electronic waste compliance and enforcement: emerging...
TRANSCRIPT
Electronic Waste Compliance
and Enforcement: Emerging Trends Managing Hazardous E-Waste to Meet Federal and State Law Requirements
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WEDNESDAY, JUNE 12, 2013
Presenting a live 90-minute webinar with interactive Q&A
Peggy Otum, Partner, Arnold & Porter, Washington, D.C.
Tricia Foley, Partner, Day Pitney, New York
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Electronic Waste Compliance and
Enforcement: Emerging Trends
Peggy Otum, Esq.
Wednesday, June 12, 2013
Tricia Foley, Esq.
Wednesday, June 12, 2013
5
Agenda
Current Status of State and Local E-Waste Laws
Enforcement Cases
Litigation
International Trends
What to Expect Next
– Bills in Congress
– Greater EPA and State Enforcement
Best Practices
6
Current Status of State and Local e-Waste Laws
25 States Passed e-Waste Recycling Legislation
23 States Passed Producer Responsibility Laws
California Passed a Consumer Fee Based Law
Utah Passed a Manufacturer Education Law
18 States Have Some Type of Disposal Ban Law – Certain types of e-waste are banned from disposal
into landfills and/or incinerators
Some state e-waste laws specifically include export prohibitions
7
Current Status of State and Local e-Waste Laws
Producer Responsibility Laws
– Producers and/or manufacturers pay for collection,
transportation, and recycling of e-waste
– Municipalities may pay for some of e-waste recycling
related costs
– In some states (e.g., South Carolina, Virginia),
producers are required to have a takeback program
8
Current Status of State and Local e-Waste Laws
Consumer Fee Based Laws (California only)
– Consumers pay a fee at time of purchase
– Consumer fee is paid to state, which is then
reimbursed to recyclers and collectors
– In 2011, $77 million in payments and 197 million
pounds of e-waste were claimed
9
Current Status of State and Local e-Waste Laws
Manufacturer Education Law (Utah only)
– Manufacturers are required to establish and
implement public education programs to inform
consumers of available recycling services for
electronic devices
– Program must include outreach materials and other
methods developed by manufacturers to inform
consumers about eligible programs for collection and
recycling of e-waste
10
Current Status of State and Local e-Waste Laws
Export Restrictions
– Some states specifically address export to other
states and/or countries
– General laws require that e-waste shall not be
exported for disposal in a manner that poses a
significant risk to the public health or to the
environment (Connecticut, New Jersey, Pennsylvania)
– More sophisticated laws require export notices to the
state, demonstration of compliance with applicable
law in receiving country (California, Illinois)
11
Enforcement Cases
Target Corporation
Executive Recycling, Inc.
Discount Computers, Inc.
Electronics Recycling Canada
Pirkle, Inc.
Compupoint USA, Inc.
12
Enforcement Cases - Target Corporation
2009 lawsuit brought by 19 California district
attorneys, the state attorney general, and city
attorneys in San Diego and Los Angeles
Since 2001, Target received more than 300
Notices of Violation for breaking California’s
hazardous waste laws
In 2006, an investigation was launched
– Target was found to have improperly disposed of
thousands of pounds of hazardous wastes
13
Enforcement Cases - Target Corporation
Complaint allegations: – More than 240 Target stores in California were unlawfully
disposing of toxic wastes, including electronic devices
– Target unlawfully disposed of hazardous waste to avoid the costs of proper disposal
– E-waste was placed in a compactor, which was then taken by a hauler not authorized to transport such materials to a destination not authorized to accept it
Settled for $22.5 million
Target also required to hire outside firm to audit its waste-handling practices
14
Enforcement Cases – Executive Recycling, Inc.
First ever guilty verdict (December 2012)
Company headquartered in Colorado
Charges filed against company and its executives
– Multiple counts of wire and mail fraud
– Failure to file a Notice of Intent to Export with the U.S.
Environmental Protection Agency (EPA) in violation of the
Resource Conservation and Recovery Act (RCRA)
– Smuggling of goods from the United States
– Destruction of records
15
Enforcement Cases – Executive Recycling, Inc.
Indictment allegations:
– Executive Recycling, Inc. exported over 300
shipments of e-waste overseas, including more than
100,000 cathode ray tubes (CRTs), which are known
to contain lead
Company and its executives found guilty for
illegally exporting e-waste overseas
Sentencing was set for April 2013
Motion for new trial denied in May 2013
16
Enforcement Cases – Discount Computers, Inc.
Headquartered in Michigan with warehouses in Missouri and New Jersey
Investigated by the U.S. EPA’s Criminal Division and the U.S. Department of Homeland Security-Homeland Security Investigations, Detroit
Allegations: – Owner and company created counterfeit labels to conceal
age of electronic devices more than 5 years after date of manufacture
– Owner and company exported more than 300 shipments, constituting more than 100,000 CRTs and valued at $2.1 million, to Egypt, where it is illegal to import devices more than 5 years past date of manufacture
17
Enforcement Cases – Discount Computers, Inc.
Owner pleaded guilty for himself and on behalf
of company
– Trafficking in counterfeit goods and services
– Violations of RCRA by failing to obtain a permit to
store or dispose of hazardous substances
Sentenced in March 2013
– Owner sentenced to 30 months in jail and a $10,000
fine for restitution
– Company fined $2 million
18
Enforcement Cases – Electronics Recycling Canada
Based in Surrey, British Columbia, with branch
offices in Arizona, Colorado, Nevada, and
Oregon
In March 2013, Canada’s Environmental
Protection Agency charged company and its
president
– 24 counts of illegally exporting recycled batteries and
CRTs to China
19
Enforcement Cases – Pirkle, Inc.
Scrap metal recycling facility in Georgia
Entered Consent Agreement with U.S. EPA in
September 2012
Pirkle allegedly violated RCRA and failed to
properly identify solid wastes generated at the
facility, including e-waste
Pirkle agreed to pay penalty of $49,410
20
Enforcement Cases – Compupoint USA, Inc.
E-waste recycling facility located in Norcross, Georgia
U.S. EPA’s allegations – Failure to make a hazardous waste determination on solid
waste, including e-waste
– Failure to properly train employees on proper waste handling and emergency procedures
– Failure to notify U.S. EPA of its intent to export used CRTs internationally
Compupoint USA agreed to pay a civil penalty of $36,000
21
Litigation
Intercon Solution, Inc. v. Basel Action Network
and James Puckett, Case No. 12CH23755,
Circuit Court of Cook County, Illinois
22
Litigation - Intercon Solution, Inc. v. Basel Action
Network and James Puckett
In June 2012, Intercon filed a lawsuit against Basel Action Network (BAN) for defamation and placing the company in a false light
Intercon sought an injunction against BAN for making any further allegedly false statements
Intercon had hired BAN to audit its business in order to obtain e-Steward certification
Complaint alleges that BAN conducted an unlawful surveillance of Intercon’s premises and falsely accused it of owning and illegally shipping hazardous e-waste to Hong Kong and other parts of China
In August 2012, BAN filed a counterclaim against Intercon requesting declaratory relief and a jury trial
23
International Trends
Nations receiving transboundary e-waste are exponentially increasing what they discard domestically
New e-waste legislation, certification programs, and pilot programs are progressing as awareness of environmental, health and safety risks increases
Primary mechanism in developing countries is extended producer responsibility (EPR)
Informal collection and recycling industries continue
Difficult to track products through lifecycle, estimate e-waste volumes, and regulate informal markets
24
International Trends – China
Domestic e-waste from mobile phones,
computers, and air conditioners rising fastest
Importing e-waste formally banned in 2000, but
market for second hand and raw materials
remains
Large portion of US and EU e-waste goes to
China through mixed shipments with bulk metal
scraps, and through Hong Kong and Vietnam
25
International Trends – China (cont.)
2006 - Policy promoting eco-design and environmentally sound re-use
2007 - Requirements for eco-design, restricts hazardous substances, promotes product info disclosure
2008 - Call for pollution prevention and reuse/disposal processes
2011 - Mandates recycling, increases producer responsibility, establishes fund to subsidize recycling (producers pay tax on televisions, refrigerators, washing machines, air conditioners, & computers) – No specific collection/recycling targets; effectiveness not well
quantified
26
International Trends - Ethiopia
Domestic e-waste increasing, but primarily in
urban centers; most waste is still stored, not
disposed
Demanufacturing Facility initiative to dismantle
electronics and find downstream markets
National e-waste strategy may include extended
producer responsibility (EPR) where
producer/importer pay fee for volume of
electronics offered on Ethiopian market
27
International Trends - India
2011 E-waste Management and Handling Act
– Extended Producer Responsibility (EPR)
• Producer is responsible for product once consumer discards
• Producer expected to finance and organize system to cover
cost of compliance; may include take-back systems or
creation/use of authorized collection centers
– Collection Centers
• Need authorization from regulator
• Responsible for sending to registered dismantlers/recyclers
• Must maintain records
28
What to Expect Next
Bills in Congress
Greater EPA and State Enforcement
Evolution of “Green” Electronics Certifications
Evolution of “Green” Recycling Certifications
Increased Federal Government Focus on
Procurement & Recycling
Lifecycle Tracking and Transparency
Basel Convention & Basel Ban Amendment
29
What to Expect Next - Bills in Congress
Currently, there is no federal mandate governing e-waste recycling
Currently, there are no bills in Congress governing e-waste recycling
Most recently, bills were presented in the 112th Congress
H.R. 2284: Responsible Electronics Recycling Act – Introduced by Representative Raymond Green in June 2011
S. 1270: Responsible Electronics Recycling Act – Introduced by Senator Sheldon Whitehouse in June 2011
Both Bills would prohibit the export of restricted e-waste from the United States
Restricted e-waste would include computers, televisions, printers, copiers, video games systems, telephones, and other consumer products containing CRTs, batteries, switches and other parts containing hazardous waste (e.g., lead, mercury, and hexavalent chromium)
Both bills were referred to, but since died in, Committee; they are expected to be reintroduced in the 113th Congress
30
What to Expect Next - Bills in Congress
H.R. 2396: Electronic Device Recycling
Research and Development Act
– Introduced by Representative John Sarbanes in June
2011
Bill would authorize the EPA Administrator to
award grants for electronic device recycling
research, development, and demonstration
projects
Bill was referred to, but since died in, Committee
31
What to Expect Next – Greater EPA and State
Enforcement
U.S. EPA’s Criminal Division is becoming active in e-waste recycling violations, along with other federal and state agencies
“Today’s sentence, the first in an e-waste case, should serve as a warning that if you are caught illegally exporting hazardous e-waste for profit, there will be serious consequences.” – Cynthia Giles, Assistant Administrator for EPA’s Office of
Enforcement and Compliance Assurance
“Homeland Security Investigations stands with our law enforcement partners ready to prevent any company from ignoring U.S. controls to export hazardous e-waste.” – William Hayes, Special Agent in Charge of HIS Detroit
32
What to Expect Next – Certification Evolution
Certifications for “Green” Electronics
– Energy Star Program
• Shift to third-party certification in EPA-recognized labs
– Federal Energy Management Program (FEMP)
• Top 25%, bi-annual review for efficiency updates
– Electronic Product Environmental Assessment Tool
(EPEAT)
• Addition of printers, copiers, scanners
• Additional capacity for product registration entities to register
products for manufacturers
33
What to Expect Next – Certification Evolution Certifications for “Green” E-cyclers
– R2 • Operations review
• Audit preparation and facility audit
• Corrective action review
– E-Stewards Certification • ISO 14001 (standard for environmental management systems)
• Audit (contracted on 3-year cycle)
• Marketing and licensing fee
• Certain export for reuse allowed
Look for expansion to larger operations in developing countries
34
What to Expect Next – Increasing Federal
Government Focus on Procurement & Recycling Numerous Existing Obligations
– EOs 13221, 13423, 13514
– Federal Electronics Challenge
– Federal Electronics Stewardship Policy
– Federal Acquisition Regulations
– Federal Management Regulation
Remains difficult to track and quantify impact of
procurement and/or recycling/disposal policies
Expect increased lifecycle tracking requirements
35
What to Expect Next – Lifecycle Tracking
Common thread of e-waste reports and analysis is
the lack of reliable lifecycle tracking and
quantification of e-cycling/e-waste
Obstacles include global supply chain, short life-
cycle, and global recycling/waste chain
Expect various regulatory schemes for lifecycle
reporting, including
– Revisions to Schedule B numbers for export classification
– Industry-driven tracking for purposes of associated
accounts/service obligations
36
What to Expect Next – Basel Convention
Basel Convention took effect in 1992 and is designed to prevent transfer of hazardous waste, including e-waste, from more developed to less developed nations
U.S. signed, but did not ratify, so there is no implementing legislation in the U.S.
Often circumvented under the guise of recycling
Basel Ban Amendment opened in 1995 and goes further, preventing export for any reason, but needs more signatories to take effect (has 70+ now)
More enforcement and media coverage could lead to further movement
37
Best Practices
Familiarize yourself with your pertinent state’s e-waste recycling laws
Review U.S. EPA’s web site on Certification Programs for Electronics Recyclers, http://www.epa.gov/wastes/conserve/materials/ecycling/certification.htm
Investigate whether EPA or any other federal, state, or local agency has sanctioned an e-waste recycler for illegal exportation prior to engaging that recycler
Add provisions to service contracts with e-waste recyclers prohibiting the exportation of e-waste and indemnifying the customer from liability in the event that e-waste is nevertheless exported
38
Best Practices - continued
Include an assessment of e-waste recycling procedures as part of environmental, health, and safety audits, with an emphasis on verifying that documentation from recycling companies reflects domestic recycling
Provide customers and retailers that purchase electronic devices manufactured, assembled, or sold by your company with a list of recycling companies that are willing to certify that they will not export e-waste
39
Best Practices (cont.)
If you do export……
– Send used electronics to certified recyclers
– Confirm receiving facilities are licensed
– Require verifiable EHS system
– Limit exports to lower risk items (e.g.
functional)
– Maximize transparency
40
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PROFESSIONAL EXPERIENCE
Tricia Foley practices in the area of the business and regulatory aspects of environmental law,
where she has experience in green and sustainable business practices and carbon reduction
programs. Tricia has extensive experience representing PRPs and PRP groups at large
multiparty Superfund sites. She serves on the environmental committee of the New York City
Bar Association. Tricia has been an adjunct professor of environmental law at the University of
Hartford and is a frequent author and speaker on environmental topics.
AWARDS & ACHIEVEMENTS
Recognized as a Connecticut Super Lawyer, 2007-2012
• Negotiated favorable settlements at over 25 complex, multiparty CERCLA sites
• Mitigated environmental penalties in seven-figure state and federal enforcement actions
• Advised clients on the complexities of complying with all state and federal environmental
laws, including the Toxic Substances Control Act and the Federal Insecticide, Fungicide, and
Rodenticide Act
• Conducted environmental due diligence on hundreds of sites and facilities throughout the
country
• Oversaw multimillion-dollar remediation projects
• Orchestrated the financing and remediation of brownfields development projects of national
prominence
• Facilitated the transfer and financing of environmentally impaired sites domestically and
abroad
Tricia H. Foley PARTNER
PRACTICE AREAS Commercial Real Estate and Development
Transactions
Energy Regulation and Compliance
Environmental and Land Use Regulation
Mergers, Acquisitions and Joint Ventures
Real Estate Redevelopment
Renewable Energy
Water Companies
Washington, D.C.
555 Twelfth Street, NW
Washington, DC 20004-1206
T: 202.942.5965
F: 202.942.5999
PROFESSIONAL EXPERIENCE
Peggy Otum is a partner in Arnold & Porter’s Environmental group. Her practice focuses on
complex environmental litigation and regulatory compliance counseling, with particular focus on
the Resource Conservation and Recovery Act; the Clean Air Act; and the Comprehensive
Environmental Response, Compensation, and Liability Act. Ms. Otum has advised clients in
investigations, litigation, and other enforcement actions brought by the US Department of
Justice and the US Environmental Protection Agency. Her experience also encompasses
advising clients on environmental auditing and environmental aspects of corporate transactions,
including identifying and evaluating potential environmental liabilities associated with
manufacturing facilities, negotiating, and drafting environmental provisions in corporate
agreements, and advising clients on environmental insurance. Ms. Otum maintains an active
pro bono practice, ranging from advocating in individual family law matters, supporting a
neighborhood environmental conservation group, and representing an employee seeking
disability benefits.Ms. Otum earned her law degree from Howard University School of Law,
where she served as the managing editor of the Howard Law Journal.
AWARDS & ACHIEVEMENTS
Washington, DC Super Lawyers 2012 “Rising Star” 2012-2013 for Environmental
ENVIRONMENTAL REPRESENTATIVE MATTERS
• Ongoing representation of leading fertilizer manufacturer in Clean Air Act enforcement
investigation and in defense of an enforcement initiative by the US Environmental Protection
Agency (EPA) and the US Department of Justice seeking enforcement of RCRA hazardous
waste requirements at mineral processing facilities subject to the Bevill Amendment.
• Provide day-to-day regulatory and transactional assistance to FORTUNE 100 company
across an array of environmental statutes and regulations applicable to its automation and
control solutions business.
• Counsel electronics retailer on applicability of various state electronic waste (e-waste)
statutes.
Peggy Otum PARTNER