E-Steward and R2 - In the Cross-fire

In 2002, I visited some great CRT refurbishing factories in China (having made connections on a consulting trip to China EPA and GEARI).   Having seen the huge reuse potential of used monitors (mostly coming from California at the time), I thought that the key problem was TAR - "Toxics Along for the Ride". 

We visited more factories in 2005, and this time I brought along a native Chinese speaker - UC Davis's Recycling Coordinator Lin King, as well as a neighbor of BAN, Craig Lorch of Total Reclaim.  I didn't want to be accused of seeing what I wanted to see, but didn't want to leave this lucrative and highest-value-added and most environmental solution to the scumbags.

There were two problems.  The first was that I could not on my own supply enough monitors for the factories to stop buying from our "lowball" competitors.  Demand was so high - estimated at 70,000 monitors per DAY at its peak in 2005 - that the factories were happy to buy monitors from both sources, the WR3A members who passed the CRT Glass Test, and the factories that didn't screen the monitors as well.  TAR wasn't stopped.

The second problem was that the Chinese Communist Party owned the largest virgin CRT manufacturing capacity in the world, having made a major investment to take over CRT production globally in the 1990s.  In my meetings with Chinese "competent authorities", they said smashed CRTs for raw materials were ok, but working CRTs were "dumping" in a protectionist / tariff sense (their virgin CRT factories shouldn't have to compete with used CRTs from wealthy nations).

That meant I was doing the right thing environmentally by sending the good CRTs to these factories and taking out the bad ones, but I was "closing one eye".   The Chinese buyers typically had small import permits for a small number of monitors (80,000 per year for our largest buyer) from a regional office, but they were playing cat-and-mouse with customs.  If we got caught with a load of good CRTs at a Chinese port, it would be like drinking a non-alcohol cocktail at a Speakeasy during prohibition... "tell it to the judge".

So we went looking for countries to send the CRTs to, and the Chinese and Taiwanese factory owners were doing the same thing.  Some of them only wanted to change the country of transit - ship CRTs to Viet Nam for transport by truck overland.  But others wanted to make larger investments to "scale up" the monitor factories.

I met the CEO of a billion dollar per year company at CES in Las Vegas.  His company had supposedly purchased a CRT Glass washing machine from Europe (probably from the Citiraya bankruptcy) and was going to use his return-the-glass contract (from buying new CRTs and sending back incidental breakage for recycling) to Samsung Corning in Klang Malaysia.  Samsung was interested in recycled CRT glass because it lowered energy costs (a big concern in 2006), and they hoped to get some environmental credentials as well.  The factory owners group gave us a tour of a huge CRT monitor factory which had 1500 employees, they were buying 5000 monitors per day just at that factory.  The specs were the same, about 40% of monitors were unwelcome because of the raster or size (putting a trinitron CRT into a thomson case is like trying to put a Cummins motor into a Volkswagon), but they could recycle the glass.  I got very excited and started promoting the WR3A hard, and had a lot of dialogue with BAN.

BAN was suspicious.   They tried to get us to remove the CRTs from the monitor housings in the USA before we shipped, saying that was the only way to be compliant with the Basel Convention.  But EPA and the importing country EPA didn't think that, and in fact the fallout (broken, unacceptable) was actually higher in the stripped / pulse-test operations than in was leaving the monitors intact (the USA factory which had been stripping the CRTs discovered the same thing and went to our method of shipping later that year).

When it came to R2, I tried to portray the discussions with BAN in a positive light, saying we were trying to solve the same problem, TAR, but approaching it differently.  At the R2 meeting, Sarah confronted me afterwards and said BAN did not like the association.   Jim at another meeting told a friend of mine from EPA (who didn't disclose she knew me) that I was just another exporter.  These two interactions signaled the beginning of a deteriorating relationship between myself and BAN.

We had some success signing up CRT suppliers to the WR3A contract.  But two problems came up.  First, the people who most wanted to join WR3A were the folks who had been exporting practically everything.  They liked that we made exporting sound ok, they just weren't committing to take out an recycle the bad CRTs.  Some said they could meet our good CRT PO specs, but told us not to ask what they do with the others.   We didn't accept their supply.   The second problem was that BAN was apparently labeling our "testing" procedures (which statistically result in 95% acceptance) as non testing, and promoting the other method (which was less effective than 95% because of the stripping-and-shipping process).  So some good suppliers we initially could buy CRTs from stopped supplying us and went to destruction.   BAN said, correctly I guess, that they were still able to ship to us if the suppliers "tested" the monitors to BAN's specs rather than WR3A's specs.  The problem was that everyone just started destroying the CRT monitors rather than bother.  The biggest example of this - and the one I have focused on - was California SB20, which requires the CRT tube be "cancelled" (the neck of the cathode ray gun broken) prior to export, which ruins every single one for rebuilding purposes.

I did not want to give up, and we started adding layer by layer to the "vetting" process for the CRT refurbishing.  We got the buyers to give us feedback within 5 days of receipt, via a reconciliation report.  We got them to charge us back $4.50 for each unacceptable monitor (damaged in shipping or shipped by mistake), and to recycle the glass at Samsung, and to provide downstream proof of recycling for each part removed or recycled.  They got ISO14001 and ISO9000.  They even went so far as to invite their nation's EPA to inspect their facility four times per year.  In 2008, we sent an R2 Auditor to verify their compliance with the PO, their import permit, etc.  I tried to reapproach BAN that winter and was rebuffed.

It became a hard year for our buyers in Africa.   Greenpeace saw the "ewaste" problem as a fund raising tool and began to compete with BAN for who owned the outrage.   60 Minutes, BusinessWeek, and other bad press for the export market made it hard on our smaller business partners who had the will but not the wherewithal to pick up their game.   One of my favorite customers had 3 containers of perfectly nice grade A monitors seized at an African port.  We came and diverted the shipment to our vetted factory, and even arranged to supply the African buyer with factory refurbished CRT monitors to get back into the game.

The PO worked well for 2008 and 2009.  Our Asian partner actually became a CRT glass recycler for their home country.  Then the enforcement by China began.  At first, that was great by us, we had left the Chinese "Speakeasy" market and were operating in a 3rd country, transparently and legally.  The fines by USA EPA started to fall on the folks who were going cheap and easy to Hong Kong.  We were bullish and started to solicit more monitors than ever, and we got more people than ever willing to meet our specifications.

Unfortunately, Hong Kong was an "end of pipe" enforcement.   We should have realized what would happen next - 80 containers per week diverted from Hong Kong, hitting the streets in the other countries including the hometown of our factory.  The PO that paid WR3A $3.50, $7, and $10 per screened and tested monitor became a handicap to our buyer.  The same CRTs were available all over town at a street price of $1.50, diverted from Hong Kong and from USA "recyclers" who had been enforced against.

We made two plans.  First,  move the factory to Mexico.  Mexico is an OECD country, and more importantly, eliminates the Panama Canal and Pacific ocean shipping for our buyers in Africa.   Second, we drastically reduced the pricing to our regular buyer, at much pain and discomfort to our USA suppliers, who were dealing simultaneously with more and more expensive CRT glass recycling in the USA.  I went for financing and asked BAN if the move to Mexico would be welcome.  We had a short and friendly dialogue.

Then my critique of the E-Steward Tested Working  standard came out, and BAN got very upset.  We tried to salvage it, but the ricochets still ping through the internet.  Last week, there was a post in Toxics Alert which named me and my company.  I was traveling in CA, trying to meet the UN purchase order for working equipment in Africa and trying to get help for Mexico.   Our $85k grant for CRT recycling on the Mexico border was frozen, and bridging the price disputes between our Asian buyer and WR3A suppliers became more difficult.

This is an extremely difficult way to try to do the right thing and not make any money doing so.  The WR3A members who went to breaking CRTs are still afraid to face BAN's wrath and are breaking CRTs.  EPA has gone to radio silence, I know their enforcement team is at work, and we are proceeding based on full disclosure.

If our factory import permit is taken away, this will all go to hell.

I just spent a few thousand dollars flying around the USA to meet with suppliers, meet with buyers (the UN program) and to shore up legal and transparent shipments of TVs, which are coming out our gills.   BAN continues to misrepresent what WR3A factories are doing legally, and E-Stewards remain confused about the repair and refurbishing market.

By the time all of this gets fixed, who knows if there will still be a need and use for CRTs?  Having lived in Africa, I think there is.  Laptops and LCD screens disappear too easily and don't last long enough.  CRTs work, they are big and bulky and dependable, and there is a strong repair culture for them established in the developing world.   Will we every find common ground with BAN?  Well, I will always take offense when a competitor who exports twice as much gets away with "pledging" his duties down.   I think we have to go to PACE at the Basel working group and make our case there.