cradle-to-cradle eco-nirvana. The OEMs have a conflict of interest when it comes to making electronics recycling more affordable. A single refurbished HP Blackbird could pay for the cost of recycling 20 large TV sets. But if you cut off all 12 capacitors, per the "end of life" instructions, you instead have one more piece of junk on top of the 20 TVs.
The end-of-life document for the HP Blackbird reads like a set of instructions for a hospital to embalm first, heal second. If the HP Blackbird 002 was not "end-of-life" before the instructions were followed, it will be now. Wake up, Product Stewardship advocates.
Risk and Reward: E-Steward vs R2 Standards
I was brushing up on my USA railroad accident statistics, preparing for a debate on which standard, BAN's E-Stewards or EPA and ISRI's "R2" practices, will be better going forward.
What I noticed this time was that the deaths, both from pedestrians and vehicle railroad crossings, appear to be steadily declining. From 4,021 deaths and injuries in 1981 to 1,221 ("preliminary statistics") for 2008.
The analogy has to do with comparing the "functional" and "tested working" definitions and standards in the Responsible Recycler (R2) certification versus the Basel Action Network's E-Steward certification. I think it is the major difference in the two standards, in terms of the cost of compliance (quarrels about "de minimus" are another). I have pointed out several times that the Basel Convention explicitly references export for repair and refurbishment, and does not say "tested working" anywhere in the document. BAN contends that it was "unfortunate choice of words" but that really what they meant by "repair and refurbishment" was that any part that might be replaced in the course of a repair or upgrade cannot be replaced overseas.
That is a standard that even "tested working" cannot meet. I would like to demonstrate that, statistically, the outcome of our shipments is superior to our competitors shipping all "working" product. The E-Stewards which are joining BAN's bandwagon have insignificant reuse rates, if any, other than Redemtech (which does not collect much residential electronics). But what we'd like to see is how the "working" product that is shipped measures up against our refurbishing factories.
Jim Puckett at BAN has said that although he appreciates our efforts to steadily measure and improve on the downstream management of incidental/accidental breakage through WR3A agreemenents, that even a single stick of RAM upgraded voluntarily (the buyer removes and replaces 128k Corsair RAM stick with 512k Kingston, and recycles the 128k RAM) constitutes a transboundary shipment of e-waste. I asked how they know that the buyers of "tested working" product are not upgrading? Do they replace USA 110v power supplies with 220 current power supplies? Do they replace 24X CDRom players with DVD players?
The risk of shipping to an expert refurbisher is that they will upgrade the product, producing a biproduct. The reward is thousands and thousands and thousands of affordable computers, which the average Iranian or Indian or Indonesian or Peruvian can aspire to use for access to the internet. BAN is suggesting that they can match the thousands of computers with either A) new computers (the "leapfrog" answer), or B) that E-Stewards will not just munch up the computers and monitors in a big crunching machine, but will actually hire Americans to fix the computers, swap the power supplies, and upgrade the RAM before it is shipped.
This came up in a discussion with BAN.org over what percentage of risk (fallout) would be an acceptable export-for-repair scenario. I wanted to know what we would have to prove to BAN when I made my annual offer to join the "Pledge". We had recently gotten our monitor fallout rates below 5%, and I quite honestly believed that it was a better outcome than my past shipments of "tested working". So I was challenging BAN to measure shipments of "tested working" product (how much of THAT winds up as non-working, accidental breakage or upgrade?) and found that not a single E-Steward actually measured the outcome of their "tested working" shipments at the other end! It's like claiming that BAN's railroads are safer because they don't measure or count the accidents! I suggested that even brand new computers sent under the "leapfrog" scenario would have some kind of fallout. Jim said those would all have to be returned.
I asked if they would be returned to the manufacturer, in China, and he said that was ok because it was legal under Basel for two non-OECD countries to trade. That means that a Chinese shipment of computers which is 85% working is better than a USA shipment of computers that is 95% working, because the 5% in the latter transaction is "illegal".
For recycling to work, we have to be realistic. We want to constantly improve. If another recycler has a better outcome than my company, a better risk (less fallout) and equal reward (number of reuse items), we want to see if we can do that affordably. If it is possible to do but no one can afford to do it, then you lose the reward.
From my many visits overseas, I have found the repairpeople and refurbishers are the best able to limit the 'toxics along for the ride' and are the best at reporting the actual useful versus lame product. Often the discussion is like this:
"Hey Americans, don't send us any more 15" monitors."
"The ones we are about to send are all tested working."
"Yeah, but we don't care about that. The 15" monitors are 28% Trinitron-"R4s" and we can't find the parts to upgrade those any more."
"What if we remove the R4s?"
"Ok, that would help, but we are getting all the 15" we need right now from Korea and Australia, and the shipping cost is lower."
"We already have 3,000 of them wrapped and ready, can we negotiate a price discount on those so we can transition out of them this month?"
"Ok, we are getting them for $1.44 at port now. Can you live with $1.50?"
These are grown-ups dealing with commodities. If the monitors were really being purchased for the copper, to burn the wires, hit the yokes off with a hammer, etc., why would the buyer pay $1.50, and why would they limit the monitors by raster or R4 screen shape?
What we are doing is the equivalent of the "Operation Lifesaver" program funded by the railroads. We admit the world is imperfect, but we honestly measure our contribution to the problem and we take steps to constantly improve. What BAN is selling is a myth, that the people earning $3000 per year, whose internet access is increasing 10 times the rate of the USA, are going to "leapfrog" us and get brand new computers. It is like accepting no railroad crossings, and offering the hope that product we buy in trains will "leapfrog" across the continent.
Everyone in America is buying monitors and computers manufactured in Asia. That is the only choice. On the east coast, they are being transported by rail car. I suppose that buying a computer shipped by rail, there is a chance I have contributed to the death of the pedestrian in the clip above.
What I noticed this time was that the deaths, both from pedestrians and vehicle railroad crossings, appear to be steadily declining. From 4,021 deaths and injuries in 1981 to 1,221 ("preliminary statistics") for 2008.
The analogy has to do with comparing the "functional" and "tested working" definitions and standards in the Responsible Recycler (R2) certification versus the Basel Action Network's E-Steward certification. I think it is the major difference in the two standards, in terms of the cost of compliance (quarrels about "de minimus" are another). I have pointed out several times that the Basel Convention explicitly references export for repair and refurbishment, and does not say "tested working" anywhere in the document. BAN contends that it was "unfortunate choice of words" but that really what they meant by "repair and refurbishment" was that any part that might be replaced in the course of a repair or upgrade cannot be replaced overseas.
That is a standard that even "tested working" cannot meet. I would like to demonstrate that, statistically, the outcome of our shipments is superior to our competitors shipping all "working" product. The E-Stewards which are joining BAN's bandwagon have insignificant reuse rates, if any, other than Redemtech (which does not collect much residential electronics). But what we'd like to see is how the "working" product that is shipped measures up against our refurbishing factories.
Jim Puckett at BAN has said that although he appreciates our efforts to steadily measure and improve on the downstream management of incidental/accidental breakage through WR3A agreemenents, that even a single stick of RAM upgraded voluntarily (the buyer removes and replaces 128k Corsair RAM stick with 512k Kingston, and recycles the 128k RAM) constitutes a transboundary shipment of e-waste. I asked how they know that the buyers of "tested working" product are not upgrading? Do they replace USA 110v power supplies with 220 current power supplies? Do they replace 24X CDRom players with DVD players?
The risk of shipping to an expert refurbisher is that they will upgrade the product, producing a biproduct. The reward is thousands and thousands and thousands of affordable computers, which the average Iranian or Indian or Indonesian or Peruvian can aspire to use for access to the internet. BAN is suggesting that they can match the thousands of computers with either A) new computers (the "leapfrog" answer), or B) that E-Stewards will not just munch up the computers and monitors in a big crunching machine, but will actually hire Americans to fix the computers, swap the power supplies, and upgrade the RAM before it is shipped.
This came up in a discussion with BAN.org over what percentage of risk (fallout) would be an acceptable export-for-repair scenario. I wanted to know what we would have to prove to BAN when I made my annual offer to join the "Pledge". We had recently gotten our monitor fallout rates below 5%, and I quite honestly believed that it was a better outcome than my past shipments of "tested working". So I was challenging BAN to measure shipments of "tested working" product (how much of THAT winds up as non-working, accidental breakage or upgrade?) and found that not a single E-Steward actually measured the outcome of their "tested working" shipments at the other end! It's like claiming that BAN's railroads are safer because they don't measure or count the accidents! I suggested that even brand new computers sent under the "leapfrog" scenario would have some kind of fallout. Jim said those would all have to be returned.
I asked if they would be returned to the manufacturer, in China, and he said that was ok because it was legal under Basel for two non-OECD countries to trade. That means that a Chinese shipment of computers which is 85% working is better than a USA shipment of computers that is 95% working, because the 5% in the latter transaction is "illegal".
For recycling to work, we have to be realistic. We want to constantly improve. If another recycler has a better outcome than my company, a better risk (less fallout) and equal reward (number of reuse items), we want to see if we can do that affordably. If it is possible to do but no one can afford to do it, then you lose the reward.
From my many visits overseas, I have found the repairpeople and refurbishers are the best able to limit the 'toxics along for the ride' and are the best at reporting the actual useful versus lame product. Often the discussion is like this:
"Hey Americans, don't send us any more 15" monitors."
"The ones we are about to send are all tested working."
"Yeah, but we don't care about that. The 15" monitors are 28% Trinitron-"R4s" and we can't find the parts to upgrade those any more."
"What if we remove the R4s?"
"Ok, that would help, but we are getting all the 15" we need right now from Korea and Australia, and the shipping cost is lower."
"We already have 3,000 of them wrapped and ready, can we negotiate a price discount on those so we can transition out of them this month?"
"Ok, we are getting them for $1.44 at port now. Can you live with $1.50?"
These are grown-ups dealing with commodities. If the monitors were really being purchased for the copper, to burn the wires, hit the yokes off with a hammer, etc., why would the buyer pay $1.50, and why would they limit the monitors by raster or R4 screen shape?
What we are doing is the equivalent of the "Operation Lifesaver" program funded by the railroads. We admit the world is imperfect, but we honestly measure our contribution to the problem and we take steps to constantly improve. What BAN is selling is a myth, that the people earning $3000 per year, whose internet access is increasing 10 times the rate of the USA, are going to "leapfrog" us and get brand new computers. It is like accepting no railroad crossings, and offering the hope that product we buy in trains will "leapfrog" across the continent.
Everyone in America is buying monitors and computers manufactured in Asia. That is the only choice. On the east coast, they are being transported by rail car. I suppose that buying a computer shipped by rail, there is a chance I have contributed to the death of the pedestrian in the clip above.
Product Stewardship Targets a Swarm
What is being said about export for repair?
"It's a loophole for e-waste exports."
"What about after the computer stops working over there? Then the ewaste hits the ground."
"Producers of electronics should take back their old stuff."
Ok, let's see what companies were involved in making a computer. Typically:
1) Intel made the chip and the board.
2) Guangzhou Steel Molding Company might have made the case.
3) Seagate in Singapore made this hard drive.
4) The power supply is made, assembled, designed, etc. by about 5 different companies.
5) The operating system is made by Microsoft.
6) The programs are made by Intuit, Adobe, Sun, etc.
7) The power cords and cables are made by one of a 98 company consortium in Ningbo, China.
8) The CRT may have been made by Samsung, Trinitron, Asahi...
9) The monitor tuner board may have been made by Proview.
10) The components could have been assembled by BenQ or Wistron or any of a hundred other contract manufacturers.
11) Audiotrak may have made the sound card
12) Foxcon or one of a couple dozen others may have made the video card.
Notice the absence of a major brand, such as HP or Dell or Gateway from the list above? Acer was a board manufacturer in Taiwan (like Proview) that, being Taiwanese-Chinese, developed assembly companies (#10, both BenQ and Wistron are Acer companies) and began to manufacture their own products... Rather suddenly, the assemblers of Acer realized that there was no "man behind the curtain" of the brand on the front. The entire computer was a Frankenstein of parts from independent companies.
Acer said, "Heck, I could do that." In no time, Acer became number 2 worldwide in sales of PCs. Lenovo bought the name of IBM's thinkpad, like a twenty-something taking the title and keys to dad's car, without a fight.
Now, notice that the fewer companies are involved in manufacture, the more press is played to the export of the item for refurbishment. No one makes noise about power supplies and cables, but hard drives and software? Very noisy.
The more a producer is trying to protect their market, the more engaged they are in legislation to protect that market, and the more they are participating in the export dialogue. Just noticing.
If I had a band, I'd consider the name, or at least a song title, called "Pay No Attention to the Man Behind the Curtain!!!"
Now, back to the beginning of this post, about export for repair. Thought I'd wandered off? Guess who owns the "Big Secret Factories"?
"It's a loophole for e-waste exports."
"What about after the computer stops working over there? Then the ewaste hits the ground."
"Producers of electronics should take back their old stuff."
Ok, let's see what companies were involved in making a computer. Typically:
1) Intel made the chip and the board.
2) Guangzhou Steel Molding Company might have made the case.
3) Seagate in Singapore made this hard drive.
4) The power supply is made, assembled, designed, etc. by about 5 different companies.
5) The operating system is made by Microsoft.
6) The programs are made by Intuit, Adobe, Sun, etc.
7) The power cords and cables are made by one of a 98 company consortium in Ningbo, China.
8) The CRT may have been made by Samsung, Trinitron, Asahi...
9) The monitor tuner board may have been made by Proview.
10) The components could have been assembled by BenQ or Wistron or any of a hundred other contract manufacturers.
11) Audiotrak may have made the sound card
12) Foxcon or one of a couple dozen others may have made the video card.
Notice the absence of a major brand, such as HP or Dell or Gateway from the list above? Acer was a board manufacturer in Taiwan (like Proview) that, being Taiwanese-Chinese, developed assembly companies (#10, both BenQ and Wistron are Acer companies) and began to manufacture their own products... Rather suddenly, the assemblers of Acer realized that there was no "man behind the curtain" of the brand on the front. The entire computer was a Frankenstein of parts from independent companies.
Acer said, "Heck, I could do that." In no time, Acer became number 2 worldwide in sales of PCs. Lenovo bought the name of IBM's thinkpad, like a twenty-something taking the title and keys to dad's car, without a fight.
Now, notice that the fewer companies are involved in manufacture, the more press is played to the export of the item for refurbishment. No one makes noise about power supplies and cables, but hard drives and software? Very noisy.
The more a producer is trying to protect their market, the more engaged they are in legislation to protect that market, and the more they are participating in the export dialogue. Just noticing.
If I had a band, I'd consider the name, or at least a song title, called "Pay No Attention to the Man Behind the Curtain!!!"
Now, back to the beginning of this post, about export for repair. Thought I'd wandered off? Guess who owns the "Big Secret Factories"?
Nobel Peace Prize to President Obama??
Yikes.
I haven't even seen any press comments yet, just the headline. But this is an example of someone overseas (usually USA is in that role) having a cultural insensitivity. In this case, the Nobel prize committee is tone-deaf to the USA issue of "affirmative action". Coming on the heels of the (hilarious) "Nope. Nothing!" Obama SNL skit of just last Saturday, this is bad Halloween candy from a well-meaning auntie.
Prediction - because I think he's smart, he will decline it with a speech that says "I haven't earned this yet, but it puts tremendous pressure on me to deliver the goods. I accept the challenge of the award, but cannot accept the award this year because I have not yet earned it."
This puts him on the same footing as Clarence Thomas and Colin Powell, who no one with a college degree suspects of being an affirmative action beneficiary, and handles the USA cross culture issue deftly for the Nobel Committee.
I haven't even seen any press comments yet, just the headline. But this is an example of someone overseas (usually USA is in that role) having a cultural insensitivity. In this case, the Nobel prize committee is tone-deaf to the USA issue of "affirmative action". Coming on the heels of the (hilarious) "Nope. Nothing!" Obama SNL skit of just last Saturday, this is bad Halloween candy from a well-meaning auntie.
Prediction - because I think he's smart, he will decline it with a speech that says "I haven't earned this yet, but it puts tremendous pressure on me to deliver the goods. I accept the challenge of the award, but cannot accept the award this year because I have not yet earned it."
This puts him on the same footing as Clarence Thomas and Colin Powell, who no one with a college degree suspects of being an affirmative action beneficiary, and handles the USA cross culture issue deftly for the Nobel Committee.
More Recycling History Lessons
While reading up on Hugo Neu Corp. (having gotten to know John and Wendy this year), I ran across this excellent 2004 Article in Forbes magazine, One Man's Junk ...Companies & Strategies ( 01.12.04)
It is fascinating article in several respects. First, the history of Hugo Neu, an immigrant from Germany who got into the scrap metal business in NY, is another great example of the recycling history lessons from yesterdays (long long) blog.
Second, the story of how Neu Senior followed the export market... He was willing to sell steel, made from scrapped WWII bombs, to Japan. I can only imagine the contrarian vs. patriotic dialogue about selling "scraps to the Japs". But Neu saw the market and followed world demand, and Japan is one of our biggest allies today.
"Manhattan-based Hugo Neu has been turning trash into cash since 1945, when it started trading surplus equipment and materials left over from Allies and Axis alike after World War II. In the years since, founder Hugo Neu and then his son John have turned the company into one of America's biggest scrap processors and its number one exporter, hitching a ride on the surging industrial fortunes of Japan, Korea, Turkey, Mexico and more than a dozen other countries along the way...
But the article describes a turning point in Japan, when as a result of the growth (including the very industry USA scrap dealers were selling to), Japan itself developed to becoming a net exporter of steel scrap. Neu saw prices fall, local competition increase, and he started selling to new steel mills in Korea. Then Korea developed, and history repeated itself.
"The company's then-number-one market of South Korea had already peaked... After a generation of building factories and buying cars and appliances, the Koreans were replacing them at a rapid clip, creating an ever growing supply of local scrap to obviate imports, a trend that William Schmiedel, Hugo Neu's chief trader, could read in statistics from Korea's own scrapyards. That meant, at the time, a looming wipeout of 40% of Hugo Neu's revenues."
This is precisely what is happening today to the "Big Secret Factories". American recyclers are definitely seeing a huge fall in price (demand) for used CRTs. Many assume that the world has gone completely to LCDs, as if Indian and Egyptian grad students were able to spend $175 on a Best Buy sale display. Nope, the demand for CRTs is still pretty strong. But there are competing suppliers... more and more Koreans, Malaysians, and Chinese are able to afford the LCD, and they are sending THEIR (relatively newer) CRT monitors to the factories.
This is all healthy and good, but sucks for those of us accustomed to earning money from the most sophisticated, best accredited, legal and "bullet proof" reuse market for CRTs. We either have to accept a wicked price cut (the second 100,000 monitors we sold this year earned us less than 50% of what the first 100k monitors earned) or follow the Forbes story of Hugo Neu and steel bearing scrap.
"Hugo Neu tears it all apart, then resells the scrap through a global network of traders with intimate knowledge of Third World steel mills."
We need the same intimate knowledge of CRT refurbishing and demand. If it is moving to Atlantic ports next (South Africa, Brazil, North Africa, Venezuela, Cuba?) then we need to relocate the remanufacturing expertise. Easiest thing, I think, is move it to Mexico, and our factory is just ONE of the people in my industry pursuing that lead.
Personally, my vision is to include the Asian factory owners in the move. I think it's a terrific story when a Taiwanese Malaysian flies to visit Mexico to teach Las Chicas Bravas women's coop how to buy USA computer monitors and turn them into small monitor-TVs to sell to the Senegalese buyer who sets up internet cafes. The United Colors of Recycling! World Peace! Digital access to wiki-government! Kiva on Steroids! (Then we can all be depressed and despondent about important things again, like the destruction of rain forests to coltan mining, and coral reefs to copper mine cyanide tailings.)
Unlike the third world steel mills in the Forbes article, computer repair and refurbishment has a MUCH lower threshold to entry than building a steel mill, and a MUCH higher return on investment. But the risks of screwing up are high - we cannot have piles of leaded CRT glass building up in places that aren't communicating their requirements in a language the USA suppliers can understand.
Anyway, I found it a fascinating irony that someone I respect so much as Hugo Neu corp is, in the trade circles, one of the harshest critics of our "middle path" of exporting (neither export junk ewaste nor destroy repairable computers). But I have a hunch that smart people eventually hook up. We are having a great year with some of the TV manufacturers who I first met at a shrill discourse at the offices of One Winter Street in Boston MA, when I was with Mass DEP's recycling program. At the time, a simple waste ban and an invitation to participate in setting up the infrastructure seemed like an act of war to some of the TV makers. Today they are participating, actively funding our approach, and wistful for the shared responsibility model now that all the states are using product stewardship to replace local tax revenues. That's another subject for another day, I have to get on the road to New York...
It is fascinating article in several respects. First, the history of Hugo Neu, an immigrant from Germany who got into the scrap metal business in NY, is another great example of the recycling history lessons from yesterdays (long long) blog.
Second, the story of how Neu Senior followed the export market... He was willing to sell steel, made from scrapped WWII bombs, to Japan. I can only imagine the contrarian vs. patriotic dialogue about selling "scraps to the Japs". But Neu saw the market and followed world demand, and Japan is one of our biggest allies today.
"Manhattan-based Hugo Neu has been turning trash into cash since 1945, when it started trading surplus equipment and materials left over from Allies and Axis alike after World War II. In the years since, founder Hugo Neu and then his son John have turned the company into one of America's biggest scrap processors and its number one exporter, hitching a ride on the surging industrial fortunes of Japan, Korea, Turkey, Mexico and more than a dozen other countries along the way...
But the article describes a turning point in Japan, when as a result of the growth (including the very industry USA scrap dealers were selling to), Japan itself developed to becoming a net exporter of steel scrap. Neu saw prices fall, local competition increase, and he started selling to new steel mills in Korea. Then Korea developed, and history repeated itself.
"The company's then-number-one market of South Korea had already peaked... After a generation of building factories and buying cars and appliances, the Koreans were replacing them at a rapid clip, creating an ever growing supply of local scrap to obviate imports, a trend that William Schmiedel, Hugo Neu's chief trader, could read in statistics from Korea's own scrapyards. That meant, at the time, a looming wipeout of 40% of Hugo Neu's revenues."
This is precisely what is happening today to the "Big Secret Factories". American recyclers are definitely seeing a huge fall in price (demand) for used CRTs. Many assume that the world has gone completely to LCDs, as if Indian and Egyptian grad students were able to spend $175 on a Best Buy sale display. Nope, the demand for CRTs is still pretty strong. But there are competing suppliers... more and more Koreans, Malaysians, and Chinese are able to afford the LCD, and they are sending THEIR (relatively newer) CRT monitors to the factories.
This is all healthy and good, but sucks for those of us accustomed to earning money from the most sophisticated, best accredited, legal and "bullet proof" reuse market for CRTs. We either have to accept a wicked price cut (the second 100,000 monitors we sold this year earned us less than 50% of what the first 100k monitors earned) or follow the Forbes story of Hugo Neu and steel bearing scrap.
"Hugo Neu tears it all apart, then resells the scrap through a global network of traders with intimate knowledge of Third World steel mills."
We need the same intimate knowledge of CRT refurbishing and demand. If it is moving to Atlantic ports next (South Africa, Brazil, North Africa, Venezuela, Cuba?) then we need to relocate the remanufacturing expertise. Easiest thing, I think, is move it to Mexico, and our factory is just ONE of the people in my industry pursuing that lead.
Personally, my vision is to include the Asian factory owners in the move. I think it's a terrific story when a Taiwanese Malaysian flies to visit Mexico to teach Las Chicas Bravas women's coop how to buy USA computer monitors and turn them into small monitor-TVs to sell to the Senegalese buyer who sets up internet cafes. The United Colors of Recycling! World Peace! Digital access to wiki-government! Kiva on Steroids! (Then we can all be depressed and despondent about important things again, like the destruction of rain forests to coltan mining, and coral reefs to copper mine cyanide tailings.)
Unlike the third world steel mills in the Forbes article, computer repair and refurbishment has a MUCH lower threshold to entry than building a steel mill, and a MUCH higher return on investment. But the risks of screwing up are high - we cannot have piles of leaded CRT glass building up in places that aren't communicating their requirements in a language the USA suppliers can understand.
Anyway, I found it a fascinating irony that someone I respect so much as Hugo Neu corp is, in the trade circles, one of the harshest critics of our "middle path" of exporting (neither export junk ewaste nor destroy repairable computers). But I have a hunch that smart people eventually hook up. We are having a great year with some of the TV manufacturers who I first met at a shrill discourse at the offices of One Winter Street in Boston MA, when I was with Mass DEP's recycling program. At the time, a simple waste ban and an invitation to participate in setting up the infrastructure seemed like an act of war to some of the TV makers. Today they are participating, actively funding our approach, and wistful for the shared responsibility model now that all the states are using product stewardship to replace local tax revenues. That's another subject for another day, I have to get on the road to New York...
Cash or Crash for Trash? (Answer: "Stash")
Throughout my adult memory, "recycling" has been a bit like weather, as a topic of conversation. It's a popular "coffee table" topic, unlike insurance adjusting or ball bearing manufacturing... great topics both, but a higher threshold to "knowing what the hell you are talking about" means that people don't form opinions, or weigh in with them, as we can with the weather.
One of the things "coffee table" industries attracts is journalists. The more a topic is interesting to talk about at a social gathering, the more a journalist is likely to consider it a topic worthy of writing about. Lots of articles about pets and coffee, fewer about lawn fertilizer.
One of the frustrating things about this is when an anecdote gets stuck in the public consciousness in the absence of proportionality to risk or profit. Search "shark attack" and "railroad crossing accident" in the news (or see previous post), and you will find that the "man bites dog" story is, ironically, "shark bites man."
Today I'm thinking about what people perceive to be the value of recyclable commodities, after reading an interesting book review (thanks to a link from Hugo Neu corporation). Here is the introduction to the article by Carl Zimring: Mr. Carl Zimring is Assistant Professor of Social Science at Roosevelt University. He is the author of Cash for Your Trash: Scrap Recycling in America. (New Brunswick, NJ: Rutgers University Press, 2005).
I'm thinking about this because Good Point Recycling is (as always?) at pivotal point of growth, where we have more profitable opportunities to grow than we have capital to pursue them, and the banks... ahem. Anyway, we have about $1M in annual gross sales from about $120k in personal ("friend and family") loans over 7 years. We are small enough that we can tweak the looks of the books by whether I draw a salary or not (I've probably earned back about as much as I've lent back in, or have put back in as much as I've earned, which is good or bad depending on your point of view). As we charge into NY, RI, ME and CT markets, we need more trucks. It means capitalizing and taking market share while times are down.
This is pretty difficult to explain to investors who don't know the recycling business. They like to look at Earnings Before Interest, Depreciation and Taxes (EbIDT). I have to explain to them the big problem with my books is that I have ANY income. When the market crashes, as it has for all raw materials during the recession, as it does every recession, the smart players - or those who can afford it - hold their cards.
At a penny a pound, sales records are a sign of weakness.
The problem is NOT that we only earned $500 per week for scrap steel last spring. The problem is that we sold ANY steel when the price fell to a penny a pound from 15 cents per pound 6 months earlier. As an undercapitalized business, we have to look at whether to pay a guy to run the baler (you need to bale it to add value and speculate storage) or whether to stop baling, and the answer differs at 1 cent per pound vs 15. A well capitalized business would not have had to choose between hiring sales people to develop new markets and paying a guy to bale the steel.
If I had lots of money, I would have looked at the history of scrap materials and kept baling, and sat on the bales (as we did for as long as we could on ABS plastic, which also fell to a penny from 22 cents per pound... we started selling again at 8 cents and the price is now up to 15 or so. I increased value of the stock eight-fold by waiting from January to May, but lost half by selling in May rather than August).
Anyway, Zimring's book appears (from the article about it, written by Mr. Zimring) to hold a lot of the knowledge I got by talking to smart old men like Shelly Appel of Perkit Folding Box and Baynard Paul of PT Container, back in my Massachusetts DEP days. I had been in recycling since high school and knew enough to accept every invitation I got from the lions of the business, and my MA DEP business card was like a free pass to Disneyland for me.
Some of the information I got from them, other things I had figured out but could verify (Analagous conversation: "Hey, was the guy who played 'Kaptain Kangaroo' the same guy who played Clarabell the Clown?" "Sure, yeah, that was Bob Keeshan.") You could play out your hunches from 50,000 s.f. views by asking the guys who had been on the ground.
Here's a kind of reproduction of the conversations I had with the retiring giants of waste paper in the 1990s.
Me: "Why does the price for toilet paper raw material fall in a recession?"
Scrapper: "Hah, that was always the question we asked. They said because of how much we charged them during the boom. It was only really bad when there was both a recession and the price of oil was high, because the mills were paying more for the oil, but that doesn't usually last too long, oil can't stay up too long in a recession, at least it hasn't."
Me: "But even then, they come back faster because recycling saves energy, I would think."
Scrapper: "You know, I never really thought about that, but it's probably why the forest stocks get hit harder, and why our waste paper never failed to stop moving again. The hard part was keeping our clients."
Me: "Yeah, we have that problem when the press announces the paper is really going to landfills during the glut, people stop participating and new programs stall."
Scrapper: "Yeah, but we spread that rumor, too, because we have to pass the price cuts to the consumer."
Me: "No paper ever got landfilled because of a lack of markets, has it?"
Scrapper: "Oh, I'm sure some moron did it sometime. But probably not by anyone with enough savvy to own a baler. Some of the towns collecting it did that, that's when we realized we'd taken the price story too far.")
You see, when the economy crashes, an automaker like GM cannot really stop paying debt without doing bankruptcy. It cannot get out of illiquid assets like factories. It hates to lay off workers. When it comes time to cut costs, raw materials become the 'go to' option. Hence, raw materials collapse in a recession (I've read that the Federal Reserve retired chairperson Alan Greenspan was a big scrap market news junkie).
But they cut the price in higher proportion than demand slows. The big ystery is toilet paper, which is made in disproportionately high percentages from recycled content (I don't know if Zimring zeros in on TP in his book, I should read stuff I review huh). The price of the raw materials for toilet paper - sorted white ledger for example - collapse tenfold just like everything else. Printing and writing paper go down, sure, and newspapers get light with less advertising - but toilet paper raw material (at least in the 80s) was independent. But it crashed too.
You can find some logic to it - factory layoffs may lead to less TP demand in the workplace. But when you gotta go, you gotta go, at home or at work or at the soup kitchen. And the price drop in SWL waste paper seems to just go along for the ride with other raw material prices. Why do they pay less? Because they can. The tissue paper mills rebound pretty well after a recession and are probably considered safe investments in a recession, like other 'staples'.
If you own a consumer like a paper mill or steel mill, you have a certain point where you don't want to see prices fall below, for a couple of reasons. First, if the material (steel, paper, or ABS plastic) is available at a penny a pound in January 2009, that's a great opportunity to stock up on inventory. You know Toilet Paper demand is going to kind of be around, so the more you buy at a penny, the less you may have to buy for a dime later on. Second, when the mills are smart (as they forgot to be in the early 90s at one point), they realize that you have to till the fields, maintain the supply. If the market falls too low, the marketplace may 'cannibalize' the packers, balers, scrap collectors, etc... when you need the paper bales again, you don't want to find the baler has been chopped into scrap steel or the dealer has sold his trucks.
During the bad times, the buyers tend to support the more loyal suppliers. They tend to stick it to the "gougers" from the past high times.
It was better in the old days when the mills actually lent the money for the balers to the scrap collectors. They'd find a really poor immigrant family in a high population area and buy him a baler and have the guy repay the loan in long term purchase orders. I really enjoyed learning the specific instances of that I learned from the old timers in my MA DEP days, and it made a lot of sense of what happened in the mid 1990s (goodbye Prins Recycling). There are still a lot of smart guys, like Johnny Gold and Ben Harvey and Randy Miller who were raised in 3rd generation scrap companies, and you will tend to see pretty honorable guys in that field, who understand the difference between "slash and burn" raw material harvesters (brokers who rush in and buy in high priced markets and are nowhere around when the price falls) and long term buyers. The importance of those 2nd-3rd-4th generation companies is that they replace the "notes payable" on the baling hardware, they institutionalize the relationships between supply and demand.
What is going on now in the "white box" or "SKD" markets is similar to the history of the scrap paper market in a couple of interesting ways, except the capacity was not baling but assembly. As paper mills de-centralized scrap material consolidation to small private entrepreneurs, using notes payable on equipment, so did OEMs outsource assembly of their products in the 1990s. The Taiwanese were (like the "Jews" the "Italians" in the scrap markets in Boston and NYC) "relocated" people who no longer owned land and therefore sent more of their kids to college (vs. societies who keep family money in land, who tend to keep one kid to watch the land, sometimes the best kid). The more of your kids go into either college or urban living (surviving in a city should be awarded with a degree on the wall), the more get jobs in engineering. Anyway, the Taiwanese who fled Mao wound up being very "mobile" investors who set up shops to assemble display devices and other peripherals for electronics, in contracts with Japanese, European, and American OEMs.
But it turns out the OEMs are not paper mills or steel mills. Turns out they have outsourced so much of the assembly that the little brooms are all finding each other, and Taiwanese and Koreans are turning from the poor outsourced labor markets to the giants of the industry.
Oh well, another long-winded blog that may not be read or appreciated, but maybe I'll put it in a book someday. The point is that there are all kinds of historical bases and connections which lead to success in recycling, which may not be apparent in a "Cash" or "Crash" in "Trash". If you have loyalty and trust, and are speculating on something other than buggy whips (i.e. metals, polymers, and fiber... not necessarily "added value" items like Pentium IIIs or CRT TVs), the raw materials market will come back, just as toilet paper markets come back. And India and China are growing centers of demand, and environmentally exploitable raw materials sources are finite.
One of the things "coffee table" industries attracts is journalists. The more a topic is interesting to talk about at a social gathering, the more a journalist is likely to consider it a topic worthy of writing about. Lots of articles about pets and coffee, fewer about lawn fertilizer.
One of the frustrating things about this is when an anecdote gets stuck in the public consciousness in the absence of proportionality to risk or profit. Search "shark attack" and "railroad crossing accident" in the news (or see previous post), and you will find that the "man bites dog" story is, ironically, "shark bites man."
Today I'm thinking about what people perceive to be the value of recyclable commodities, after reading an interesting book review (thanks to a link from Hugo Neu corporation). Here is the introduction to the article by Carl Zimring: Mr. Carl Zimring is Assistant Professor of Social Science at Roosevelt University. He is the author of Cash for Your Trash: Scrap Recycling in America. (New Brunswick, NJ: Rutgers University Press, 2005).
I'm thinking about this because Good Point Recycling is (as always?) at pivotal point of growth, where we have more profitable opportunities to grow than we have capital to pursue them, and the banks... ahem. Anyway, we have about $1M in annual gross sales from about $120k in personal ("friend and family") loans over 7 years. We are small enough that we can tweak the looks of the books by whether I draw a salary or not (I've probably earned back about as much as I've lent back in, or have put back in as much as I've earned, which is good or bad depending on your point of view). As we charge into NY, RI, ME and CT markets, we need more trucks. It means capitalizing and taking market share while times are down.
This is pretty difficult to explain to investors who don't know the recycling business. They like to look at Earnings Before Interest, Depreciation and Taxes (EbIDT). I have to explain to them the big problem with my books is that I have ANY income. When the market crashes, as it has for all raw materials during the recession, as it does every recession, the smart players - or those who can afford it - hold their cards.
At a penny a pound, sales records are a sign of weakness.
The problem is NOT that we only earned $500 per week for scrap steel last spring. The problem is that we sold ANY steel when the price fell to a penny a pound from 15 cents per pound 6 months earlier. As an undercapitalized business, we have to look at whether to pay a guy to run the baler (you need to bale it to add value and speculate storage) or whether to stop baling, and the answer differs at 1 cent per pound vs 15. A well capitalized business would not have had to choose between hiring sales people to develop new markets and paying a guy to bale the steel.
If I had lots of money, I would have looked at the history of scrap materials and kept baling, and sat on the bales (as we did for as long as we could on ABS plastic, which also fell to a penny from 22 cents per pound... we started selling again at 8 cents and the price is now up to 15 or so. I increased value of the stock eight-fold by waiting from January to May, but lost half by selling in May rather than August).
Anyway, Zimring's book appears (from the article about it, written by Mr. Zimring) to hold a lot of the knowledge I got by talking to smart old men like Shelly Appel of Perkit Folding Box and Baynard Paul of PT Container, back in my Massachusetts DEP days. I had been in recycling since high school and knew enough to accept every invitation I got from the lions of the business, and my MA DEP business card was like a free pass to Disneyland for me.
Some of the information I got from them, other things I had figured out but could verify (Analagous conversation: "Hey, was the guy who played 'Kaptain Kangaroo' the same guy who played Clarabell the Clown?" "Sure, yeah, that was Bob Keeshan.") You could play out your hunches from 50,000 s.f. views by asking the guys who had been on the ground.
Here's a kind of reproduction of the conversations I had with the retiring giants of waste paper in the 1990s.
Me: "Why does the price for toilet paper raw material fall in a recession?"
Scrapper: "Hah, that was always the question we asked. They said because of how much we charged them during the boom. It was only really bad when there was both a recession and the price of oil was high, because the mills were paying more for the oil, but that doesn't usually last too long, oil can't stay up too long in a recession, at least it hasn't."
Me: "But even then, they come back faster because recycling saves energy, I would think."
Scrapper: "You know, I never really thought about that, but it's probably why the forest stocks get hit harder, and why our waste paper never failed to stop moving again. The hard part was keeping our clients."
Me: "Yeah, we have that problem when the press announces the paper is really going to landfills during the glut, people stop participating and new programs stall."
Scrapper: "Yeah, but we spread that rumor, too, because we have to pass the price cuts to the consumer."
Me: "No paper ever got landfilled because of a lack of markets, has it?"
Scrapper: "Oh, I'm sure some moron did it sometime. But probably not by anyone with enough savvy to own a baler. Some of the towns collecting it did that, that's when we realized we'd taken the price story too far.")
You see, when the economy crashes, an automaker like GM cannot really stop paying debt without doing bankruptcy. It cannot get out of illiquid assets like factories. It hates to lay off workers. When it comes time to cut costs, raw materials become the 'go to' option. Hence, raw materials collapse in a recession (I've read that the Federal Reserve retired chairperson Alan Greenspan was a big scrap market news junkie).
But they cut the price in higher proportion than demand slows. The big ystery is toilet paper, which is made in disproportionately high percentages from recycled content (I don't know if Zimring zeros in on TP in his book, I should read stuff I review huh). The price of the raw materials for toilet paper - sorted white ledger for example - collapse tenfold just like everything else. Printing and writing paper go down, sure, and newspapers get light with less advertising - but toilet paper raw material (at least in the 80s) was independent. But it crashed too.
You can find some logic to it - factory layoffs may lead to less TP demand in the workplace. But when you gotta go, you gotta go, at home or at work or at the soup kitchen. And the price drop in SWL waste paper seems to just go along for the ride with other raw material prices. Why do they pay less? Because they can. The tissue paper mills rebound pretty well after a recession and are probably considered safe investments in a recession, like other 'staples'.
If you own a consumer like a paper mill or steel mill, you have a certain point where you don't want to see prices fall below, for a couple of reasons. First, if the material (steel, paper, or ABS plastic) is available at a penny a pound in January 2009, that's a great opportunity to stock up on inventory. You know Toilet Paper demand is going to kind of be around, so the more you buy at a penny, the less you may have to buy for a dime later on. Second, when the mills are smart (as they forgot to be in the early 90s at one point), they realize that you have to till the fields, maintain the supply. If the market falls too low, the marketplace may 'cannibalize' the packers, balers, scrap collectors, etc... when you need the paper bales again, you don't want to find the baler has been chopped into scrap steel or the dealer has sold his trucks.
During the bad times, the buyers tend to support the more loyal suppliers. They tend to stick it to the "gougers" from the past high times.
It was better in the old days when the mills actually lent the money for the balers to the scrap collectors. They'd find a really poor immigrant family in a high population area and buy him a baler and have the guy repay the loan in long term purchase orders. I really enjoyed learning the specific instances of that I learned from the old timers in my MA DEP days, and it made a lot of sense of what happened in the mid 1990s (goodbye Prins Recycling). There are still a lot of smart guys, like Johnny Gold and Ben Harvey and Randy Miller who were raised in 3rd generation scrap companies, and you will tend to see pretty honorable guys in that field, who understand the difference between "slash and burn" raw material harvesters (brokers who rush in and buy in high priced markets and are nowhere around when the price falls) and long term buyers. The importance of those 2nd-3rd-4th generation companies is that they replace the "notes payable" on the baling hardware, they institutionalize the relationships between supply and demand.
What is going on now in the "white box" or "SKD" markets is similar to the history of the scrap paper market in a couple of interesting ways, except the capacity was not baling but assembly. As paper mills de-centralized scrap material consolidation to small private entrepreneurs, using notes payable on equipment, so did OEMs outsource assembly of their products in the 1990s. The Taiwanese were (like the "Jews" the "Italians" in the scrap markets in Boston and NYC) "relocated" people who no longer owned land and therefore sent more of their kids to college (vs. societies who keep family money in land, who tend to keep one kid to watch the land, sometimes the best kid). The more of your kids go into either college or urban living (surviving in a city should be awarded with a degree on the wall), the more get jobs in engineering. Anyway, the Taiwanese who fled Mao wound up being very "mobile" investors who set up shops to assemble display devices and other peripherals for electronics, in contracts with Japanese, European, and American OEMs.
But it turns out the OEMs are not paper mills or steel mills. Turns out they have outsourced so much of the assembly that the little brooms are all finding each other, and Taiwanese and Koreans are turning from the poor outsourced labor markets to the giants of the industry.
Oh well, another long-winded blog that may not be read or appreciated, but maybe I'll put it in a book someday. The point is that there are all kinds of historical bases and connections which lead to success in recycling, which may not be apparent in a "Cash" or "Crash" in "Trash". If you have loyalty and trust, and are speculating on something other than buggy whips (i.e. metals, polymers, and fiber... not necessarily "added value" items like Pentium IIIs or CRT TVs), the raw materials market will come back, just as toilet paper markets come back. And India and China are growing centers of demand, and environmentally exploitable raw materials sources are finite.
Truce on Ewaste Export?
Yesterday's post was a tad provocative. What this discussion is about is encouraging USA companies to either employ the techs to fix the equipment, or to allow "junior" techs to sort equipment for repair, under binding and legal purchase order, at a clean, audited, qualified overseas repair facility. The former would be great, and if BAN can pull that off, my hat's off to BAN. But the demand is over there, and we cannot just pretend to be meeting it without the buyers turning to less scrupulous suppliers.It is frustrating to be on the side of "export reform", when the documentation of abuse, dumping of useless product, and pollution is so strong. We would never export printed circuit boards to Guiyu, China, or defend soaking the boards in acid for gold recovery. But the debate has gone on without debate, and every computer donated to Goodwill Industries is now destroyed under the Dell "Reconnect" program. That's right, Goodwill Industries, one of the oldest reuse programs in the United States, has been paid to go "zero reuse" with the computers and monitors delivered there. We tried to get Dell to allow us to take the good ones and fix them, the recycler said to send a proposal, and we heard back in no uncertain terms that nothing that touches Goodwill can be tested, fixed, or resold. Aaarrrrggghhh!!
Jim at BAN always emphasizes that he is in favor of reuse, and that he believes that tested working product standards are possible (though he'd prefer that the developing world "leapfrog" us, which I guess means they all get newer computers than we have. Right.). But we can't get BAN to protest the Dell-Goodwill policy, or the California "cancellation" policy, or to weigh in on product stewardship legislation which results in chopping and grinding. What I want is for Africans, Cubans, Chinese and Arabs to have sustainable jobs (not mining) and affordable internet. If E-Stewards comes through and provides that, we will definitely join the bandwagon.
For us to achieve the reuse rates of 22.5% (from 2008) without any overseas repair, I would have to either charge 3 times what we charge, or get a lot of H-1 visas and bring the repairpeople from developing countries. My techs gave up on a laptop, I brought it with me to Egypt, and they fixed it for me (board level repairs) in about 40 minutes.
Mark Twain says:
quote 1: "A person with a new idea is a crank until the idea succeeds."
quote 2: "A man who carries a cat by the tail learns something he can learn in no other way. ."
The recycling community has not really resolved whether I'm simply being a crank, or if I'm carrying the export-cat in a sacrilegious fashion. But viva Las Chicas Bravas.
(Can you tell if the repairman above is American, Latin American, or Immigrant?)
Video of repair operation in southeast Asia
Risk
Choose Your Headline:1) Man killed crossing railroad tracks
2) Man killed in shark attack
3) Man killed in combat fighting.
Rank these in A) order of risk, and B) order of press coverage.
Press is attracted to "man bites dog" stories. (in other words, A and B are "inversely proportional").
(pSST* railroad tracks, that's what kills the most people per year. shhh!*)
The fact that something is exported for proper repair and recycling, and is properly repaired and recycled, is not pressworthy. If something is exported for proper repair and recycling, but is actually disposed and creates pollution, that is the "shark attack".
Actual risk? See video:
When USA exporters tell an African repairman that the oldest 50% of electronics is worth repairing, they are lying. But when non-profits state that 80% of the items exported to Africa are for dumping, not repair and reuse, they are lying too. But it is much easier for the non-profit to find press than for the African to find a different, more honest, USA exporter.
The transport to Africa has no "reverse transport" or "backhaul" sea container economies, and African buyers pay full freight - $8000 per container. No doubt there is TAR - Toxics Along for the Ride - but 80% junk is not a repeatable excercise.
The non-profits believe what they are saying, fervently, but when they say it is 75% or 80% waste, they are lying. They are so upset about the shark attack that they will exaggerate the risk. And as a result of the lies, governments will stop export of used computers entirely, and people will not get computerized blood donation trackings, and people will die. On the railroad tracks.
You see, women are dying in childbirth in Africa, because African med students lack computers to learn blood donation inventory and management systems, that happens every day. That is a railroad crossing accident.
Some USA companies refuse to export PCs to Africa, and they are hence innocent of exporting junk. Others export everything, including the junk which is expensive to recycle, and then applaud this blog and say their exports help Africans.
The Africans I know and have lived with want good people to export good computers. They don't want good people to destroy good computers. They don't want bad people to export bad computers. They are *&@*ing 100% smarter than 60 Minutes.
Deaths from shark attacks in the USA are, plus or minus, one every two years. Around 1,000 Americans die crossing the railroad tracks every year, much higher a death toll than troops in Iraq or Afghanistan.
A similar number of women die in childbirth in Cameroon daily. One of my students did, when I was a teacher in Cameroon. We didn't have the internet then. But if I was a teacher in Cameroon today, by God, I would want the hospital to have a used computer if I had a student in labor.
I repeat. If "tested working" accomplishes the same number or computers exported as overseas repair does, I will stand down. If "tested working" is supporting big shredding investments and planned obsolescence by computer manufacturers, then I will export till my hands fall off. What I observe among E-Stewards is that some are exporting and saying its working (better than destroying) but the computers are actually repaired and upgraded overseas, or they are shredding and claiming "no export!" in triumph (ugh!! rich people throwing away computers rather than give them to poor people willing to fix it). I am not seeing any E-Stewards with USA repairpeople fixing computer displays.
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