Certification audit exposes exporter
Tue, 07/05/2011 - 13:36 | 
henry
Certification audit exposes exporterBy Henry Leineweber *Updates to this story appear at the bottom of the page* Illinois-based electronics recycling firm Intercon Solutions has become the first processor to be denied e-Stewards Certification for what the Basel Action Network says is "compelling evidence" that the company exported electronic waste to Hong Kong. In a letter to Intercon CEO Brian Brundage dated June 28, BAN executive director Jim Puckett said the organization would not be accepting Intercon into the e-Stewards Certification program based on evidence BAN collected showing the company exported containers of electronics – a violation of the conditions for e-Stewards Certification and likely the import laws of Hong Kong. BAN presented photographic and documentary evidence it collected showing electronic scrap in one Intercon Solutions shipping container bound for Hong Kong in 2009, and two additional shipping containers bound for Hong Kong in 2011. "The final decision by BAN to deny the certification took place only after an on-site audit had been conducted and after direct discussions between BAN and Intercon Solutions failed to convince BAN that Intercon Solutions had not exported the toxic containers," read an official statement from the Seattle-based watchdog. "Such export is a violation of the e-Stewards Standard and is likely also to violate the importation laws of Hong Kong, the U.S. federal Resource Conservation and Recovery Act (RCRA) and Illinois state law governing the conduct of registered electronics recyclers." "We determined we had a serious problem just before we began the Phase 2 audit during the certification process," says Puckett, speaking with E-Scrap News. "We made sure to have an observer there during the third-party auditing process after that and began the process of trying to work with [Intercon] on this problem. After they continued to deny ownership of the containers, or that the events took place, we took the action that we did." As part of being denied certification, BAN says it will bar the company from e-Stewards certification for a minimum of two years. "We gave them plenty of opportunities to work with us and correct their behavior, but we just kept getting denials," continues Puckett. Several attempts to contact representatives of Intercon Solutions, including Brundage, by E-Scrap News were unsuccessful at press time [see update below]. In a marketing letter postmarked June 30, two days after the company received its correspondence from BAN, Intercon Solutions business development director Dan Hagan bills the company as one that will "Properly recycle anything that does not contain a liquid with zero landfill, zero export, zero remarketing, zero incineration and zero shredding." Intercon's marketing letter also highlights the company's other certifications, including the R2 and RIOS standards. However, shortly after the story broke on July 5, R2 Solutions, the housing body for the standard, announced it had delisted Intercon Solutions from its directory of R2 processors. R2 Solutions said it took the action based on data provided to it by BAN, which showed that the company violated the R2 certification's provision against exporting "focus materials," such as batteries, CRT glass, circuit boards, mercury and other hazardous substances. Intercon Solutions' current troubles may soon extend beyond certification. BAN says officials in Hong Kong are taking enforcement action against the importing firm documented in the evidence. BAN says that action by the U.S. Environmental Protection Agency is possible against Intercon directly, although a more immediate concern is its status as a registered processor under Illinois' state electronics recycling program, which requires companies exporting covered electronics to meet all laws of the United States and the recipient country, and to keep records of their export activity for a period of three years. Intercon Solutions is a major electronics processor in Illinois and the surrounding region. For example, it is a member of the Institute for Scrap Recycling Industries and according to the company has 12 sites, processing approximately 143 million pounds of electronics per year. SAI Global conducted third-party audits of the company for the e-Stewards certification process. BAN says any outstanding issues regarding payment for services during the auditing process will have to be resolved between the two firms. *UPDATE 1: Just after going to press with this story, E-Scrap News was contacted by a lawyer representing Intercon Solutions, who provided the following statement: "Intercon Solutions does not export hazardous waste. While Intercon Solutions has the highest respect for BAN's mission, it has reviewed its findings and the evidence in no way justifies the conclusion that Intercon Solutions exported hazardous waste. Intercon Solutions has hired a law firm to review the matter and to protect its reputation in the e-cycling industry." *UPDATE 2: On July 6, the day after the story broke, Intercon Solutions filed a lawsuit in Cook County, Illinois Circuit Court. The company says the containers of e-waste do not belong to them and their presence could only be the result of trespassing on its property. Intercon Solutions seeks disclosure of information about the containers and other shipments, since a second company, CGA CGM (America) LLC was involved in making ground and sea transportation arrangements. Intercon is seeking the identities of shippers to which the material in question was directed. In a second statement provided to E-Scrap News by the Law Offices of Cathy A. Pilkington, the company says it "Did not own the ocean containers, did not load them with hazardous waste, and did not ship anything in them nor cause them to be transported. Intercon Solutions maintains that such action could have only been accomplished by trespass on its property, and that the actions of the trespasser created a nuisance entitling Intercon Solutions to sue for disclosure and for losses it may suffer as a result." A hearing is set for July 19. *UPDATE 3: The issue of fees associated with certification has been brought up several times in the comments on this story. While E-Scrap News is awaiting confirmation from parties regarding auditing fees, Intercon Solutions does not appear to be obligated to pay licensing fees to BAN, since they were denied certification. |
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BAN answers your Questions
Dear readers:
BAN has released an FAQ to answer many readers questions and concerns. Please find this at www.ban.org homepage or click on the link here BAN answers questions regarding Intercon Solutions hazardous waste exportation. Hope this helps. Please feel free to ask questions directly to us at inform@ban.org.
Yours,
Jim Puckett, BAN
why anonymous?
I have found reading the allegations and information in these comments very interesting. But it's disturbing that most of the people making these comments are not putting their names behind them. I understand that sometimes a person's position might be a bit sensitive, so I'm not saying anonymity is always inappropriate, but look: The crux of this problem is people not disclosing honest information and dodging the truth. If you aren't brave enough to even put your name behind your comments, why should anyone take your input into this situation seriously?
Joshua Goldstein
USC History
Public Disclosure of Audit Information
Aside from the allegations concerning Intercon and what BAN is/is not, one issue that deserves some serious consideration is the matter of the disclosure of the audit information. The audit results were made directly available to the media and the regulators. BAN has specific statements making it clear that they keep audit information confidential except when they don't. The professional EHS auditing community has posted a few comments from their perspective at http://www.linkedin.com/groupItem?view=&gid=1791635&type=member&item=61190758&qid=0445ff32-69b8-4a8d-9d59-a94801d9e312&trk=group_most_popular-0-b-cmr&goback=%2Egmp_1791635.
As a 25 year veteran of EHS auditing and an original/grandfathered member of the BEAC CPEA auditor certification, I am disturbed by this - as are many other professional EHS auditors.
One consequence of this is that I expect that many companies will carefully review their contract terms with third party certification bodies with respect to information confidentiality/disclosure and perhaps even create a disincentive for companies to seek voluntary environmental certifications.
Please contact meI
Dear Sir,
I would like to understand more about audits like this. Please give me a call.
Ronald Kobler
Recovery Processes Innovations
801 973 4774
Public Disclosure of Audit Information
In the case of Intercon Solutions, as well as every other e-Stewards certification applicant or client, BAN took every precaution to protect the confidentiality of audit information for this applicant. In fact none of the information that was collected from the Stage 2 audit that was conducted was shared with any third party. The evidence of exportation of hazardous e-waste was collected during separate events that happened several months earlier. Further, BAN sought and obtained authorization for the release of the application status of Intercon Solutions with Intercon Solutions itself before revealing that the company was even in the process of certification. The only statement made by BAN regarding the results of the audit was that the third party audit process did not produce information which would refute the evidence already collected and in the hands of BAN prior to the beginning of the Stage 2 audit.
Greg Swan
Consultant to inustry and the Basel Action Network
Intercon's response
Intercon's response to BAN's investigation is completely bogus. Intercon was awarded a $75,000 grant several years ago to go toward the purchase and installation of a Department of Defense grade security system. Since installing it, Intercon has boasted that they have the most secure recycling facility in North America. Yet somehow on four separate occasions Intercon would like us to believe that someone was able to get containers onto their property, back them up to their loading docks, and drive away with material right under their noses. If you believe that, then you are the most gullable person on the planet. The truth of the matter is that Intercon professes it never ships any of the mateiral it receives outside of the USA's borders. This is another bogus offering by Intercon. Hopefully, now that BAN has uncovered these exports, someone will do an even greater audit, tracking downstream vendors Intercon uses who do nothing more than cross-dock their material and ship directly overseas as well. Intercon's clients who have been told for years that 100% of their material is being recycled in the USA, with no resale or export have been defrauded. These customers should utilize their legal teams to subpoena bills of lading, purchase orders, and invoices to determine where Intercon has been sending their material for all of these years. Let's see how many more unreal denials can be offered by Intercon then.
We support BAN and R2 great work.
Dear all electronics recyclers - We all know, (from the financial crisis), free enterprise must have some constraints. If not, companies will drive unconstrained toward maximizing profits. Greenspan didn't get that until lately.
Recovery of old materials back to commerce costs money. But as a recycler, you elected to do something good, not just maximize profits. If all you want are profits, pick wall street, or another profession. As recyclers, we have an obligation that transends profits alone. We have the obligation, that when we tell someone / anyone we will recycle their material, we are prepared to say what percentage goes back into commerce, and the products it makes. Thats recycling and recycled.
Most real recycling to commerce occures by the downstreams. So if you are really concerned about true recycling, go audit your downstreams and insure they are returning things to commerce and in what percentages.
Go develop domestic, traceble outlets for your materials. Thats what business is. Its not sending it to an environmental graveyard, and calling it recycling.
Go BAN and R2, I would NOT certify in the future, unless companies provide full tracking, of every pound in and out, and where its going, to whom, and what the final products are.
Ronald Kobler - Recovery Processes Innovations 801 973 4774
Intercon's Explanation?
From EnvironmentalLeader.com: "Intercon says that one or more persons must have trespassed on its premises to deposit the containers, then load them with hazardous waste for shipment." Question: Does that sound reasonable to you?
Reasonable?
Hell NO! Is Intercon saying that their 'advanced' security system has no record of these surreptitious loadings? Someone snuck in, loaded containers, and snuck out numerous times over the years (that we know about), and we're just now finding out about it? Wow. Either security is severely lacking or Intercon's full of it. My vote is for the latter.
That is "if" the containers
That is "if" the containers from Intercon did indeed contain hazardous waste. However no proof of the actual contents have been provided by Ban. All they have are pictures of the containers in a parking lot and the tracking numbers. Could of been plastics or anything other than the worst possible assumption ie: haz waste. They lease part of their property to a diesel engine exporter! Where is proof of product?
Would you be dumb enough to invite ban into your home while your doing something they are out to get companies for? Wake up. All about money and politics. Ban couldnt afford this kind of publicity if they tried. Unfortunately, they are shooting themselves in the foot this time around and are further tarnishing their negative image. Congrats to ERI by the way ha. What a joke
Certificaton Audit
Intercon was in the midst of their certification audit. As one who has gone through this process, it's more than likely that the company could not provide proof of a legitimate downstream to their auditor. There has to be more evidence than a few pictures of containers in a parking lot.
Some recyclers think that if they sell their goods to a domestic broker that they can claim they have a zero export policy. It's about time that companies such as Intercon are exposed and the industry purges itself of this type of "recycler".
So it does sound reasonable
So it does sound reasonable to you? Because Intercon states the existence of haz materials in their quote.
Legal Motions
Not necessarily. They are only defending the term "haz mat" b/c that is what they are accused of. However, in taking this to court, they are going to deny everything and create an explanation until some real proof (or lack there of) shows up through the discovery process. Until then, nothing but a few pictures of containers and a screen shot of the tracking info of them being sent back to the USA (btw: says nothing about them being rejected). Go to BAN's site - All the "evidence" is there.
Return to Sender
I did. It seems compelling to me. The Hong Kong Environmental Protection Department saw the evidence, and the container (containing the material in question) was returned, arriving back in Long Beach on May 26, 2011.
BAN all about the MONEY!!!
Typically in situations like this you "follow the money" and as stated in the original article:
"BAN says any outstanding issues regarding payment for services during the auditing process will have to be resolved between the two firms."
It's about the money... trust me. BAN is trying to blackmail Intercon into submission... i.e. payment.
BAN now has a huge black eye. Why would any company in their right minds now try to work with BAN? If you don't agree BAN goes public with
private details about your organization... not good. Wouldn't be surprised to see lawsuits fly!
Actually, you've got it backwards
In fact, by letting the public know we have verifiable evidence of exports that have been rejected by the Hong Kong government, and refusing to allow this company into the e-Stewards certification program for now, BAN has lost the potential of their licensing fees, the opposite of what is suggested by "Anonymous" above. Instead, we are protecting the integrity of the program. The sentence quoted above is referring to the business-to-business financial relationship between the recycler and their certification body, which BAN has nothing to do with.
We understand that as the result of BAN protecting the integrity of the e-Stewards certification program, some companies might feel a little uncomfortable, as this industry evolves into better, more transparent practices. But, as stated in the original press release, certification audit information is ALWAYS kept completely confidential. On the other hand,active tracking of containers to countries that cannot legally accept them from the US is outside the audit process, and represents continued efforts by BAN to provide a rigorous certification program to help customers identify the truly responsible companies, from a global perspective.
Sarah Westervelt
e-Stewardship Policy Director
Basel Action Network
"Liklihood"
All I have to say about this article is " likely also to violate the importation laws of Hong Kong, the U.S. federal Resource Conservation and Recovery Act (RCRA) and Illinois state law governing the conduct of registered electronics recyclers" to me sounds like speculation without research of the facts. This is not something you should say about a company without having specific laws and documents to support such claims. I guess its just easier to spit out word vomit and put possible or likely in front of it.
R2
when R2 takes the work of BAN there is no hope
Legality of imports/exports is determined by governments
BAN has documentation of the containers that were rejected by the competent authority of Hong Kong, but has been asked by HK not to provide that documentation to the public. Instead, interested parties may contact inform@ban.org in order get the direct email of the HK government representative involved in stopping illegal trafficking of electronic waste coming though HK. Hong Kong's laws are available at www.epd.gov.hk/epd/eindex.html, and clearly make it illegal for them to import CRTs and batteries. The illegality of any shipment must be determined by the importing or exporting countries, and not by non-profit public interest groups, and therefore we leave it up to respective governments to complete their prosecutions, which always takes some time.
Sarah Westervelt, e-Stewardship Policy Director, Basel Action Network
Sending it back home!
Way I see it Intercon is just sending it back where it came from! China, Hong Kong, etc... LOL.. maybe we should charge those countries a hazardous waste import fee when we import it! Oh my now I have opened a can of worms... no one wants to pay an extra tax on that new 60" LCD. I mean come on if it is hazardous when its at the end of it's usefull (i.e. american overkill - probably nothing wrong with it) then it was hazardous when it came in. Certifications, and audits are just a way for democrats (I guarantee you there are no entrepreneurial republicans running BAN or R2, etc) to get money from the companies that are creating real jobs in the US and abroad. What makes me sick is some organization coming in and telling business owners they need to be "certified" i.e. pay us money, to conduct business. When we already have the Federal EPA for that very purpose.
RE:Sending it back home!
In complete agreement. Make it easy to buy from overseas and hard to give back. We wonder why we cant pay the bills in America when all we do is increase government programs and restrict businesses (in the long run business growth), but rely on the tax revenue, fees, and overall expendatures of people in these companies. It seems like the government has become a bunch of clowns in a giant oxymoron.
it's all about $$$!
it's all about $$$!
Busted for Exporting
Can a sole proprietor become ISO certified? When I see stories about how the CRT's are being recycled, I have to wonder since I have yet in 12 years to find a company that actually recycles the glass. Seems like a scam to me. Maybe the laws or rules could be tailored to accept CRT's as trash since most of the folks in the TV recycling business dump the glass anyway. They were being dumped for decades until the 2000's. Besides... What's worse? CRT's or automotive fluff?
CRT Glass
If you've never seen a company that actually recycles the glass, please let me introduce you to 2trg. We separate CRT glass with the end product of furnace ready CRT glass cullet. The cullet is shipped directly to a domestic smelter. This is a costly endeavor and yet there are several e-waste recyclers that do it right!
Reply to replies
Anonymous comments make me sick. If you have something to say and mud to sling then have the courage to state your name, otherwise keep it to yourself.
?
You make the statement anonymously. Can we say case and point?
Anonomous
I made a statement amount people running their mouths anonomously. In no way did I comment on the story, BAN or anything else. I very much enjoy people making accusations or personal attacks anonomously. Those types of attacks are simply gutless. I certainly see no need to attach a name on a blanket statement.
Agreed and promoted! Mike
Agreed and promoted! Mike Enberg/e-Stewards
BAN
I do think it is interesting that they want compliance (i.e. money) and think this is a BIG win, when in reality a lot of companies will just shy away - because if they can construe anything into a "news" story they will! Good luck BAN - there is a lot of money being made on "certifying" companies. (read below) You try to do the right thing and this is your reward... too bad that once China opens up their fully compliant, government approved, reclamation plant - BAN won't be needed, and R2 will become R2-D2!
"BAN says any outstanding issues regarding payment for services during the auditing process will have to be resolved between the two firms."
ERI
Apparently ERI was a bigger contributer to BAN.... Come on Puckett... put some teeth into your certification by being consistent! ERI screwed up and you gave them a pass. Go back a revoke their certification if you expect to be taken seriously.
ERI violated Pledge, not certification
There seems to be some confusion here. ERI's violations were of the e-Stewards Pledge program, and not the certification program. The Pledge program had no on-site auditing, no independent certification, and a one and a half page standard. On the other hand, the new certification program has a 50 page standard, accredited 3rd party certification, and active oversight of BAN and a certification consultant.
In addition, the Pledge program did not have a "one-strike, you're out" policy, but rather a policy to give violators one chance to come into conformity with the Pledge requirements before being removed from the program. As administrators of the program, we felt the need to consistently administer that Pledge program policy. But that policy did not serve the Pledge program well when it faced the magnitude of the ERI violations, and therefore BAN now has a new policy, called the Critical Non-Conformity Policy, which gives BAN the authority to consistently take action against Pledged or Certified companies that have significant violations in the first instance. This new policy will be approved by the e-Stewards Leadership Council shortly, and is already in effect on a provisional basis. The Pledge program sunsets on August 31st, 2011, after giving Pledged e-Stewards 18 months in which to become Certified e-Stewards.
Funding for the e-Stewards certification program is typical of most certification programs internationally, relying on licensing fees to cover on-going operating costs such as: program oversight, quality control, program promotions, revision of the standard, co-training with the professional auditor training organization, staff labor, legal support, website maintenance, etc. Currently, these licensing fees only cover 60% of our operating costs for the certification program, and we continue to supplement that limited program funding with grants from foundations. As a non-profit, BAN's entire funding is fully transparent, unlike most companies; our latest annual report is available at www.ban.org/library/BAN_AnnualReport_Final_2010.pdf When we started up the development of the certification program, we received one-time donations from 14 companies and organizations ("e-Stewards Founders", listed on our website), in order to hire certification experts and build the program. ERI was one of the 14 founders who sought to support the development of a certification program held by the environmental community. The only other funding from ERI comes in the form of licensing fees, just like all other e-Stewards, based on a visible, sliding scale.
If anyone would like any further information, please contact BAN at inform@ban.org The program is fully transparent and we are happy to answer any questions you may have.
Thank you,
Sarah Westervelt
e-Stewardship Policy Director
One strike?
Well, it was clearly more than one strike, and it is ridiculous to imagine that they were not fully aware of the odious nature of they're activities. My concern is that by giving them a pass, BAN has "watered-down" and seriously damaged the credibility of the nascent cerification they have worked so hard to bring to fruition. Perception is realitiy, and the prevailing perception is that once again "special interest" has been given a pass. Had they been shown the door, BAN's integritiy would have been preserved.
Re: ERI
Couldn't be more right. Giving someone the pass who failed vs. failing someone with zero evidence - BAN is a joke and Puckett is nothing but a whiney attention whore.
Intercon Solutions & BAN
This was not news to me that Intercon Solutions has been caught sending material overseas. Intercon has been professing for years that it has an absolutely zero tolerance for exporting any of the material it receives from its customers outside of the USA borders. This claim is made in emails sent by its employees to potential customers, current customers, marketing flyers, and presentations they give. Intercon claims it utilizes ONLY ISO 14001 certified downstream processors in the USA to recycle the material they receive. Instead, for years Intercon has been selling its material to companies who do absolutely no processing of material and who it knows ships directly overseas to China. If a customer of Intercon wants an audit to verify where their material goes, Intercon refuses to give that information, claiming that it would compromise Intercon's competitive advantage by divulging who they are parntered with. Intercon's response to its customers is to say look at all of our wonderful certifications. We must be trustworthy because of that, and therefore so are our downstream processors. Most companies believe Intercon since there has never been any evidence to the contrary. Well, now there is evidence, and I'm sure plenty of it. My guess is that the information BAN's investigators found is just the tip of the iceberg. BAN is giving the public just enough information to tell the story, but should Intercon try to fight them, I'm sure all of the evidence will come out, making Intercon look even worse. I don't agree with everything BAN does, but I definitely don't agree with companies who attempt to conceal their true business workings and defraud their clients. Is Intercon one of these companies? I know the answer, but I guess the rest of the public will just have to see where the chips fall in the near future to make their decision.
Fraud?
Export is an integral part of the electronics recycling infrastructure. There are materials we in the US are simply not able to process domestically. If a company is telling you NO export, NO landfill, and NO resale, think long and hard about that one. I find my intelligence insulted when I am fed such lies, knowing the necessary practice of export in the industry.
BAN's due diligence has exposed only one of the lies Intercon has been feeding its clients, but the ramifications of this discovery and subsequent disclosure can, and likely will, have far reaching and very serious consequences. I am interested to see how many lawsuits come down the pike by major corporations who have the financial and legal resources to get to the bottom of what has happened to their material. Does Intercon have clients in the military field? Do they handle ITAR regulated materials? If so, we may just see some (mandatory) jail time for the responsible parties if such materials were indeed exported. Only time will tell.
As far as the 'it wasn't me' mentality of the company, all I can say is good luck! Denials will only get you so far. No one believes multiple containers made it onto and off of the property without anyone knowing, especially given the security system and Intercon's claims that their facility is one of the most secure in the nation. Are we going to have another Watergate if the video surveillance is subpoenaed? Take a look at the dates and the pictures in BAN's report! Each time their people witnessed and documented the containers, it was a weekday during daylight hours. Look at the pic from Sept 9, 2009 and you'll see the shadows indicate the sun is high in the sky, and the truck/container is right by the loading dock!
The lawsuit filed by Intercon is a joke, and will likely add fuel to the fire instead of allowing it burn its way out. BAN made it clear they would fight them in any forum Intercon chose, so why the denials, smoke, mirrors, and bravado? Does Intercon really want to force BAN to release all of the information they have gathered to the public? What I have a hard time believing is the powers that be at the company could be so smug as to continue exporting material while deeply entrenched in the certification process. Funny thing is BAN's people were watching them long before they submitted the application for certification.
In parting, I am curious what happened to the returned containers. Isn't the US EPA or Customs supposed to be the entity to open the containers once back in the US to verify compliance/non-compliance with export regulations? I am surprised it was sent back to the California location where they had the ability to unload and ostensibly destroy the evidence. No matter really, as the cat is out of the bag on this 'NO landfill, NO export, NO resale' company. Regardless of whether or not what was in the containers was legal or illegal to export is irrelevant. The fact that they are professing not to export and indeed are should prove severely detrimental to the company. So what about the NO landfill and NO resale claims? I certainly wouldn't put my trust in this or any similarly structured company. There is no room for such misrepresentation and fraudulent behaviour in a field where they are supposed to be making a positive difference. For shame Intercon. For shame.
Intercon
Material goes overseas, we all know this, it has to at some point in processing. My issue with the whole thing is those who lie and say they don't export. Vet your downstreams, know where your product is going and what they are doing with it and once you have done this be honest with your customers and be transparent.