A recent report found that many certified electronic waste, or e-waste, brokers are falsifying documents and disguising themselves as benevolent actors while shipping electronic waste illegally to junkyards in Southeast Asia, and many certified e-waste recyclers are working with these fraudulent brokers.
Certification bodies, like the Basel Action Network and Sustainable Electronics Recycling International, run audits and spot checks on recyclers to ensure they are responsibly managing waste. They now find themselves in a fight to prove their worth and clean up the industry.
“We’re hoping we can ramp up the rigor together and stop this cheating that’s going on in North America,” said Jim Puckett, executive director of the Basel Action Network.
E-waste trading is e-legal, depending on who does it
The sheer volume of e-waste is a problem in itself, with an estimated 2,000 shipping containers going from the U.S. to developing countries each month. The more disconcerting problem, however, is “the grim reality of informal processing: acid baths, open-air burning and child labor,” according to the Basel Action Network report.
To help stem the wave of hazardous waste flowing to developing countries, an international agreement called the Basel Convention was enacted in 1992 to regulate the flow. The U.S. has not ratified it, joining East Timor, Fiji, Haiti and South Sudan as the only non-parties to the agreement.
Countries party to the convention are not allowed to trade hazardous waste with countries that have not ratified the convention. E-waste is classified as hazardous.
The estimated 2,000 shipping containers full of e-waste leaving American ports every month are each breaking international laws when they head to countries that ratified the Basel Convention.
Shady brokers and questionable certification
The two main certification bodies for electronic waste and recycling are Sustainable Electronics Recycling International’s R2 (Responsible Recycling) certification and the Basel Action Network’s e-Stewards certification. Both certification bodies audit e-waste processors and recyclers to ensure they meet environmental, social and legal standards.
Of the 10 waste brokers that the Basel Action Network tracked and concluded to be illegally trading e-waste, eight of them held Sustainable Electronics Recycling International’s R2 certification. The Basel Action Network does not certify waste brokers, but recyclers and processors with its certification have been documented using these brokers, which would be a violation of its certification.
The report claims that some waste brokers are disguising and mislabeling shipments to circumvent authorities. Catching these shameful actors is not easy, but it’s necessary to maintain the integrity of the certification system.
“We’re finding some of these cases as fraud. There are off-book transactions being hidden from the auditors,” said Corey Dehmey, CEO of Sustainable Electronics Recycling International. “We have an assurance program where we’re working to discover those acts of fraud and get rid of those companies that are intentionally deceiving the auditors.”
Retail giants like Best Buy or dedicated electronics recyclers collect old electronics so that they can be processed responsibly and kept from being burned or tossed in landfills. Disassembled electronic components like batteries and circuit boards get directed to their respective recycling streams, with the hope that the next processor down the line will manage the e-waste responsibly, which is what the certifications are supposed to assure.
The certifications do provide some assurance that recyclers and processors are acting in good faith, but many certified waste brokers jump through the hoops to obtain certification, but continue shipping waste illegally around the world.
Potential for fraudulent actors exists throughout the electronics recycling value chain, but the waste brokers at the end of the e-waste stream are the most problematic. For that reason, the Basel Action Network does not certify brokers.
“We never allowed brokers to be certified. We suspected they were high risk,” Puckett said. “R2 decided to certify brokers, and that was a mistake.”
A big difference between Basel Action Network’s e-Stewards certification and Sustainable Electronics Recycling International’s R2 is the way due diligence is enforced. Basel Action Network requires all certified companies to perform downstream due diligence on their waste streams. Sustainable Electronics Recycling International, on the other hand, says it is the responsibility of the final R2-certified company in the downstream business chain to ensure responsible end use of the waste.
“That might sound good on paper,” said Puckett, referring to Sustainable Electronics Recycling International’s due diligence requirements. “But these certifications are not infallible. Auditors only show up once a year, and they can be gamed.”
Both organizations contract independent auditors to check company compliance with their standards, and both admit that their audit systems need to be improved.
“We’re working to get out ineffective or fraudulent auditors,” Dehmey said. “It’s hard when you’re in 43 countries and business ethics are different all over the world. It’s no small challenge, but that’s what we’re doing every day.”
Collaboration between competing certifications
Puckett, who heads the Basel Action Network, said he is constantly working to improve his own standard, and he would like to see Sustainable Electronics Recycling International do the same.
“We’re trying to work with R2 to see if they’ve been getting more aggressive and rigorous,” Puckett said. “We’re trying to get a level playing field so that we have equal vigor and punishment for violation of these standards.”
The elephant in the room, perhaps, is the inherent conflict of interest.
“There is a clear conflict of interest with certification bodies because we get license fees from these companies,” Puckett said. “There is an incentive for us not to jettison companies willy-nilly because we need to keep those license fees.”
Without strict enforcement of the standards, however, they fail to carry much weight.
The Basel Action Network is currently investigating one of its largest clients, Iron Mountain, for potentially partnering with a waste broker that was caught sending shipments of electronic waste abroad. If found to knowingly be in the wrong, Iron Mountain will lose its certification, and Basel Action Network will lose the associated license fees.
It is appreciably difficult to monitor every shipment leaving the U.S. The Port of Los Angeles alone loads over 100,000 export containers per month. But both Basel Action Network and Sustainable Electronics Recycling International say they need to do better to curb the outflow of hazardous waste leaving American ports.
Featured image credit: Katie Campbell for KCTS and EarthFix/Flickr
