Fair Trade of Electronics

Can exports of used electronics be done in a win-win manner through Fair Trade

Recycling contracts?

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

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?

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”)

• 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

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.

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.

Domestic or Foreign?

Domestic E-Waste Generated

Financing the Infrastructure

• The infrastructure needed in order to set up aformal recycling process in countries that importused electronics can be financed by refunds givenfrom 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 allelectronics imported, and creating reconciliationreports on those electronics that did not meet thecriteria established in the contract or that weredamaged from point A to point B.

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, auditedenvironment.

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 tonsper day of leaded silicate, a use approved by EPA.

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 hissupplier offers him a discount both for each monitor suppliedthat needs to be recycled and for implementing the take-backprogram for domestic e-waste.

1. Under the condition that he keeps records and makes reconciliation reports ofwhat’s imported, repaired, resold, taken back domestically and recycled.

4. Previously unattainable technology is sold to the masses indeveloping countries thanks to cheaper, second hand goods.

5. People now have internet and thus, access to more info/skills.

• 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

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

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!

What we want

• Prove that, with help and proper training,electronics recycling done responsibly and correctlycan 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

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.

NOT ban exports/imports of electronics

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.

For more information

Visit:

http://fairtraderecycling.org/

Or

Email Oscar Adrian Orta at:

oscar@fairtraderecycling.org