Electronic Waste: Harmful U.S. Exports Flow Virtually		 
Unrestricted Because of Minimal EPA Enforcement and Narrow	 
Regulation (17-SEP-08, GAO-08-1166T).				 
                                                                 
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 damage health and the environment. Items 
with cathode-ray tubes (CRTs) are particularly harmful because	 
they contain lead, a known toxin. As a result, in January 2007,  
EPA began regulating the export of CRTs under a rule requiring	 
companies to notify EPA before exporting CRTs. GAO's August 2008 
report 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 Internet buyers of broken CRTs.  
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-1166T					        
    ACCNO:   A84262						        
  TITLE:     Electronic Waste: Harmful U.S. Exports Flow Virtually    
Unrestricted Because of Minimal EPA Enforcement and Narrow	 
Regulation							 
     DATE:   09/17/2008 
  SUBJECT:   E-waste						 
	     Electronic equipment				 
	     Electronics recycling				 
	     Environmental law					 
	     Environmental monitoring				 
	     Environmental policies				 
	     Environmental protection				 
	     Export regulation					 
	     Exporting						 
	     Federal regulations				 
	     Hazardous substances				 
	     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-08-1166T

   

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Testimony: 

Before the Subcommittee on Asia, the Pacific, and the Global 
Environment, Committee on Foreign Affairs, House of Representatives: 

United States Government Accountability Office: 
GAO: 

For Release on Delivery: 
Expected at 2:00 a.m. EDT:
Wednesday, September 17, 2008: 

Electronic Waste: 

Harmful U.S. Exports Flow Virtually Unrestricted Because of Minimal EPA 
Enforcement and Narrow Regulation: 

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

GAO-08-1166T: 

GAO Highlights: 

Highlights of GAO-08-1166T, a testimony before the Subcommittee on 
Asia, the Pacific, and the Global Environment, 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 damage 
health and the environment. Items with cathode-ray tubes (CRTs) are 
particularly harmful because they contain lead, a known toxin. As a 
result, in January 2007, EPA began regulating the export of CRTs under 
a rule requiring companies to notify EPA before exporting CRTs. 

GAOï¿½s August 2008 report 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 Internet 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 amount ends up in countries where 
disposal practices can harm workers and the environment. Recent surveys 
taken on behalf of the United Nations found that used electronics 
exported from the United States to many Asian countries are dismantled 
using methods like open-air incineration and acid baths to extract 
metals such as copper and gold. Over 3 months, GAO observed thousands 
of requests for these items on e-commerce Web sitesï¿½mostly from Asian 
countries such as China and India but also from 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 EPAï¿½s CRT rule. Posing as foreign buyers 
of broken CRTs in Hong Kong, India, Pakistan, and other countries, GAO 
found 43 U.S. companies that expressed willingness to export such CRTs. 
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 EPAï¿½s request. 

* EPAï¿½s 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 was identified by 
GAO. EPA officials acknowledged CRT rule compliance problems but said 
that given the ruleï¿½s relative newness, they were focusing on educating 
the regulated community. This explanation, however, is undermined by 
GAOï¿½s observation of the apparent willingness by many companies to 
violate the rule, even by those aware of it. Finally, EPA has done 
little to ascertain the extent of noncompliance, and EPA officials told 
us that 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 devicesï¿½such as 
computers, printers, and cell phonesï¿½are exported in a manner that does 
not harm health or the environment. Among the options GAO has raised 
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 like these could help 
make U.S. export controls more consistent with those of other 
industrialized countries. 

What GAO Recommends: 

In its August 2008 report, GAO recommended that EPA (1) develop a 
systematic plan to implement and enforce the CRT rule and (2) develop 
options to broaden its authority to address the export of other 
potentially harmful used electronic items. EPA expressed significant 
reservations with GAOï¿½s 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-08-1166T]. For more 
information, contact John Stephenson at (202) 512-3841 or 
[email protected]. 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss our recent findings regarding 
exports of electronic waste from the United States and the 
effectiveness of regulatory controls over export practices. According 
to the Environmental Protection Agency (EPA), Americans removed more 
than 300 million electronic devices from their households in 2006. 
Toxic substances, such as lead, in electronics are well known to harm 
people's health, and when electronics are disposed of improperly, these 
substances 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 to recycle 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. As the export of these items 
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. Environmental groups 
have alleged that 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. 
Products with cathode-ray tubes (CRTs), such as televisions and 
computer monitors, can be especially harmful to humans and the 
environment. Accordingly, in the United States, used CRTs are the only 
electronic devices regulated as hazardous waste and whose export is 
specifically controlled by EPA. Internationally, 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. 

Our testimony, which is based on our recent report on electronic waste 
exports,[Footnote 1] addresses (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. 

Summary: 

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. 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 
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, 
exposing people to lead and other hazardous materials. In particular, 
as China's growing economy has driven its demand for raw materials, the 
country appears to be relying 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 unsafely recycled, 
such items are exported to West African countries primarily for reuse. 
Many units are in fact 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. 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. Under U.S. law, only exports of CRTs are regulated as 
hazardous waste. 

* Regulatory controls easily circumvented. Despite adoption of a CRT 
rule in 2006, the export of CRTs from the United States in apparent 
violation of the rule seems widespread. 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 that would appear to violate the CRT rule.[Footnote 2] 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 is 
required by the CRT rule for actual shipments.[Footnote 3] 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, Hong Kong 
officials said, these exports violated Hong Kong's hazardous waste 
import laws. 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. 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 the agency has done little to ascertain 
the extent of noncompliance. Moreover, Enforcement and Compliance 
Assurance officials told us that 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--are also 
exported in a manner that does not contribute to human health and 
environmental harm overseas. Among the available options--which could 
make U.S. export controls more consistent with international norms--is 
to propose amending RCRA regulations to include exports of a broader 
range of used electronics posing health or environmental risks when 
disassembled or reclaimed. Additionally, EPA could enhance U.S. control 
over the export of used electronics by submitting a legislative package 
to Congress to complete ratification of the Basel Convention and by 
working with Customs and Border Protection and the International Trade 
Commission to improve identification and tracking of exported used 
electronics. 

Background: 

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 4] 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 has been ratified by 170 countries, including 
virtually all industrialized countries except the United States. It 
stipulates that a country may ship hazardous waste only after receiving 
prior written consent from the receiving country. Additionally, exports 
of hazardous waste can occur only under the following circumstances: 
(1) if the exporting country does not have sufficient disposal capacity 
and (2) if the exporting country does not have disposal sites that can 
dispose of the waste in an environmentally sound manner.[Footnote 5] 

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 generally cannot be shipped to 
developing countries. 

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 
recycles CRT glass and manufactures new CRT televisions, which can 
contain 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 safety conditions, according to Malaysian 
environmental protection officials. 

Significant Demand Exists for Exported Used Electronics, and Many 
Countries Receiving These Items Lack the Capacity to Safely Handle and 
Dispose of Them: 

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 LCD monitors. On the same site, we found 430 
requests for central processing units and 665 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 CRTs--seeking about 7.5 million units. Brokers in developing 
countries represented over 60 percent of all requests we observed. Over 
75 percent of the requests made by brokers were for $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 that 
came from developing countries were from Asia, with China and India 
posting by far the largest number; the remaining requests came largely 
from Africa (see fig. 1). 

Figure 1: 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 1 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] 

Unlike the United States, many foreign countries, particularly those in 
the developing world, do not have the landfill capacity and regulatory 
controls to ensure safe handling and disposal of used electronics. 
According to surveys made on behalf of the United Nations Environment 
Programme, 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. 

China and Hong Kong: 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 6] 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. In one city, the report 
found that 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.[Footnote 7] 

Indonesia: In March 2007, Indonesian officials reported 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.[Footnote 8] 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. 

Cambodia: 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. 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. Items that lack value are often dumped 
and sometimes burned (see fig. 2). 

Figure 2: Photograph: Open Dump Site for Electronic Waste in Cambodia: 

[See PDF for image] 

Source: Basel Convention Regional Centre in China. 

[End of figure] 

India: 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--again, 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. 

Western Africa: 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. Some U.S. recyclers, 
however, 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. 

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 9] 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. 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. 

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 has frequently failed to deter 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 10] Many of these companies also actively promote an 
environmentally responsible public image, with 3 holding Earth Day 2008 
electronics-recycling events. For example: 

* 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." 

* A 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. 

* A representative of an electronics-recycling company in Colorado told 
us that the company does not export CRTs, instead asserting that all 
CRTs are recycled in-house and that the CRT rule therefore 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 Maryland electronics recycler charges $10 to $30 for CRT monitors 
to cover its "responsible, domestic recycling costs," stating that its 
mission is to be globally responsible. Yet when we posed as a buyer in 
Singapore, the Chief Operating Officer asked what price we were paying 
for untested, as-is CRT monitors, suggesting that he was interested in 
selling the items to us. 

Of note, 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, indicating that government 
CRTs may be among those offered for sale to overseas brokers. 

EPA Has Done Little to Enforce the CRT Rule: 

Our investigation revealed little inclination on EPA's part to enforce 
the CRT rule. Since the rule took effect in January 2007, for example, 
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. 

[A Tale of Three Containers: 
Three containers were shipped across the Pacific Ocean four times 
before EPA initiated enforcement action. Hong Kongï¿½s 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 ï¿½wasteï¿½ CRT monitors, which are 
illegal for import into Hong Kong. EPA records indicate that the U.S. 
exporter had not notified EPA. GAO notified EPAï¿½s 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 ï¿½by mistakeï¿½ and that the company had 
voluntarily removed the CRT monitors before re-exporting the containers 
to Hong Kong. About 3 weeks later, Hong Kongï¿½s Environmental Protection 
Department intercepted the containers a second time and verified that 
the three containers still contained the same ï¿½wasteï¿½ 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 EPAï¿½s 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.] 

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. 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." 

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. Although EPA 
acknowledged that the container included used CRTs that may be in 
broken or unstable condition, the agency concluded that an inspection 
of the container was not necessary to address the apparent 
noncompliance. 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 in August. 

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 [CRT] rule's 
notification provision." Nonetheless, the Deputy Director of the 
agency's Office of Civil Enforcement 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. 

We believe that EPA's contention, that a focus on enforcement should 
await the effects of an education program, has not been substantiated 
by the facts. This view implies that violations to date have resulted 
largely from unawareness of the rule and not from willful disregard for 
it. This implication, however, has clearly not been borne out. With 
very 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. 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, nor does it have plans to develop 
such a program. 

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 11] 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, (1) amending RCRA regulations 
to include exports of used electronics posing health or environmental 
risks when disassembled or reclaimed, to expand the scope of the CRT 
rule, and/or to revise the regulatory definition of hazardous waste, 
(2) submitting a legislative package to Congress for ratifying the 
Basel Convention, and (3) working with Customs and Border Protection 
and with the International Trade Commission to improve identification 
and tracking of exported used electronics. 

* 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 action 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. 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. 

* 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 
exporting countries stop shipments of waste if they have reason to 
believe that the waste will not be handled in an environmentally sound 
manner, as well prohibit exports to countries that have prohibited 
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 the U.S. 
system have significant distinctions. 

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 12] Passage of such legislation would 
complete the prerequisites to ratification and, in effect, would make 
the United States party to the Basel Convention. Although the 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 to date not been 
submitted to Congress. According to EPA Solid Waste officials, the 
agency has not submitted the legislative package to Congress because, 
at present, it has other priorities for Congressional attention. 

* 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. At present, 
the schedule's codes do not enable identification of used electronics, 
nor do they distinguish between 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 no such code exists for used electronics. U.S. exporters can use 8- 
or 10-digit codes, which helps Customs and Border Patrol officials 
track more 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's 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 others. 

Because of EPA's enforcement and regulatory shortcomings, we 
recommended in our August 2008 report 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. We maintain, 
however, that the recommendations are fair and well supported, and that 
a commitment on EPA's part to address these issues is appropriate. 

Mr. Chairman, this concludes my prepared statement. I would be happy to 
respond to any questions that you or Members of the Subcommittee may 
have. 

GAO Contact and Staff Acknowledgments: 

For further information about this testimony, please contact me at 
(202) 512-3841. Steve Elstein, Assistant Director; Nathan Anderson; 
Elizabeth Beardsley; Mark Braza; Ellen Chu; Paul Kazemersky; and Arvin 
Wu also made key contributions to this statement. 

[End of section] 

Footnotes: 

[1] GAO, Electronic Waste: EPA Needs to Better Control Harmful U.S. 
Exports through Stronger Enforcement and More Comprehensive Regulation, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-1044] (Washington, 
D.C.: Aug. 28, 2008). 

[2] Three others indicated that 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. 

[3] 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. 

[4] 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 government(s) 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. 

[5] The Basel Convention also prohibits movement of waste between 
parties and non-parties, 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. 

[6] 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, December 2005. The Basel Convention has a network 
of 14 regional centers that assist party countries in controlling the 
transboundary movement of hazardous wastes. 

[7] 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. Xia Huo et al., "Elevated Blood 
Lead Levels of Children in Guiyu, an Electronic Waste Recycling Town in 
China," Environmental Health Perspectives, vol. 115, no. July 7, 2007. 

[8] Regional Workshop on the Environmentally Sound Management of E- 
Wastes, Siem Reap, Cambodia, March 13-15, 2007. 

[9] 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. 

[10] Six others requested more information about our purchase offer; 2 
indicated they would sell us only working CRTs; and 3 others said they 
would not do business with us because they did not export nonworking 
CRTs. 

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

[12] 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 prior to 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. 

[End of section] 

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