THE RISKS OF HIGHTECH TRASH: As Technology Use Grows throughout the World, Companies Are Increasingly at Risk for Costly Penalties over Their Handling of Electronic Waste

By Hodgson, Paul | Risk Management, April 2018 | Go to article overview

THE RISKS OF HIGHTECH TRASH: As Technology Use Grows throughout the World, Companies Are Increasingly at Risk for Costly Penalties over Their Handling of Electronic Waste


Hodgson, Paul, Risk Management


In 2016, the world generated 44.7 million metric tons of e-waste, equivalent to almost 4,500 Eiffel Towers, according to the Global E-Waste Monitor 2017, ajoint report produced by the United Nations University, the International Telecommunication Union and the International Solid Waste Association. This amount is expected to increase to 52.2 million metric tons by 2021. In the United States, the Environmental Protection Agency (EPA) has estimated that electronic waste is growing two to three times faster than any other waste stream.

So what is e-waste? According to the UN report, e-waste refers to a wide range of discarded electronic equipment and parts. This refuse falls into six primary categories:

1. Temperature exchange equipment such as refrigerators, freezers, air conditioners and heat pumps.

2. Screens and monitors, including televisions, laptops and tablets.

3. Fluorescent, high-intensity discharge and LED lamps.

4. Large equipment like washing machines, dryers, dishwashers, stoves, large printers and copiers, and photovoltaic panels.

5. Small equipment like vacuum cleaners, microwaves, toasters, electric kettles, electric shavers, scales, radios, video cameras, electronic toys, electrical tools and small medical devices.

6. Small IT and telecommunications equipment, including mobile phones, GPS devices, pocket calculators, routers, personal computers, printers and telephones.

As markets expand into developing countries, more and more people are adopting--and discarding--the latest technology. At the same time, product replacement cycles continue to shorten. As a result, the volume of e-waste generated is becoming an increasing problem worldwide. As regulators try to clamp down on the issue, manufacturers, retailers and end-users will need to understand how e-waste could impact their businesses and what they need to do to avoid potentially costly consequences.

REGULATORY PENALTIES

Primary concerns regarding e-waste include health, safety and environmental risks. A typical desktop computer, for example, contains 57 grams of lead, 2.5 grams of barium, 0.01 grams of arsenic, 0.8 grams of antimony, and smaller amounts of other toxic metals. Cathode-ray tube (CRT) monitors, commonly used in older glass video displays, contain four pounds of lead. These and many more substances found in e-waste are either poisonous, carcinogenic or both, and can accumulate in soil, water and food.

Because of the harm that can come from the byproducts of e-waste, companies that improperly dispose of these products face substantial legal and regulatory penalties. In 2014, for example, AT&T was prosecuted and fined more than $50 million by authorities in California for illegally dumping e-waste. The company paid approximately $23.8 million in civil penalties, including $3 million that was to be used toward future enforcement actions. They were also required to pay another $28 million over five years to make process changes to prevent future violations. In 2011, Target paid $22.5 million to settle similar charges that it was illegally dumping electronics collected in California stores.

A Colorado enforcement involving the recycling firm Executive Recycling resulted in a smaller fine of $4.5 million, but this case also demonstrated the criminal risks associated with e-waste, as two of its executives were sentenced to federal prison time for illegally sending electronic waste to foreign countries, including China, after telling customers they would dispose of it in an environmentally-friendly manner.

There are a number of regulations around the world that govern e-waste disposal. The main international regulation is the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, a multilateral treaty aimed at curtailing environmentally and socially detrimental hazardous waste trading patterns. …

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