Electronic Waste Compliance and Enforcement: Emerging Trends Managing Hazardous E-Waste to Meet Federal and State Law Requirements
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1 Presenting a live 90-minute webinar with interactive Q&A Electronic Waste Compliance and Enforcement: Emerging Trends Managing Hazardous E-Waste to Meet Federal and State Law Requirements WEDNESDAY, JUNE 12, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Peggy Otum, Partner, Arnold & Porter, Washington, D.C. Tricia Foley, Partner, Day Pitney, New York The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.
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5 Electronic Waste Compliance and Enforcement: Emerging Trends Tricia Foley, Esq. Wednesday, June 12, 2013 Peggy Otum, Esq. Wednesday, June 12,
6 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
7 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
8 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
9 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
10 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
11 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
12 Enforcement Cases Target Corporation Executive Recycling, Inc. Discount Computers, Inc. Electronics Recycling Canada Pirkle, Inc. Compupoint USA, Inc. 12
13 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
14 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
15 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
16 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
17 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
18 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
19 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
20 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
21 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
22 Litigation Intercon Solution, Inc. v. Basel Action Network and James Puckett, Case No. 12CH23755, Circuit Court of Cook County, Illinois 22
23 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
24 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
25 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
26 International Trends China (cont.) Policy promoting eco-design and environmentally sound re-use Requirements for eco-design, restricts hazardous substances, promotes product info disclosure Call for pollution prevention and reuse/disposal processes 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
27 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
28 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
29 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
30 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 112 th 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 113 th Congress 30
31 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
32 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
33 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
34 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 (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
35 What to Expect Next Increasing Federal Government Focus on Procurement & Recycling Numerous Existing Obligations EOs 13221, 13423, 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
36 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 lifecycle, 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
37 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
38 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, ertification.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
39 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
40 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
41 New York 7 Times Square New York, NY T: (212) F: (212) Boston One International Place Boston, MA T: (617) Tricia H. Foley PARTNER 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. 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 AWARDS & ACHIEVEMENTS Recognized as a Connecticut Super Lawyer, 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
42 Washington, D.C. 555 Twelfth Street, NW Washington, DC T: F: Peggy Otum PARTNER 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 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.
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