Why We Should Ship Our Electronic "Waste" to China and Africa
About ten years ago, a small non-governmental organization in Seattle took film of a primitive looking scrap operation in Guiyu, China.
About ten years ago, a small non-governmental organization in Seattle took film of a primitive looking scrap operation in Guiyu, China. They later got CBS's 60 Minutes to follow them there, and retold the story of desperate humans pawing through toxic junk, poisoning the rivers and dooming their children.
The press was a wake up call, and ten years ago I applauded the organization for "raising the bar" on the electronics recycling industry. Too many "e-waste" recyclers were shipping "toxics along for the ride" in containers of otherwise legitimate repair and reuse loads, metal and plastic recycling. As a former Peace Corps volunteer (Cameroon, Africa) and environmental regulator, I had entered the field of electronics recycling to give these "Geeks of Color," as I call them, a better choice of places to buy from, hoping to do for them what Fair Trade Coffee tries to do for coffee farmers.
What I stepped into has taken more than ten years to straighten out. It seems that the anti-export organization had stumbled into a kind of watchdog goldmine. The pictures of poor children in China and Africa hit a "perfect storm" of white guilt. The starving Chinese the boomers heard about at the dinner table, the guilt over obsolescence and stuff-grades, and the environmental harm of pollution, all coalesced into a single headline: Recycling Exports Are Bad.
Well, just as a boycott of coffee farmers would not do much to improve the life of coffee farmers, I was skeptical of the direction this was taking. My geek friends – engineers in Indonesia, China, Malaysia, Singapore, Thailand, Egypt, Senegal, Mexico, Peru, Burkina Faso, Ghana, etc. had explained to me how the toxic junk had gotten over there. They pay for material to be shipped over the sea. They don't like garbage mixed into the container. But they also don't much like being called primitive, either. The "accidental racists" had scored an own-goal.
You see, the economics of "ewaste" exporting has never, ever supported the Watchdog's claim that "80%" of used electronics exports are unwanted junk. They claim that the low cost of disposal pays for sea container trips across the ocean. There is definitely validity to the claim that environmental standards are lax, as they are for mining (the only opposite of recycling). But that does not create an incentive for poor people to pool their money to buy crap.
And after a little digging, I came up with a dirty little secret: The 80 percent export statistic was made up out of thin air. There is absolutely not one stitch of data to support it. The watchdog organization has been referring to circular sources (other articles in which they were quoted with the same claim). They meant well – but in their passion to improve the pollution, they did not know what they were talking about and began to make it up as they went along.
There are entire factories in Asia dedicated to repair and refurbishing used electronics. These "white box" manufacturers do things like purchase capacitor-plague Optiplexes which USA companies were shredding, and… GASP… fix the capacitor! Just like Americans did with their TV capacitors in the 1960s and 1970s. Repair sites like Silicon Sam's repairfaq.org and ifixit.org show exactly how these repairs can be done. I was standing inside factories in China which were refurbishing USA "stuff" by the shipload, much as described in the 2007 Harvard Business Review article The Battle for China's Good Enough Market . Most of these factories had originally been "contract manufacturers" for companies like Foxconn, which in turn was a contract manufacturer for companies like Dell, Compaq, HP, and IBM.
The Geeks of Color could not believe their luck when parts worth $110 – like a good, non-trinitron, 17", uncancelled cathode ray tube – were being sold to them for $5. They quickly stopped buying brand new CRTs and started assembling monitors and televisions from 5-10 year old USA monitors which had been "upgraded". This hurt the brand names which did not like competing with their own product in the secondary market. But even worse, it hurt the largest shareholder in new Cathode Ray Tube manufacturing in the world: The Chinese Communist Party.
The Chinese had tried to "corner the market" in CRT production at about the time the Guiyu story hit the press. They bought out Techneglas, Corning and Thomson CRT glass furnaces. It was a bit of an early goof by the Chinese government, focusing on buggy-whips as LCDs and plasmas were taking off. But the new CRT market remains significant today, because people in poor countries think a month's pay is worth something. The emerging "Good Enough" market for such monitors, meanwhile, is huge. No wonder: nations with per capita incomes of $3000 per year have accessed the internet at 10 times the rate of growth in OECD countries.
In 2002, the Chinese tried to close the secondary market, calling refurbished CRTs "dumping". While in China I had it translated: that's "dumping" in the below-tariff sense. The junk was allowed as a raw material, and "treatment" meant breaking stuff so it would not be resold.
The watchdogs mis-translated the "dumping" ban as an environmental enforcement, and the Chinese picked right up on that, adding the law to environmental statutes. But the supply and demand forces continued. The white box market was too good to abandon, and the geek factories quickly set up in other southeast Asian countries. Some remained in China, playing cat and mouse with customs rules which are seen as arbitrary as the weather. (You can walk into a Hong Kong bank and buy "smugglers insurance" because trade laws can change any day, what's legal today may be a fine tomorrow).
Fair Trade It
Good USA recycling companies, "product stewards", should have exported more product, at least to the legal factories, in order to give the techs of color more choices of supplier. It would have killed the sham recyclers, helped the USA trade deficit, provided leverage to clean up standards at the factories, and lowered the cost of e-recycling to boot. They could have out-marketed the lazy exporters who refused to screen the products they exported. Instead, American environmentalists did the exact opposite. Our best recycling companies refused to export anything. Left with a choice of whether to buy mixed loads from sham recyclers, or to stay barefoot and pregnant in the digital age, my colorful geek friends chose to stay in business.
The naive image of barefoot primitives caught fire in the American press. With the passage of e-waste law SB20, California went from being the largest used CRT export market in the world to being a giant crunching noise, using taxpayer dollars to pay recyclers to break working equipment. The cost of recycling a monitor in New Jersey fell dramatically as a result – mob recyclers filled the shortfall created by California. Junk piled up. And the watchdogs saw this as further fuel for their crusade against the Geeks of Color.
In addition to the anti-gray market alliances, planned obsolescence interests, Chinese Communist Party, and white guilt rhetoric, the Watchdogs now had a new ally – the shredding industry which was created to chop up all the stuff the Geeks were no longer allowed to buy from California. Millions of dollars in capital equipment had to compete against an export market made hot by the shortages the shredders were creating. The shredders pay money to the Watchdogs to stifle the competition, and in return are described as "best practitioners" – despite wasting rare earth metals, parts, and being lower in the recycling hierarchy.
The most hilarious example of this silly campaign is perhaps the 60 Minutes episode on e-waste exports to China. CBS circled computer monitors in Hong Kong, then "followed the trail" to Guiyu, where they saw not a single darn computer monitor anywhere. On the way, they passed one of the largest white box refurbishing factories, which I'd given them film of. They found a cesspool in the area of Shenzhen, China (where all the IPhone and Android and Ipads are made) and they told a story that a rinky-dink scrap metal shop was the best available recycling technology, what Scott Pelley calls "a tidy little shop".
Too bad they missed the fact there were no CRT monitors there, or that most of the junk came not from the U.S. but from rapidly affluent Hong Kong, Shenzhen, and Guangzhou. CBS went to the zoo and posed by a visitor's poodle, never stopping to look at the giraffes and elephants and zebras.
What is happening today? Well, first off, the Geeks of Color are now modernizing. Forced to buy junk when Stewards called them too primitive to do business with, they are buying the same scrap equipment that Califonia installed. They are starting to recycle e-waste they are forced to accept by sham recyclers. And they are making a lot of money doing it. As they should, since along the way, the UN and EPA and Interpol discovered another little secret: China, Malaysia, Singapore, Indonesia, etc. generate more "e-waste" than we do. Most of the junk in Guiyu had not been imported in the first place. By the way, these hand disassembly jobs in China typically pay more than a Ph.D earns, according to Adam Minter of Shanghai Scrap.
Americans, meanwhile, are taking our hard assets and are shredding them, eliminating billions of dollars in added value, to protect manufacturing interests in Japan, Taiwan, and Korea. This is bad for the environment, as reuse is far better than shredding. The carbon generated to make a computer monitor is more than the carbon used to run it for its intended life.
The other victims
Besides the environment, the biggest victim is probably Africa. Countries there must pay more for refurbished equipment, and many are now the target of a campaign to make sure they don't get their own "white box" factories. This will take away Africa's chance to follow the same "tinkerer and geek" path of development which Japan, China, Korea, Taiwan, and other Asian Tigers used. Throughout modern history, geeks and tinkerers have climbed the ladder from used sales to repairs to contract assembly to original equipment manufacturing.
My largest export load ever seized – working Pentium 4's called "e-waste" – was in Alexandria Egypt, just as Mubarak was trying to put the internet genie back in a bottle. He failed; later, computers – many likely refurbished ones – would help the geeks ensure that his regime failed too.
Anti-export groups might be right about one thing… maybe it is all about money after all. For the millions of dollars they raised using photos of children on piles of scrap, not a dime goes to the child who stirs the pot of white guilt. The money goes to pay salaries of NGOs who club geeks in Egypt to death like baby seals, and to the shredding companies that put the internet out of reach of a technician in Ghana. They are making fair trade between geeks illegal, and it works like a cultural lobotomy, making us think brown people are primitive because they never visit us anymore in our "recycling stewardship" factories.
As Walt Kelly's Pogo said, in a strip that ran sometime around the first Earth Day in 1970, "We have met the Enemy, and He is Us".
Robin is the founder of American Retroworks Inc., a fair trade recycling company, and WR3A.org, a fair trade export association. Read more at Robin's blog, Good Point: Ethical Ewaste.