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Features - R2 Certification

Sustainable Electronics Recycling International summarizes its efforts to expand the footprint of R2 certification, as well as the organization’s broader goal of expanding the use of best practices in electronics recycling worldwide.

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March 8, 2016

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R2 (Responsible Recycling Standard for Electronics Recyclers) certification—the certification program for electronics recyclers based on the best management practices developed by a group of stakeholders convened by the U.S. Environmental Protection Agency—has made progress over the past several years. It is emerging as the most-used method of assessing responsible recycling practices in the electronics refurbishing and recycling sector in North America.

This progress begs the question, “Where do we go from here?”

Put another way, what are the most effective methods to promote responsible recycling practices in emerging economies, where they are needed most?

PIECEMEAL PROGRESS

Responsible repair and recycling practices are not widespread enough around the world to ensure that used electronics are managed sustainably, but some progress is being made.

Many countries, states and provinces and international bodies have enacted laws and regulations aimed at ensuring responsible management of used electronics. These vary in scope and quality of implementation but overall provide a positive effect on the management of used electronics. These lawmakers and regulators should be commended for their efforts.

However, at the opposite end of the spectrum, many jurisdictions are not addressing the problem. The wide disparity between these programs has produced a global network of managing used electronics that is rife with regulatory and enforcement gaps. Unfortunately, support for good repair and recycling best practices is inconsistent, and numerous incentives to process material “informally” are present, which obfuscates the true scale of the used electronics challenge.

In places where nascent support exists for responsible management of used electronics, signs of progress are visible. Chinese regulators are cleaning up the infamous e-scrap slums of Guiyu, using enforcement and incentives to move recycling activities to a nearby industrial park, where the technologies employed and work conditions are better.

Elsewhere, India enacted national e-scrap legislation in 2011, though the country has struggled to implement the law and change the long-standing practices of businesses, consumers and recyclers. Discussions on the best way to do so dominate the country’s used electronics policy debate.

OEM (original equipment manufacturer) recycling vendor requirements have a positive effect on a number of electronics recyclers. In most cases, these requirements far exceed the local regulatory requirements and provide strong financial incentives for responsible recycling practices through vendor contracts and audits. Of course, these positive effects are limited in scope to companies that have a direct relationship with OEMs and their downstream partners.

ACCESS TO CERTIFICATION

In this fractured environment, the R2 certification program—and the best practices it promotes—has the potential to provide a more consistent framework in which refurbishing and recycling companies, and their customers, can manage used electronics.

The international growth of the certification program to date has been modest but encouraging. At the end of 2015, 550 facilities were R2 certified. Of these, slightly more than 10 percent are outside the United States, with at least one R2 facility present in 21 countries. 2016 will see additional growth in existing and in new countries. Significant interest in R2 certification exists in Latin America and Asia. And late in 2015, Sims Recycling Solutions became the first company to operate an R2 certified facility in the Middle East with the certification of its facility in Dubai, United Arab Emirates.

Also in 2015, SERI (Sustainable Electronics Recycling International) joined with several partners, including R2 Leader companies DirecTV, Sims Recycling Solutions and Oracle, and the consulting firm Greeneye Partners, to identify potential candidates in Latin America to assist in completing R2 certification. Facilities were selected in Brazil, Chile, Colombia and Ecuador based on a variety of factors, including pre-existing certifications, such as ISO 9001 or ISO 14001, established relationships with OEMs and a commitment to completing the certification process. Assistance to these facilities included the translation of the R2 Standard and supporting documents into Spanish and Portuguese, completion of a gap analysis at each site, assistance in developing an environmental health and safety management system (EHSMS) and preparing for their audits. R2 audits are scheduled to be completed for the sites in early 2016, and with the exception of Brazil, the facilities will be the first R2 certified sites in their countries.

Although this effort has been successful in providing direct assistance to participating facilities, the project has identified significant barriers to the growth of R2 certification in emerging markets. Specifically, these include:

Cost – The costs of completing R2 certification (i.e., an environmental health and safety certification, management system, consultant costs, auditor rates and travel, etc.) are acceptable to businesses in developed markets, such as the United States and Canada, but are not as affordable to businesses in emerging markets.

We can get a better sense of what recyclers in emerging markets might be able to pay for certification services using purchasing power parity (PPP), a measure of the adjustment needed to a currency exchange rate for residents in each country to be able to purchase the same amount of goods or services on their respective domestic markets. For instance, the cost of implementing an EHSMS (a requirement of R2 certification) in the United States is approximately $6,000, or 24,310 Brazilian real. According to the World Bank, Brazil’s PPP ratio is 0.7, so for an EHSMS to be as “affordable” in Brazil as it is in the United States, it would need to be priced at $4,200 (at the time of this writing), or approximately 17,000 real.

By not adjusting prices to reflect the local market, certification is effectively more expensive in these countries, creating a major impediment to its adoption.

Infrastructure – R2 certification requires services and professionals to support certification. These include consultants to assist with the certification process, insurance providers (pollution insurance is required by R2) and accredited auditors.

At the onset of SERI’s project to assist Latin American recyclers, the nearest Spanish and Portuguese speaking auditors accredited to perform R2 audits were in Mexico. A Sao Paulo-based auditor has been trained, but the general lack of local auditors contributed to higher costs.

Market Pressure – Another factor influencing R2’s international growth is market pressure. Certification is strong and continues to grow in North America in part because of the high number of certified facilities. This creates a market incentive for facilities to pursue R2 certification because doing so enables them to compete more effectively with the large number of certified firms. In many emerging markets, this pressure does not exist.

As SERI works to expand the footprint of R2 certification internationally, we will be working with local stakeholders to establish the requisite infrastructure to support certification, to lower the costs of getting certified and to identify enthusiastic “first-adopters” willing to jump-start certification in these new markets.

USING BEST PRACTICES

While there may be a need and a desire for certification programs for electronics recyclers, including R2, in emerging economies, significant challenges are present. Economic, regulatory, technological and cultural dynamics in some developing countries make certification difficult or impossible to implement, as I have noted. In fact, certification is possible only in emerging markets that are relatively mature with respect to these dynamics. In many markets this is not the case, and used electronics too often are managed using unsafe and unsustainable practices.

Understanding the true scope of this problem and taking steps to address it are incredibly complicated issues relative to simply expanding R2 certification.

Nonetheless, SERI sees an opportunity to create positive change in this space. Specifically, in markets where used electronics are poorly regulated and dominated by informal processing, there is an opportunity to partner with local NGOs (nongovernment organizations), regulatory agencies and small to midsized recyclers to improve the use of best practices. This necessitates an assessment of the current informal recycling practices in each market and tailored education, outreach, training and documentation for each.

These country-level assessments and developing relationships with recycling stakeholders in these emerging markets ideally will support the spread of environmental, health and safety practices in repair and recycling. SERI plans to continue to work on identifying the needs of these markets and potential local partners throughout 2016 and beyond.

SCRATCHING THE SURFACE

SERI is scratching the surface of the challenges posed by managing used electronics in emerging markets, and it will take many years, the participation of multiple stakeholders and foundational shifts in the electronics recycling landscape before this problem begins to be addressed effectively.

We are committed to continuing to work with the global electronics recycling community to meet these challenges. Progress has been made, but we still have a long way to go.

Henry Leineweber is operations director for Sustainable Electronics Recycling International (SERI), Boulder, Colorado. He provides operational support, project oversight and relationship management for SERI’s electronics repair and recycling projects around the world. SERI is a nonprofit dedicated to the responsible reuse, repair and recycling of electronic products and the housing body for the R2 Standard.