Scrap Metal Industry Faces Environmental Dilemma

By Katzman, Martin T. | Risk Management, December 1989 | Go to article overview

Scrap Metal Industry Faces Environmental Dilemma


Katzman, Martin T., Risk Management


Scrap Metal Industry Faces Environmental Dilemma

The scrap metal industry recycles metals like steel, aluminum and lead from discarded consumer products. Although this industry serves the national interest by saving energy and reducing environmental damage, about 30 percent of its members have been held liable for cleanup under the Superfund law.

The scrap metal recycling industry provides a growing source of raw materials for the basic metals industry. In addition to reducing the environmental damage from mining, the recycling of metals saves energy. Compared to the processing of metallic ores, the recycling of steel reduces energy consumption by 50 percent and the recycling of aluminum by over 90 percent.

Scrap recycling involves three distinct stages: the collection of scrap metal from dispersed sources, a preliminary cleaning and separation into homogeneous streams and smelting or reuse. In the parlance of the industry, firms operating in the last stage are considered consumers, a group which accumulates many of the unrecyclable toxic wastes.

Through careful management, scrap recyclers can reduce the release of toxins under their control. However, by its very nature, the recycling process shifts the control of materials to other parties downstream. For example, scrap metal dealers specializing in recovering steel and aluminum from automobiles transport batteries to specialized smelters who recover the lead. Despite this shift in control and the fact that in the absence of recycling even more hazardous materials would be released into the environment, recyclers may still be held liable for environmental damages.

Under the Resource Conservation and Recovery Act, scrap recyclers can be held liable for cleaning up the sites that pose an "imminent hazard" to parties off-site. Under the Superfund statute, recyclers can be held liable for cleanup costs incurred by downstream reprocessors or disposers of the residual waste. Under the doctrine of joint and several liability, one firm may be required to pay for the damages of all. Joint and several liability under Superfund is the single most important factor accounting for the virtual disappearance of environmental impairment liability insurance.

Much of the discussion regarding the costs and consequences of Superfund has been based upon speculation supported by little hard evidence. Underwriters have estimated their liability as high as $200 billion, which presents the scrap metal industry with some serious, indirect consequences. Scrap processors are likely to raise their expenditures on loss prevention and loss protection, thereby increasing the cost of recycled metals and reducing the viability of the basic metals industry upon which it heavily depends.

Survey Method

The entire membership of the Institute for Scrap Recycling Industries, 1,705 organizations, was sent a pre-tested questionnaire in the spring of 1988 surveying such items as the quantity of materials handled, methods of disposal, changes in acceptability of scrap types, changes in management practices, changes in capital expenditures as a result of environmental concerns, liability experience and insurance coverage. Liability experience indicates whether or not the firm is currently involved in a cleanup. If so, the survey then probed for information regarding the contaminating substance, the costs for management, legal counsel, site investigations and cleanups at each site affected.

Responses were obtained from 503 members, approximately 30 percent of the membership. Among the respondents, larger firms were over-represented, as were firms that process nonferrous metals. Several statistical tests suggested that firms with liability problems were more likely to respond to the questionnaire than firms without such problems.

Nearly 30 percent of the firms in the sample have been informed by a governmental cleanup agency or private party that they may be liable for cleanup costs at a hazardous waste site. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Scrap Metal Industry Faces Environmental Dilemma
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.