A Reminder of Why Due Diligence on E-Waste is Crucial

You may remember that awhile ago, I expressed concerns over low e-waste export fines, and compared the recommended fines with a similar Mexican export action that resulted in millions in fines and jail time for the exporter and company’s principle. Well, this saga continues.

Let me set the background: 19 years ago, I was called in as a consultant by the owner to inspect and recommend action to mitigate environmental effects during a state-mandated shutdown of two illegally operated smelters. One was located in Mexico, and the other was in California. My responsibilities included sulfuric acid treatment, emission controls, and community and employee protection during the scheduled shutdown.

If my recollection is correct, the California smelter had been operating since 1960. The primary function of this smelter was lead furnace byproduct (dross or slag) or low lead recovery material recycling. The company also recycled lead acid batteries. This company was authorized to operate by at least three government agencies. However, between 1985 and 1990, the company lost one of its four permits. This wasn’t public knowledge, nor did any agency try to inform suppliers of the revocation of their permit.

Furthermore, they allowed the company to operate while it was under investigation for mismanagement. Complicating matters even further, the facility had unknowingly accepted radioactive waste from the government. They filed for bankruptcy and the property was listed as a Cal-Superfund site.

Round One:
In 2003, CAL-DTSC bought action against all major Alco Pacific waste suppliers. Under CIRCLA, the state agency was seeking reimbursement for all oversight, professional services and site-remediation costs. All but two of the waste contributors were exempt, and weren’t required to pay any costs associated with the site clean-up. The two deep-pocketed companies were left with most if not all of that cost. I believe this was the correct decision, because both companies were primary contributors over a long term to this superfund site.

Round Two:
Another former client had allegedly shipped a few loads of his dross (a byproduct of metal-melting) to this smelter, not knowing of the revoked permit. He was not called into round one, either. The oddest thing about this case, however, is the fact that the two deep-pocketed companies, after being held responsible, are now (with the permission of the court) suing all the smaller companies for reimbursement.

Round Three:
I don’t know how this happened, but in the litigation, I was somehow named as the owner of my client’s company. It’s likely that settlement attorneys simply found my name on a facility permit and assumed I was the owner. I’m sure this confusion will be cleared up and I will soon be able to inform my former client of their first round exemption and its conditions. I received a letter from a law firm involved in the case, reminding all alleged Superfund potential responsible parties of the high litigation costs. It offered to settle with me for a payment in the high five figures.

When I called to inquire about that, I mentioned that the dross generated from my former client’s process was purchased from his current client (one of the aforementioned deep pockets). I heard a cricket chirp in the background before he responded. He merely mentioned that my client should be able to meet the five conditions of exemption.

So what do I conclude from all of this? I see legal parallels between these actions and the actions of some e-waste collectors and so-called “recyclers.” I wonder how many Superfund sites e-waste export companies have created. And are we creating future sites (warehouses or storage facilities) in the United States?  This is only one of many reasons to exercise responsible due diligence. It should be a prerequisite when selecting or developing a comprehensive e-waste management (toxic chain of custody) system.