[OKRA] BAN answers questions raised re: Intercon Solutions

Thu Jul 14 11:45:42 PDT 2011

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BAN answers questions raised regarding Intercon Solutions hazardous waste
exportation to developing countries and   

     e-StewardsR Certification denial

July 14, 2011

On blogs, phone and on email, BAN has been asked numerous questions
regarding the actions we have taken with the Chicago area recycler, Intercon
Solutions (see story on homepage of  BAN website
<http://e2ma.net/go/7133261661/208615835/223845521/1400891/goto:http:/www.ba
n.org> ).  With this document we hope to answer some of these questions.
Feel free to ask us any others directly by writing to inform at ban.org.   As
new questions arise we can update this document. 

What does BAN think about Intercon Solutions' efforts to petition the
shipping line for more information about the "true" exporter? 

The overwhelming evidence remains that Intercon Solutions has been an
exporter of hazardous electronic waste to developing countries (China).
This petition by Intercon to the shipping line would appear to be an effort
to maintain the appearances and distract from facts at hand.   It is very
likely that the petition, even if responded to, is unlikely to reveal
anything. It is very likely that Intercon has used a Freight Forwarding
Agent to ship materials and thus entered the name of that agent as the
shipper on the Bills of Lading.  This is done by those wishing to hide their
identity as shipper. Thus, it is quite likely that Intercon knows that the
Bills of Lading do not list their name anywhere. Possibly the only way
records of Intercon as shipper will be revealed is through  court action
which can force the forwarding agents / brokers (and no the shipping line)
to reveal their books. 

Intercon claims some other entity trespassed on their property and dropped
off and filled the containers with hazardous electronic waste.  What does
BAN think of this theory?

According to news reports, Intercon recently received a $75,000 grant from
the State of Illinois to provide sophisticated security systems at the
Chicago Heights site to prevent data and other IT asset security risks.  It
is believed that this was a prerequisite of their award of Department of
Defense contracts for handling of highly sensitiveb data and equipment. They
are also recipients of a NAID certification, which requires extensive
surveillance camera monitoring.  It is, therefore, unlikely that such a
blatant breach of security could take place under monitored remote cameras
and other security measures put in place as a result of the grant.  If this
did occur, such a breach would give cause for alarm about the diligence of
Intercon Solutions in all of its operations and assurances of security to
its customers.     

Further, it is difficult to imagine a motivation for a third party that just
happens to also be in the electronic waste business to park containers
within the Intercon fenced facility even if they were to find a way in.
Every day a container is leased and sits, it costs the shipper money for no
gain.   Intercon Solutions is not in a convenient location to park
containers for anyone else.   Finally, the manager of LKQ, the company which
co-leases the property, told BAN without equivocation that the containers in
question belonged to Intercon, observing that "Intercon parks them there all
of the time." The claim of trespass therefore made by Intercon CEO Brundage
stretches normal bounds of credulity.

Why is Intercon the first compnay for BAN to take such serious action
against when other companies involved in BAN programs were caught exporting
in the past?

Prior to the e-Stewards Certification program, BAN managed the e-Stewards
Pledge program which was not nearly as comprehensive. Under the Pledge
program, BAN's policy for violators of the Pledge was "two strikes and you
are out" to give the violator one opportunity at corrective action.  

Under the much more rigorous certification program, BAN realized that
previous policies needed to be strengthened. BAN now has a policy in place
that considers a class of willful violations it refers to as "critical
non-conformities."  These are violations that could be so damaging to the
program that they could lead to a denial of licensing the company as an
e-Stewards Recycler.  That policy has now been formulated and has been
provisionally adopted while awaiting final revision and adoption by the
e-Stewards Leadership Council.  It was on the basis of this new policy that
the action on Intercon Solutions was taken.   This new policy now applies to
all prospective or active e-Stewards recyclers.  

Is BAN being too harsh on companies with a one-strike policy and should
there not be some sort of arbitration system instead?

By now, any recycler that still doesn't know that the e-Stewards program
prohibits the export of hazardous electronic waste to developing countries
is clearly negligent.  Even if this requirement is initially misunderstood
at the outset of the e-Stewards Certification process, any recycler
preparing for the e-Stewards audit must understand the entire standard.
The prohibition on export rules are defined front and center in the
standard. Intercon Solutions had tried unsuccessfully to be qualified under
the Pledge program, and was now trying to become certified to an even higher
standard. 

Further, apart from the e-Stewards Standard, the export of hazardous waste
to developing countries is well known in the industry following exposes in
60 Minutes, Frontline, 20/20, and the broad coverage by the trade press.
e-Waste export causes great, tangible harm to human health and the
environment.  No company in the e-recycling industry can credibly claim
ignorance of this fact.  

The entire value of a certification is diminished if companies game the
certification system, keep double books, set up shell companies to do their
exporting for them, or do something else to hide information from auditors.
If such violators only got a slap on the wrist, there is little incentive
for others to do the right thing and uphold the standard.  Without
accountability, the certification process has no value for anyone.

Arbitration for matters of willful violation is inappropriate.  It must be
remembered that this is a voluntary program.  Those that choose to be part
of it are committing themselves to meet a rigorous standard.  For those that
willfully violate the standard, as opposed to making an honest mistake, it
is important to take punitive action to maintain the integrity of the
program.   While BAN will always keep its ears open to extenuating
circumstances or mistakes, it will not arbitrate what has already been made
clear in the licensing contract and in the Standard.  

The e-Stewards contract does not say a company has to be perfect.  Indeed,
most non-conformities discovered during an audit are not considered
"critical."  But that contract does say that if a recycler's actions
seriously devalue or discredit the program, BAN has the right to withhold or
withdraw the license to be an e-Stewards Recycler. 

Why does BAN say that a company may have violated the law rather than giving
us a definitive statement?  Haven't you done your homework?

BAN has identified the laws it believes are likely to have been violated by
the actions of Intercon Solutions.  But it would be irresponsible for BAN to
presume to take on the role of government and assume guilt before it is
proven in a court or plea.  BAN cooperates with enforcement bodies such as
US EPA, Hong Kong EPD and Interpol, but does not pretend to do their job.

Why does BAN state that the import to Hong Kong was hazardous waste?  How do
you know?

BAN had alerted Hong Kong Environmental Protection Department of containers
coming from Intercon Solutions.  They opened the container and found that
the shipment contained hazardous waste as determined by Hong Kong.  They
subsequently required that the shipment be returned to the U.S.  Hong Kong
law forbids the importation of hazardous waste electronics such as cathode
ray tubes (CRTs) and batteries.  More information regarding the facts of
this case and the Hong Kong importation laws is available by contacting Hong
Kong EPD.   For those wishing to make such contact BAN can provide the email
addresses and names of the competent authorities there.

I thought that the results of audits are meant to stay confidential.  Did
BAN violate that principle?

BAN did not violate the audit confidentiality agreement.  The violation was
discovered outside of the audit process in surveillance that BAN conducts in
various cities across the U.S.  Rather, BAN requested that the Certifying
Body conducting the e-Stewards audits at Intercon present the findings to
determine if there was an explanation.  Intercon presented nothing to the
auditors that could allay or alter our concerns about the discovered
exports.  Stating this fact does not in any way violate the confidentiality
agreement.

Why would Intercon actively pursue certification if they knew they could not
meet the requirements of the e-Stewards Standard?

Of course this is impossible to know.   Unfortunately, some companies may
try to achieve what they do not deserve.   Even in a comprehensive
certification audit, shipping records can be falsified or missing and thus
auditors can get an imcomplete picture.   Our supplemental evidence provided
by the tracked containers indicated that this was a distinct possibility.
It is for this reason that BAN maintains an added layer of verification with
the e-Stewards certification by conducting unannounced surveillance.
e-Stewards is currently the only electronics recycling certification that
provides this kind of additional verification.  E-Stewards is also currently
the only e-recycler certification program that can remove egregious
violators from the program and revoke or deny certifications.

What should long-time customers of Intercon Solutions do? 

Intercon Solutions advertises that they are the preferred vendor of many
large and sensitive customers including the Department of Defense,
Department of Energy, NASA, Sony, and Texas Instruments.  It is known that
many state agencies also are using Intercon Solutions.  Customers of
Intercon Solutions or any other company shown to be exporting should take
such evidence as presented in this case by BAN very seriously.   The larger
the generator, the higher the risks from illegal or damaging exportation of
hazardous e-waste.   All generators should conduct their own due diligence
to protect their interests and the interests of stockholders and
stakeholders.   Those who might have been misinformed about services should
consider appropriate action.

Will BAN conduct similar investigations on other recyclers?

BAN intends to continue its practice of spot-checking random locations for
e-waste export.  Most electronic waste exportation is illegal under
international law (e.g. Basel Convention) and BAN's mission is to uphold the
laws and agreements of the Basel Convention.  We do these checks without
prejudice to certifications held.  BAN's intention is to make the recycling
industry a truly responsible one.   Many recyclers are doing the right thing
but suffer because of the lack of a level playing field caused by countries
like the United States not ratifying the Basel Convention and the Basel Ban
or by poor enforcement.  Unscrupulous recyclers make more money on illegal
export while others are spending great amounts of money to protect people
and our environment.   This must stop.  BAN will continue its efforts to
make sure it stops.

Why did BAN only sanction Intercon Solutions for two years rather than
permanently? 

BAN's goal is to reform the electronics recycling industry and therefore
believes that companies should be allowed in time, to correct their ways.
Many recyclers that once exported hazardous e-waste do developing countries
are now recycling responsibly by internalizing costs and following
international rules.   However, some punitive action against egregious
violators is necessary to reward those doing things the right way and to
ensure the integrity of the program.  BAN believes a two-year sanction is
the appropriate balance.

What is the situation with payments of fees in the case of a denied
certification?

Some confusion seems to have arisen following a story in Resource
Recycling's online newsletter regarding payment of fees.  BAN was asked if
Intercon Solutions would be obliged to pay the audit fees.   Audit fees are
a contract matter between the recycler and the certifying body, in this
case, SAI Global and Intercon Solutions.   BAN is not privy to those
arrangements.   On the other hand, BAN gets paid a license and marketing fee
for administration and promotion of the program.   These fees are normally
paid after a company passes the e-Stewards audit conducted by the certifying
body and then signs the licensing agreement with BAN.  Because Intercon was
denied entry into the e-Stewards program, no license fee will be collected
by BAN. 

END

206 1st Ave South Suite 410 | Seattle, WA 98104 US

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