A Shocking Amount of E-Waste Recycling Is a Complete Sham

Until recently, I had never really thought about what happens to my old electronics. I took them to a community e-waste recycling drive, or dropped my old phone in a box somewhere, and I assumed my stuff was recycled.

An alarming portion of the time this is not actually the case, according to the results of a project that used GPS trackers to follow e-waste over the course of two years. Forty percent of all US electronics recyclers testers included in the study proved to be complete shams, with our e-waste getting shipped wholesale to landfills in Hong Kong, China, and developing nations in Africa and Asia.

The most important thing to know about the e-waste recycling industry is that it is not free to recycle an old computer or an old CRT television. The value of the raw materials in the vast majority of old electronics is worth less than it costs to actually recycle them. While consumers rarely have to pay e-waste recycling companies to take their old electronics (costs are offset by local tax money or manufacturers fronting the bill as part of a legally mandated obligated recycling quota), companies, governments, and organizations do.

Or at least, in a rational market, your office would have to pay an e-waste recycler to take their old stuff. But an astounding amount of US electronics recyclers will take old machines at no cost or for pennies per pound, then sell them wholesale to scrapyards in developing nations that often employ low-salary laborers to dig out the several components that are worth anything.

Based on the results of a new study from industry watchdog Basel Action Network and MIT, industry documents obtained by Motherboard, and interviews with industry insiders, it's clear that the e-waste recycling industry is filled with sham operations profiting off of shipping toxic waste to developing nations. Here are the major findings of the study and of my interviews and reporting:

• Real, environmentally sustainable electronics recycling can be profitable only if recycling companies charge a fee to take on old machines; the sale of recycled materials rarely if ever covers the actual cost of recycling in the United States.

• Companies, governments, and other organizations have a requirement to recycle old machines; because there is little oversight or enforcement, a secondary industry of fake recyclers has popped up to undercut sustainable recyclers. These "recyclers," which advertise themselves as green and sustainable, get paid pennies per pound to take in old TVs, computers, printers, and monitors. Rather than recycle them domestically, the recycling companies sell them to junkyards in developing nations, either through middlemen or directly.

• These foreign junkyards hire low-wage employees to pick through the few valuable components of often toxic old machines. The toxic machines are then left in the scrapyards or dumped nearby.

• Using GPS trackers, industry watchdog Basel Action Network found that 40 percent of electronics recyclers it tested in the United States fall into this "scam recycling" category.

"These companies are misrepresenting what they do and they're deluding the public," BAN Director Jim Puckett told me. "They're telling people that they're recycling waste in the US properly, that they're diverting e-waste from landfills but what they're doing is blatantly lying."

Late last week, BAN and MIT published the results of the project, in which investigators stuck small GPS tracking chips into 205 pieces of e-waste (152 total "donations" to electronics recyclers, some donations contained more than one machine), including old CRT televisions, printers, and LCD screens. They found that 40 percent of those 152 deliveries ended up in other countries, passing through a total of 168 different "identifiable recyclers."

BAN is an nongovernmental organization that was created to make sure countries are adhering to the Basel Convention, a 1989 international treaty that prohibits the exportation of hazardous waste from developed countries to developing ones. The US signed the treaty but never ratified it.

The study found that in many cases, electronics recyclers that said they were seeking a "zero landfill" goal were actually not doing any recycling at all and instead were simply selling e-waste to other companies or were exporting it directly to Hong Kong or China themselves.

"There are people in China who will pay you pennies on the pound, so it's an economic decision," Puckett added. "It's more profitable to export, so that's what they're doing."

A service called Peony Online serves as a scrap and e-waste price list and marketplace. Motherboard obtained a price sheet from June that showed dozens of middlemen in the United States who would be willing to buy e-waste in bulk. Prices range from between $.19 per pound for an old cable boxes to a quarter a pound for old computers, to $.16 a pound for landline telephones and $.03 a pound for printers. Large LCD TVs and monitors were selling for $7.50 each. Considering that an estimated 1.25 million tons of e-waste goes through electronics recyclers in the United States every year, those numbers can add up.

Motherboard also obtained dozens of emails sent to electronics "recyclers" from companies that are looking to buy bulk scrap electronics for export.

"These guys, they have a few guys operating forklifts and not much else," John Shegergian, CEO of Electronic Recyclers International, the largest e-waste recycler in the US, told me. "They're not worried about OSHA, or EPA, or other groups because they just throw this stuff in shipping containers without overhead or labor. They have no investment [in recycling equipment], no labor, so it's all profit to them."

There are two types of electronics recycling certifications that the Environmental Protection Agency recognizes, both of which are actually administered by nongovernment organizations. The most common one is called R2; the other is called "e-Stewards" and was created by BAN. e-Stewards is an inherently stricter standard that requires companies to act as though the US had ratified the Basel Convention. The study found that companies with an R2 certification export raw e-waste at a higher rate than even those companies that have no certification at all. e-Stewards exported at a lower rate, but were still in some cases found to be involved in supply chains that exported e-waste to developing nations.

SERI, the group that administers R2, noted in a letter published by the group in July noted that a lot of raw e-waste can be exported legally and according to R2 standards if it is labeled for "re-use" in a foreign country: "Although they represent a small minority, too many recyclers are willing to illegally mislabel shipments of electronic junk as 'reusable' in order to get the shipment through customs." BAN, however, noted that 96 percent of the exports found in its study were illegal either by US standards or in the country importing the waste. In an email, SERI executive director John Lingelbach told me the organization is looking into using GPS trackers in the future.

"SERI is continuously looking at ways to improve conformance to the standard and is currently evaluating the use of GPS trackers and other strategies," he said.

In theory, companies need to at least notify the EPA if they are planning on exporting CRT televisions, but a 2008 Government Accountability Office report found that there are many "exporters willing to engage in apparent violations of the CRT rule, including some who are aware of the rule … EPA has done little to ascertain the extent of noncompliance."

Puckett says little has been done since then to get the problem under control. The EPA has not been willing to use GPS trackers, which, he says, is the only way to determine how much e-waste is leaving our shores. The most recent EPA study on the subject, published earlier this year, found that "the accreditation, certification and implementation process of the R2 and e-Stewards standards is working well." The study, however, was based only on interviews, surveys, and an in-person audit of just nine recyclers nationwide. No tracking devices were used to determine where the e-waste was going.

"We went to a meeting when the government was thinking about doing these tracking studies—we were there and the scrap industry was there. And even in that mixed group, when the EPA asked about the most effective way to track illegal exports, the group told them to use tracking devices," Puckett said. "They told them what to do and government ignored it. They chose not to do it so we thought, 'What if we did it?'"

The New Territories

Using the trackers, BAN found that the vast majority of e-waste that leaves the United States goes to junkyards in an area of Hong Kong known as "The New Territories." BAN describes the New Territories as a rural area filled with "furniture factories, scaffolding vendors, large metal fabrication, auto and bus body workshops, illegal gasoline vendors, a great deal of general import and export staging, and a very high percentage of electronics junkyards."

According to BAN, workers at these junkyards are paid about 60 cents per LCD monitor that they break down, and the rest of it is just tossed into the scrapyard.

"The majority of waste observed originated from the US," the report noted. "Indeed, it was challenging to find evidence of non-US waste … close visual inspection easily revealed asset tags linking e-waste as previously belonging to US schools, police departments, jails, hospitals, libraries, and numerous government institutions."

The problem is that when electronics are dismantled in a rudimentary way, they release toxic mercury, lead, and other heavy metals; toxic gases; and arsenic. Environmental tests from near these scrapyard found toxic levels of arsenic, cadmium, chromium, copper, lead, and zinc, and junkyard fires from battery ignitions are common.

How recycling is supposed to work

Shegerian says that sustainable electronics recycling is both labor intensive and usually requires expensive machinery that can prevent toxins from machines from polluting the environment or causing a fire. Batteries must be removed, glass has to be cut away from screens, and then the rest of any individual machine is shredded and turned into individual commodities, which can then be resold individually.

"There is no such thing as free recycling. Responsible recycling costs money," he said. "It's like any other service in America—it's truly become professionalized. It's not the old days of scrap yards. This is highly sophisticated business and—if you're doing it right—you're using proprietary technology for cutting, cleaning, and shredding, meaning you're obtaining commodities and destroying everyone's data. If you're not responsibly recycling yourself, the data and the environment is at massive risk."

Puckett said that BAN specifically attached GPS trackers to low-value, highly toxic electronics because things like LCD monitors, printers, and CRT televisions are hardest things to recycle and are thus most likely to simply be shipped elsewhere.

"We knew the stuff we were tracking has low commodity value that's seen as junk in the industry," he said. "This stuff is a real pain in the ass, and you have to be very careful about how you're recycling them."

Puckett's e-Steward-certified companies fared better than R2-certified ones, but BAN caught several e-Stewards involved in an exportation supply chain.

"We caught some of our gang exporting and have dealt with them harshly," Puckett said, adding that a company called Total Reclaim was recently hit with a $500,000 fine from the state of Washington, partially because it was exposed in the BAN study. "We're going to police this to death and we're going to make sure any cheaters are thrown out and exposed."

SERI's Lingelbach said BAN did not have a large enough sample size to make larger generalizations about the recycling industry.

"SERI does not consider BAN's naming of an R2 company in the report as proof dispositive that the company acted irresponsibly," Lingelbach said. "Rather, SERI is treating BAN's naming of a R2-certified company the same way it treats other allegations against R2-certified companies … we will take action against those companies we find are not meeting the requirements of the R2 Standard, including its prohibition on illegal exports and its extensive requirements for downstream due diligence.

The BAN study names e-waste "recyclers" engaged in the wholesale export of old machines—the full report is available here.

Update: This article has been updated to include comment from SERI.

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