Canadian Electronics Makers at Risk with e-Waste Exports

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by Jonathan Cocker, Partner at Baker McKenzie

“Canada continues to allow exports of hazardous e-waste to flow to developing countries (in this case, China and Pakistan)… These are all likely to be illegal.”
Export of e-Waste from Canada, October 10th, 2018, Basel Action Network

The release of this report by the Basel Action Network, subtitled A Story as Told by GPS Trackers, has thrown a veritable thunderbolt into the midst of the waste electrical and electronic equipment recycling industry in Canada (and beyond as these issues are not unique to any one country). Not only are current stakeholders engaging in the continued export of toxic materials to unlicensed (and unregulated) locations in developing countries, but these exports may well violate one or more laws, including national laws adopting the original Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal.

e-Waste Monopolies and the Limits of Due Diligence
A question arises as to how manufacturers of electronics could allow their products and their industry representatives to engage in these exports long after the harmful environmental and societal impacts of such exports have come to light and addressed through international agreements. The answer lies in their proximity to the compliance activities undertaken on their behalf. In Canada, the makers of electronics are mandated to participate in a single government-approved WEEE recycling organization in each province. Decisions around this reverse supply chain are simply too remote to many in the electronics industry.

More importantly, there is too little incentive for the government designate to rigorously oversee the end-of-life compliance of the waste they transfer, as painfully demonstrated by the Export of e-Waste from Canada Basel Ban report. Instead, the organizations can rest upon the recycler qualifications and standards as due diligence and blame the bad apples when these scandals come to light. Their compliance mandate can be viewed as essentially process, not results, driven and they have little organizational risk, as the monopoly party, in whatever mischief happens thereafter. Equally, individual electronics manufacturers aren’t invested in the environmental outcomes as they are not at risk. It’s no coincidence that the report itself does not name one electronics company as culpable.

Electronics Industry Facing Coming Individual Producer Responsibility
Ironically, it is the Canadian e-Waste government designates which will lose their monopoly positions in the marketplace under the coming individual producer responsibility model (IPR) for many waste streams, including electronics. Under IPR, it will be individual producers who will assume direct responsibility for the proper resource recovery of the electronics they place on the market. These electronics companies will retain the liability for outcomes such as illegal shipments to:

“an area well documented as being a global e-waste trafficking and smuggling hub.”

The risks to the electronics industry participants become real, both regulatory and reputational, truly motivating them to ensure that their oversight role doesn’t end at a qualification program, in the same way that international brands in many other industries are increasingly scrutinizing their (front end) supply chains. Canada’s Province of Ontario will have IPR for e-Waste in 2020.

Small(er) Is Beautiful in Managing e-Waste
To conduct this kind of effective auditing and verification, electronics makers will want to stay closer to their reverse supply chains (and potentially lucrative secondary markets) through individual or smaller, market-segmented groups to best structure reverse supply chains which meet their individual or group needs. Leaving it in the hands of a single monolith entity acting on behalf of a myriad of parties, from manufacturers to retailers and everyone in between, across the broad spectrum of waste-relegated electronics and electrical equipment, will continue to prove ineffective in ensuring e-Waste compliance. It will be up to the producers themselves to finally bring these e-Waste exports to a permanent halt.

This article was originally published on the Baker McKenzie website.

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About the Author

Jonathan D. Cocker heads the Firm’s Environmental Practice Group in Canada and is an active member of its Global Consumer Goods & Retail and Energy, Mining & Infrastructure groups. He participated in founding one of North America’s first circular economy producer responsibility organizations. Jonathan is a frequent speaker and writer on EHS matters, an active participant on EHS issues in a number of national and international industry associations, and most recently the author of the first edition of The Environment and Climate Change Law Review (Canada chapter) and the upcoming Encyclopedia of Environmental Law (Chemicals chapter).

Chinese Waste Import Restrictions/Impacts

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by Walter Wright, Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.

The Solid Waste Association of North America (“SWANA”) issued what it describes as an “update” on the topic of:  China Waste Import Restrictions and Impacts on State and Local Recycling Programs (“Update”).

SWANA describes itself as “an organization of more than 10,000 public and private sector professionals committed to advancing from solid waste management to resource management through their shared emphasis on education, advocacy and research.”

China had previously put in place a ban of the import of certain scrap materials. The ban took effect in January 2018 and applied to 24 categories of scrap and recyclables. In March 2018 a 0.5% contamination standard was implemented.

The issue is critical because demand is obviously a driver of recycling growth. China has had significant importance in terms of scrap and recyclable demand because of its status as the largest importer of such materials in the world.

Waste Paper at Hong Kong dock (Photo Credit: Reuters)

The SWANA Update is intended to provide an overview of the effect that the Chinese restrictions are having on the export of recyclables from the United States and Canada. This analysis includes what it describes as the increased movement of material to southeast Asian countries and additional potential restrictions.

SWANA notes that the Chinese restrictions have caused a dramatic decline in the amount of scrap and recyclables exported from the United States to China. Its Update includes a graph illustrating the impact on both mixed paper and scrap plastics.

The SWANA Update states that other countries, primarily in Asia, have increased their import of these materials from the United States and other countries. In recent months several of these countries (citing Vietnam and Indonesia) are stated to have announced measures to reduce the flow of recyclables into their ports. Graphs are included to illustrate the change in the amount of scrap paper and plastics to Indonesia, Malaysia, Thailand, and Vietnam.

The Update also identifies what it characterizes as SWANA’s aggressive steps to respond to the Chinese restrictions. They are stated to include:

  • Establishment of a Recycling Task Force consisting of industry and municipal leaders from the United States and Canada to guide SWANA’s response
  • Identifying best practices for reducing contamination of curbside recyclables
  • Creating demand for recycled content
  • Requesting that Congress include support for recycling in the Infrastructure bill
  • Working with other recycling stakeholders to amplify messages/concerns
  • Providing education on the impact of the Chinese waste import restrictions at online and in-person events

A copy of the Update can be downloaded here.

 

This article was first published on Mitchell Williams Law website.

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About the Author:

Walter G. Wright, Jr. is a member of the Business Practice Group.  His practice has focused for almost thirty years on environmental, energy (petroleum marketing), and water law.  Mr. Wright’s expertise includes counseling clients on issues involving environmental permits, compliance strategies, enforcement defense, property redevelopment issues, environmental impact statements, and procurement/management of water rights.

Mr. Wright routinely advises developers, lenders, petroleum marketers, and others about effective strategies for structuring real estate and corporate transactions to address environmental financial risks.  He also serves as General Counsel and provides legislative representation to the Arkansas Oil Marketers Association, Arkansas Recyclers Association (scrap facilities) and Arkansas Manufactured Housing Association.  A unique part of his practice has been drafting and negotiation of a variety of specialized agreements involving the sale or consignment of motor fuels along with the ancillary agreements associated with the upstream segment of the petroleum industry.