How E-Stewards Made Me Rich?

Confessions of an Exporter on "America Recycles Day"

Well, rich is a bit of an overstatement.  But here's why I should be happy about BAN being around for the past decade, if not as happy as other exporters they made even richer.

Robin Ingenthron, Caught in the Act of Reuse, 2004

A decade ago, the SKD (elective upgrade) factories in Guangdong Provice (China),  Malaysia, Taiwan, Thailand, and Indonesia were buying hundreds of thousands of CRT computer monitors per week - mostly from California.  BAN's first video, showing primitive recycling conditions in Guiyu, led Silicon Valley Toxics Coalition and other non-profits to believe that anyone Chinese who buys monitors is burning and breaking them.

This led to a system of subsidies on the west coast, where consumers are taxed to break (cancel) monitors so they cannot be resold in Asia.  California CRT monitor supply disappeard from the market, almost overnight, or had to be smuggled in a replace-CA-address-with-AZ-product campaign (see Monkeys Running Environmental Zoo, my most-read post ever).

Tested Working Monitors, back in the day

The Asian factories still had very high demand for remanufacturing display units in emerging markets like India, Egypt, and Indonesia.  Reluctantly, they raised prices and offered to pay higher shipping costs from companies like mine, on the East Coast.  California's shortfall brought booming demand to New York, Boston, and even floated boats in Vermont.

In my defense, I declared the good things going on and tried to bring BAN on board, but the pictures of good geeks of color doing good things with exported displays complicated BAN's message.  It was easier for most recyclers to tell American consumers that the importers were "poisoning children", rather than make the effort to distinguish between good and bad reuse and recycling.



Not wanting to sell baby poison, my competitors in the Northeast - companies like Uniwaste, Electronicycle, Eco International, and WeRecycle, adapted "no intact unit" programs and began to put shredders in, like California.  This made the "Al Capones" of NY, NJ, MA, etc. even richer, and their prices on bids blew the "stewards" out of the water.  I didn't have volume to justify a shredder, so we put our money into better audits, tighter controls, and better accountability for our reuse sales.

Getting paid by computer refurbishers is more profitable than buying million dollar shredders to render working computers into scrap.  With the profits, I added more employees and plant, and opened my own "fair trade recycling" plant in Mexico.

Of course, the "war on exports" campaign made other people rich, too.  Some of these "Al Capone" characters I don't particularly like, others may be naive but aren't bad actors.  Some, like Gordon Chiu, committed no crime worse than speaking English with an accent.  From the interviews with the geek buyers overseas, quality of the material they imported declined in this period because they were forced to buy more "as is" and less tested equipment from shadier operations in the northeast and south.  Having taken themselves out of the export game, the "Stewards" made exporting too easy.

Some of the overseas factories (at least 2) put in very high end CRT recycling equipment in order to deal with the junk they were forced to buy "along for the ride"... material they would have rejected before California and "no intact unit" companies took root.  Adapting to the lower quality, these factories almost made exporting bad equipment a "victimless crime".  It was beginning to look less like Al Capone, and more like Joe Kennedy Senior at the end of prohibition.  If the story broke that the export market itself was being "repaired", a lot of watchdogs would be looking for work.

CRTs removed for recycling - not reuseable

But BAN told the governments in places like Indonesia and Malaysia that the factories were illegal and poisoning little children, and they are not choosing to buy from the USA as much.  The "steward" companies are now lobbying furiously in Washington in support of the Green-Thompson bill, to change the rules and make exports illegal.

Stewardship becomes a popular game as local and municipal governments find taxing manufacturers for extended produce stewardship to be as lucrative as cigarette and gasoline taxes.  The original manufacturers, forced into a takeback scheme, either embraced no-reuse in order to stem "market cannibalization" (reuse) or out of fear of being branded an exporter...

So supply was cut, prices went up, quality went down, competitors invested in more expensive processes.  I was able to charge less, and got invited to visit beautiful and exotic locales like Malaysia and Hong Kong and Cairo and Sonora, bringing my children to meet wonderful people like Fung and Jinex and Hamdy.  We shared our home with Fixers and Geeks from so many different nations.  They pay me for the working product, and I dismantle and remove the bad stuff, keeping certain parts they need and pay for out of the scrap.

My local competitors who built shredders are still kind of upset with me for not joining the planned-obsolescence-in-hindsight campaign.  Some of them have way more money than I do, and are lobbying furiously ... Vermont's a small market and it's hard to compete with larger recyclers.   Some are really just furious at the lower common denominators, the pack and ship exporters, who they compete with.

Dead Factory Indonesia Walking

I'm labelled an "apologist" for the exporters who, I know from interviews overseas, have taken advantage of the market to demanufacture less, and who export "toxics along for the ride".  Some of them send trucks to cherry pick the accounts of shredding companies, using the good stuff to "sweeten" their own loads and dilute the junk.

I write this blog because the market will eventually decline anyway.  Fixers and refurbishers are finding product now closer to home.  California is not as important as it used to be, now that Hong Kong office buildings are constantly upgrading their IT equipment.

Its too bad, really, how this shook out.   The no-export people I really like in New England - Dick, Bob, Mick - increased their floor prices to compensate for the no-reuse, no-export commitments they made, and they all were forced to sell their companies to anti-reuse shredding investors.  They remain traumatized, like Lauren R and Dave Z, by the other "exporters" who took advantage of the system like I did.  They are throwing tomatoes, and I keep getting geeks in the way.

They cannot help but like a campaign which makes the people who underbid and underprice them look bad in the press.  Lauren now works for that campaign full time.

Me, I'm in the middle in many ways.  Because we aggressively remove junk and demanufacture it in Vermont, we don't export as much as the people profiled in 69 Minutes or BusinessWeek.  But the 22% we do export brings in about 60 percent of our revenue, and we apply that to lower our costs and bids, pay better wages, and hire more workers here in Vermont.

Vermont has yet to approve our exports for material collected under the legislation.  I was practically scolded at last week for "playing games" when I asked whether a maquila which demanufactures equipment and sends it all back north as a maquila is "transboundary movement" or export.   Being shouted at by your local state regulator and contract manager isn't good.  So much for Ms. Vicki, Dolores, and the Chicas Bravas jobs... Vermont is becoming a no-reuse state.

USA Commerce Departments, WTO, and Basel definitely make a distinction between "trans-boundary movement" and "export", just as we make a distinction between "tourism" and "immigration" or "emigration".  But over the past ten years, I've kind of been branded a nigger-lover, an exporter, and an apologist, and a lot of good people would really like to see me shut up.

It may soon reach the point where I cannot write any more.  As the export market writes off the USA and Europe and begins to rely on Asia for surplus and good enough tech, and as state governments ban exports for reuse under "stewardship" funding, or write BAN-Pledge language into state regulations and procedures, my window of reuse will close.

It has been a terrific decade.  I believe I'll stay friends with many of the overseas techs, geeks, and fixers who I've met by participating in the export market.  In another decade, all these exports will be legal, and the big shredders will be dismantled for scrap.  But it's time to pipe down, do more destruction, play by Vermont's rules.

No, it won't create seven times more jobs to lose 70% of my revenue.  The current press that says shredding equipment creates more jobs than selecting what can be exported and demanufacuring what cannot, that's another load of rubbish.  Teaching Vermonters to separate SSG (Korean style) CRTs from Trinitron (Japanese style), to check screens with blacklight for screen burn, to produce barebones Pentium 4 computers for upgrade, was more complicated and challenging work.  It caused me to spend much of our income from exports on higher paid, more educated, college staff.  Those people give me an advantage today.   We'll have to figure out how to best survive the next decade.

Happy America Recycles Day.