    Electronic Waste: EPA Needs to Better Control Harmful U.S.
    Exports through Stronger Enforcement and More Comprehensive
    Regulation (28-AUG-08, GAO-08-1044).

    Increasingly, U.S. consumers are recycling their old electronics
    to prevent the environmental harm that can come from disposal.
    Concerns have grown, however, that some U.S. companies are
    exporting these items to developing countries, where unsafe
    recycling practices can cause health and environmental problems.
    Items with cathode-ray tubes (CRT) are particularly harmful
    because they can contain 4 pounds of lead, a known toxin. To
    prevent this practice, since January 2007 EPA began regulating
    the export of CRTs under its CRT rule, which requires companies
    to notify EPA before exporting CRTs. In this context, GAO
    examined (1) the fate of exported used electronics, (2) the
    effectiveness of regulatory controls over the export of these
    devices, and (3) options to strengthen federal regulation of
    exported used electronics. Among other things, GAO reviewed waste
    management surveys in developing countries, monitored e-commerce
    Web sites, and posed as foreign buyers of broken CRTs.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-08-1044
        ACCNO:   A83862
      TITLE:     Electronic Waste: EPA Needs to Better Control Harmful
    U.S. Exports through Stronger Enforcement and More Comprehensive
    Regulation
         DATE:   08/28/2008
      SUBJECT:   E-waste
    	     Electronic equipment
    	     Electronics recycling
    	     Environmental law
    	     Environmental monitoring
    	     Environmental policies
    	     Environmental protection
    	     Export regulation
    	     Exporting
    	     Federal regulations
    	     Hazardous substances
    	     Hazardous wastes
    	     Health hazards
    	     Internal controls
    	     International trade regulation
    	     Noncompliance
    	     Recycling
    	     Restrictive trade practices
    	     Risk management
    	     Safety
    	     Waste disposal
    	     Waste management
    	     Foreign countries
    	     Policies and procedures
    	     Cathode-Ray Tubes (CRT)

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    GAO-08-1044

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    Report to the Committee on Foreign Affairs, House of Representatives:

    United States Government Accountability Office:
    GAO:

    August 2008:

    Electronic Waste:

    EPA Needs to Better Control Harmful U.S. Exports through Stronger
    Enforcement and More Comprehensive Regulation:

    GAO-08-1044:

    GAO Highlights:

    Highlights of GAO-08-1044, a report to the Committee on Foreign
    Affairs, House of Representatives.

    Why GAO Did This Study:

    Increasingly, U.S. consumers are recycling their old electronics to
    prevent the environmental harm that can come from disposal. Concerns
    have grown, however, that some U.S. companies are exporting these items
    to developing countries, where unsafe recycling practices can cause
    health and environmental problems. Items with cathode-ray tubes (CRT)
    are particularly harmful because they can contain 4 pounds of lead, a
    known toxin. To prevent this practice, since January 2007 EPA began
    regulating the export of CRTs under its CRT rule, which requires
    companies to notify EPA before exporting CRTs.

    In this context, GAO examined (1) the fate of exported used
    electronics, (2) the effectiveness of regulatory controls over the
    export of these devices, and (3) options to strengthen federal
    regulation of exported used electronics. Among other things, GAO
    reviewed waste management surveys in developing countries, monitored e-
    commerce Web sites, and posed as foreign buyers of broken CRTs.

    What GAO Found:

    Some exported used electronics are handled responsibly in countries
    with effective regulatory controls and by companies with advanced
    technologies, but a substantial quantity ends up in countries where
    disposal practices are unsafe to workers and dangerous to the
    environment. Recent surveys made on behalf of the United Nations found
    that used electronics exported from the United States to many Asian
    countries are dismantled under unsafe conditions, using methods like
    open-air incineration and acid baths to extract metals such as copper
    and gold. GAO observed thousands of requests for these items on e-
    commerce Web sites during a 3-month period�mostly from Asian countries
    such as China and India but also from some in Africa.

    U.S. hazardous waste regulations have not deterred exports of
    potentially hazardous used electronics, primarily for the following
    reasons:

    * Existing EPA regulations focus only on CRTs. Other exported used
    electronics flow virtually unrestricted�even to countries where they
    can be mismanaged�in large part because relevant U.S. hazardous waste
    regulations assess only how products will react in unlined U.S.
    landfills.

    * Companies easily circumvent the CRT rule. GAO posed as foreign buyers
    of broken CRTs in Hong Kong, India, Pakistan, and other countries, and
    43 U.S. companies expressed willingness to export these items. Some of
    the companies, including ones that publicly tout their exemplary
    environmental practices, were willing to export CRTs in apparent
    violation of the CRT rule. GAO provided EPA with the names of these
    companies at EPA�s request.

    * EPA�s enforcement is lacking. Since the CRT rule took effect in
    January 2007, Hong Kong officials intercepted and returned to U.S.
    ports 26 containers of illegally exported CRTs. EPA has since penalized
    one violator, and then only long after the shipment had been identified
    by GAO. EPA officials acknowledged compliance problems with its CRT
    rule but said that given the rule�s relative newness, their focus was
    on educating the regulated community. This reasoning appears misplaced,
    however, given GAO�s observation of exporters willing to engage in
    apparent violations of the CRT rule, including some who are aware of
    the rule. Finally, EPA has done little to ascertain the extent of
    noncompliance, and EPA officials said they have neither plans nor a
    timetable to develop an enforcement program.

    Beyond enforcing the CRT rule, EPA can take steps to ensure that the
    larger universe of potentially harmful electronic devices�such as
    computers, printers, and cell phones�are exported in a manner that does
    not harm health or the environment. Among the options raised by GAO are
    (1) expanding hazardous waste regulations to cover other exported used
    electronics; (2) submitting a legislative package to Congress for
    ratifying the Basel Convention, an international regime governing the
    import and export of hazardous wastes; and (3) working with Customs and
    Border Protection and other agencies to improve identification and
    tracking of exported used electronics. Options such as these could help
    make U.S. export controls more consistent with those of other
    industrialized countries.

    What GAO Recommends:

    GAO recommends that EPA (1) develop a systematic plan to enforce the
    CRT rule and (2) develop options to broaden its regulatory authority to
    address the export of other potentially harmful used electronics. In
    its comments, EPA expressed significant reservations with GAO�s
    findings and recommendations. GAO maintains, however, that they are
    fair and well supported.

    To view the full product, including the scope and methodology, click on
    [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-1044]. For more
    information, contact John Stephenson at (202) 512-3841 or
    stephensonj@gao.gov.

    [End of section]

    Contents:

    Letter:

    Results in Brief:

    Background:

    Used Electronics Are Exported Worldwide and Often Handled and Disposed
    of Unsafely:

    U.S. Exports of Potentially Harmful Used Electronics Flow Virtually
    Unrestricted:

    EPA Has Several Options That Would Strengthen the Federal Role in
    Reducing Harmful Exports of Used Electronics:

    Conclusions:

    Recommendations for Executive Action:

    Agency Comments and Our Evaluation:

    Appendix I: Scope and Methodology:

    Appendix II: Comments from the Environmental Protection Agency:

    Appendix III: GAO Contact and Staff Acknowledgments:

    Figures:

    Figure 1: Toxic Substances Contained in a Central Processing Unit and
    CRT Monitor:

    Figure 2: Developing Countries Requesting CRTs on Two Internet E-
    commerce Web Sites, February 2008 to May 2008:

    Figure 3: Three Stages of Electronics Dismantling and Disposal in
    Indonesia:

    Figure 4: Open Dump Site for Electronic Waste in Cambodia:

    Figure 5: Broken CRT Monitors from an Illegal Shipment of Used CRTs:

    Abbreviations:

    CRT: cathode-ray tube:

    EPA: Environmental Protection Agency:

    LCD: liquid-crystal display:

    OECD: Organization for Economic Cooperation and Development:

    RCRA: Resource Conservation and Recovery Act:

    [End of section]

    United States Government Accountability Office:
    Washington, DC 20548:

    August 28, 2008:

    The Honorable Howard L. Berman:
    Chairman:
    Committee on Foreign Affairs:
    House of Representatives:

    In recent years, consumers have grown more aware that tossing their old
    electronic devices into the trash can produce undesirable, and
    unintended, consequences. Toxic substances contained in used
    electronics--such as lead--are well known to harm people's health, and
    when electronics are disposed of improperly, they can leach from
    discarded devices into the surrounding environment. As a result, when
    U.S. consumers purchase new devices, such as computers, monitors,
    televisions, and cell phones, they are increasingly paying electronics
    recyclers--who routinely assure them that the used items will not end
    up in a landfill--to handle their old ones. Since one person's trash is
    often another person's treasure, a thriving international trade has
    emerged in used electronics, largely from industrialized to developing
    countries. Functional secondhand computers exported from the United
    States to Africa, for example, can be purchased for less than 1/10th
    the cost of a new one, a practice referred to as bridging the "digital
    divide."

    As the export of used electronics has continued, however, concerns have
    mounted that not all recycling is conducted responsibly, particularly
    in developing countries, and that some U.S. recyclers and exporters may
    be at fault. According to the Environmental Protection Agency (EPA),
    Americans removed more than 300 million electronic devices from their
    households in 2006. As alleged in recent years by environmental groups,
    imported used electronics that cannot be repaired are often recycled in
    developing countries by crude and inefficient means and with virtually
    no human health or environmental protection. One report by two such
    groups asserted that most of the used electronics handled in this
    manner originated in North America.[Footnote 1]

    Products with cathode-ray tubes (CRT), such as televisions and computer
    monitors, can be especially harmful to humans and the environment. CRTs
    contain copper--a commodity in high demand, in part because its price
    has increased threefold over the last several years--but also 4 pounds
    of lead, a toxin that can delay neurological development. Accordingly,
    used CRTs are the only electronic device regulated as hazardous waste
    and whose export is specifically controlled by EPA.[Footnote 2] The
    agency's July 2006 CRT rule required that, starting in January 2007,
    CRT exporters file a notification of export with EPA. For CRTs exported
    for reuse, the rule requires the exporter to notify EPA of intent to
    export CRTs for reuse or repair. Further, for CRTs exported for
    recycling, exporters must obtain consent from the importing country for
    shipment.[Footnote 3] If these conditions are not met, CRTs, which
    would likely fail EPA tests for toxicity, would be considered hazardous
    waste. Implementation of the CRT rule is a shared responsibility
    between EPA's Office of Solid Waste and Emergency Response and the
    Office of Enforcement and Compliance Assurance. Used electronic devices
    other than CRTs do not generally qualify as hazardous waste under the
    Resource Conservation and Recovery Act of 1976 as amended (RCRA), which
    is the statute governing hazardous waste handling and disposal.

    The Basel Convention, an outgrowth of the United Nations Environment
    Programme, in 1989 established an international legal regime governing
    the export and import of hazardous wastes for disposal. Ratified by 170
    countries--including virtually all industrialized countries except the
    United States--the Basel Convention stipulates that a country may ship
    hazardous waste only after receiving prior written consent from the
    receiving country. Although not a ratifying member of the Basel
    Convention, the United States is a member of the Organization for
    Economic Cooperation and Development (OECD) and therefore has agreed to
    be bound by OECD Council decisions.[Footnote 4] A 1986 decision imposes
    general obligations on members concerning exports of hazardous wastes
    to non-OECD countries (in part because of concerns over the
    effectiveness of developing countries' regulatory regimes) and
    prohibits exports unless the wastes are sent to an adequate disposal
    facility.[Footnote 5] A 1992 decision established a notice-and-consent
    process for hazardous waste recovery among OECD members; this decision
    has been implemented by the United States in RCRA provisions.[Footnote
    6] In 2001, because a majority of its members are also parties to the
    Basel Convention, the OECD Council changed its waste classifications,
    including which products are considered hazardous wastes, to harmonize
    with those of the Basel Convention. While the 2001 decision does not
    require changes to the scope of hazardous wastes regulated in the
    United States, it does require adoption of the classification system to
    facilitate coordination among exporting and importing countries.
    Although the United States has agreed to be bound by the OECD decision,
    the United States has not yet implemented it.[Footnote 7],[Footnote 8]

    As electronic devices are purchased with increasing frequency--along
    with the coming transition from analog to digital signals for
    televisions, making CRT technology obsolete--the prospect looms that
    many more used electronic devices will be discarded in the near future.
    In addition, a growing number of state laws prohibit discarding used
    electronics in landfills, in part because of the toxic substances
    contained within them. The increase in landfill bans could cause U.S.
    exports to increase significantly. In this context, this report
    examines (1) the fate of exported used electronics, (2) the
    effectiveness of regulatory controls over the export of used
    electronics from the United States, and (3) opportunities for
    strengthening the federal role in regulating used electronics exports.

    To answer these questions, we reviewed pertinent EPA documents;
    interviewed EPA, State Department, and Customs and Border Protection
    officials; and conducted several Internet-based exercises, such as
    monitoring Internet e-commerce sites and posing as foreign buyers of
    nonworking CRTs. Specifically, we conducted the following work:

    * To examine the fate of used electronics, we obtained and analyzed
    Basel Convention surveys and reports on electronic waste disposal in
    Cambodia, China, Indonesia, Malaysia, and Sri Lanka. We also
    interviewed a West African computer importer and officials with Hong
    Kong's Environmental Protection Department. As part of our monitoring
    of Internet e-commerce sites, we documented information on global
    demand for CRTs, the location of the demand, the volume requested, the
    price offered, and whether working or nonworking equipment was sought.

    * To examine regulatory control over used electronics exported from the
    United States, we interviewed EPA officials to obtain information on
    EPA's enforcement of the CRT rule and what, if any, enforcement
    challenges existed. We posed as overseas and domestic scrap brokers
    with a clear intent to purchase and export untested, nonworking, or
    broken CRTs--items that are not likely to be recycled in an
    environmentally responsible manner. We e-mailed 343 solicitations to
    electronics recyclers and trading companies in the United States,
    including members of the International Association of Electronics
    Recyclers;[Footnote 9] of these, 64 responded.[Footnote 10] During the
    3-month period from mid-February to mid-May 2008, we also monitored two
    Internet sites that facilitate trade in electronic products, among
    other goods.

    * To examine opportunities for strengthening the federal role in
    regulating used electronics exports, we obtained and analyzed
    documentation on EPA's authority to regulate exported used electronics.
    In addition, we examined other countries' approaches to governing
    exported used electronics. We also obtained and analyzed EPA Office of
    Solid Waste and Emergency Response and Office of Enforcement and
    Compliance Assurance documentation on the implications of expanding
    EPA's authority to regulate these items.

    We found the data we obtained on Internet e-commerce Web sites to be
    adequate to conclude that significant demand exists for exported used
    electronics. Appendix I describes our scope and methodology in greater
    detail. We conducted our review from October 2007 through July 2008 in
    accordance with generally accepted government auditing standards. These
    standards require that we plan and perform the audit to obtain
    sufficient, appropriate evidence to provide a reasonable basis for our
    findings and conclusions based on our audit objectives. We believe the
    evidence we obtained provides a reasonable basis for our findings and
    conclusions based on our audit objectives.

    Results in Brief:

    While some exported used electronics can be handled responsibly in
    countries with effective regulatory regimes and by companies with
    advanced technologies, a substantial amount ends up in countries such
    as China and India, where they are often handled and disposed of
    unsafely. These countries often lack the capacity to safely handle and
    dispose of used electronics if the units are not in reusable condition
    when received, and the countries' extremely low labor costs and the
    reported lack of effective environmental controls make unsafe recycling
    commonplace. Recent surveys conducted on behalf of the United Nations
    Environment Programme found that used electronics imported from the
    United States are dismantled in many developing countries under unsafe
    health conditions. Other investigations have corroborated disassembly
    practices in some Asian countries involving the open-air burning of
    wire to recover copper and open acid baths for separating metals. These
    practices expose people to lead and other hazardous materials. China,
    in particular, has been at the center of much of the world's attention
    regarding electronic waste export issues since 2002, when environmental
    groups first exposed egregious electronics-recycling and disposal
    practices in Guiyu and other areas in southeastern China. As China's
    growing economy has driven its demand for raw materials, China appears
    to have come to also rely on the inexpensive labor and lax
    environmental controls reported in other countries in the region, such
    as Indonesia and Cambodia, to help meet its demand. Whereas used
    electronics exported to Asian countries are often recycled, such items
    are exported to West African countries primarily for reuse. Many units
    are exported broken, however, and some U.S. companies appear to mix
    broken units with shipments of working units. The nonworking units are
    often dumped and left for scavengers.

    Current U.S. regulatory controls do little to stem the export of
    potentially hazardous used electronics, primarily for the following
    reasons:

    * Narrow scope of regulatory control. U.S. law allows the unfettered
    export of nearly all types of used electronic devices. U.S. hazardous
    waste regulations do not consider most used electronic products, such
    as computers, printers, and cell phones, as hazardous, even though they
    can be mismanaged overseas and can cause serious health and
    environmental problems. Instead, under U.S. law, only exports of CRTs
    are regulated as hazardous waste.

    * Regulatory controls easily circumvented. The export of CRTs from the
    United States in apparent violation of the CRT rule seems widespread,
    despite adoption of the CRT rule in 2006. Posing as fictitious buyers
    from Hong Kong, India, Pakistan, Singapore, and Vietnam, among other
    countries, we found 43 electronics recyclers in the United States who
    were willing to export to us broken, untested, or nonworking CRTs under
    conditions which would appear to violate the CRT rule. Three other
    companies indicated they do not export broken CRTs, and 7 others asked
    for more information about our fictitious identities, such as phone
    numbers, a Web site, or what we intended to do with the broken CRTs.
    EPA records show that none of the recyclers willing to sell to us had
    filed proper notifications of their intent to export CRTs for
    recycling, as required by the CRT rule for such shipments.[Footnote 11]
    Some of these seemingly noncompliant companies actively cultivate an
    environmentally responsible public image; at least 3 of them held Earth
    Day 2008 electronics-recycling events.

    * EPA has done little to enforce the CRT rule. EPA has taken few steps
    to enforce the CRT rule. Since the rule took effect in January 2007,
    for example, Hong Kong has intercepted and returned to the United
    States 26 shipping containers of used CRT monitors because these
    exports violated Hong Kong's hazardous waste import laws, Hong Kong
    officials said. Under the CRT rule, these shipments are considered
    illegal hazardous waste exports because the U.S. exporter did not
    notify EPA. Such exporters could be subject to administrative or
    criminal penalties. The agency can take action and seek criminal
    penalties of up to $50,000 per day of violation and imprisonment of up
    to 2 years against exporters who knowingly violate the CRT rule's
    notice-and-consent requirements.[Footnote 12] Nonetheless, EPA did not
    issue its first administrative penalty complaint against a company for
    potentially illegal CRT shipments until July 2008, and this penalty
    came as a result of a problem we identified. EPA acknowledges the
    existence of compliance problems with its CRT rule, but agency
    enforcement officials told us that given the rule's relative newness,
    the regulated community must first be made aware of the requirements.
    This explanation, however, is undermined by the instances we found
    where companies that indicated a willingness to engage in activities
    that would likely violate the CRT rule also indicated an awareness of
    the rule. Finally, EPA has done little to ascertain the extent of
    noncompliance, and Enforcement and Compliance Assurance officials told
    us they have no plans and no timetable for developing the basic
    components of an enforcement strategy, such as enforcement targets,
    monitoring, follow-up of suspected violations, and prosecution.

    Beyond enforcing its own CRT rule, EPA can also take steps to ensure
    that the larger universe of potentially harmful electronics--possibly
    including computers, flat-panel monitors, and cell phones, among other
    items--are also exported in a manner that does not contribute to human
    health and environmental harm overseas. EPA's adoption of the CRT rule
    shows that the agency recognized that while certain CRTs--those being
    reused--may not need to be considered hazardous waste within U.S.
    borders, regulatory control was needed to ensure that, when exported,
    they are not ultimately discarded in a manner that poses a health and
    environmental hazard outside U.S. borders. Among the options available
    to EPA to deal with this larger universe of exported used electronics-
    -options that could make U.S. export controls more consistent with
    international norms--is to propose amending RCRA regulations to include
    exports of used electronics posing health or environmental risks when
    disassembled or reclaimed, such as by expanding the scope of the CRT
    rule and revising the regulatory definition of hazardous waste.
    Additionally, EPA could (1) submit a legislative package to Congress
    for ratifying the Basel Convention, (2) work with Customs and Border
    Protection and the International Trade Commission to improve
    identification and tracking of exported used electronics, and (3)
    update RCRA regulations to reflect U.S. obligations under OECD.

    To help ensure that EPA provides a deterrent to potentially illegal
    exports of CRT monitors and televisions, we are recommending that the
    Administrator, EPA, develop a timetable for implementing an enforcement
    plan for the CRT rule. We also recommend that EPA evaluate options to
    regulate other exported used electronics, which could include expanding
    the scope of the CRT rule and collaborating with other federal agencies
    to improve tracking of exported used electronics. In addition,
    determining whether to ratify international treaties is a policy
    decision that rests with Congress and the President; we therefore
    recommend that EPA submit to Congress a legislative package to complete
    ratification of the Basel Convention, so Congress can deliberate
    whether and to what extent the United States should have additional
    controls over the export of used electronic items that may threaten
    human health and the environment when disassembled overseas.

    In commenting on a draft of this report, EPA generally disagreed with
    our recommendations, stating, among other things, that (1) it did not
    want to build an "extensive compliance monitoring and enforcement
    program" around the CRT rule or any other individual provision of its
    broader RCRA program and (2) it preferred nonregulatory, voluntary
    approaches to address the problems discussed in this report. First, we
    disagree that an extensive program would be required to develop the
    basic components of an enforcement deterrent, such as enforcement
    targets and a plan for compliance monitoring, following up on suspected
    violations, and prosecuting violators. Second, our findings cast
    serious doubt about the effectiveness of a strategy that relies almost
    entirely on voluntary approaches. Overall, we believe that nothing in
    EPA's comments changes the reality that the United States' regulatory
    coverage of exported used electronics is among the narrowest in the
    industrialized world and that the little regulation that does exist has
    been enforced to only a minor degree. EPA's comments and our response
    are included in appendix II.

    Background:

    Consumers and businesses may hesitate to discard obsolete electronic
    devices because the devices may still function and have value. Users
    generally have to pay fees, however, to have their used electronics
    recycled or refurbished domestically. Recyclers and refurbishers charge
    these fees because costs associated with recycling and refurbishing
    outweigh the revenue received from recycled commodities or refurbished
    units.

    The costs associated with recycling often make it unprofitable without
    charging fees for several reasons. First, recycling used electronics is
    labor intensive: the equipment must be separated into its component
    parts, including the plastic housing, copper wires, metals (e.g., gold,
    silver, and aluminum), and circuit boards, as well as parts that can be
    easily reused or resold, like hard drives and CD-ROM drives. Second, to
    obtain salable commodities, metal and plastic "scrap" must be further
    processed to obtain shredded plastic, aluminum, copper, gold, and other
    recyclable materials, and such processing typically involves
    multimillion-dollar machinery. Finally, recyclers incur additional
    expenses when handling and disposing of some toxic components (such as
    mercury-containing lamps). In contrast, selling these items for export
    can bring in revenue. According to EPA, a vast majority of used
    electronics (including their component parts and commodities) donated
    for reuse or recycling are exported, both responsibly and
    irresponsibly.[Footnote 13] Responsible recyclers often test used
    electronics to determine which components can be reused, then separate
    the remaining materials into their component parts and commodities
    before exporting. Recyclers like these have told us that they operate
    at a competitive disadvantage against companies that export whole,
    untested units.

    Exporting used electronics from the United States brings important
    benefits. For example, export leads to viable and productive secondhand
    use of electronic devices in developing countries--a practice known as
    "bridging the digital divide"--where they can be purchased for 1/10th
    the price of a new unit and contribute significantly to the operations
    of schools, small businesses, and government agencies. Moreover,
    extending the life cycle of electronic products prevents substantial
    environmental damage. A United Nations University study found that the
    manufacturing phase takes up 80 percent of the natural resources used
    during the life cycle of computers, so extending the lifetime of
    computers provides an important environmental service.

    In addition, strong demand exists overseas to recycle the raw materials
    contained within electronic devices. State-of-the-art recycling
    facilities in developed countries, such as Belgium, can extract
    precious metals and salable commodities. Recycling in this fashion also
    provides an important environmental benefit: Metals can often be
    extracted from used electronics with less environmental impact than
    from mining. The U.S. Geological Survey, for instance, reports that 1
    metric ton of computer scrap contains more gold than 17 metric tons of
    ore and much lower levels of harmful elements common to ores, such as
    arsenic, mercury, and sulfur.

    In recent years, concerns have been raised because toxic substances
    such as lead, which have well-documented adverse health effects, can
    potentially leach from discarded electronic products, especially if
    disposed of improperly. Nearly all the substances of concern in an
    electronic appliance are in solid, nondispersible form, so there is no
    cause for concern with respect to human exposure or release into the
    environment through normal contact. Instead, human health and
    environmental concerns related to the presence of these substances
    arise if the equipment is improperly disassembled or incinerated. EPA
    has identified lead, mercury, and cadmium (which are typically found in
    computers or monitors) as priority toxic chemicals for reduction.
    According to EPA, these toxic substances do not break down when
    released into the environment and can be dangerous, even in small
    quantities (see fig. 1).

    [This page intentionally left blank]

    Figure 1: Toxic Substances Contained in a Central Processing Unit and
    CRT Monitor:

    [See PDF for image]

    This figure is an illustration of a CPU and monitor, indicating key
    contaminants and their locations, as follows:

    Key contaminant: Lead:
    CRTs contain up to 4 pounds of lead, and circuit boards also contain
    some of this metal. Lead is toxic and can delay neurological
    development in children and cause other adverse health effects in
    adults. Lead can leach out of CRT glass and circuit boards disposed of
    in landfills, or it can be released into the environment by
    incineration.
    Locations: CRT; monitor circuit boards; CPU circuit boards.

    Key contaminant: Brominated flame retardants:
    Found in plastic casings of personal computers, CRT monitors, and
    circuit boards, brominated flame retardants can persist in the
    environment and accumulate in living organisms, where they may cause
    liver and thyroid toxicity. They can be released into the environment
    when computer parts are shredded or heated.CRT monitors may also
    contain antimony, barium oxide, and phosphors, which could cause human
    health and environmental concerns if improperly managed.
    Locations: Plastic casings of monitor and CPU; Monitor and CPU circuit
    boards.

    Key contaminant: Cadmium;
    Small amounts of this highly toxic metal are in electronic contacts and
    switches. Cadmium persists in the environment and accumulates in living
    organisms. It may be released into the environment by heat and
    incineration.Computer central processing units may also contain
    beryllium and lithium, which could cause human health and environ-
    mental concerns if improperly managed.
    Locations: connectors within CPU.

    Sources: EPA and GAO analysis of Basel Convention technical guidelines.

    [End of figure]

    Used Electronics Are Exported Worldwide and Often Handled and Disposed
    of Unsafely:

    Some exported used electronics can be handled responsibly in countries
    with effective regulatory regimes and by companies with advanced
    technologies. A substantial quantity, however, ends up in countries
    where the items are handled and disposed of in a manner that threatens
    human health and the environment.

    Some Exported Used Electronics Appear to Be Handled Responsibly:

    Certain developed countries have regulatory regimes that require safe
    handling and disposal of used electronics. Member states of the
    European Union, for example, must comply with the Waste Electrical and
    Electronic Equipment Directive of 2002, which established comprehensive
    take-back and recycling requirements involving retailers,
    manufacturers, and importers of electrical and electronic products. The
    directive requires member countries to ensure that producers and
    importers finance the separate collection, treatment, recovery, and
    environmentally sound disposal of "waste electronics," either on their
    own or through collective systems financed by themselves and other
    members of the industry.

    European Union countries are also parties to the Basel Convention. The
    aim of the convention is to protect human health and the environment
    from the adverse effects caused by the export of hazardous wastes,
    especially to developing countries, where the risk of unsafe hazardous
    waste management is often higher. As part of European Union countries'
    implementation of the Basel Convention, hazardous wastes intended for
    disposal cannot be shipped to non-OECD countries. Exports of waste
    occur only under the following circumstances: (1) if the exporting
    country does not have sufficient disposal capacity, (2) if the
    exporting country does not have disposal sites that can dispose of the
    waste in an environmentally sound manner, and (3) if the wastes are
    required as a raw material for recycling or recovery industries in the
    importing country.[Footnote 14]

    In addition to being governed by comprehensive regulatory controls,
    some companies in European Union countries use advanced technologies to
    recycle used electronics. For example, the recycler Umicore, according
    to its own documents, operates a state-of-the-art facility in Belgium,
    where it uses advanced technologies and processes to extract precious
    metals from circuit boards and responsibly handles waste by-products.
    Umicore samples electronic scrap to determine the presence of hazardous
    materials. The company then captures hazardous materials, such as
    cadmium and mercury, in the extraction process and disposes of them in
    an environmentally sound manner, state company documents. Over 95
    percent of the electronic items that Umicore recycles become new
    electronic products, and many of the remnants are recycled into
    construction materials.

    Some companies located in developing countries also appear to safely
    recycle and dispose of used electronics using advanced technologies.
    Samsung Corning, for example, operates a plant in Malaysia that not
    only recycles CRT glass but also manufactures new CRT televisions
    containing as much as 50 percent recycled-glass content. Samsung
    Corning's contractor in the United States has coordinated with
    approximately 40 U.S. recyclers for the export of CRT glass. According
    to the contractor, about 250 shipping containers, totaling about 4,000
    tons of CRT glass, leave the United States for the Malaysian facility
    each month. Malaysia's regulatory regime helps ensure safe recycling
    and disposal practices for CRTs; these products may be exported to
    Malaysia only if they meet certain conditions, according to Malaysian
    environmental protection officials. If local facilities lack the
    capacity or ability to safely carry out recycling activities, the
    government of Malaysia will not allow companies to import CRTs from the
    United States, according to a Malaysian government document. In
    addition, officials with the country's Department of Environment and
    Department of Customs have said CRTs cannot be legally imported from
    other countries if destined for final disposal.

    Many Countries Receiving Used Electronics Lack the Capacity to Safely
    Handle and Dispose of Them:

    While the United States has the landfill and institutional capacity to
    provide safe handling and disposal of used electronics domestically,
    many foreign countries, particularly those in the developing world, do
    not. According to surveys made on behalf of the United Nations
    Environment Programme, many developing countries lack the
    infrastructure to safely manage waste, including hazardous waste. These
    surveys found that large quantities of used electronic items are
    imported by developing countries, particularly in Southeast Asia, where
    they are improperly handled and, in some cases, informally recycled in
    "backyard" operations involving open-air burning of copper wire and
    acid baths to recover valuable metals.

    Upon importation, brokers, recyclers, and refurbishment companies in
    some developing countries examine items to determine how they can be
    used most profitably. According to individuals familiar with the
    international electronics industry, to maximize profit, working units
    are resold, repairable products are refurbished, and broken units are
    disassembled into component parts for further reclamation. Reusable
    electronics--those that can be directly resold or easily refurbished--
    generally have the highest value and are sold in retail shops in some
    developing countries. For nonworking or otherwise broken units, workers
    disassemble those that cannot be resold into their component parts,
    generally by hand. After disassembly, metals and plastics are recovered
    from the component parts, using methods that may lead to pollution and
    contamination. For instance, in some cases, workers burn the plastic
    coating off wires to recover copper and submerge circuit boards in open
    acid baths to extract gold and other metals. Unsalvageable computer
    parts are often burned in the open air.

    Significant demand exists for used electronics from the United States,
    particularly in developing countries. In a search of one Internet e-
    commerce site, we observed brokers from around the world place 2,234
    requests to purchase liquid-crystal display (LCD) screens. On the same
    site, we found 430 requests for central processing units and 665
    requests for used computers. In an extensive search of two Internet e-
    commerce sites over a 3-month period, we observed brokers in developing
    countries make 230 requests for about 7.5 million used CRTs. Brokers in
    developing countries represented over 60 percent of all requests we
    observed. Over 75 percent of the brokers' requests offered $10 or less
    per unit, and almost half offered $5 or less. Low prices (under $10 per
    unit) indicate a high likelihood that these items will ultimately be
    handled and disposed of unsafely. About 70 percent of the requests came
    from developing countries in Asia, with China and India posting the
    largest number by far; the remaining requests came largely from Africa
    (see fig. 2).

    Figure 2: Developing Countries Requesting CRTs on Two Internet E-
    commerce Web Sites, February 2008 to May 2008:

    [See PDF for image]

    This figure is a map of the world depicting developing countries
    requesting CRTs on two internet e-commerce web sites, February 2008 to
    May 2008:

    Ten highest requests:
    Bangladesh;
    China;
    Egypt;
    Hong Kong;
    India;
    Malaysia;
    Pakistan;
    Sri Lanka;
    United Arab Emirates;
    Vietnam;

    Placed requests:
    Afghanistan;
    Albania;
    Algeria;
    Botswana;
    Burma;
    Ethiopia;
    Ghana;
    Indonesia;
    Iran;
    Jordan;
    Kenya;
    Moldova;
    Morocco;
    Nigeria;
    Philippines;
    Singapore;
    South Africa;
    Syria;
    Taiwan;
    Thailand;
    Tunisia;
    Ukraine;
    Zambia;
    Zimbabwe.

    Transshipment points:
    Hong Kong;
    Singapore.

    Source: GAO analysis of two Internet-e-commerce sites.

    The information presented in figure 2 assumes that buyers do not post
    fictitious country names. It also assumes that there is no double
    counting of requests. Hong Kong is a special administrative region of
    China. Requests were also placed in Aruba, Peru, and Venezuela.

    [End of figure]

    China and Hong Kong Define the Used Electronics Trade in Southeast
    Asia:

    China has received global attention over electronic waste export issues
    since 2002, when environmental groups exposed "egregious" electronics-
    recycling and disposal practices in the city of Guiyu and elsewhere in
    southeastern China. China's fast-growing economy drives the nation's
    demand for raw materials, and one way that this demand is met is by
    importing used electronic products, according to a 2005 report by the
    Basel Convention Regional Centre in China.[Footnote 15] The report
    concluded that Chinese importers and foreign exporters (including ones
    in the United States and Japan) could easily evade China's import and
    export controls, resulting in potentially hazardous electronic devices
    entering the country illegally for disassembly and recycling. Chinese
    and Japanese researchers told us that most of these devices are likely
    to be shipped through Hong Kong.

    Once in China, most disassembly happens "by hand," according to the
    2005 report, where workers use primitive means in workshops of seven or
    eight employees.[Footnote 16] In Guiyu, the study found, more than 300
    groups were active in electronic waste recovery efforts. Open burning
    and acid baths to recover metals are commonplace, and the residual
    toxic waste from such operations is simply discarded, allowing
    pollutants to seep into the ground and water sources.

    Recent studies have highlighted the dangers of working and living near
    these facilities, particularly for children. For example, a study
    conducted by a Chinese medical school and published in 2007 in the
    journal Environmental Health Perspectives found that children in Guiyu
    had lead levels in their blood that were more than 50 percent higher
    than the limit for lead exposure set by the Centers for Disease Control
    and Prevention in the United States. The study also found that lead
    levels among children in Guiyu were also more than 50 percent higher
    than among children in a neighboring village where used electronics
    were not dismantled.

    At a 2007 conference in Beijing, Chinese environmental protection
    officials acknowledged that the country lagged behind developed
    countries in its ability to ensure safe reuse, recycling, and disposal
    of hazardous wastes such as used electronics.

    Other Asian Countries Import Used Electronics for Recycling and Reuse:

    While much of the export of used electronics to date has focused on
    China, awareness of electronic-waste-recycling and disposal problems in
    other Asian countries has grown in recent years. As a reflection of
    this growing awareness, eight Asian countries met in Cambodia in March
    2007 to discuss electronic waste management issues. At the conference,
    Indonesian officials disclosed that used electronics are imported from
    the United States for re-export to China, Hong Kong, and Taiwan, and
    the lack of effective environmental controls make unsafe recycling
    commonplace. As an archipelago, Indonesia has hundreds of seaports,
    which are nearly impossible to monitor, according to the environmental
    officials. According to these officials, electronics-recycling
    activities occur in east Java in an industrial estate and on Batam
    Island (near Singapore) in a "special bounded zone" exempt from
    government regulation. Recyclers at these facilities dismantle, crush,
    and melt used electronics. Most of the waste recycled on Batam Island
    is hazardous and would otherwise be more expensive to handle in "legal"
    facilities outside the special bounded zone, according to Indonesian
    officials. Photographs from the presentation show workers dismantling
    electronics by hand, with low-value components discarded haphazardly
    (see fig. 3).

    Figure 3: Photograph: Three Stages of Electronics Dismantling and
    Disposal in Indonesia:

    [See PDF for image]

    Source: 2007 Regional Workshop for the Environmentally Sound Management
    of E-Wastes.

    [End of figure]

    Cambodian environmental protection officials described similar human
    health and environmental harm associated with unsafe disassembly of
    used electronics in Cambodia. These officials stated that refurbishment
    and reuse activities are more prevalent in their country than
    recycling. According to Cambodian environmental officials, the primary
    electronic devices for sale consist mostly of secondhand material
    imported from the United States, the European Union, China, and other
    Southeast Asian countries. According to the Basel Convention Regional
    Centre in China's 2005 report, although used electronics are imported
    primarily for resale, some "rudimentary" recycling activities also take
    place. Unrepairable electronic products are often disposed of in
    municipal waste sites that are not designed to contain hazardous
    materials. Some scavengers in Cambodia, including children, often work
    directly for scrap yards, collecting material for as little as $1 a
    day. At the scrap yards, material is sorted, and metals are exported
    abroad for recycling. Materials that lack value are often dumped and
    sometimes burned (see fig. 4).

    Figure 4: Photograph: Open Dump Site for Electronic Waste in Cambodia:

    [See PDF for image]

    Source: Basel Convention Regional Centre in China.

    [End of figure]

    In India, which also receives used electronics from the United States,
    many parts of the country cannot safely handle these devices. In 2004,
    the environmental group Toxics Link documented containers of computer
    waste labeled as mixed electronics scrap imported from the United
    States through the port of Chennai. According to Toxics Link, more than
    10,000 people--including children--work in the "informal" recycling
    industry in Delhi alone, breaking equipment, using acid baths, and
    openly burning wires and plastic casings to reclaim gold, copper, and
    other commodities.

    Used Electronics Are Exported to Western Africa Primarily for Reuse:

    In contrast to the situation in many Asian countries, used electronics
    exported to West African countries are intended for reuse. Businesses
    importing used computers, for example, can sell functional units for as
    little as $100, well below the cost of a new computer, bringing
    technology within the reach of more people, according to one African
    computer importer. Recycling is not as prevalent in West Africa as it
    is in Southeast Asia, in part because West Africa is farther from
    markets where recycled commodities are sought. In addition, shipping
    costs to Africa are considerably higher than to Hong Kong and Southeast
    Asian countries. One recycler told us that rates from the United States
    to West Africa range from $4,000 to $7,000 per 20-foot container--
    considerably more expensive than the $750 it costs to ship 40-foot
    containers from the United States to Hong Kong.

    Some U.S. recyclers mix broken units with working units in shipments to
    Africa, and the nonworking units are often dumped and left for
    scavengers. Accepting "junk" equipment is often part of the
    "arrangement" U.S. recyclers make with African importers, according to
    a used computer importer in Senegal. Negotiating the amount of working
    versus broken equipment is routinely part of the agreement, and this
    importer told us that even if he receives a shipment of up to 40
    percent "junk," he can still make a profit. Often, the "junk" computers
    are dumped in the countryside and burned, he explained. In addition, in
    2007, an official with the Basel Convention Regional Centre for Africa
    for Training and Technology Transfer noted, on the basis of his
    experience that a high proportion of the units that arrive in Nigeria
    are unusable, that used electronics are rarely tested for functionality
    before export to developing countries like those in Africa.

    U.S. Exports of Potentially Harmful Used Electronics Flow Virtually
    Unrestricted:

    Current EPA regulations for hazardous waste have not prevented the
    export of potentially hazardous used electronics. Most used electronics
    can be legally exported from the United States with no restrictions;
    EPA controls only the export of used CRTs under its CRT rule, yet we
    observed widespread willingness to engage in activities that would
    appear to violate the CRT rule. Further, EPA has done little to
    determine the extent of noncompliance with the rule and even less to
    deter such noncompliance.

    Existing Regulation Focuses Only on CRTs:

    Current EPA hazardous waste regulations control only the export of a
    narrow segment of used electronics--CRTs--therefore allowing
    unrestricted export of nearly all others.[Footnote 17] In issuing its
    final CRT rule in July 2006, EPA obtained information that prompted the
    agency to assert that "[CRTs] are sometimes managed so carelessly
    [overseas] that they pose possible human health and environmental risks
    from such practices as open burning, land disposal, and dumping into
    rivers." As a result, for nearly 2 years, CRT exporters have been
    required to notify the appropriate EPA regional office when the items
    are destined for reuse. When CRTs are exported for recycling, the
    exporter must first notify EPA's Office of Enforcement and Compliance
    Assurance in Washington, D.C., which then obtains consent from the
    importing country. The written acknowledgment of the importing
    country's consent, which EPA then sends to the exporter, must accompany
    the shipment. If these conditions are not met, the CRTs are considered
    hazardous waste subject to full RCRA regulation because they typically
    fail EPA's tests for toxicity.[Footnote 18] As of June 2008, 25
    companies have submitted to EPA 47 notices for export of CRTs for
    recycling. These companies informed EPA that they intended to
    responsibly recycle CRTs at facilities in Brazil, Canada, Korea,
    Malaysia, and Mexico.

    Besides CRTs, most other types of exported used electronics can be
    mismanaged and cause serious health and environmental problems
    overseas. These products, however, are generally not considered
    "hazardous" under EPA's regulatory definition. Consequently, exporters
    can ship most types of used electronic products, such as computers,
    printers, and cell phones, without restriction. Under RCRA regulations,
    waste products are designated as "hazardous" according to the extent to
    which they will leach toxins if disposed of in unlined landfills.
    [Footnote 19] The tests used to make such a designation do not account
    for the potential for toxic exposure when items are disassembled or
    handled differently, such as by burning, as they often are outside the
    United States, particularly in developing countries.

    In contrast, the European Union's hazardous waste rules govern the
    export of nearly all types of used electronics, generally requiring
    that exporters notify relevant environmental protection agencies and
    receive consent from importing countries. In addition, the European
    Union has banned the export of hazardous materials contained within
    waste electronic and electrical equipment to non-OECD countries.
    [Footnote 20]

    Companies Exporting Nonworking CRTs Can Easily Circumvent EPA's
    Regulatory Controls:

    The limited regulation that exists over used electronics exports from
    the United States--namely, the CRT rule--is largely ineffectual because
    EPA's implementation of it apparently has not deterred companies from
    illegally exporting these items from the United States. When we posed
    as foreign buyers looking for nonworking CRT monitors, 43 U.S.
    companies that responded to our fictitious requests were willing to
    export nonworking CRTs to us, in apparent violation of the CRT rule.
    [Footnote 21] According to EPA records, as of July 2008, only 1 of
    these 43 companies submitted a notification for recycling as required
    by the CRT rule.[Footnote 22] The company that submitted the
    notification for recycling, however, informed EPA that it intended to
    export CRTs to Malaysia for recycling, whereas our fictitious request
    was for exports to Hong Kong. Moreover, as of July 2008, the government
    of Malaysia has not consented to CRT imports from this company.

    We reached employees with 18 of the 43 companies and interviewed them
    about the effect of the CRT rule on their business. In some cases,
    employees claimed that their companies do not export CRTs, even though
    we received contradictory information from e-mails they sent to our
    fictitious foreign brokers, as shown by the following examples:

    * A regional manager for a trading company in California stated that he
    was not aware of CRT rule notification requirements, but his company
    does not export CRTs. In an e-mail to our fictitious broker in
    Pakistan, however, he offered to sell "as-is" CRT monitors. In
    addition, his company offered 900 as-is CRT monitors, some with power
    cords cut, on a Chinese e-commerce Web site.

    * A sales representative for a large electronics recycler in New Jersey
    said that he was not aware of the CRT rule and was not the right person
    to speak to about this issue. This same individual, however, told our
    fictitious buyer from Hong Kong not to worry about U.S. laws' holding
    up export of untested CRT monitors. He explained that "it's the laws at
    [the port of Hong Kong] that you have to find out about."[Footnote 23]

    * A representative of an electronics-recycling company in Colorado told
    us that the company does not export CRTs; instead, all CRTs are
    recycled in-house, so the CRT rule does not apply. This same person
    offered to sell 1,500 CRT monitors and 1,200 CRT televisions, which
    were ready for immediate shipment, to our fictitious broker in Hong
    Kong.

    * A representative of an electronics-recycling company in Washington
    State told us that all of its CRT monitors are sent to its shredding
    facility in Oregon. A sales associate at the company, however, offered
    to sell 4 containers of CRT monitors (approximately 3,200 units) in
    April 2008 and another 20 containers (approximately 16,000 units) in
    June 2008 to our fictitious broker in Hong Kong.

    * A representative of a metal-recycling company in Illinois told us
    that the CRT rule does not apply to this company because it sends all
    of its CRT glass to a lead smelter in the United States. In response to
    an e-mail inquiry to ship nonworking and untested CRT monitors to
    Southeast Asia, however, this person wrote back, "What are you paying
    for the monitors? Let me know and I'll give you an inventory count."

    We were unable to interview the other 25 companies that indicated a
    desire to export CRTs to our fictitious foreign brokers, although some
    of them showed a willingness to knowingly export CRTs in apparent
    violation of the CRT rule. For example, an electronics recycler in Utah
    who offered to sell five containers of used CRTs stated in an e-mail
    that he had had "no problems with the CRT rule so far." He offered to
    mix the broken materials at the back of the containers, which implies
    he is aware that it is illegal to export broken CRTs without consent.
    In addition, a computer wholesaler in Wisconsin offered to sell two
    containers (900 units per container), telling us that the CRT rule will
    definitely not affect shipment: "We ship these overseas all the time,"
    he wrote.

    Many of the companies that responded to our fictitious foreign brokers,
    particularly the electronics recyclers, actively promote an
    environmentally responsible public image. Nearly all of the electronic
    recyclers claimed to be environmentally friendly, with at least 17 of
    these companies citing on their Web sites the hazards of improper
    disposal of used electronics equipment. At least 3 of these recyclers
    held Earth Day 2008 electronics-recycling events. Some of the
    electronics recyclers accept used CRTs at no charge, while others
    charge the consumer, ostensibly to cover recycling expenses. One
    Maryland electronics recycler, for instance, charges from $10 to $30
    for CRT monitors, depending on size, to cover its "responsible,
    domestic recycling costs." In fact, the company's Web site states that
    its mission is to be globally responsible and asserts that it sends its
    monitors to domestic glass-to-glass recycling facilities. Yet when we
    posed as a buyer in Singapore, the Chief Operating Officer of this
    company asked what price we were paying for untested, as-is CRT
    monitors, suggesting that he was interested in selling CRTs to us.
    Another recycler from Missouri states on its Web site that it is an
    organization "dedicated to keeping old discarded computer equipment
    from entering America's landfills." This company, however, offered to
    sell a container-load of CRT monitors to our fictitious broker in Hong
    Kong, offering us a 10 percent discount because we were new buyers.

    At least two electronics recyclers that responded to our fictitious
    foreign brokers have purchased used state-government surplus CRT
    monitors from two auction Web sites. One of these sites was
    GovDeals.com, a Web site that posts surplus equipment from state and
    local government agencies, indicating that government CRTs may be among
    those offered for sale to overseas brokers. In our review of one
    auction site's records for sales of surplus electronics between May
    2007 and May 2008, a New York electronics recycler made four purchases
    of used electronics from the New York state Office of General Services,
    including 221 CRT monitors. In response to our fictitious Hong Kong
    broker's inquiry on the availability of nonworking CRT monitors, this
    company replied, "Yes. Many. What is your best price?" In February
    2008, a Georgia electronics recycler purchased two lots of computer
    monitors from the state of Alabama's Surplus Property Division on
    GovDeals.com, one lot of 100 CRT monitors for $45 and another lot of
    155 CRT monitors for $366. This company was also ready to send three
    container-loads of a mix of untested CRT monitors to our fictitious
    broker in India. For an additional $400, this company offered to "hand
    stuff" the container to increase the load from about 850 monitors per
    container to between 1,100 and 1,200 monitors per container.

    EPA Has Done Little to Enforce the CRT Rule:

    EPA has done little to enforce the CRT rule. Since the rule took effect
    in January 2007, Hong Kong's Environmental Protection Department and
    its Customs Department have worked together to intercept and return 26
    containers of "waste" CRT monitors to the United States. In each
    instance, the U.S. exporters neither notified EPA nor received consent
    from Hong Kong. An official from Hong Kong's Environmental Protection
    Department stated that his agency would not grant consent for importing
    such items because under Hong Kong regulations, it is illegal to import
    CRTs from the United States. From January to July 2008, we provided
    EPA's Office of Enforcement and Compliance Assurance with current
    information we received from Hong Kong's Environmental Protection
    Department, which included information on six shipments (10 40-foot
    containers) of waste CRTs intercepted and returned to the United States
    during this period, one of which was returned from Hong Kong multiple
    times.

    In one instance, we asked U.S. Customs and Border Protection to detain
    a container that was intercepted in Hong Kong and returned to the
    United States in February 2008. We viewed the contents of this
    container at the Port of Long Beach, California. We observed hundreds
    of CRT computer monitors stacked haphazardly, some with cracked plastic
    cases and broken glass tubes (see fig. 5).[Footnote 24]

    [A Tale of Three Containers:
    Three containers were shipped across the Pacific Ocean four times
    before EPA initiated enforcement action. Hong Kong�s Environmental
    Protection Department notified GAO of three 40-foot containers of CRT
    monitors that had been inspected in Hong Kong and returned to the Port
    of Los Angeles because they contained �waste� CRT monitors, which are
    illegal for import into Hong Kong. EPA records indicate that the U.S.
    exporter had not notified EPA. GAO notified EPA�s Office of Enforcement
    and Compliance Assurance that the containers were still at the Port of
    Los Angeles. After sitting at the port for 11 more days, the three 40-
    foot containers were loaded onto another cargo ship and re-exported to
    Hong Kong. An EPA Office of Enforcement and Compliance Assurance
    official explained to GAO that the original shipper had placed the CRT
    monitors in the containers �by mistake� and that the company had
    voluntarily removed the CRT monitors before re-exporting the containers
    to Hong Kong. About 3 weeks later, Hong Kong�s Environmental Protection
    Department intercepted the containers a second time and verified that
    the three containers still contained the same �waste� CRT monitors.
    They were returned again to the Port of Los Angeles, at which time EPA
    detained the containers and arranged for their inspection. The result
    of EPA�s investigation is pending. According to an EPA inspector, the
    shipper had simply changed the name of his business to a fictitious
    company and re-exported the containers after they had originally been
    returned from Hong Kong.]

    Figure 5: Four photographs: Broken CRT Monitors from an Illegal
    Shipment of Used CRTs:

    [See PDF for image]

    Source: GAO.

    [End of figure]

    We received photographic evidence showing that this illegal shipment of
    CRT monitors originated from the Denver metropolitan area. According to
    a third-party source, these monitors came from an electronics recycler
    in Colorado, which claims to hold 20 to 30 community recycling events
    each year for homeowners' associations, city governments, and property
    managers. The company's Web site also states that "many domestic
    recycling companies ship e-waste to China, where it ends up harming the
    environment and the population. With [this company], your e-waste is
    recycled properly, right here in the United States, not simply dumped
    on somebody else."

    The director of EPA's Waste and Chemical Enforcement Division explained
    that inspections to determine compliance with environmental laws are
    labor intensive because inspectors must spend time planning and
    preparing before each inspection occurs. After an inspection,
    inspectors must spend time analyzing any information collected,
    drafting an inspection report, and determining necessary follow-up
    actions. Given the number of regulated facilities and competing
    priority demands, the director said, EPA must "carefully plan" how it
    directs its inspection resources.

    In at least one case, EPA chose not to physically inspect and detain a
    container that was intercepted and returned to the United States by
    Hong Kong, even though EPA acknowledged that the container likely
    contained broken CRTs. In this case, referring to a container returning
    to the Port of Tacoma in April 2008, EPA asked a Customs and Border
    Patrol officer not to detain the container on its behalf, according to
    an Enforcement and Compliance Assurance regional manager:

    EPA has reason to believe that this container includes used CRTs that
    may be in broken or unstable condition. Since CRTs typically contain
    hazardous constituents, I recommend that the contents of the container
    should not be opened or disturbed unless appropriate precautions have
    been taken to protect individuals handling the materials and to prevent
    the materials from being released to the environment.

    EPA concluded that an inspection of the container was not necessary to
    address the apparent noncompliance. Customs and Border Protection
    inspected the container and provided information to EPA about the
    container's contents and the identity of the shipper. Upon consultation
    with EPA, Customs and Border Protection released the container, which
    was re-exported to Hong Kong. We do not know if Hong Kong's
    Environmental Protection Department again intercepted the container.
    EPA's deputy director for Civil Enforcement stated that EPA intended to
    initiate contact with the responsible party for this shipment. The
    outcome of EPA's investigation was pending at the time of our report.

    The Deputy Director of EPA's Office of Civil Enforcement told us that
    EPA's enforcement of the CRT rule relies primarily on tips and
    complaints. As of August 2008, EPA reported having 10 ongoing
    investigations of potentially illegal CRT shipments based on such
    complaints (7 of which appeared to be from us.) As a result of its
    investigations, in July 2008, EPA issued its first administrative
    penalty complaint against a California company we identified, seeking
    the maximum civil penalty of $32,500. In the view of one recycler, who
    had expressed willingness to sell nonworking CRTs to our fictitious
    broker from Singapore, "If EPA whacked some [exporters], then they
    would comply with the rule."

    The Director of EPA's Hazardous Waste Identification Division
    acknowledged in an e-mail to EPA's RCRA regional directors, "[I] expect
    there has been considerable noncompliance with the rule's notification
    provision." The Deputy Director of the agency's Office of Civil
    Enforcement, however, told us that EPA's initial efforts to address
    noncompliance have been aimed at education and outreach. He explained
    that given the rule's relative newness, the regulated community must
    first be made aware of the rule's requirements.[Footnote 25] His
    statement is consistent with the Office of Enforcement and Compliance
    Assurance's Guide for Addressing Environmental Problems, which states
    that the regulated community should be aware of and understand the
    regulations that apply to it and have the means of achieving compliance
    with those requirements.[Footnote 26]

    We believe that EPA's explanation that it needs to focus on education
    and outreach is insufficient. The explanation that an enforcement
    deterrent should await the effects of an education program implies that
    violations to date have resulted largely from unawareness of the rule
    and not from willful disregard for it. This implication has clearly not
    been borne out. With little effort, we were able to observe substantial
    willingness to engage in activities that would appear to violate the
    CRT rule--including instances where the exporters were aware of the CRT
    rule--by simply monitoring e-commerce Web sites and conducting limited
    follow-up. EPA, on the other hand, has done little to ascertain the
    extent of noncompliance with the CRT rule. In the absence of such an
    effort, it has set no enforcement targets, conducted no monitoring, and
    taken only one action against a violator of the rule.[Footnote 27]
    Moreover, the agency has not taken the initial steps necessary to
    develop a program for identifying and prosecuting exporters who do not
    notify the agency when shipping CRTs overseas for recycling or reuse,
    and it does not have plans to develop such a program. The deputy
    director of EPA's Office of Civil Enforcement explained that there is
    no "hard and fast" rule on how long EPA is going to rely on outreach as
    its primary tool for the CRT rule or when the agency will use its
    enforcement resources to deter noncompliance. He added that enforcement
    of the CRT rule is one of the office's many responsibilities, but it is
    not among its highest enforcement priorities.

    EPA Has Several Options That Would Strengthen the Federal Role in
    Reducing Harmful Exports of Used Electronics:

    Even if there were total compliance with the CRT rule, the effect would
    reach only a small percentage of all potentially harmful used
    electronics exported from the United States. Enforcement and Compliance
    Assurance guidance states that if an environmental problem would not be
    solved if 100 percent compliance were achieved within the regulated
    community, then modification of regulations or other initiatives may be
    necessary.[Footnote 28] It adds that if "gaps" exist in the regulatory
    structure and opportunities exist for filling these gaps, voluntary
    initiatives, new regulations, or combinations of multiple approaches
    may be needed to fill these gaps. As we have shown, such a gap exists
    with respect to used electronics that do not meet the current U.S.
    regulatory definition of hazardous waste. More comprehensive regulation
    of used electronics exports could narrow this gap. Options in this
    regard include, but are not limited to, amending RCRA regulations to
    include exports of used electronics posing health or environmental
    risks when disassembled or reclaimed, expanding the scope of the CRT
    rule, and revising the regulatory definition of hazardous waste. In
    addition, EPA has options to enhance U.S. control over the export of
    used electronics: It could submit a legislative package to Congress for
    ratifying the Basel Convention, work with Customs and Border Protection
    and with the International Trade Commission to improve identification
    and tracking of exported used electronics, and update RCRA regulations
    to reflect U.S. obligations under OECD decisions.

    Amend RCRA Regulations:

    EPA could amend RCRA regulations to cover exports of used electronics
    where risks exist to human health or the environment when reclaimed for
    reuse or recycling, an amendment that--if implemented--could bring U.S.
    export controls more in line with those of other industrialized
    countries. For example, EPA could revise the definition of "hazardous"
    in its RCRA regulations to encompass certain used products that can
    pose risks upon disassembly or reclamation, including desktop
    computers, laptop computers, printers, and cell phones. Currently, many
    electronics contain toxic constituents in small quantities, yet do not
    come within the regulatory definition of "hazardous" because these
    substances do not leach from the electronic products at unsafe amounts
    under tests simulating disposal in a landfill. Compelling evidence
    shows, however, that when exported, many of these used electronics are
    disassembled in a way that results in human and environmental exposure
    to toxic components.

    As long as the regulatory definition of "hazardous" does not include
    such used products, they will not be subject to any of RCRA's export
    provisions, such as notice and consent, and the burden for identifying
    and controlling the flow of such products will remain solely with the
    receiving country. A revised definition or new rule for other used
    electronics could be developed to effectively cover only exports while
    conditionally exempting domestic activity from substantive
    requirements, if EPA determines that such conditions along with other
    approaches--such as voluntary initiatives and existing regulatory
    controls on recycling facilities--provide adequate domestic protection
    of health and the environment.

    If EPA expanded the scope of used electronics subject to RCRA export
    rules, it could consider requiring exporters of such products for
    reuse--not just those for recycling--to notify EPA. The rationale for
    regulating used electronics destined for reuse with at least a
    notification requirement would be the same as for the CRT rule. In the
    preamble to the final CRT rule, for instance, EPA explained that it
    obtained compelling evidence showing that exported CRTs often are not
    handled as valuable commodities in foreign countries. Used and unused
    intact CRTs are identical in appearance; consequently, it would be
    difficult to distinguish between intact CRTs destined for recycling
    (including disassembly and reclamation) and those for reuse. This same
    difficulty characterizes other used electronic products, such as
    desktop computers, laptop computers, flat panel monitors, and cell
    phones, which can look identical whether functional or broken.

    Moreover, EPA could examine its authority to modify its regulations so
    that regulated used electronics--when shipped for reuse and
    indistinguishable from those shipped for recycling--would be subject to
    the same control procedures as when shipped for recycling. Currently,
    exporters of CRTs for reuse or repair are required to notify EPA of
    their intent to export CRTs, whereas exporters of CRTs for recycling
    are required to notify EPA and to obtain consent from the importing
    country. Thus, although exporters of CRTs for reuse have a lesser
    requirement than those exporting CRTs for recycling, the former need
    only assert that the products are reusable or repairable, and the
    products can be visually indistinguishable. Regulating used electronics
    exported for reuse in this manner, however, would likely create an
    "overwhelming" number of notice-and-consent requests for EPA to handle
    each month, according to EPA officials, and could be successfully
    managed only with additional resources.

    Revising RCRA regulations to more comprehensively cover used
    electronics for export could help ensure that they are handled as
    commodities and, if necessary, disposed of safely. Once regulated as
    hazardous wastes, such used electronics would be subject to RCRA's
    existing export provisions. Revising RCRA regulations would require one
    or more rule makings, which could take several years to implement.

    Provide Congress with a Legislative Package for U.S. Ratification of
    the Basel Convention:

    U.S. regulations contain no provisions for addressing situations when a
    waste is not classified as hazardous under U.S. law but is so
    classified--with its trade restricted or prohibited--under an importing
    country's law. The effect is that the importing country bears the full
    burden of identifying and intercepting such materials, without the
    benefit of U.S. cooperation as the export country. By contrast, the
    Basel Convention on the Control of Transboundary Movements of Hazardous
    Wastes and Their Disposal--effectively the international standard for
    hazardous wastes shipped for disposal or recycling--provides for
    cooperation between exporting and importing countries. For example, the
    convention requires that an exporting country stop shipments of waste
    if it has reason to believe that the waste will not be handled in an
    environmentally sound manner, as well as an obligation to prohibit
    exports to countries that have prohibited the import of that type of
    waste. The Basel Convention also established a prior notice-and-consent
    system for such wastes. While the U.S. has an existing notice-and-
    consent system, the Basel Convention and its system have significant
    distinctions. According to EPA's International and Transportation
    Branch Chief, U.S. ratification of the Basel Convention has five key
    implications:

    * Scope of waste. The Basel Convention has a much broader definition of
    "controlled" waste than the current RCRA regulatory definition. In
    contrast to the United States, which, to encourage recycling and reuse,
    has numerous conditional exclusions and exemptions to the definition of
    waste, the Basel Convention considers a broader range of items as
    waste. In addition, unlike the United States and OECD, the Basel
    Convention defines hazardous waste in terms of intrinsic hazards;
    therefore, a product is potentially hazardous even when it contains
    very small amounts of toxic substances, as is the case with cell phones
    and other electronic devices.[Footnote 29]

    * Notice-and-consent process. If the United States ratified the Basel
    Convention, an exporter would typically need to work through EPA to
    obtain written consent from the importing country before exporting
    material to a country that considered this material to be hazardous
    waste. U.S. law provides a notice-and-consent process for regulated
    hazardous waste exports; if the United States ratified the Basel
    Convention, the number of products requiring notice and consent would
    likely increase.

    * Environmentally sound waste management. The Basel Convention imposes
    a requirement on the exporting country to ensure that the wastes will
    be handled and disposed of in an environmentally sound manner.
    Implementing this provision would require EPA to make this
    determination, which could involve evaluating overseas facilities. EPA
    has already developed a plan to determine environmental soundness in
    this fashion, but actual implementation will likely require additional
    resources.

    * Understanding importing countries' laws. U.S. ratification of the
    Basel Convention would impose on the United States a greater obligation
    to understand the hazardous waste laws of foreign countries to
    determine what materials U.S. exporters cannot export to other
    countries. Exporting countries must prohibit or not allow exports to
    countries that have informed the Basel Secretariat of an import
    prohibition.

    * Take-back provisions. The Basel Convention requires that if an export
    of hazardous waste is refused by the importing country or facility, the
    exporting country must take it back. At present, EPA lacks the legal
    authority or the implementing regulations to take back waste, according
    to EPA officials. For example, from 1998 through 2001, Pyramid
    Chemicals shipped 29 containers of falsely labeled hazardous wastes,
    which were intended for Nigeria, from the United States to the
    Netherlands. Environmental protection officials in the Netherlands
    noticed leakage from some of the shipping containers and detained the
    shipment. Dutch officials cooperated with EPA, but EPA could not have
    the containers returned to the United States for proper handling.
    Instead, EPA had to work with its criminal investigative units to
    prosecute Pyramid Chemicals. According to EPA's International and
    Transportation Branch Chief, EPA found itself in an embarrassing
    position. Ultimately, the containers were not returned; they instead
    had to be disposed of by Dutch officials.[Footnote 30] In proposing the
    implementing legislation necessary for U.S. ratification of the Basel
    Convention, EPA would seek to obtain the statutory authority to take
    back hazardous waste shipments denied by an importing country.

    Some government and industry officials have expressed concerns about
    some aspects of the Basel Convention. For example, the scrap-recycling
    industry has mixed views about Basel ratification because of lingering
    uncertainties over the convention's definitions of exports for
    recycling, refurbishment, and reuse. Some Basel parties argue, for
    example, that the Basel Convention regulates the international movement
    of used products for repair, refurbishment, or remanufacture. If Basel
    Convention parties decide that exports for refurbishment should be
    controlled in the same way that other exports are controlled, then,
    according to EPA officials, the agency would have to manage an
    "overwhelming" number of notice and consents. The U.S. State Department
    takes the position that trade of used products for refurbishment is not
    within the convention; it has also asserted that the current Basel
    system for controlling international shipments of hazardous waste makes
    trade in many used and scrap electronics "difficult." The department
    favors alternative systems for such wastes under the convention.
    Although disagreement persists, some Basel parties are working together
    to develop interim proposals, described in the Mobile Phone Partnership
    Initiative, for managing exports for refurbishment under the Basel
    Convention. Under these proposals, the Basel Convention is exploring
    appropriate mechanisms for exports of mobile phones destined for the
    reuse and refurbishment markets. These proposals could serve as a model
    for regulating reuse and refurbishment exports of other potentially
    hazardous items.

    For the United States to become a party to the Basel Convention,
    Congress would need to enact implementing legislation giving a U.S.
    agency, such as EPA, the authority to enforce the convention's
    provisions domestically.[Footnote 31] Passage of such legislation would
    complete the prerequisites to ratification and, in effect, would make
    the United States party to the Basel Convention. EPA informs us that
    the United States supports ratification of the Basel Convention, but to
    date no implementing legislation has been enacted. Although EPA had
    developed a legislative package that, if signed into law, would give
    EPA the statutory authorities it needs to fulfill the requirements of
    the Basel Convention, the legislative package has not been submitted to
    Congress. The legislative package has not been submitted to Congress
    because, according to Solid Waste officials, the agency has other
    priorities for congressional attention. These officials told us that
    EPA instead wants attention devoted to its legislative package on the
    Stockholm Convention on Persistent Organic Pollutants, which is a
    global treaty to protect human health and the environment from widely
    distributed toxic chemicals that remain intact in the environment for
    long periods.

    Cooperate with Other Federal Agencies to Improve Tracking of Exported
    Used Electronics:

    The U.S. government has adopted the Harmonized Tariff Schedule as the
    basic system for tracking exports for duty, quota, and statistical
    purposes. While the schedule is based on an international standard, the
    United States uses more detailed categories to track goods of
    particular national interest. The U.S. International Trade Commission
    is responsible for the Harmonized Tariff Schedule, while Customs and
    Border Protection is responsible for interpreting and enforcing it.

    At present, the harmonized tariff codes neither enable identification
    of used electronics nor distinguish whether such electronics are being
    exported for recycling or reuse. Through identification of potentially
    illegal shipments of CRTs, we observed that shippers described used
    electronic exports as "mixed plastics" and "scrap metals." Customs
    regulations require that U.S. exporters use the 7-digit international
    standard code that most closely describes the contents of a container,
    but there is no such code for used electronics. U.S. exporters can use
    8-or 10-digit codes, which helps Customs and Border Protection
    officials track specific product types.

    Adding more detailed codes to the schedule could assist other countries
    in controlling used electronics exported from the United States. For
    example, a country such as China, which reports it has tried to ban all
    imports of used electronics, could use the codes as listed on the
    shipper export declaration accompanying the shipment to select
    shipments for inspection and potential rejection at the border.
    Further, such codes could facilitate basic statistical tracking of such
    exports, including by type, price, and receiving country, among other
    data.

    Customs and Border Protection appears to have a framework in place that
    could help EPA obtain data and improve oversight of exported used
    electronics. The agency's automated tracking systems electronically
    store information from shippers' export declaration forms, which
    include tariff codes. These systems help Customs monitor and, if
    necessary, enforce the provisions of agreements it has with other
    agencies.[Footnote 32] For example, these systems are used to target
    high-risk outgoing shipments, such as those possibly containing
    materials that would have national security implications. To determine
    which shipments to target, Customs uses criteria based on those
    provided by the responsible agency, such as EPA for hazardous waste
    shipments. While most of Customs' monitoring and enforcement efforts
    directed to outgoing containers occur on behalf of the State Department
    and the Department of Commerce, Customs officials told us that
    provisions are in place to monitor outgoing shipments of RCRA hazardous
    wastes and CRTs. Because Customs enforces the policies, directives, and
    regulations of other agencies, if EPA were to designate used
    electronics as hazardous waste, and tariff codes were developed to
    describe such shipments, Customs could give additional scrutiny to
    outgoing shipments of used electronic products. Moreover, EPA could ask
    for greater scrutiny of particular types of shipments. One Customs
    official stated that, to his knowledge, EPA has not requested Customs'
    assistance to enforce RCRA hazardous waste export provisions. Beyond
    potentially using the information for enforcement, EPA could benefit
    from the data that detailed codes would generate, such as quantitative
    information not currently available about potentially hazardous
    exports, whether regulated or not.

    Update RCRA Regulations to Reflect OECD Changes:

    Although a member of OECD, the United States has not yet updated its
    RCRA regulations to reflect the 2001 OECD decision concerning
    transboundary shipments of wastes for recovery and its subsequent 2004
    amendments. Because the majority of OECD members are also Basel
    parties, the OECD decision revised waste classifications to harmonize
    them with those of the Basel Convention. The decision also altered the
    OECD notice-and-consent framework. Although the 2001 change does not
    require changes to the scope of hazardous wastes regulated in the
    United States, it does require adoption of the classification system to
    facilitate coordination among exporting and importing countries.

    EPA has acknowledged that the 2001 decision is legally binding and must
    be implemented by amending RCRA regulations. EPA told us that they
    submitted proposed changes to RCRA regulations to the Office of
    Management and Budget on May 8, 2008, and EPA officials anticipate
    issuing a proposed rule in mid-November in the Federal Register. The
    proposal would revise RCRA regulations to be completely consistent with
    the 2001 OECD decision, according to EPA officials, and would give EPA
    the regulatory authority to fulfill its obligations as described in the
    decision.

    The options described above--amending RCRA regulations to broaden U.S.
    control over exported used electronics, submitting a legislative
    package to Congress for consideration to complete ratification of the
    Basel Convention, working with Customs and Border Protection and with
    the International Trade Commission to improve identification and
    tracking of exported used electronics, and updating RCRA regulations to
    reflect U.S. obligations under OECD--are just several possible options
    to strengthen the federal role in preventing exports of harmful used
    electronics. These options are not mutually exclusive, and they could
    be used together in any combination. In particular, the first three
    options could explicitly address exports to developing countries where
    adverse human health and environmental effects occur. Broadening U.S.
    control over exported used electronics, and cooperating with other
    federal agencies to improve identification and tracking of these
    devices, are actions that can be spearheaded by EPA.

    Conclusions:

    Americans have increasingly adopted the environmental tenet of "reduce,
    reuse, recycle," but when it comes to obsolete electronics, they lack
    sound information on their disposal options. Exporting used electronics
    to support reuse and recycling ought not be discouraged. Recycling
    electronics can provide social, economic, and environmental benefits,
    both in the United States and abroad, such as providing affordable
    computers to the developing world. In recent years, however,
    irresponsible practices have come to light, prompting EPA to implement
    notification requirements for any company exporting CRTs. To date, the
    agency has established no enforcement targets, done no monitoring,
    conducted only preliminary follow-up of suspected violations, and taken
    only one enforcement action. Not only do EPA's present enforcement
    efforts fall short, but the agency also apparently has no tangible
    plans to develop more effective ones. Until an enforcement mechanism is
    developed and effectively implemented, consumers and businesses aiming
    to be environmentally responsible with their used electronics--
    particularly CRT monitors and televisions--should be skeptical of some
    companies that claim to responsibly recycle these devices.

    Because of high demand for the metals and other resources within
    electronic products, all kinds of exported used electronics--computers,
    televisions, laptops, printers, and cell phones, among others--are
    dismantled in developing countries where local waste management systems
    are often not equipped to handle them. Despite well-documented health
    and environmental effects, EPA's regulation of exported used
    electronics is confined only to CRTs. In stark contrast, countries that
    are party to the Basel Convention, including most members of OECD, have
    largely embraced the idea that industrialized countries should be
    responsible for ensuring the environmentally sound management of
    potentially hazardous items exported to countries that cannot guarantee
    the safety of workers who will handle them. In issuing the CRT rule,
    EPA exercised its authority to regulate exports of functional CRTs
    because of the likelihood that some will be handled unsafely and the
    danger that they pose when disassembled. Following the rationale of
    this rule to provide controls over other potentially harmful used
    electronics could help bring the United States in line with important
    international norms. A number of options could move EPA forward along
    these lines, such as providing controls over electronic products that
    pose health and environmental risks when unsafely disassembled, such as
    in another country, and taking steps to honor key international
    agreements.

    Recommendations for Executive Action:

    We recommend that the Administrator, EPA, identify a timetable for
    developing and implementing a systematic plan to enforce the CRT rule.
    This plan should include the basic elements of effective enforcement,
    such as enforcement targets, monitoring, follow-up of suspected
    violations, and prosecution.

    We recommend that the Administrator, EPA, direct the heads of
    appropriate offices to take the following two actions:

    * Develop options on how the agency could broaden its regulations under
    existing RCRA authority to address the export of used electronic
    devices that might not be classified as hazardous waste by current U.S.
    regulations but have a high likelihood of threatening human health and
    the environment when unsafely disassembled, as often occurs overseas.
    Among the options that should be considered is expanding the scope of
    the CRT rule to cover other exported used electronics and revising the
    regulatory definition of hazardous waste.

    * Cooperate with other federal agencies to improve the tracking of
    exported used electronics, which could be accomplished by implementing
    specific harmonized tariff codes for these devices.

    In addition, because determining whether to ratify international
    treaties is a policy decision that rests with Congress and the
    President, we recommend that EPA submit to Congress a legislative
    package for ratification of the Basel Convention, so Congress can
    deliberate whether and to what extent the United States should adopt
    additional controls over the export of used electronics that may
    threaten human health and the environment when disassembled overseas.

    Agency Comments and Our Evaluation:

    We provided a draft of this report to the Administrator, EPA, for
    review and comment. EPA's August 1, 2008, letter said the draft report
    "does not provide a complete or balanced picture of the agency's
    electronic waste program" and disagreed with our recommendations to
    improve enforcement of the CRT rule and to broaden EPA's authority to
    cover used electronics exports other than CRTs. We continue to believe
    that, as now constructed, the breadth of U.S. regulation covering
    exported used electronics is unacceptably narrow--an outlier among most
    industrialized countries in the world. We also believe that EPA's
    enforcement over used CRT exports--the only electronic device currently
    covered by U.S. regulations--has done little to deter violations.

    The following paragraphs summarize EPA's comments and our responses. In
    keeping with the structure of EPA's letter, we then address the
    agency's comments on our findings related to (1) EPA's enforcement of
    the CRT rule, (2) EPA's outreach to affected parties about CRT rule
    requirements, and (3) the potential expansion of regulation over
    exported used electronics.

    Overall observations. EPA wrote, "Overall, as a general matter, EPA is
    concerned that readers of the report may be misled to believe that a
    very large percentage of U.S. electronic waste is currently being
    reused and recycled globally." The agency then cited statistics showing
    that "80 to 85 percent of used electronics are disposed of
    domestically, primarily in landfills." The wording suggests that
    because only 15 percent to 20 percent of used electronics are collected
    for reuse or recycling, our report overstates the health and
    environmental problems associated with exported used electronics. We
    find that this response needs to be put in the proper perspective.
    First, the document EPA references shows that 330 million electronic
    products were "ready for end-of-life management" in 2006. Fifteen
    percent to 20 percent of 330 million (50 million to 66 million) is
    still a significant number--especially in light of EPA's estimate that
    "a vast majority" of such products are exported. Second, and more
    important, it is EPA's stated goal to significantly reduce the amount
    of used electronics going into landfills--a goal that is also pursued
    by a growing number of states that are banning the dumping of
    electronics in their landfills. Over time, the effect of these efforts
    can be expected to greatly increase the quantity of used electronics
    being both recycled and exported. Under this likely scenario, it will
    become that much more important to ensure that used electronics are
    handled safely and exported in a manner that complies with U.S. and
    international laws.

    EPA's enforcement of the CRT rule. Among EPA's most significant
    comments regarding our enforcement-related findings is its contention
    that the agency should not be asked to "build an extensive compliance
    monitoring and enforcement program" around the CRT rule or any other
    individual provision of its broader RCRA program. We believe the
    comment mischaracterizes our recommendation and the resource commitment
    that would be needed to establish a credible enforcement deterrent. We
    are not recommending that EPA establish an extensive program, but
    rather that it develop the basic enforcement components needed to
    enforce the CRT rule, such as enforcement targets and a plan for
    compliance monitoring, following up on suspected violations, and
    prosecuting violators. Moreover, we continue to believe that these
    actions are reasonable and necessary in light of (1) the substantial
    number of exporters we observed willing to export in apparent violation
    of the CRT rule and (2) EPA's very limited enforcement of the CRT rule.
    In this connection, our work has demonstrated that much can be done to
    identify violators and deter noncompliance without an exorbitant
    commitment of resources. It took little of our time and effort, for
    example, to identify potential violators and potentially illegal
    shipments. Specifically, in several hours--rather than days--of
    monitoring e-commerce Web sites, we observed substantial willingness to
    engage in activities that would appear to violate the CRT rule.
    Similarly, it took only minutes to identify potentially illegal CRT
    shipments by contacting environmental protection officials in countries
    known to import these items and by working with Customs and Border
    Protection officials to detain and observe the shipments.

    EPA's outreach to affected parties about CRT rule requirements. EPA
    stated that our draft report incorrectly described the agency's
    outreach efforts as consisting of only a limited number of
    presentations at conferences and similar venues. The letter points to
    the agency's CRT rule "Communication Plan," stating that the plan "sets
    forth a number of specific activities to reach out to the regulated
    community." It further states that EPA "implemented this plan
    immediately after the rule was published" in July 2006. We have used
    the information provided by EPA to more fully describe what the agency
    states is the entire range of its outreach activities. That said, our
    characterization of EPA's actual outreach efforts is based on comments
    we obtained from EPA program officials during our review and, most
    recently, at meetings with EPA Enforcement and Compliance Assurance and
    Solid Waste officials in May and June 2008. Moreover, although an
    outreach plan may have existed for some time, it is unclear to what
    extent these efforts have focused on educating the regulated community
    about the need to notify EPA when exporting used CRTs. For example, a
    March 2008, internal Office of Solid Waste e-mail to EPA's RCRA
    division directors--prepared 20 months after the rule's adoption--
    stated, "We expect that there has been considerable noncompliance with
    the notification provisions of the CRT rule and we are planning to
    develop [emphasis added] a strategy for reaching out to the regulated
    community and the states to educate them about the [notification]
    requirements." Hence, the e-mail suggests that a plan for educating the
    regulated community was still needed at the time of our report.

    Potential expansion of regulation over exported used electronics. EPA
    disagreed with our conclusion that the regulatory framework governing
    used electronic exports was too narrowly constructed and with our
    recommendation that it broaden its regulations under existing RCRA
    authority to address the export of used electronics other than CRTs
    (such as computers and cell phones). EPA contends that it should
    instead pursue nonregulatory, voluntary approaches to address the
    problems discussed in this report, because developing options to
    broaden its RCRA regulatory authority might take years and would entail
    legal complexities. Our findings, however, cast serious doubt about the
    effectiveness of a strategy that relies almost entirely on voluntary
    approaches. Given the compliance issues and market realities we
    identified with just the CRT rule, it is not realistic to expect that
    sufficient control over exports of nonworking and potentially harmful
    electronic devices will be achieved without a credible and enforceable
    regulatory framework. Moreover, we do not believe that the time and
    complexities in establishing necessary regulatory controls over
    electronic waste exports is a sufficiently compelling reason for not
    doing so, particularly in light of the anticipated increase in
    potentially harmful electronic devices available for export.

    EPA's letter appears in appendix II, along with our responses. The
    agency also provided technical comments that were incorporated in our
    final report, as appropriate.

    As agreed with your office, unless you publicly announce the contents
    of this report earlier, we plan no further distribution until 30 days
    from the report date. At that time, we will send copies to interested
    congressional committees; the Administrator of the Environmental
    Protection Agency; and other interested parties. We will also make
    copies available to others upon request. In addition, the report will
    be available at no charge on the GAO Web site at [hyperlink,
    http://www.gao.gov].

    If you or your staff have any questions about this report, please
    contact me at (202) 512-3841 or stephensonj@gao.gov. Contact points for
    our Office of Congressional Relations and Public Affairs may be found
    on the last page of this report. GAO staff who made major contributions
    to this report are listed in appendix III.

    Sincerely yours,

    Signed by:

    John B. Stephenson:
    Director, Natural Resources and Environment:

    [End of section]

    Appendix I: Scope and Methodology:

    To examine the fate of used electronics, we obtained and reviewed
    surveys from Basel Convention Regional Centres in Africa, China, and
    Southeast Asia on electronic waste disassembly and disposal practices.
    We obtained and reviewed conference proceedings and presentations from
    a regional workshop in Siem Reap, Cambodia, held from March 13 through
    15, 2007, on environmentally sound management of electronic wastes in
    Southeast Asia. We interviewed officials with Hong Kong's Environmental
    Protection Department about imports of used electronics from the United
    States. We interviewed experts from government, industry, environmental
    groups, and academia and obtained and reviewed documents authored by
    them to learn how used electronics exported from the United States are
    managed overseas. For example, we interviewed officials with Dell on
    its overseas recycling practices and two companies that export CRT
    monitors to facilities in Southeast Asia from the United States. To
    learn firsthand about practices in Africa, we also spoke with a West
    African computer dealer who imports used computers from the United
    States. In addition, we spoke with officials from Greenpeace in China
    and the Basel Action Network in the United States. We also reviewed
    published scientific studies about the health effects of improper
    recycling practices in Asia. We interviewed a professor at Arizona
    State University currently conducting research on used electronics
    exports. We also attended two conferences on the export of used
    electronics, where we interviewed officials with Toxics Link, a
    nonprofit organization; academic officials from research institutions
    in China, Japan, Switzerland, and the United States; electronics-
    recycling and scrap industry officials; and officials from the
    Environmental Protection Agency's (EPA) national and regional offices.

    In addition, we monitored two e-commerce Web sites to obtain
    information on requests for used monitors, untested monitors,
    nonworking monitors, cathode-ray tubes (CRT), used CRTs, untested CRTs,
    nonworking CRTs, liquid-crystal displays (LCD), used LCDs, untested
    LCDs, nonworking LCDs, central processing units (CPU), used CPUs,
    untested CPUs, nonworking CPUs, used computers, untested computers, and
    nonworking computers. We collected information from these Internet
    sites from February 2008 to May 2008. Among the information we obtained
    were data on the volume requested, location of request, price, and
    quality of equipment sought (such as working, nonworking, untested, as-
    is, or broken). For CRTs in particular, we estimated the total number
    of units requested using conservative assumptions. For example, if a
    buyer requested one container per month, we estimated that 800 CRTs fit
    in a container and multiplied this number by three to obtain an
    estimated request of 2,400 monitors for the 3-month period.

    To determine the effectiveness of regulatory controls over used
    electronics exported from the United States, we took several
    approaches. First, we interviewed EPA officials and reviewed key
    documents. For example, we interviewed officials in the Office of Solid
    Waste and Emergency Response, the Office of Enforcement and Compliance
    Assurance, and the Office of Civil Enforcement to determine what
    challenges exist to implementing EPA's CRT rule. We also reviewed EPA's
    CRT rule and hazardous waste export provisions of the Resource
    Conservation and Recovery Act of 1976 (RCRA), as amended, and its
    implementing regulations. Finally, we reviewed EPA's Hazardous Waste
    Civil Enforcement Response Policy and the Office of Enforcement and
    Compliance Assurance's Guide for Addressing Environmental Problems.

    Second, we posed as buyers of CRTs from India, Indonesia, Hong Kong,
    Pakistan, the Philippines, Singapore, South Korea, and Vietnam. We also
    posed as a United States-based broker working for a fictitious company
    in Hong Kong. Using these identities, we e-mailed 343 U.S. companies,
    including members or affiliates of an electronics recyclers'
    association and other companies that posted CRT "sell" offers on the e-
    commerce Web sites we monitored. From these companies, we requested CRT
    monitors that were unlikely to be reused (untested, nonworking, and
    broken CRTs), clearly destined for export, and could be supplied in
    less than the 60-day time period for export notifications under the CRT
    rule. Of the 64 firms that responded to our requests, 43 expressed a
    willingness to export. Among the other 21 companies that responded, 3
    stated that they did not export broken CRT monitors; 7 asked for more
    information about our fictitious identities, such as phone numbers, a
    Web site, or what we intended to do with the broken CRTs; and the
    remaining 11 provided various responses, such as offering broken CRT
    monitors from Canada, currently not having CRT monitors in inventory,
    offering working televisions, or offering Pentium IV motherboards. Of
    the 43 companies that expressed a willingness to export, we reached 18
    in separate interviews and asked employees about their knowledge of the
    CRT rule and their perspectives on its effect on their business. We
    obtained notifications for CRT exports for recycling from EPA's Office
    of Enforcement and Compliance Assurance, and from EPA's regional
    offices, we obtained notifications to export CRTs for reuse. We used
    this information to determine whether the U.S. companies that responded
    to our fictitious foreign buyers had previously filed a notification
    for export with EPA.

    Third, we obtained information from Hong Kong's Environmental
    Protection Department on shipments of used CRTs that the department had
    intercepted and returned to the United States because, according to the
    officials, the shipments violated Hong Kong's hazardous waste import
    laws. For the shipments that occurred during our review, we referred
    the information to EPA's Office of Enforcement and Compliance
    Assurance. On one occasion, we personally viewed one of these shipments
    at the Port of Long Beach, California, with the assistance of Customs
    and Border Protection officials.

    To examine options for strengthening the federal role in regulating
    used electronics exports, we interviewed EPA officials in the Office of
    Solid Waste and Emergency Response and the Office of Enforcement and
    Compliance Assurance about the implications of (1) expanding the scope
    of the CRT rule to cover other exported used electronics, (2)
    submitting to Congress a legislative package for ratification of the
    Basel Convention, and (3) updating RCRA regulations to reflect a key
    2002 decision by the Organization for Economic Cooperation and
    Development. We interviewed Customs and Border Protection officials
    about the implications of working with EPA to improve tracking of
    exported used electronics. We also examined the regulatory regimes of
    European Union countries pertaining to hazardous waste exports.

    We found the data we obtained on e-commerce Web sites to be adequate to
    conclude that a significant demand exists for exported used
    electronics. We conducted our review from October 2007 through July
    2008 in accordance with generally accepted government auditing
    standards. These standards require that we plan and perform the audit
    to obtain sufficient, appropriate evidence to provide a reasonable
    basis for our findings and conclusions based on our audit objectives.
    We believe the evidence we obtained provides a reasonable basis for our
    findings and conclusions based on our audit objectives.

    [End of section]

    Appendix II: Comments from the Environmental Protection Agency:

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix.

    United States Environmental Protection Agency:
    Washington, D.C. 20480:
    [hyperlink, http://www.epa.gov]

    August 1, 2008:

    Mr. John B. Stephenson, Director:
    Natural Resources & Environment:
    Government Accountability Office:
    441 G. Street, NW Room 2075:
    Washington, DC 20548:

    Dear Mr. Stephenson:

    Thank you for the opportunity to review and comment on the draft
    report, "EPA Needs to Take a Stronger and More Comprehensive
    Enforcement Action to Control Harmful U. S. Exports," dated August
    2008. - We have completed our review and have significant concerns with
    the completeness and accuracy of this draft report.

    EPA believes the GAO draft report does not provide a complete or
    balanced picture of the Agency's electronic waste program. In
    particular, the draft report fails to consider enforcement of the
    Cathrode-ray tube (CRT) rule in the larger context of the Resources
    Conservation and Recovery Act's (RCRA's) enforcement program and
    mischaracterizes EPA's actions with respect to incidents of non-
    compliance with the rule. Further, EPA disagrees with the
    recommendation to develop a separate program for compliance monitoring
    and enforcement of the CRT rule. In reviewing the draft report, we
    address each of these issues by providing background on the
    responsibilities of the RCRA enforcement program, discussing how EPA
    has responded to information provided by GAO, and explaining what EPA
    will do to help address the larger issue of non-compliance with the
    rule. In addition, we have provided a number of comments, attached,
    that correct technical and factual errors we identified during our
    review. [See comment 1]

    Overall, as a general matter, EPA is concerned that readers of the
    report may be misled to believe that a very large percentage of U.S.
    electronic waste is currently being reused and recycled globally. To
    avoid this mistaken conclusion, the report should put into proper
    perspective the amount of used electronics now being reused or
    recycled. Consumer electronics - including TVs and other video
    equipment, computers, assorted peripherals, audio equipment, and
    phones - comprise less than two percent of the municipal solid waste
    stream. US EPA, Municipal Solid Waste in the United States: Facts and
    Figures for 2005. EPA 530-R-06-011. EPA estimates that, in the U.S.,
    between 15-20 percent by weight of used and end-of-life electronics
    (TVs, computer products, and cell phones) are collected for reuse and
    recycling. The remaining 80-85 percent is disposed of domestically,
    primarily in landfills. US EPA, Office of Solid Waste. Electronics
    Waste Management in the United States: Fact Sheet: Management of
    Electronic Waste In the United States. April 2007. EPA530-R-07-004a.
    [hyperlink, http://www.epa.gov/ecycling/manage.htm]. [See comment 2]

    We also recommend changing the report's title by eliminating the term
    "Enforcement," because singling out enforcement does not accurately
    reflect the report's content. The report discusses the regulation of
    used electronics. In fact, only one of the report's four
    recommendations is directed at strengthening enforcement. [See comment
    3]

    Enforcement:

    The Office of Enforcement and Compliance Assurance (OECA) and its
    counterparts in EPA's 10 regional offices oversee the compliance
    monitoring and enforcement program for all environmental statutes,
    including RCRA. RCRA regulates the transport, treatment, storage, and
    disposal of hazardous waste. Monitoring compliance and enforcing these
    regulations is no small task. Tens of thousands of entities generate
    and manage more than 80 billion pounds of hazardous waste a year in the
    United States.

    EPA does not agree that formally subdividing the RCRA enforcement
    program to dedicate resources solely to the CRT export rule is wise or
    necessary. [See comment 4] The RCRA regulations governing hazardous
    waste are comprehensive and complex and the threats posed to human
    health and the environment by non-compliance are serious and diverse.
    The current RCRA enforcement program has a demonstrated track record of
    success enforcing all of RCRA's requirements. Given the diversity of
    facilities and problems that the RCRA enforcement program must address,
    it is not practical for EPA to build an extensive compliance monitoring
    and enforcement program around every limited provision of the RCRA
    hazardous waste regulations. That does not mean that EPA will not take
    steps to monitor and compel compliance with the CRT rule. In fact, EPA
    has quickly responded to the problems identified by GAO, issuing one
    administrative penalty complaint, initiating eight additional
    investigations, and planning a number of inspections to take place this
    year. [See comment 5]

    EPA's RCRA enforcement program makes significant contributions to
    protecting human health and the environment. In fiscal year 2007, the
    program conducted nearly 4,000 inspections, of which approximately
    2,000 revealed incidents of non-compliance with the RCRA hazardous
    waste requirements. During the same year, EPA concluded 446 RCRA
    enforcement actions. These actions reduced, treated, or eliminated
    nearly 100 million pounds of hazardous waste that companies mismanaged,
    mischaracterized, or illegally disposed - posing a threat to human
    health and the environment. Through these actions, EPA also collected
    approximately $9 million in civil penalties and secured complying
    actions and supplemental environmental projects totaling over $400
    million.

    For the majority of the RCRA regulations EPA shares its compliance
    monitoring and enforcement authorities with the States. The states
    typically conduct more inspections and enforcement actions than EPA,
    while EPA tends to focus on facilities and problems where the threats
    to human health and the environment are most significant. This leads to
    a broad range of cases, against a variety of entities that address a
    number of different problems. [See comment 6]

    EPA appreciates the time and effort that GAO expended to identify
    compliance problems with the CRT rule. The report notes that GAO
    discovered 22 shipments where the exporter failed to provide proper
    notice; GAO informed EPA of seven of these shipments. In addition, GAO
    identified in its report 43 companies that appeared willing to violate
    the RCRA hazardous waste regulations. Contrary to statements in the
    report, EPA does ensure that every tip and complaint is investigated.
    [Footnote 1] However, investigations do not always mean "inspections."
    [Footnote 2] EPA uses a variety of means to collect evidence, including
    working with Customs and Border Protection (CBP) to obtain information
    and issuing information request letters to exporters or other
    potentially liable companies or individuals.[Footnote 3] [See comment
    7] To be effective, RCRA enforcement actions require the development of
    information and evidence and take time to reach a conclusion. To date,
    EPA has issued one administrative penalty complaint against a company
    associated with one of the seven shipments, seeking the statutory
    maximum civil penalty of $32,500. [See comment 8]

    The report suggests that EPA has not taken sufficient action against
    violators and bases this conclusion on EPA's statements that for new
    rules EPA primarily focuses on outreach to ensure that the regulated
    community is aware of the requirements. EPA does follow that general
    principle; however, a primary focus on outreach does not mean that EPA
    will not take enforcement actions if it learns of specific incidents of
    non-compliance. EPA is investigating and will take appropriate action
    to address violations of the CRT rule. EPA currently has ten ongoing
    investigations and the regions plan to conduct inspections at
    electronic waste collection and recycling facilities this year. In
    addition to EPA's investigations of the specific incidents shared by
    GAO, EPA has initiated an internal discussion to raise awareness of the
    issue within the RCRA enforcement program and identify steps that EPA
    could take to help address the problem.

    Outreach:

    The draft report criticizes EPA's implementation of the CRT rule,
    stating that "EPA has conducted virtually no outreach beyond a limited
    number of presentations..." (See the top of page 31 of the draft
    report.) We believe this significantly understates EPA's outreach
    efforts to the regulated community relative to the CRT rule. EPA's
    outreach efforts consisted of much more than "a limited number of
    presentations at annual scrap-recycling conferences." In fact, the
    Agency's "Communication Plan" for the CRT rule set forth a number of
    specific activities to reach out to the regulated community. We
    implemented this plan immediately after the rule was published. EPA
    mailed and e-mailed copies of the rule and Fact Sheet to numerous
    interested parties, including all relevant trade associations, public
    interest groups, states (through the Association of State and
    Territorial Solid Waste Management Officials), local government
    associations, the trade press, and the print media. EPA made many
    presentations at major e-waste conferences (which are attended by the
    major recyclers), and also invested significant staff time in providing
    assistance to the regulated community, states, and others to enhance
    their understanding of the rule. Further, EPA spoke with the national
    press on issues related to electronics in general and on export
    requirements under the CRT rule, specifically. Moreover, EPA believes
    our website is an excellent source of information on the rule. We also
    believe this statement is contradicted by several statements reflecting
    GAO's own experiences in its contacts with electronics recyclers. For
    example, in the paragraph that follows (with similar statements made on
    pages 7, 21, and 23 through 26 and in the draft report "GAO
    Highlights"), GAO states that it observed that recyclers had a
    "substantial willingness to engage in activities that would appear to
    violate the CRT rule-including instances where the exporters were aware
    of the CRT rule...." Additionally, the electronics recycling industries
    closely followed the progress of the rule and were well aware of its
    issuance through implementation of our outreach strategy and through
    their persistent inquiries as to the rule's status. [See comment 11]

    The RCRA enforcement program also has discussed the issue at length
    during regularly scheduled monthly conference calls and biannual
    meetings. OECA has also talked with individual regional offices with
    large U.S. ports. These discussions have already led three EPA regional
    enforcement programs to conduct additional investigations of companies
    beyond those shared by GAO. The conversations have also generated the
    following ideas for actions that EPA plans take to better monitor
    compliance and enforce the rule:

    * Review existing enforcement guidance to determine the need for
    modifications to address the unique aspects of compliance monitoring
    and enforcement of the CRT rule. Such documents include the National
    Program Managers Guidance (2008)(revised annually) and the Hazardous
    Waste Enforcement Response Policy (2003).

    * Hold discussions with CBP and individual port authorities about the
    CRT rule and ways to improve the monitoring of CRT shipments.

    * Publicize concluded enforcement actions to deter others from non-
    compliance.

    * Refer the most serious violations of the CRT rule to the OECA's
    Office of Criminal Enforcement, Forensics and Training (OCEFT) for
    criminal investigation into whether the violations were "knowing",
    i.e., where the alleged violators knew that they were exporting
    electronic waste and were aware of the general hazardous character of
    the waste.

    * Offer compliance assistance to the e-waste recycling industry, states
    and retailers.

    EPA believes these actions will lead to increased compliance with the
    rule and increase the number of identified violations. Therefore, we
    believe that the draft report should be modified to more accurately
    reflect the Agency's outreach efforts on the CRT rule.

    Regulatory Program:

    One of the GAO's recommendations to address electronic waste is for EPA
    to "...develop options on broadening its authority to address the
    export of other potentially harmful used electronic items that are
    currently unregulated." Specifically, GAO identified a number of
    options that EPA could consider, including "...amending RCRA
    regulations to include exports of used electronics posing health or
    environmental risks when disassembled or reclaimed, expanding the scope
    of the CRT rule, and revising the regulatory definition of hazardous
    waste." (See pg 32 of draft report.) Furthermore, GAO suggested that
    "...a revised definition or rule for other used electronics could be
    developed to cover only exports or to exempt domestic activity from
    substantive requirements if EPA determines that other approaches-such
    as voluntary initiatives and existing regulatory controls on recycling
    facilities-provide adequate domestic protection of health and the
    environment." (See pg 33 of draft report.) GAO also suggested that EPA
    examine its authority to regulate used electronics shipped for reuse
    under the same control procedures as electronics shipped for recycling
    (see pg 34 of draft report).

    EPA is well aware of the numerous challenges in appropriately
    controlling the management of e-waste, both domestically and
    internationally. [See comment 12] However, we are not convinced that
    developing a regulatory scheme to address these issues is the most
    appropriate course of action. First, as GAO itself acknowledges, the
    development of regulations would take several years. In addition, we
    believe that there may be legal questions that would limit our
    authority or would need to be resolved. For example, many of the
    concerns that were identified by GAO deal with worker safety issues,
    which are addressed domestically by the Occupational Safety Health Act.
    [See comment 13] Additionally, defusing a waste as hazardous based on
    another country's management scheme may also raise legal questions
    since RCRA does not apply extra territorially. Therefore, because we
    believe that we should not wait years to address some of the issues
    identified by GAO, we believe that non-regulatory approaches can make
    important contributions when it comes to safe exports of electronic
    equipment. As an example, EPA, along with numerous other stakeholders,
    has invested a great deal of effort over the last couple of years in
    our "Responsible Recycling" initiative. `R2' is a voluntary, third-
    party, e-waste recycler certification program. EPA is now working with
    electronics recyclers on a voluntary basis to determine which exports
    of various kinds of electronics equipment are or are not allowed to
    enter various foreign countries. We believe we will learn a great deal
    about the regulatory programs of countries such as China (including
    Hong Kong), South Korea, India, and others through our communication
    with the competent authorities in those countries concerning allowable
    imports of electronics to those countries.

    Regarding EPA's ongoing rulemaking effort related to the Organization
    for Economic Co-operation and Development (OECD) Council Decision, on
    page, 3 the draft report reads as follows - "In 2001, because a
    majority of its members are also Basel parties, the OECD council
    changed its waste classifications, including what products are
    considered hazardous wastes, to harmonize with those of the Basel
    Convention. Although the United States has agreed to be bound by such
    decisions, the U.S. has not yet implemented the 2001 change." We
    believe this statement is misleading and could be read to imply that
    under our OECD responsibilities, the U.S. must modify our hazardous
    waste determinations to comport with those contained in the Basel
    Convention. [See comment 14] This is not the case. The 2001 OECD
    Decision still retains the fundamental approach of allowing each Member
    country to employ its "national procedures" to determine whether a
    waste is hazardous under its laws and regulations, and therefore
    whether it is subject to the OECD controls. The national procedures for
    the U.S. specify that OECD's "Amber list controls" (i.e., hazardous
    waste controls) apply to the wastes that are: (1) defined as RCRA
    hazardous waste in 40 CFR 262.3, and (2) subject to Federal hazardous
    waste manifesting requirements or to the universal waste management
    standards. (See 40 CFR 262.89(a).) Therefore, although the OECD waste
    lists were modified to align more closely with the Basel Convention
    waste lists, this does not change the scope of wastes in the U.S.
    subject to Amber controls, nor does this OECD decision obligate the
    U.S. to change its national procedures for defining Amber wastes. A
    more accurate description of the waste classification change would be:

    In 2001, because a majority of its members are also Basel parties, the
    OECD council changed its waste classifications to harmonize with those
    of the Basel Convention, although the application of the waste lists is
    different under the OECD than it is under Basel.

    In addition, while the draft report correctly notes (on page 40) that
    the Agency is in the process of modifying its hazardous waste
    regulations to reflect the 2001 OECD Council Decision, we believe such
    statements (in a footnote) should also be noted when GAO discusses this
    issue, such as on pages 3, 8, and 32. [See comment 15]

    Furthermore, in a number of places in the draft report, GAO recommends
    that EPA could work with Customs and the International Trade Commission
    to improve identification and tracking of exported electronics" and
    thus enhance control over the export of used electronics. We agree with
    GAO and intend to contact representatives of those agencies.

    We are providing an enclosure to this response which provides our more
    detailed comments on this draft report. We would like your office to
    consider our comments as you finalize this report. Please see the
    enclosure for additional detailed technical comments.

    We appreciate the opportunity to work with your team on this review,
    and your consideration of our significant reservations with the
    findings and recommendations of this report, If you have any comments
    or questions regarding this Agency response, you may contact Margaret
    Schneider, Director, Office of Administration and Policy at 202-564-
    2530.

    Sincerely,
    Signed by:

    Granta Y. Nakayama:
    Assistant Administrator
    Office of Enforcement and Compliance Assurance:

    Signed by:

    Susan Parker Bodine:
    Assistant Administrator:
    Office of Solid Waste and Emergency Response:

    Comment letter footnotes:

    [1] EPA has asked GAO for information regarding the other 15 shipments
    but, to date, EPA has not yet received that information from GAO. [See
    comment 9]

    [2] GAO also appears to criticize EPA for not detaining shipments. EPA
    has no explicit authority to detain shipments or seize personal
    property under RCRA. With respect to the shipment in Long Beach,
    referenced in Figure 5 of the report, CBP exercised its authority to
    detain the shipment. CBP also made the decision to release the
    containers based on a letter from the exporter to Customs that the
    exporter would remove the CRTs from the container. EPA was not aware of
    the exporter's letter until after the containers arrived back in Long
    Beach, and after Hong Kong had rejected the container for the second
    time. [See comment 10]

    [3] EPA issues information request letters pursuant to RCRA �3007. 42
    U.S.C. 6927 (2000). GAO questions whether we obtain any meaningful
    information from such information request letters. EPA commonly issues
    information request letters in RCRA investigations. We usually receive
    useful information because recipients know that they can be penalized
    for failing to respond. A person who fails to respond to such a letter
    is subject to penalties of up to $32,500 a day under RCRA. In addition,
    all information submitted in response to a 3007 request must be
    certified as true, accurate, and complete; a knowing submittal of false
    information in response to a 3007 request may be actionable under 18
    U.S.C. � 1001 and 42 U.S.C. � 6927(d).

    The following are GAO's comments on the Environmental Protection
    Agency's letter dated August 1, 2008.

    GAO Comments:

    1. EPA's statement incorrectly characterizes our recommendation in
    asserting that the recommendation calls on EPA "to develop a separate
    program for compliance monitoring and enforcement of the CRT rule."
    Rather, the recommendation asks EPA to "identify a timetable for
    developing and implementing a systematic plan to enforce the CRT rule,"
    which would "include the basic elements of effective enforcement such
    as enforcement targets, monitoring, follow-up of suspected violations,
    and prosecution." We do not see why such basic elements could not be
    developed within the context of the overall RCRA enforcement program.
    In any case, our May 2008 meeting with EPA officials to discuss
    preliminary findings made it apparent that a strategy for enforcing the
    rule was needed. Specifically, we were told at that time that the
    agency had not begun to consider how it would enforce the rule (it also
    did not have a time frame for doing so) because it was still
    emphasizing outreach to the regulated community. We continue to believe
    that without the minimal elements of a formal enforcement strategy, it
    will be difficult to determine whether the single penalty EPA has
    levied to date is an isolated action or part of an overall strategy to
    deter noncompliance.

    2. EPA stated that our report should "put into proper perspective the
    amount of used electronics now being reused or recycled," noting that
    "80-85 percent is disposed of domestically, primarily in landfills."
    EPA's comment implies that because only 15 percent to 20 percent of
    used electronics are collected for reuse or recycling (since the other
    80 percent to 85 percent is primarily disposed of in landfills), we
    overstate the human health and environmental problems associated with
    exported used electronics. We find that this response needs to be put
    in the proper perspective. First, the document EPA references shows
    that 330 million computer products were "ready for end-of-life
    management" in 2006. Fifteen to 20 percent of 330 million is not an
    insignificant number--especially in light of EPA's acknowledgment that
    "a vast majority" of such products are exported. Second, and more
    important, it is EPA's stated goal to significantly reduce the 80
    percent to 85 percent of used electronics going to landfills--a goal
    that is also pursued by a growing number of states enacting bans on
    disposing of used electronics in landfills. Over time, the effect of
    these efforts can be expected to greatly increase the quantity of used
    electronics being both recycled and exported--but especially exported,
    given the relatively greater profitability of that alternative. Under
    this likely scenario, it will become that much more important to ensure
    that exported used electronics are handled safely.

    3. We did not delete the word enforcement from the title, as suggested
    by EPA, given the state of present CRT rule enforcement. We did,
    however, broaden and clarify our title to reflect our findings beyond
    enforcement, particularly the limited scope of U.S. regulation. The
    title now reads, Electronic Waste: EPA Needs to Better Control Harmful
    U.S. Exports through Stronger Enforcement and More Comprehensive
    Regulation.

    4. This paragraph restates what we believe to be a misinterpretation of
    our recommendation. EPA's comment implies we are recommending that the
    agency build an extensive compliance monitoring and enforcement program
    for the CRT rule. To the contrary, we are recommending that the agency
    take reasonable steps to establish a credible enforcement deterrent--
    such as developing enforcement targets and plans for monitoring,
    following up on suspected violations, and prosecuting violators. We
    continue to believe that these actions are necessary and appropriate in
    light of what we observed, including exporters willing to engage in
    apparent violations despite awareness of the CRT rule. We believe our
    own work demonstrates that much can be done to identify violators and
    deter noncompliance without establishing the "extensive compliance
    monitoring and enforcement program" that EPA describes. In particular,
    little effort was required on our part to identify potential violators
    and potentially illegal shipments. In just several hours of monitoring
    of e-commerce Web sites, we were able to observe substantial
    willingness to engage in activities that would appear to violate the
    CRT rule. Additionally, in only minutes, we were able to identify 26
    potentially illegal CRT shipments by simply e-mailing environmental
    protection officials in countries where such imports are known to
    occur. While collecting evidence to establish a violation would take
    additional efforts, our experience suggests that obtaining leads is
    relatively simple.

    5. We acknowledge EPA's response to the violations we identified, but
    also note that 2 years after the CRT rule's implementation, the agency
    has demonstrated little effort to identify noncompliance on its own. We
    would note further that the only administrative penalty EPA has issued
    to date was on July 31, 2008, more than 5 months after we identified
    that violation for the agency in February 2008. Thus, while we
    acknowledge this action, we continue to believe that until EPA adopts
    the basic elements of an enforcement strategy, it will remain unclear
    whether this single penalty was an isolated action--that, in turn, is
    unlikely to deter future violations--or part of an emerging enforcement
    strategy. We also acknowledge EPA's claim that it is "planning a number
    of inspections to take place this year," and see this as a positive
    development if it is part of an overall strategy to ensure greater
    compliance as part of a formal, written plan.

    6. EPA notes that for most RCRA regulations, it shares its compliance
    monitoring and enforcement authorities with the states. We acknowledge
    that this practice is common among RCRA and other environmental
    programs, but, as agency officials told us on May 28, 2008, states do
    not have authority over export provisions. Hence, the states' lack of
    jurisdiction over this particular issue amplifies the importance of
    EPA's role.

    7. EPA's letter states that the agency "uses a variety of means to
    collect evidence, including working with Customs and Border Protection
    to obtain information and issuing information request letters to
    exporters or other potentially liable companies or individuals." EPA
    does, in fact, have two memorandums of understanding with Customs and
    Border Protection to promote information sharing and enforcement of
    environmental laws. The memorandum on information sharing addresses
    imports only. The memorandum on enforcement of environmental laws is
    intended to ensure the timely coordination, communication, and
    cooperation necessary to process violations of environmental
    regulations as they relate to exports and imports. During our May 28
    meeting with EPA officials, they told us they had worked with Customs
    and Border Protection only on imports of potentially hazardous waste,
    not exports.

    8. We applaud EPA's issuance of the administrative penalty on July 31
    but, as noted above, believe this action should be part of an emerging
    enforcement strategy and not an isolated instance. We also note that we
    had identified this particular shipment as a potentially illegal export
    of CRT monitors 5 months earlier, after we were told by Hong Kong
    authorities that it was being returned to the United States as an
    illegal shipment of used electronics. On February 20, 2008, we informed
    EPA of the shipment and asked Customs and Border Protection to detain
    it. We viewed the container's contents on February 27, 2008, and
    observed hundreds of CRT computer monitors stacked haphazardly, some
    with cracked plastic cases and broken glass tubes. EPA completed its
    action 5 months later.

    9. The EPA comment suggests it is waiting for information from us. In
    fact, an Office of Solid Waste official told us EPA already has this
    information. In January 2008, when we began to uncover potentially
    illegal shipments of CRTs where the exporter failed to provide proper
    notice, we also began to provide this information to EPA. EPA implies
    that it asked us for information on all shipments mentioned in our
    draft report. During a June 2008 meeting with the agency, however, EPA
    officials asked us to verify only the information we obtained on the
    shipments we identified during our review. EPA did not ask us for
    information on the containers that were returned before our review
    began (although this information would have been easy for EPA to obtain
    from Hong Kong environmental protection officials). We understand that
    EPA has since obtained this information.

    10. EPA's comment suggests that the agency was not aware of the
    potential illegality of the three containers until they had been
    shipped to Hong Kong for the second time. We find this suggestion
    puzzling since we provided EPA with information on these containers
    when they were returned from Hong Kong the first time. We had several
    telephone conversations and sent numerous e-mails to EPA staff in the
    Office of Enforcement and Compliance Assurance. Before the three
    containers were re-exported to Hong Kong, about 4 weeks after being
    returned to the Port of Los Angeles, a director in EPA's Office of
    Enforcement and Compliance Assurance e-mailed us, stating that the
    exporting company had contacted Customs and Border Protection and
    intended to remove the monitors before shipping the containers back to
    Hong Kong. As we note in our report, the exporter did not remove the
    monitors. In fact, according to an Office of Enforcement and Compliance
    Assurance investigator, the exporter merely changed his company's name
    and re-exported the used CRTs.

    11. Our characterization of EPA's outreach efforts was based on (1)
    interviews during two meetings with EPA officials in May and June 2008,
    and (2) an internal EPA document from March 2008--20 months after
    adoption of the rule--stating that "the agency still needed to develop
    a strategy for educating the regulated community about CRT rule
    notification requirements." In our final report, we have nonetheless
    used the information provided by EPA to more fully describe what the
    agency states is the entire range of its outreach activities. For
    example, the agency's communication plan for the CRT rule states that
    EPA is to notify its regional offices, state hazardous waste directors,
    the press, environmental groups, and relevant associations.

    12. EPA contends that because developing options to broaden the
    agency's regulations under existing RCRA authority might take several
    years and require addressing legal complexities, the agency should
    instead pursue nonregulatory, voluntary approaches. We disagree. First,
    as EPA's experience has shown, voluntary programs can also take years
    to implement--and in some cases may never attain effective broad
    coverage since in a voluntary scheme, the agency has no enforcement
    recourse against reluctant participants. Second, given the widespread
    willingness to export in apparent violation of EPA's one existing
    electronics export regulation (the CRT rule), including some exporters'
    admitting knowledge of the rule, we do not assume that the industry
    will voluntarily agree to adopt and adhere to broader, meaningful
    export controls in the absence of a broader, better enforced regulatory
    framework.

    13. Among the factors EPA cites as drawbacks to the regulatory options
    we identified are possible "legal questions that would limit [EPA's]
    authority or would need to be resolved" involving the Occupational
    Safety and Health Act (OSH Act) and RCRA. We believe these concerns are
    not well founded. With respect to the applicability of the OSH Act, EPA
    states that many of the concerns our report identified relate to worker
    safety risks, which in the United States are regulated under the OSH
    Act by another agency. Although EPA's statement is correct as far as it
    goes, it does not explain why the other risks our report identified--
    risks to the environment--cannot be regulated by EPA under RCRA in the
    ways we have suggested. We note that the OSH Act focuses solely on
    workplace safety, including controlling exposures to hazardous
    materials, while RCRA grants EPA broad authorities to regulate
    management of hazardous waste to protect human health and the
    environment. Many of the improper management practices we have cited
    pose a risk both to workers' health and to the environment (e.g., via
    related releases of gases and liquids and potential dumping of
    materials without value). Because RCRA and the OSH Act regulate
    different aspects of the same toxic substances, applicable OSH Act
    regulations may be an appropriate consideration in crafting a RCRA
    approach to used electronics. As a part of developing options on how
    the agency can broaden its RCRA regulations to address used electronic
    devices, EPA should address any legal issues it may identify involving
    the OSH Act. With respect to EPA's suggestion that a regulatory program
    to include additional used electronics "may also raise legal questions
    since RCRA does not apply extraterritorially," we are not suggesting
    that EPA apply RCRA extraterritorially. We recommend that EPA develop
    options to address management of used electronics under existing RCRA
    authority, including RCRA's existing subtitle C export provisions,
    which apply to parties in the United States, on the basis of conditions
    in the United States. These provisions control exports by imposing
    requirements, such as notice and consent, upon parties in the United
    States who are exporting regulated wastes. Our recommendation would
    expand the scope of the regulated wastes subject to existing export
    provisions, not extend the geographical application of the export
    provisions themselves. The basis for this expansion of the scope of
    regulated wastes subject to export provisions is EPA's existing broad
    legal authority under RCRA. Thus, we are not suggesting that EPA
    "define a waste as hazardous based on another country's management
    scheme." Although our rationale for our recommendation acknowledges the
    risks to health and the environment that can occur when these items are
    exported, as documented in this report, it also involves concerns about
    domestic management, which fall squarely within EPA's RCRA authorities.
    [Footnote 33] We believe EPA has authority to regulate at least some
    used electronics on the basis of potential domestic mismanagement.
    While RCRA provides EPA with broad authority and significant
    flexibility in its regulatory approaches, EPA should address any legal
    issues it may identify as part of developing options on how the agency
    can broaden its RCRA regulations to address used electronic devices.
    If, after studying the options that we discuss herein, EPA concludes it
    needs additional authority to implement its preferred approach, then
    the agency should seek such authority.

    14. Our statement is accurate as written. But to avoid any implication
    that our OCED responsibilities require the United States to modify its
    hazardous waste determinations to comport with those contained in the
    Basel Convention, we have added the following sentence: "While the 2001
    change does not require changes to the scope of hazardous wastes
    regulated in the United States, it does require adoption of the
    classification system to facilitate coordination among exporting and
    importing countries."

    15. We added footnotes as requested, noting that EPA has stated that it
    intends in the fall of 2008 to propose regulatory amendments to
    implement the 2001 OECD decision.

    [End of section]

    Appendix III: GAO Contact and Staff Acknowledgments:

    GAO Contact:

    John B. Stephenson, (202) 512-3841 or stephensonj@gao.gov:

    Staff Acknowledgments:

    In addition to the individual named above, Steve Elstein, Assistant
    Director; Nathan Anderson; Elizabeth Beardsley; Mark A. Braza; Ellen W.
    Chu; Michael Derr; Paul Kazemersky; David Stikkers; and Arvin Wu made
    key contributions to this report. Also contributing to the report were
    Lydia Araya and Katherine Raheb.

    [End of section]

    Footnotes:

    [1] Basel Action Network and Silicon Valley Toxics Coalition, Exporting
    Harm: The High-Tech Trashing of Asia (Seattle, Washington, and San
    Jose, California, Feb. 25, 2002).

    [2] Circuit boards (removed from any product) are also regulated under
    RCRA. Circuit boards intended to be disposed of, recycled, or reclaimed
    would come under the definition of hazardous waste. EPA regulations,
    however, provide a conditional exclusion from the hazardous waste
    definition for circuit boards that are shredded for recycling after
    removal of certain hazardous components and an exemption from the
    definition for whole circuit boards to be recycled, which are
    considered scrap metal. These circuit boards are not subject to any
    regulatory requirements when exported. Any exported circuit boards
    intended for disposal must comply with notice-and-consent requirements.
    Beyond CRTs and circuit boards, any other used electronics that qualify
    as "hazardous" under RCRA regulations would be subject to export
    provisions; EPA has stated repeatedly, however, that to its knowledge,
    other types of electronics do not fail its threshold toxicity test and
    thus are not currently regulated.

    [3] The CRT rule requires that any exporter of CRTs for recycling
    (which includes reclamation and other processing) must notify EPA at
    least 60 days prior to the intended shipment, and that the shipment be
    accompanied by and conform with an acknowledgment of consent, provided
    by EPA, that documents the importing country's consent. Any exporter of
    intact CRTs for reuse (which includes use after repair or
    refurbishment) must send EPA a one-time notification and maintain
    business records demonstrating that each shipment will be reused. Thus,
    broken CRTs (which cannot be reused and can only be recycled) that lack
    or fail to conform with an acknowledgment of consent would be in
    violation of the CRT rule and therefore regulated as hazardous waste. A
    shipment of broken CRTs falsely represented as intact CRTs for reuse
    would likewise be considered hazardous waste, since any shipment of
    broken CRTs (excluding processed CRT glass) is required to have and to
    conform with an acknowledgment (whether shipped for recycling under the
    CRT rule or as hazardous waste for disposal). Used CRTs generated by
    households are subject to the CRT rule when a recycler or collector
    mixes them with CRTs from other sources (e.g., businesses or government
    entities).

    [4] Since 1961, the OECD has provided a setting where governments
    compare policy experiences, seek answers to common problems, identify
    good practices, and coordinate domestic and international policies,
    particularly in the areas of trade, environment, agriculture,
    technology, and taxation.

    [5] OECD Council, On Exports of Hazardous Wastes from OECD Area,
    Decision-Recommendation C(86)64/Final (June 5, 1986). The decision
    recommends that member countries implement it by requiring exporters of
    hazardous waste to non-OECD countries to provide the exporting country
    with documentation that the proposed disposal operation will be
    performed in an environmentally sound manner and that the proposed
    disposal facility may, under the importing country's laws and
    regulations, dispose of the exported wastes.

    [6] OECD Council, Concerning the Control of Transfrontier Movements of
    Wastes Destined for Recovery Operations, Decision C(92)39/Final (Mar.
    30, 1992).

    [7] OECD Council, On the Control of Transboundary Movements of Wastes
    Destined for Recovery Operations, Decision C(2001)107/Final (June 14,
    2001) as amended by Decision C(2004)20 (March 9, 2004), which replaces
    Decision C(92)39/Final.

    [8] EPA submitted proposed changes to RCRA regulations to the Office of
    Management and Budget on May 8, 2008, and EPA officials anticipated
    issuing a proposed rule in the Federal Register by mid-November 2008.

    [9] The International Association of Electronics Recyclers is a trade
    association that represents the electronics recycling industry. Its
    stated priority is to promote high standards of environmental quality
    and regulatory compliance, as well as high-quality business practices.

    [10] It is not possible to determine why the other 279 companies did
    not respond to our offers from fictitious foreign brokers. It is likely
    that many of our e-mails did not reach recipients because of spam-mail
    filters.

    [11] As of June 2008, 25 companies have submitted 47 notices for export
    of CRTs for recycling to EPA. These companies informed EPA that they
    intended to responsibly recycle CRTs at facilities in Brazil, Canada,
    Korea, Malaysia, and Mexico.

    [12] To establish such a criminal violation in these circumstances, EPA
    would need to prove that (1) the party exported CRTs, (2) the party did
    not notify EPA as required by the CRT rule, and (3) the party knowingly
    failed to notify EPA.

    [13] In addition to the location of markets for reusable and recyclable
    electronics, a number of reasons lead U.S. companies to export used
    products, including waste. Often, the nearest waste management facility
    capable of handling a particular waste stream may be just over the
    international border from the point of generation. In other cases, a
    facility in another country may specialize in treating, disposing of,
    or recycling a particular waste. Such a facility may be one of a kind,
    or it may present a more environmentally sound management solution for
    the waste. In some cases, hazardous wastes constitute "raw" material
    for industrial and manufacturing processes in many developing countries
    where natural resources are scarce or nonexistent. In addition, using
    hazardous wastes is often preferable to natural resource extraction or
    hazardous waste disposal.

    [14] The Basel Convention also prohibits movement of waste between
    parties and nonparties to the convention, except when these movements
    occur under an equivalent bilateral or multilateral agreement. The
    bilateral or multilateral agreements must provide an equally sound
    management structure for transboundary movements of waste.

    [15] Asia-Pacific Regional Centre for Hazardous Waste Management
    Training and Technology Transfer, Report on the Survey of the Import
    and the Environmentally Sound Management of Electronic Wastes in the
    Asia-Pacific Region (2005). The Basel Convention Regional Centre in
    China, the publisher of this report, is one of 14 regional centers that
    assist party countries in controlling the transboundary movement of
    hazardous wastes.

    [16] Hand dismantling has many positive benefits: more reusable
    components can be obtained, and the value of the extracted materials is
    higher because of less contamination. Hand dismantling is the
    predominant method of recycling in the United States.

    [17] EPA issued a special regulation for CRTs because, the agency
    stated, the products are hazardous waste under RCRA regulations as they
    typically fail EPA's tests for toxicity. EPA also stated that the
    principal goal of this regulation was to promote the reuse and
    recycling of CRTs.

    [18] U.S. exporters of hazardous wastes must comply with all applicable
    domestic laws and regulations, which include regulations under RCRA. In
    general, a U.S. exporter must prepare and submit certain documents.
    Before a shipment proceeds, an exporter must submit to EPA headquarters
    a notification of intent to export, describing the type and amount of
    waste, its itinerary, the number of shipments expected, and the period
    during which shipments will occur. EPA forwards this notification to
    the governments of all concerned countries. The government of the
    importing country must consent to the shipment before it may proceed.
    While a shipment is in transit, an exporter must attach a hazardous
    waste manifest to the shipment, along with the acknowledgment of
    consent from the importing and transit countries. Finally, an exporter
    must file an annual report with EPA headquarters summarizing the
    exporter's shipments for the previous calendar year.

    [19] EPA regulations pursuant to RCRA state that a solid waste is a
    hazardous waste if it exhibits one or more of the characteristics of
    ignitability, corrosivity, reactivity, or toxicity or if it is
    specifically listed as a hazardous waste (e.g., certain industrial
    wastes and pure chemicals). The hazardous characteristic most relevant
    to electronics is toxicity. By EPA regulation, toxicity is measured by
    a lab procedure called the toxicity characteristic leaching procedure,
    which predicts whether a particular waste is likely to leach toxic
    chemicals into groundwater at dangerous levels. A waste would fail--and
    be regulated as hazardous waste--if the leachate from the test exceeded
    specified levels of a toxic contaminant. Because many used electronics
    feature constituents such as plastic housing that are not prone to
    leach toxics, they are unlikely to exceed the concentrations because
    the test is performed on the entire product, not separately on its
    potentially toxic constituents.

    [20] Despite this export ban, a 2006 European Union report estimates
    that since implementation of the ban, a small number of exporters have
    shipped over 2 million computer monitors and 1 million televisions out
    of the European Union, ostensibly for reuse; many of these items were
    probably for dismantling under unsafe conditions.

    [21] Six others requested more information about our purchase offer;
    two indicated they would sell us only working CRTs; and three said they
    would not do business with us because they did not export nonworking
    CRTs.

    [22] The 43 may represent the tip of an iceberg for a number of
    reasons. For example, over a 3-month period, we observed more than 50
    U.S companies selling nearly 1.3 million CRTs on two Internet e-
    commerce trade sites. In addition, according to California State
    officials knowledgeable about the electronics-recycling industry, the
    electronics-recycling community is "tight-knit" and tends to operate
    only within long-standing, established relationships. They said that
    established players do not need to advertise on Web sites for new leads
    and would therefore be invisible to us.

    [23] We continue to receive requests from this company, including one
    from July 2008, seeking a buyer for 60 40-foot containers of used
    televisions "available now," or around 48,000 used televisions. On a
    Chinese e-commerce Web site, this company states that it has "a
    continuous supply of used monitors" and currently has over 200,000
    nonworking CRT monitors for sale. On its own Web site, this company
    claims that it is a "leader in CRT recycling" and it "satisfies all
    state and federal requirements regarding proper disposal of toxic/
    hazardous electronic waste," as well as ensuring that "100 percent of
    the electronic waste we receive is reused or responsibly recycled."

    [24] California's Department of Toxic Substances Control sent
    investigators to inspect the containers and, upon inspection, pursued
    administrative penalties against the shipper for potentially violating
    California's hazardous waste storage and transportation laws. The
    outcome of California's action against the shipper was pending as of
    August 2008. Like all states, however, California does not have
    authority over exports.

    [25] EPA advised the public as early as 2001 that CRTs were generally
    regulated as hazardous waste because they typically fail the toxicity
    test. EPA officials told us, however, that before the CRT rule, the
    agency had not made its regulatory policy on CRT exports clear.

    [26] The agency's May 2006 communication plan for the CRT rule states
    that EPA would notify its regional offices, state hazardous waste
    directors, the press, environmental groups, and relevant associations.
    It is unclear, however, the extent to which these efforts have focused
    on educating the regulated community about the need to notify EPA when
    exporting used CRTs. For example, an internal EPA document from March
    2008--20 months after adoption of the rule--states that "the agency
    still needs to develop a strategy for educating the regulated community
    about CRT rule notification requirements." One electronics recycler,
    for instance, told us that he has "not seen any effort to publicize the
    rule besides seeing it in print, which is in contrast to EPA's previous
    [outreach] efforts."

    [27] RCRA provides EPA with broad authorities to collect information
    and to inspect facilities to investigate suspected violations, as well
    as to evaluate compliance. EPA has the authority to contact exporters
    who have notified the agency, when appropriate, to ask for verification
    that the CRTs are exported for reuse instead of recycling or disposal.
    These persons must keep copies of normal business records demonstrating
    that each shipment of exported CRTs will be reused, and this
    documentation must be retained for 3 years from the date the CRTs were
    exported. For any past or present violation, EPA may issue an
    administrative enforcement order assessing a penalty of up to $32,500
    per day or requiring compliance. Further, EPA may submit a civil
    judicial referral to the Department of Justice. RCRA also provides for
    criminal penalties for knowing violations; if an exporter of CRTs
    knowingly fails to file a notification--or if the CRTs were intended to
    be or actually were discarded and the exporter did not obtain an
    acknowledgment--then the exporter may be subject to criminal penalties.
    Relevant to the CRT rule's documentation requirements, criminal
    penalties are authorized for any person who knowingly omits material
    information or makes any false material statement or representation in
    any document filed, maintained, or used for purposes of compliance with
    RCRA regulations or who exports a hazardous waste and knowingly
    destroys, alters, conceals, or fails to file any document required to
    be maintained or filed. Criminal penalties also are authorized for any
    person who knowingly exports a hazardous waste without the consent of
    the receiving country. The criminal penalties may include a fine of up
    to $50,000 per day of violation or imprisonment of up to 2 years.

    [28] EPA, Office of Enforcement and Compliance Assurance, Guide for
    Addressing Environmental Problems: Using a Strategic Approach
    (Washington, D.C., March 2007).

    [29] Under the Basel Convention, a country may use its own national
    definition of hazardous waste. If a country prohibits import of a
    hazardous waste, other countries must prohibit or not permit exports of
    such wastes to that country.

    [30] The owner and an affiliated company were indicted and pleaded
    guilty to illegally storing, transporting, and exporting hazardous
    waste. The damages imposed as part of the sentences (which included
    over $2 million in restitution and fines) covered the port operator's
    costs for storing the hazardous wastes for 3 years, the Dutch
    government's cost in incinerating the almost 300 tons of hazardous
    wastes, and EPA's cost in overseeing the warehouse cleanup in the
    United States, according to EPA.

    [31] The United States Ambassador to the United Nations signed the
    Basel Convention on March 21, 1990. The United States Senate gave
    consent to ratification in 1992 (138 Congressional Record 12291-92).
    The State Department has advised the Senate that it will not ratify the
    convention before the enactment of implementing legislation.
    (Ratification occurs when a country submits its documents of
    ratification to the Secretariat.) Thus, the next step in ratification
    would be congressional passage of implementing legislation, followed by
    presentation to the President.

    [32] Customs and Border Protection has existing memorandums of
    understanding with EPA; EPA, however, told us that its current
    coordination activities with Customs focus mainly on imports.

    [33] See, for example, GAO, Electronic Waste: Strengthening the Role of
    the Federal Government in Encouraging Recycling and Reuse, [hyperlink,
    http://www.gao.gov/cgi-bin/getrpt?GAO-06-47] (Washington, D.C.: Nov.
    10, 2005).

    [End of section]

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