OEM Sponsorship of Electronics Recycling - Enlightened Self Interest

This could have been a chapter 9 in "Collateral Damage" series started in October. Original Equipment Manufacturers have been at ground zero in the "Ewaste" War.

But Original Equipment Manufacturers aren't really collateral. They are are active players, for better and for worse, in the battle over recycling policy.  Their role has been extended to finance recycling of products at end of life.  Or not at end of life.  Product support, software upgrades that turn "obsolete" into a verb, negotiations over broadcast changes (Telecommunications Act of 1996), VHS or Beta, copyright law...

They are targets, and they are targeters.  They are allies and adversaries.  Interested parties with a stake in the game.

It's just business.

Some manufacturers are my company's clients, directly or not.  I'm way too small a player to factor into corporate strategy, but have a history with the writing of the first CRT waste ban in the country (MA DEP) and some consulting for EPA on the 2006 CRT Rule.  I've tended to distrust Extended Producer Takeback laws (testified against Vermont's, until it was a done deal and then advised on some of the rules and bid on the contract), though I promote reuse and secondary markets.

With all that on the table, I advise manufacturers to cooperate in the takeback business.  There are four reasons why manufacturers of original equipment should contribute to programs to lower the cost of recycling their material.  Guess Which One is the most important?

1. Goodwill value for the Brand

Example, Dell Computers was threatened by an NGO 15+ years ago for using a recycling program (Unicor) which employed prison labor. Unicor had taken contracts from a rather wealthy and savvy private electronics recycler in Florida.  He contributed money to the NGO and told them to go after Unicor.  NGO went after Unicor by going after Dell.  That was bad brand karma for Dell, so Dell did a lot of voluntary events and hired NERC (who hired me) to run workshops on recycling.  At the last workshop, Dell VP asked me what Dell could do, I told them what MA DEP did that was successful was partner with Goodwill Industries and Salvation Army.  That led to Dell ReConnect, which for years put Dell's brand in front of people who were donating computers to a charity (and writing off some insane estimated value for the computer on their taxes).  Anyway there is more history in that example (and explains animosity of the NGO that went back after the Dell Goodwill program this year in the infamous MoniTour project).  But it's still a good example of using ADVERTISING budget in a takeback program.

2. Responsible management of potential future liability

Some NGOs (SERI and E-S) and OEM groups (MITS, MRM) have advertised their "added value" to the OEMs as working as an "insurance" that their product would not be improperly recycled or exported in a way which created either a) real or perceived downstream liability / responsibility (NGO takes photo of Brand label at Africa dump) or b) shreds up stuff so it isn't resold in the secondary market.  The latter is "planned obsolescence in hindsight" and led to the preponderance of Big Shred in some OEM plans.  The former reflected a legitimate concern by OEMs that creating a responsible downstream reverse supplychain would normalize recycling and remove the need for legislation making them responsible for it.  See #3.


3.  Access to and Involvement In Policy Formation

When an OEM has a paid representative who is active in the recycling activity, they meet regulators and NGOs and influencers.   Maybe one day they get a chance to influence a simple decision like, "should market share be calculated based on what is sold now (future waste) or what is collected now (past sales)".  If you are an older, legacy manufacturer like IBM who isn't participating much in making personal products since the "white box" revolution, a decision to attribute financial responsibility based on current collection or current sales could be worth tens of millions of dollars.  Being around and involved in the "game" is a great ROI - if your person does it right and has an agenda and knows all 4 reasons you are involved.  If they are going to meetings and glad-handing and not aware (I have seen that too), the OEM misses this opportunity.

4.  Defuse the Billion Dollar Extended Responsibility Bomb

As mentioned, when electronics are expensive or difficult to recycle, NGOs and regulators cook up solutions which are usually funded with some kind of advanced disposal fee or tax on the OEM.  This is by far the biggest problem.   Once you become part of the local government tax base, it's over.  Forever.  The cigarette tax and gasoline taxes may have been passed to fund something in some referendum, but no one remembers what it is and the gasoline and cigarette manufacturers will pay local government, like Mr. Wonderful, "royalties in perpetuity".

This is why it is in the enlightened self interest of manufacturers to keep the cost of recycling CRT displays under control.  Most Americans only dispose of a display every ten years, and will shrug off a price point that's say, less than the toll at the George Washington Bridge.  But if the cost of recycling a TV becomes too onerous, legislation is likely to follow.  I'm not threatening it, I just thing that a shared cost, shared responsibility model is a beautiful thing.

And to the environmental NGOs who want manufacturers to be permanently a part of the takeback system, you are wrong.  It does not result in manufacture of more recyclable devices.  There's nothing an OEM could have done to make cassette players and black and white TVs upgradeable, and no one could have designed a 486 computer to run Windows 10.  What the devices are made of is a concern for the mining of rain forests and coral reefs, not landfills.  We should be more concerned about rare and conflict metals extraction than about what vitrified CRT leaded glass does in a landfill (hint - absolutely nothing).

If you do look over the Collateral Damage blogs (which I hope to finish over vacation), ask yourself how many of the unintended consequences came from passing laws when the advocate did not know what he/she was talking about, and was making it up as they went along?  The "80%" statistic did more harm to more people than anything I've witnessed.  Including OEMs.