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Fair Trade Recycling (E-waste Research)

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This presentation was given at the 2013 E-Scrap Conference last week in Orlando. It was given by Oscar A. Orta who shared the podium with Cees van Duijn of INTERPOL and Feng Wang of UN University. The presentation seeks to give an update on the multi-party research being made regarding electronics recycling and the export/import and reuse and refurbishment of second hand electronics between developed and emerging countries.

The point is to show that most of the stuff filmed at dumps in emerging markets was generated in emerging markets (Lagos had 6,900,000 households with TVs in 2007 World Bank), and that most imports are intended for reuse in Africa and Latin America at least (91% reuse at UNEP study, 87% ASU study). Further, UNEP confirmed our 2006 hypothesis that much of the junk found at reuse shops was brought in as "trade ins"... same as you find old Ford cars at a Toyota dealership (no, Japan did not dump old cars here).

In the Fair Trade Recycling model, the reuse entrepreneurs stop being cast as villains, and instead are seen for their potential to finance an actual takeback system. Instead of selling $100,000 worth of used computers or displays, the USA/Export country charges $75,000 on the condition that the buyers properly report whatever is damaged in shipping or unrepairable damage (e.g. customs searches of containers) and take back old units from their cities, like a "cash for clunkers" or "needle exchange". We can cross train by visit or by video, but use data (mass balance, reconciliation) to determine reuse and recycling rates and to tweek the system if necessary.

It's a very powerful partnership, a very different model. One where governments and NGOs can participate but are not completely needed, one where the free market can act and entrepreneurs from different countries support themselves and work together in order to set up proper and responsible electronics' recycling operations and infrastructure while at the same time promoting entrepreneurship in developing countries and creating better and better paying jobs.

With the publication of the UNEP studies (showing 85-91% reuse in Africa), the publication of Junkyard Planet (Adam Minter), the Memorial U + Fair Trade Recycling grant, and the bizarre retraction of the 80-90% waste statistic, we believe this is the year people will finally be able to see and understand the other side of the story.

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Fair Trade Recycling (E-waste Research)

  1. 1. Fair Trade of Electronics Can exports of used electronics be done in a win-win manner through Fair Trade Recycling contracts?
  2. 2. Research Grant- $469K/5 years • Memorial University/Geography – Josh Lepawsky, Charles Mather, Mostaem Billah, Grace Abena Akese • USC/Chinese History – Josh Goldstein • Universidad Pontifica Catolica de Peru/Engineering – Ramzy Kahhat • Retroworks de Mexico – Roberto Valenzuela, “Las Chicas Bravas”, Oscar A. Orta • Resolve/Recycling Without Borders – Taylor Kennedy, Steve D’Esposito • VoICE – Katharina Kummer Perry • WR3A/Fair Trade Recycling – Robin Ingenthron, Eva Carreria. • Based on Masters’ Thesis by FTR researcher Brenda Wijnen, Adelaide Riverau, Frederique Somda, Jay Boren and Oscar A. Orta
  3. 3. Goal • Define whether the Fair Trade model makes sense as a paradigm. – Not just for “Fully Functional” – Not just for “Repair” – For Recycling itself. • Can recycling be done fairly and legally in emerging economies? – Who would define whether it’s fair? • Can recycling infrastructure for the e-scrap in major cities (Accra, Dhaka, Guangzhou, Lagos, Jakarta, Lima, Cairo, etc.), which generate far more e-waste than they import, be financed? • Can “refunded” reuse and repair value actually finance this kind of recycling infrastructure? • Can hand-disassembly not only be sustainable, but outperform OECD shredding?
  4. 4. Fair Trade Recycling Model • Visit by buyer to inspect USA goods • Visit by USA seller to witness buyer processes • Purchase order defining what should be tested • Reconciliation agreement (take back or reimburse failed product) • Incentives: Discounts on exports if buyer takes back from their community (“PCs for Clunkers”)
  5. 5. • REUSE: Fully Functional for Retail or immediate use – Working, warrantee • REPAIR: Functional for Refurbishment, Repair – Binding Purchase Order – Reconciliation and 3 years record keeping – Contract is legal in both countries, civil law • RECYCLE: Recyclable Commodity – Clean, uniform, graded • DUMP: No Disposal or TAR 4 Export Categories
  6. 6. Emerging Economies • Approximately 3 billion people earn approximately $3,000 per year. • Rate of internet growth is 10X USA • Where does this growth get its support from? – Used and affordable electronics.
  7. 7. Some Data • Studies show: – Kenya 2007: 90% Reuse – Peru 2009: 87% Reuse – Ghana 2011: 85% Reuse – Nigeria 2011: 91% Reuse – Liberia 2012: 85% Reuse • These can be reused and resold.
  8. 8. Domestic or Foreign?
  9. 9. Domestic E-Waste Generated
  10. 10. Financing the Infrastructure • The infrastructure needed in order to set up a formal recycling process in countries that import used electronics can be financed by refunds given from the exporters to the importers. – As an incentive for starting take-back programs for domestically generated e-waste. – As well as for documenting and keeping records of all electronics imported, and creating reconciliation reports on those electronics that did not meet the criteria established in the contract or that were damaged from point A to point B.
  11. 11. Example 1: Retroworks de Mexico As a recycling operation: 1. RDM gets 1,000 TVs. 2. RDM reuses 25%, diverting 250 TVs from recycling and earning money. 3. RDM offers a coupon- $40 for a TV, or get $10 off if they bring an old junk Mexican TV. 1. Part of the cost of recycling these old junk TVs is offset by the supplier. 4. RDM disassembles the TVs in a safe, audited environment. 1. The supplier (Good Point Recycling) gets back the boards, plastic, copper, etc. for sale and control of focus materials. 5. RDM has a PO with a smelter which needs 1,200 tons per day of leaded silicate, a use approved by EPA.
  12. 12. Example 2: Entrepreneur in developing country As a reselling business: 1. He buys 1,000 monitors. 2. Reuses 65-70% directly, repairs another 15-20% and resells all the previous for a profit. 1. Disassembles the rest, and either sells parts for a profit or keeps them as spare parts for repairing other monitors and recycles the remains responsibly. 3. He and his supplier, partner- he uses part of the profits and his supplier offers him a discount both for each monitor supplied that needs to be recycled and for implementing the take-back program for domestic e-waste. 1. Under the condition that he keeps records and makes reconciliation reports of what’s imported, repaired, resold, taken back domestically and recycled. 4. Previously unattainable technology is sold to the masses in developing countries thanks to cheaper, second hand goods. 5. People now have internet and thus, access to more info/skills.
  13. 13. • Pre-processing machinery developed and applied in Europe is often optimized to reduce labor costs rather than maximizing resource efficiency. • For precious metals, this means losses estimated at roughly 20%– 58%. • “Any approach to improve e-waste recycling in Ghana should make use of the abundant labor force instead of deploying expensive shredding and sorting machinery.” Hand disassembly vs. shredding
  14. 14. Case Study: Mexico • Belongs to OECD (Head of OECD is Mexican). • Rapidly Emerging. • One of the largest city in the world (20M+). • Richest man in the world (Carlos Slim). • Largest slum in the world (Neza-Chalco-Itza). • Low wage ($5- USD per day). • Lowest GDP per capita of OECD countries. • OECD distinction not working. – Singapore: 90% richer than most OECD countries, not OECD
  15. 15. What I’ve learned • Same operation done in U.S./Europe can be replicated with same quality and more thoroughly. – U.S. company has 1 security foreman? We can have 3, 4, 5 or more. – Europe uses shredders? We use hand disassembly and acquire more value out of electronics. • “Las Chicas Bravas”- the power of a coop. – 65 year old semi retired women can change the destiny of a “forgotten” town. • No roads, electricity nor internet. – Business owners. – Creating jobs in their hometown next to U.S. border. • No more border crossing. – They can learn to do it too!
  16. 16. What we want • Prove that, with help and proper training, electronics recycling done responsibly and correctly can be a win-win situation for everyone. – Catalyst for entrepreneurship. • Create more and better jobs. – Help bridge the digital divide. – Allow people to acquire new skills to earn more $$$ • Affordable PC -> PC Skills -> More choices of career paths
  17. 17. Informal Recycling • If this is what we are worried about: – Focus on helping 3rd world entrepreneurs develop an infrastructure. • Train them. • Help them. • Cooperate with them. • Listen and learn from them. – Build a system with government’s, NGO’s help to have a more responsible way of disposing end of life electronics than they already have. However, this can be done directly by creating a partnership between sellers and buyers.
  18. 18. NOT ban exports/imports of electronics
  19. 19. Case in Point • If I don’t make enough money a year to buy a brand new TV or computer, should I: – Not buy one at all? – Spend the next few years trying to pay off what I just bought? – Should I have to choose between an electronic I can’t afford or putting food on the table? • This should not have to even be a choice.
  20. 20. For more information Visit: http://fairtraderecycling.org/ Or Email Oscar Adrian Orta at: oscar@fairtraderecycling.org

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