Showing posts with label regulations. Show all posts
Showing posts with label regulations. Show all posts

Once Upon a Time in the North: Certification = Barrier to Entry?

Quicksilver X Man Duct Tape, for all your needs
After two decades of study of the recycling and reuse of electronics, it is increasingly clear that "barrier to entry" and monopolization of services is the biggest economic driver.

The USA Supreme Court is considering an important case this summer, to consider whether licensing rules are truly established to reduce risks, or whether (nudge nudge) they are simply anticompetitive.

GPS' Fareed Zakaria program spotlighted the challenge to Federal Trade Commission's successful defense of public mall "teeth whitening" services, which were banned as "unlicensed dentistry" by NC's State Board of Dental Examiners.   The Board of DE's, staffed completely by dentists, ruled that you have to have a dentist license to practice teeth whitening.

Why we should care about teeth whitening - Zakaria Blog

Facts And Strategy in Recycling Business: Part 1

Time to share some experiences about the export market and used electronics.  I've now spent more than a decade building the Fair Trade Recycling aspect of the business, and growing my companies (American Retroworks, Retroworks de Mexico, and Good Point Recycling) to be healthy and fully functional.  There is not as much strategy and trade secret to the business.

Commodity value of fiber = ?
In this Part I, we can see how electronics recycling is basically just like curbside recycling.  There are three key differences which we will explore in Part II.   Part I starts with simple and factual observations about the recycling business, and then wades into how government can or should involve itself in regulating that "waste" or "raw materials" business.

1.0  Similarities between E-Scrap and Consumer Recyclables:  

Like curbside recycling, the revenue comes from different grades of raw material which must be separated, graded, and cleaned to replace virgin raw material from feldspar mining (glass), smelting (metals), forestry (fibers), and refining (polymers).  Each of these products can be sold, at some stage, for cash, but they have drastically different values, grading, and transport requirements.

1.1  Commodity Value:  Glass is a bane for both curbside and e-scrap recycling, in that it's heavy, easily contaminated, distances to furnaces are enormous, virgin production is fairly simple and raw material - igneous, metamorphic, and sedimentary rocks all have abundant silica for feldspar mining.  Metals are easy to manage (magnets and eddy currents) and easy to sell, and the pollution from metal mining and smelting is colliding worldwide with growing population.  More people, with more money, want more things made of metal, and no one wants the smelters to impact their property values through pollution.  Even in China and India, the incomes and expectations have grown to where people are less and less tolerant of a lead-zinc smelter which spills noxious toxins into the rivers and water supplies.   Fiber is much more or a part of the curbside business, but the difference isn't as great as you'd assume when you look at the declining tonnage of newspapers and the huge volume of wood from console televisions, speakers and stereos which our plants manage.

1.2  Labor:  If all of the materials in a computer, tablet, TV or printer were pre-disassembled, you could run them down the exact same Mayfran sorting belt that you run curbside recyclables through.  Magnets and eddy currents can grab the steel and aluminum, blowers could separate the lighter plastics, shaker trays could get the small light pieces into a different direction than the big pieces.  But in every Materials Recycling Facility (or Material Recovery Facility*), labor is high.  You need humans to pick out and grade different raw materials.   You can add two people and further grade (glossy magazines from newspaper, for example) or one person and send the bales to a paper mill with easier tolerances.   But each laborer adds value.  The problem is when the value added by labor (e.g. sorting plastics by resin, paper by ink and clay content, green from clear and brown glass) produces less than minimum wage.   If you pay a woman $8 per hour to separate two tons of material and only make an additional $5 on the sorted material, you cannot afford her.  This labor-to-value dynamic is just as important in E-Scrap recycling as it is in collection.

1.3  Collection:  The distance between residents in a city and a countryside is a part of the cost of both recycling and waste collection.  The economics and competition between waste and recycling collide.   Since you cannot affordably recycle road kill, dirty sponges, spoiled food, wet tissue, many high heeled shoes and chicken skin (sorry Zero Wasters), you are committed to running the Waste truck.  If you don't, ask Naples Italy and Seattle Washington (recent Waste Management strike) what happens to property values and pest control.  The recycling truck is therefore an "also ran", and has to collect material valuable enough to offset the convenience of running a single waste truck to a single landfill or incinerator.

Fortunately, despite know-it-alls like Penn and Teller saying otherwise, this works for a couple of reasons.  First, like a subway, you don't have to prove that the subway is faster than the cars on the commute.  Going to work by car may be faster, but if you eliminate the subway the people are all in cars and it's no longer faster.  Similarly, if you try shutting down recycling, you find that avoided disposal costs are more than the per ton at the landfill.  When you add the "value added" from income of sale of the commodities, you find a lot of multipliers and higher employment - not just at the sorting line but at the paper mills and refiners as well.

1.4   Markets:   There are "niches" in collection besides rural (high mileage costs) and urban.   Some recovered materials - especially glass (and especially especially CRT glass) have a small number of buyers around the world and face huge transport costs after collection.  This transport cost affects labor - you may decide to pay someone to sort plastic by color because the transport distance to a mixed-color market is higher.

1.5  Government involvement:  Both electronics recycling and curbside recycling involve government, through procurement law (government contracting), labor law, environmental law, transport law, etc.  Every time there is a real problem with waste management - a recycling fire, an abandoned speculatively accumulated pile, a fraud, illegal dumping, alleged malfeasance (usually a claim by a competitor with a different or better process) - we pay for a regulator to enforce rules and public contracts.   Recycling businesses must know the laws (ignorance is no excuse), but also anticipate how regulators are interpreting the laws.

EPA drafts new "Reuse Sale" Rules for CRTs

(Late additions in red)


When does "closing a loophole" crossover into "prosecuting the innocent"?  What are the legitimate reuse applications for CRT (Cathode Ray Tube) monitors, and when do concerns over their high disposal cost make it an EPA, rather than Department of Commerce, issue?

These are the questions that EPA's Newly Proposed CRT Export Rules are meant to resolve.

When the EPA CRT Rule was first issued in 2006, after a couple of years of investigation, it rightly allowed for the "determination" of waste to be made by the recycler, followed by EXPORT based on that determination.

At that time, despite false and fabricated claims that 80% of the CRTs exported wound up in primitive recycling operations like Guiyu, the commerce was mostly driven by three factors:

  1. Original CRT Manufacturing Plants (same as warranty repair) were buying back CRT monitors with key functions
  2. These refurbishing factories were selling the SKD CRTs to 3B3K nations - the 3 billion people who are neither richest or poorest, but who were gaining internet access at 10 times the rate of growth of OECD nations.
  3. The only places the factories could get decent, newer CRTs (at the time) were the wealthy countries, which were rapidly turning them over to replace with flat screens.

The ubiquitous photo of the Chinese woman hammering the yoke off with a hammer raised peoples concerns, but in the end EPA allowed export for reuse on two conditions:

A)  One time notification
B)  Maintenance of 3 years of records showing actual reuse.

The problem in implementation was B.  I have kept meticulous records, and can't get anyone at EPA or Region I to show any interest in them.   They aren't getting them from any of my competitors, either.  This is how "reuse" becomes a loophole.

The EPA is now trying to close this loophole by creating an EPA-to-foreignEPA dialogue tracking the CRT to make sure that their sale is recorded and tracked.  They also want the same reports to be generated by everyone in the transaction - buyer, broker, and seller.   Excuse my lack of enthusiasm... but is the solution to never having reviewed the 3 years of records really to demand more records from more people?

The other issue is that EPA appears to be leaving out Department of Commerce and US Trade Offices out of the discussion.   Those entities know that when the Communist Party owns a factory making brand new CRTs, that they have a bias or incentive to ban USA Commerce.   Working CRTs which are sold for refurbishment are USA products, governed by Commerce.  The USA shouldn't set a precedent simply allowing a foreign nation to label our goods as a "waste" if they are not being discarded or speculatively accumulated.


See past post "Red Scare: Competent Authority Decision Trees" 


If China bans import of a computer which could be used to display a photo of the Dalai Lama, does violating that ban really trigger USA EPA enforcement?  These are "color orange" laws... a foreign nation can ban the color orange, but the USA should not draft a law which incorporates that into USA law by simple reference (making it illegal to export orange goods to a country banning the color orange).   There needs to be a clear environmental case against reuse.   Otherwise, another nation may use environmental laws to subterfuge WTO free trade agreements.  


China is already being investigated by WTO for doing this with rare earth metals.  If USA EPA makes it illegal to violate China's "environmental law" on trade in the commodity, then it doesn't matter if China loses the WTO case - you have now violated USA LAW by buying the "environmentally regulated" rare earth metals, which the USA made illegal based on the foreign nation's "competent authority" rule.  Reuse of CRTs is not an environmental crime, and second-hand goods are not "waste"... the Department of Commerce knows the distinction, and needs to be involved in this.  

But is CRT reuse still an important market?   That is a bigger "question mark" today than it was ten years ago.  The biggest difference is that foreign markets can now shrug the USA suppliers off... there are more displays in more places, new and used, than ever before.  If the USA wants to cut off its own nose, off with it, say the long-insulted CRT refurbishing factories.

Regulatory Nuts: To Approve Reuse of Waste

There are peanut allergies.  People can die if they eat a peanut by mistake. [Peanut Allergies Over-Reaction]

At the same time, there is a peanut shortage [Soaring Peanut Prices Hurt Food Banks]

Looks like a job for government regulators.  (I've been on both sides, with a decade as both a regulator and a decade as a private business and a decade in the non-profit / activist sector).

First, at the point the peanut is harvested, you put in rules against harvesting bad peanuts.  Ok, this really has nothing to do with deaths from peanut allergies, but you've been called and it doesn't sound unreasonable.

Peanut Stewardship:    Second, you institute a state procurement plan to pay for destruction of bad peanuts.  You've been told it's really expensive to remove bad peanuts.  So you tax peanut butter, peanut oil, the producers of new peanut snacks, to help pay for the inspection and removal of bad peanuts.

Now, since the peanut collectors are getting state funds (from peanut butter tax), it's reasonable to require more rules and regulations of these nut collectors.   In addition to the rules for what happens to bad peanuts removed through the subsidy program, you add a line about what may happen to the good peanuts.  Surely it's reasonable to track them.

The easiest way to regulate this is to declare all peanuts "bad" or "waste" or "p-waste", and then to set conditions under which they can be "de-wasted".

Local P-Waste Reuse:  You want to know how many peanuts are eaten locally.   Vermont is a small state with porous borders.  Since trucking is harder to track than you thought, you define "local" as the "United States of America".  If the peanuts are sold to Florida, California, Texas, Alaska or Hawaii, they must be tracked.  Define "local" as USA.

An anti-externalization/anti-globalization activist/watchdog suggests that sale of good peanuts could still be a loophole for export of bad peanuts to countries with little infrastructure to deal with them.  "Up to 80%" P-Waste exports result in crying children photos..  Regulators are paying so much for the bad peanut destruction, that would be a terrible loophole, a shame, if some bad peanuts were labelled good peanuts, and paid for by exporters instead of charged to the state subsidy... it would be a failure of the whole state subsidy program if bad peanuts got through.

Again, you don't actually have the authority to under RCRA Waste regulation to seize or regulate good peanuts.   So you define all peanuts as 'pwaste' even if they are not charged to the bad peanut removal program (because they were good peanuts).

Although they are not charged to your bad peanut removal program, the good peanuts must be tagged as "p-waste" at the point of collection.  They can be "un-wasted" if they qualify as good.  This is how you capture Reuse under RCRA, which has defined reuse not to be waste.

You institute a toe-tag label program.  Every single peanut collected in Vermont is labeled "p-waste", so that you maintain the authority in case a bad peanut is labelled a good peanut.  Do not tag bad walnuts, bad almonds, stones, dirt, roots, or  as waste, as these are not "covered nuts".  Not all waste is "p-waste", and not all "p-waste" is waste, and not all p-waste is covered by the subsidy...  clear enough.

Now, to define how good peanuts, not charged to the program, may be used.  Some good peanuts go into peanut butter, some go into peanut oil, some go into snacks.  You now ask the collectors to identify whether the peanuts are going into a snack, an oil, or a butter.  The collectors and farmers explain they don't know, they sell peanuts to a peanut buyer who grades and processes peanuts for sale.

To simplify, since the farmers are allowed to sell for "local" use, and most local reuse in Vermont is for snacks, you define local use to be snacks.  You then write a rule that the collectors can only sell peanuts to snacks, and that if sold as snacks, they cannot be charged to the bad peanut program.  But first they must be tagged as bad peanuts, so that snacks do not become a loophole for poisoning people.

This is not a game.  Remember, environmentalists have pictures of poor children.  People die.  The ebattled regulators have been accused by watchdogs of being pushed around by peanut collectors and processors, you need to demonstrate you can regulate this.  Be firm.

Now, peanuts sent for non-local reuse can be defined to be butters or oils.  You now need a plan from the peanut buyers, the ones who process peanuts for sale to oil, butter, and snack manufacturers. You don't want to complicate the paperwork you've created, so you ban the processors from selling for "local use" (forgetting you have defined the USA as "local", or perhaps not caring, or perhaps just living up to the laws you've written - its a thankless job).

If a peanut is sold as good to the "export" market for oils and butters, it must have been tagged a "waste" but must not have been charged to the "waste" program.  The professional peanut processors complain that selling perfectly good peanuts labelled as "waste" violates the health laws of the importing nation, which is trying to keep bad (waste) peanuts out of their products, and bans use of "waste" peanuts to make butters and oils.  Cleverly, you see this is an attempt to reopen the loophole, and must stand firm.

Now, the processor must define a plan for the export of "un-wasted" peanuts, regulated but not charged to the waste peanut program.  The plan needs to account for whether peanuts are sold for oil, waste, or snacks.  Is the shell removed?  Explain how the shell is left intact for the snack market, or removed for the butter market.  What?  Some snacks, such as candy bars, remove the shells?  Simple, just explain that in your plan so that sales can be approved.  Stop complaining.

Wait.  The bill you sent for waste peanut destruction shows that some peanuts have been removed.  While there was a plan and an understanding that peanuts would be removed for use, the missing peanuts must be labelled and tracked.  That is, in addition to not charging for them through the waste peanut program, and selling them only through a certified non-local (export) oil, butter, or snack program, you must INDIVIDUALLY account for the peanuts removed from individual bags of "p-waste".

All in all they're all just bricks in the wall
The processor tries to explain "triage".  The people like collectors or sorters are trained to remove bad peanuts.  They are not trained to know which peanuts are best sold for candy bars, peanut oil, or crunchy style or smooth peanut butter.  That happens at the buyers, or according to the purchase order QA/QC of the buyers.   Oil buyers have a different specification for "good" peanut than snack buyers.  In fact, a perfectly tested working peanut might not be right for the individual snack, oil, or butter factory.

The fact that a shell-on peanut is not accepted by the oil factory does not mean the shell-on peanut was "bad", but it will become "waste" if you send it to someone who doesn't or cannot shell peanuts.  This is the same fallacy of "tested working" and "fully functional" computers, they are not all acceptable at the best buyers.  Because your solution didn't work for them, that doesn't make them bad people!

Is E-Waste Hazardous or Universal Waste? Not Yet...

Following last weekend's surreal blogging into the mind of Jesus, it's time to focus on recycling regulations and law.  EPA is about to tinker with RCRA definitions of used electronics, purportedly to close the "loophole" of calling something reused a "commodity".  It appears EPA wants to follow China's lead, and declare reused metals "wastes".   This will help complete the snatch of authority from Department of Commerce by the Environmental Protection Agency, once again leaving horrific mining of raw virgin ores "commodity" and relatively clean scrap metals will be "hazardous wastes."

I've written previously about the "rights" of states to form rules which are stricter than federal rules - so long as the federal rule agrees that the substance is in fact "discarded".  But the state environmental agency cannot charge into your house to find a "working" unit, and whether something "works" is a silly test if the non-working P4 is worth much more than the working P2.

What if a state wants to regulate an item which is excluded from "solid waste" as a "universal waste"?  Can an item which meets commodity exclusion rules still be hazardous?  Can it be universal, and hazardous, but not a waste?  Earlier this year, we looked at the "chicken or egg" problems which arose in one state which tried to make e-waste "universal waste" without classifying reuse as waste.

EPA and "universal waste" is something I'm very familiar with, going back to my days as recycling director for the Massachusetts DEP Division of Solid Waste (and later Consumer Programs division director).   EPA ultimately sided with Mass. DEP in deciding that scrap metals should not be treated much differently from mined ores.  If the ores were hazardous, then so should the scrap, but when the ores were not treated as hazardous, making scrap "hazardous" merely because it was secondary material was a mistake we didn't make.  Why another refresher course on universal waste and RCRA?


For now, since so many are confused about what RCRA says in the first place, is a refresher course in USA waste vs. commodity law.  The current USA law treats recycled scrap as the equivalent of mined ore.  That was smart.  The perfect should not be the enemy of the good, and if recycled content is the only alternative to virgin content, and the production of virgin content is more toxic than recycling, recycling is the good.  14/15 largest Superfund sites (which bankrupted Superfund more than a decade ago) are "hard-rock" metals mines.   RCRA as written saw that the worst recycling is better than the best mining.  Thanks to "Recycling Watchdogs", that is about to change.  But for now, here is the way recycling is governed by federal law:

Related Posts
First, here is the language in § 261.4  of RCRA

Bad Law: Mandate What's Right 80% of the Time

Here's where I draw the line on my liberal friends (and my conservative ones).   When you are convinced that something is the best answer or best trade or best technique 80% of the time, and you make it law.  Moderates and Independents, you know what I'm talking about.

If it's procurement, fair enough.   If someone is paying me for a service, and they want the service that is the best practice 80% of the time, that's fair to insist on it, and if I'm bidding to do that, obviously that's what I have to plan on doing.  If I don't execute, I should be subject to civil law.

Those good guys... imperfect... Hmmmm.
However, what if I have a client who really has studied what they are doing and, after careful consideration, wants the practice which is only ok to do 20% of the time?   To ban me from doing that in Vermont, when I'm servicing the 20% of New York and Boston clients for whom it's appropriate, there's a word for that.

This was a case of Vermont taking "procurement law" (best R2 and E-Stewards practices, brand new untested standards) and making it LAW.  If E-Stewards judges that 80% of export for repair is bad, and doesn't allow it, Vermont was going to go a step further and put you in jail for exporting the 20% of the time it's ok.  In the process of confusing procurement law with RCRA, Vermont used "focus material" as a synonym for RCRA hazardous materials, and used TCLP test as an OSHA standard.  It sounded "stricter", and if you buy into the poster child hoopla, stricter is gooder.

The word is called BAD LAW.  It undermines everything.  It is cynical to say that the law will never go after the 20%, that your solution is to make it easy to enforce and just use your judgement when or whether to enforce the other 20% of the time.

If 80% of gay marriages or interracial marriages are bad, they should be legal.  We are not in the business of  making state payroll officials into ayatollahs.  See?  The line works well when drawn against conservatives, too.  Vermont needs to beware the San Francisco "Tyranny of the Majority" as more liberal people relocate here.  There is a line between judgement and law.


There are lots of lists you can google and tweet which are based on this piecemeal thinking.  If it's illegal to drive while blindfolded in Alabama, how many more laws do we need to eliminate ever other thing you shouldn't be doing while driving, and how many times will those be bad 80% of the time?


The perfect should not be enemy of the good.