Electronic Disposal and Business Liability

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Electronic Disposal and Business Liability

• Richard Troia
• Founder and President
• i-recycle llc

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Electronic Disposal Overview

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What is Electronic Disposal?

• Unbroken chain of custody.
• Disassembly of computer into component parts.
• Recycling
• Metals
• Plastics
• Circuit boards
• Memory chips
• Processors
• Environmentally friendly recycling of CRT tubes.
• Secure destruction of hard drives.
• Disposal verification and auditing.

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Management of Electronic Waste in the United
States

• Study Performed by the Environmental Protection
  Agency
• Full report available at www.epa.gov/ecycling/mana
  ge.htm
• In 2005 . . .
• 1.9 2.2 million tons obsolete
• 1.5 1.9 million tons discarded
• 345,000 379,000 recycled
• The Study used two methods

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Management of Electronic Waste in the United
States

• Method One
• This analysis relies primarily on market
  research data on sales of electronic products. It
  then applies these sales data to some of the most
  comprehensive collection information available to
  estimate product life spans and the amounts of
  particular products that are ready for EOL
  management. From these EOL estimates, we subtract
  the estimated quantity recycled to yield the
  quantity disposed. This approach also provides
  information on the export of CRT monitors and
  TVs, as well as the amount of selected
  electronics cumulatively in storage.

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Management of Electronic Waste in the United
States

• Method Two
• This analysis relies primarily on government
  statistics on sales of electronic products. It
  then uses the same lifespan data (with some
  modifications) as Approach One to estimate EOL
  quantities. From these EOL estimates, we subtract
  the quantity of selected electronics disposed to
  yield the quantity recycled. This approach also
  provides information on the composition of
  electronic products, as well as the number of
  select electronic devices entering storage/reuse
  annually.

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Product Lifecycle Model
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Key Findings as of 2005

• Electronic Products Lifecycle
• Almost half, or 976 million units, of all the
  products sold between 1980-2004 are still in use
  or reuse.
• About 42 percent, or 842 million units, of the
  products sold between 1980- 2004 have been
  recycled or disposed of.
• Nine percent, or 180 million units, of products
  sold between 1980-2004 are still in storage.

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Key Findings as of 2005 continued

• Storage
• Between 1980-2005, 180 million electronic
  products had accumulated in storage
• In 2005 alone, approximately 460 million products
  were put into storage and/or reuse.
• Desktop PCs account for approximately 24 percent
  (by weight) of stored units.

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Key Findings as of 2005 continued

• Recycling vs. Disposal
• Between 2003-2005, electronic products available
  for EOL management were recycled or disposed of
  in the following approximate percentages
• About 15-20 percent were collected for recycling.
  The recycled/disposed split remained fairly
  constant between 1999-2005. Although recycling
  continues to increase, the percentage recycled
  remains constant because of the ever-increasing
  number of electronics available for EOL
  management.
• About 80-85 percent were disposed of (largely to
  landfills).
• Between 2003 2005, when we include products put
  into storage or reuse,
• Approximately 44 percent of products were
  disposed of, and 11 percent recycled.

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Key Findings as of 2005 continued

• End Markets
• In 2005, approximately 61 percent, or 107,500
  tons, of CRT monitors and TVs collected for
  recycling were exported for remanufacture or
  refurbishment.
• The next largest portion (about 14 percent or
  24,000 tons) was CRT glass sold to markets abroad
  for glass-to-glass processing, while lead
  recovery in North America accounts for about 6
  percent (10,000 tons) of the material.

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Recycling and Disposal Estimates
Amount of Desktops Recycled 2000-2005
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Storage and Reuse
Electronic Products Recycled, Disposed, or Going
into Storage/Reuse 2003 2005 ( by weight)
Includes landfilling and incineration.
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End Market for TVs and CRTs
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Electronic Disposal

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Electronic Disposal and Your Liability
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Why Should You Care?

• State of Wisconsin Child Data Found on Nigerian
  Hard Drive
• Patients Sue Doctor Over Data On Old Computer
• Bank of Montreal Sold Computer With Account
  Numbers Still on Hard Drive
• Morgan Stanley Blackberry Sold on eBay Contained
  Proprietary Data
• Paul McCartney's Financial Records Found On Old
  Computer
• ATT Fined 195,000 for Improper Disposal of
  Computers
• Recycling Center Manager Caught Stealing

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Environmental Regulations

• RCRA (Resource Conservation and Recovery Act)
• Requires manifest system and record keeping for
  the transport of hazardous wastes including CRTs
• Exempts households and small businesses
• CERCLA (Comprehensive Environmental Response,
  Compensation, and Liability Act)
• a.k.a. Superfund
• Empowers EPA to seek compensation from violators

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Environmental Regulations

• California (SB 20)
• Advance Recovery Fee (ARF) of 6-10 charged for
  new CRTs
• Collectors and processors reimbursed by state
• Maine
• Mandates manufacturers pay for transporting and
  collecting
• Maryland
• Government and manufacturers share financial
  responsibility
• State Recycling Trust Fund assess manufacturers
  5,000 annually

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Data Security Responsibilities
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Data Security Regulations

• HIPAA (Health Insurance Portability and
  Accountability Act)
• Secure electronic PHI when at rest and while in
  transit
• Requires Business Associates Contract and due
  diligence
• Gramm-Leach-Bliley
• Firms required to develop, implement and
  maintain a comprehensive written information
  security program that includes disposal of
  customer information

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Data Security Regulations

• FACTA (Fair and Accurate Credit Transaction Act)
• Requires any consumer report information on
  retired equipment cannot practicably be read or
  reconstructed
• Due diligence to include an independent audit of
  the disposal company's operations
• California SB 1386 (Mandatory Disclosure)
• Requires any company that stores information
  about California residents to publicly divulge
  any breach of security affecting that data within
  48 hours

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Business Liability Exposure
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Current Penalties

• The Health Insurance Portability And
  Accountability Act Allows Fines Up To 250,000
  And 10 Years In Prison for each violation of
  patient health information privacy rules.  
• The Gramm-Leach-Bill Act Imposes Up To 100,000
  Per Violation for financial institutions that
  fail to protect customer information.
•  The Environmental Protection Agency (EPA) Holds
  Equipment Owners Fully Accountable in terms of
  fines and litigation, if their e-waste leaks
  toxins or more into the environment.

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Consequences for Inaction
Who has your data?
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Threats to your business

•  Exposure of proprietary intellectual property
  and competitive information
• Liability of exposing data subject to privacy
  regulations
• Potential public relations backlash, the costs of
  which are incalculable
• Exposing the enterprise to unauthorized entry,
  leading to scenarios such as identity theft and
  corporate espionage

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Selecting a Partner
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Disposal Partners Requirements

• One of the reasons you outsource asset disposal
  or remarketing is for legal indemnification, and
  you must be confident that your asset disposal
  partner
• 1) has the resources to maintain sufficient
  liability coverage,
• 2) is not engaging in low cost but legally
  tenuous practices like exporting e-waste
  overseas, and
• 3) is equipped to handle information security
  either through complete data erasure and/or media
  destruction.

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Best Practices

• Secured Logistics
• Certified Processors
• Audited Disposition Reports
• Validated Value Recovery

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Additional Resources

• International Association of Electronics
  Recyclers (IAER)
• Institute of Scrap Recycling Industries (ISRI)
• International Association of IT Asset Managers
  (IAITAM)
• International Electronics Recyclers Institute
  (IERI)
• National Electronics Product Stewardship
  Initiative (NEPSI)
• National Recycling Coalition (NRC)
• National Center for Electronics Recycling (NCER)
• Silicon Valley Toxics Coalition (SVTC)
• Basel Action Network (BAN)
• Environmental Protection Agency
• Take It Back Network (TIBN)

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Questions?

• Thank you for attending this presentation today.

FOR MORE INFO...
Rich Troia 402-697-8400 www.i-recycle.net