RECYCLING E-WASTE: A SOLUTION THROUGH THIRD PARTY RECYCLER

Abstract

With 50 million metric tons of e‐ waste disposed worldwide each year, e-waste recycling has become an increasingly important issue globally. The U.S. alone generated a total of 3.01 million tons of e-waste in 2007, of which only 13.6% was recycled. Improper disposal of e-waste poses an immediate and prominent threat to environmental and public health. Many electronic vendors have initiated either the Expended Producer Responsibility or the Producer Stewardship and launched manufacturer-sponsored recycling programs. Many of these programs, however, are in trouble because of the fee generated for recycling, thereby blocking the road for effective actions. In this paper, we propose a third party recycler model as an alternative solution to e-waste recycling. The third party recycler works as the intermediary between consumers (source of e-waste) and electronic vendors (recipient of recycled items) to recycle disposed electronics properly. The proposed information system is composed of five modules and supports the business operations and functionalities of the third party recycler. We hope the third party recycler structure will be adopted globally in the near future.

Full text

The 9th International Conference on Electronic Business, Macau, November 30 - December 4, 2009
RECYCLING E-WASTE: A SOLUTION THROUGH THIRD PARTY RECYCLER
Hua Zhong1, Shu Schiller2
1School of Management and Economics
Beijing Institute of Technology (BIT), Beijing, China
2Department of Information Systems & Operations Management
Raj Soin College of Business
Wright State University, Dayton, OH, USA
1zhonghua@bit.edu.cn; 2shu.schiller@wright.edu
Abstract
With 50 million metric tons of e
‐
waste disposed
worldwide each year, e-waste recycling has
become an increasingly important issue globally.
The U.S. alone generated a total of 3.01 million
tons of e-waste in 2007, of which only 13.6% was
recycled. Improper disposal of e-waste poses an
immediate and prominent threat to environmental
and public health. Many electronic vendors have
initiated either the Expended Producer
Responsibility or the Producer Stewardship and
launched manufacturer-sponsored recycling
programs. Many of these programs, however, are in
trouble because of the fee generated for recycling,
thereby blocking the road for effective actions. In
this paper, we propose a third party recycler model
as an alternative solution to e-waste recycling. The
third party recycler works as the intermediary
between consumers (source of e-waste) and
electronic vendors (recipient of recycled items) to
recycle disposed electronics properly. The
proposed information system is composed of five
modules and supports the business operations and
functionalities of the third party recycler. We hope
the third party recycler structure will be adopted
globally in the near future.
Keywords: e-waste, recycle, extended producer
responsibility, producer stewardship, information
system
Introduction
“Computers don’t have exhaust pipes, but their
environmental impact is no longer invisible. The
cumulative life cycles of billions of machines, from
manufacture to usage to disposal, are combining
into an environmental footprint large enough to
attract widespread attention.” [18]
The advent of modern computing
technologies is now providing powerful, affordable,
and easy-to-use electronic devices and equipments
to individual and corporate business users in
support of communication, collaboration, and
business operations, most of which are now carried
out in a global manner. As a result, people have
become increasingly dependent on such devices
and equipment and consume a large amount of
electronics in their everyday activities.
Despite the benefits, fast-growing computing
technologies, unfortunately, have a dark side. The
life span of electronics has been continuously
shrinking because of the introduction of more
superior and technologically advanced items [16].
Consequently, older computing devices are being
replaced at an accelerated pace and generating an
astonishingly large amount of e-waste, the numbers
of which number continue to increase every year.
For instance, the world produces 20 to 50 million
metric tons of e-waste annually [4]. China alone
adds 2 million tons of e-waste and the number
increases at rate of more than 10% each year, [20]
American consumers replace their mobile phones
every one and half years on average [14],
producing 130 million discarded cell phones
annually nation wide [12]. In China, 70 million
mobiles phone and 5 million PCs are being
discarded each year [21]. Likewise, more than 50
million PCs are disposed in the U.S. each year [18],
with this number accounting for only 10% of the
disposable computers [12]. The majority of defunct
computers are not being used and simply collect
dust. In the past decade, governments and
organizations worldwide have been investigating
the causes and impacts of e-waste and have made
great efforts to regulate the collecting and recycling
of e-waste through legislative and public means.
Extended Producer Responsibility (EPR) is so far
the most widely adopted legislation, especially in
the United States. Such recycling structure,
however, has long been challenged by the fee
generated for recycling and will be addressed by
either the producer responsibility model or the
consumer responsibility model.
In this paper, we propose a third party
recycler model as an alternative solution to e-waste
recycling. The third party recycler performs as the
intermediary between consumers (source of
e-waste) and electronic vendors (recipient of
recycled items) to collect, inspect, recycle, and

966 Hua Zhong, Shu Schiller
The 9th International Conference on Electronic Business, Macau, November 30 - December 4, 2009
distribute the usable parts of electronics and to
dispose of unusable parts properly.
In this paper, the next section introduces the
background of e-waste and challenges related to the
recycling of it. In section three, we will discuss
EPR, the most widely adopted solutions to e-waste
recycling. This section will be followed by the
introduction to the third party recycler solution and
its system modules. The paper concludes with the
contribution of the proposed model and the future
plans for adoption of the model.
Background of E-Waste Recycling
Electronic waste (e-waste), sometimes called Waste
Electrical and Electronic Equipment (WEEE), has
been defined loosely to refer to any electronic
products and appliances near or at the end of their
useful life that have become obsolete, broken, or
discarded [2] [19]. The European Union (EU)’s
WEEE Directive uses ten product categories to
describe e-waste to include IT and
telecommunication equipment, household
appliances, consumer equipment, and so forth [9].
Generally speaking, e-wastes are commonly seen
as discarded computers (desktop and laptop),
monitors, video game consoles, mobile phones,
printers, telephones, fax machines, TVs, VCRs,
DVD players, video cameras, stereo systems,
digital music players, and other electronic
equipment.
The prevalent problem of e-waste recycling
mainly comes from three issues. First, the amount
of e-waste generated each year is enormous and
keeps rising. According to the 2007 report released
by the United States Environmental Protection
Agency (EPA), the U.S. generated a total of 3.01
million tons of e-waste in 2007, an increase of
37.4% from five years ago. Unfortunately, only
13.6% of the 3.01 million tons were recycled,
leaving 2.6 million tons of e-waste dumped into
landfills and incinerators [8]. According to
Electronics Take Back Coalition, an environmental
activist group, all human kind globally generate up
to 50 million tons of e-waste every year [4];
however, only a small percentage of this amount of
e-waste is being recycled and 70% of the global
e-waste is being dumped in China at the rate of
2,800 tons per hour [20]. Although the percentage
of e-waste recycled has been slowly rising in the
past decade, in the U.S. it stubbornly stayed in the
lower ten percent range.
Second, toxic substances in e-waste are
another aspect to the resisting to recycling e-waste
products.. E-waste contains toxic materials, such as
lead, mercury, cadmium, brominated flame
retardants (BFRs), plastics, and beryllium, all of
which are harmful to humans and their
environment [3]. In the U.S. and Europe, e-waste
account from one to four percent of solid waste and
is responsible for more than 70% of toxic waste
annually [7]. Such hazardous material can leak into
the groundwater when buried, contaminating the
landfills, or it can enter the air through burning or
dust [12].
Unlike clothes donated to the Salvation Army,
e-waste has to be recycled properly because of the
toxic material involved. Improper disposal of
e-waste will pose an immediate and prominent
threat to environmental and public health.
Some considerable amount of e-waste, meant
to be recycled are, in fact, handled and processed
through improper or even illegal means. Each year,
tons of e-waste is transported to developing
countries, such as China and South Africa, where
valuable parts of materials, such as microchips, are
stripped off by skilled workers and then later
repackaged and resold to the electronics market.
Some of these dangerous counterfeits made their
way to, unfortunately, U.S. military computers and
satellites [10].
The same story continues in the sweatshops
of e-waste disassembling factories in India.
Workers, some young children, dig in the piles of
old computers, hard drives, and circuit boards,
searching for precious metal such as gold, copper,
and palladium [15]. Without the regulations from
the local government, Indian produces 1.5 million
tons of e-waste a year and illegally imports at least
half of that amount from the West [15].
Last but not the least, individual consumers
who are willing to dispose their used electronics
properly often fail because of the lack of simple
and convenient channels for recycling. Three out of
four consumers find themselves clueless as how
and where to dispose e-waste [12]. Instead of
letting e-waste end up at the curb, governments and
organizations around the globe are now taking
effective actions toward the proper disposal and
recycling of e-waste. Building a national e-waste
recycling infrastructure for consumers and vendors
becomes one of the most immediate and logical
solutions for most countries.
Extended Producer Responsibility
The daunting fact of e-waste has caught the
attention of heads of governments and
organizations when they realized that a joint effort
between the parties is more than necessary to
address e-waste recycling successfully. Introduced
by Organization for Economic Cooperation and
Development in 1998 in U.S., the Extended
Producer Responsibility (EPR), also called
Producer Stewardship (PS), makes each producer
responsible for “collecting and processing its own
products at the end of their life” [16, p.337]. The
European Union defines a producer as “any person

Recycling E-Waste: a Solution through Third Party Recycler 967
The 9th International Conference on Electronic Business, Macau, November 30 - December 4, 2009
who 1) manufactures and sells own brand electrical
and electronic equipment, 2) resells equipment
produced by other suppliers under its own brand, or
3) imports or exports electrical and electronic
equipment on a professional basis into a Member
State” (European Union, 2002, p. L 37/27). The
EPR, therefore, requests producers to take
responsibility and minimize its negative
environmental impacts from designing recyclable
products in the first place (eco-design) to collecting
those to be disposed at the end of the products’
useful lives.
Some major electronic vendors have initiated
producer stewardship and have launched
manufacturer-sponsored recycling programs to
facilitate the recycling of e-waste, making good
public image by taking the stand in support of
environmental protection and green IT. Among this
league are some well-known leaders in the
computing and related industry. In 2005,Apple Inc.
launched an iPod recycling program that allows
users to trade their used iPods for a 10 percent
discount on a new one [18]. Sony launched the
Take Back Recycling Program in U.S. in 2007,
allowing consumers to recycle all Sony-branded
products for free at 80 Waste Management Recycle
America eCycling drop-off centers throughout the
country [13]. As early as 1987, Hewlett-Packard
(HP) launched a series of e-waste initiatives, one of
which provides a pre-paid envelope to return the
used printer cartridge for recycling with each new
cartridge sold. By July 2007, HP has recycled more
than 1 billion pounds of electronics and print
cartridges around the world [13].
The vendor-sponsored recycling programs
took a big leap toward effective e-waste recycling,
largely because of pressure from government
legislation. For example, in the U.S., so far 20
out of 50 states and New York City have passed
e-waste legislation mandating e-waste recycling [6].
Another 13 states proposed the e-waste recycling
law in 2009 to be voted by the states [5]. Similarly,
in Canada, the Information Technology Association
of Canada and Electro-Federation Canada together
funded the Electronics Product Stewardship
Canada (EPSC) in 2003 to “design, promote, and
implement sustainable solutions for recycling
end-of-life electronics.” [1]. In Europe, the
Directive on WEEE and the Restriction of Use of
Certain Hazardous Substances (ROHS) have been
adopted by member countries to guide the
collection, treatment, and recycling of e-waste [17].
One big obstacle to the adoption of EPR
initiatives appears to be the establishment of the fee
structure to address the costs involved in e-waste
collection, disposal, and management. The current
suggestion is for the producers, as defined by EPR
regulations, to take responsibility for the costs. In
the U.S., nineteen of the twenty states who have
passed the e-waste legislation are adopting a
producer responsibility code which require
manufactures and vendors pay for the recycling
costs, which includes providing a free recycling
option to consumers. By contrast, California
switched such financial burden to the consumers
(consumer responsibility), charging a $6 to $10
disposal fee on every computer and television
purchased [11]. An often seen dilemma is that
producers are not willing to pay for recycling
because such costs, very likely, were not being
considered in the initial pricing model; on the other
hand, consumers are reluctant to take such
responsibility because in some states, there is still
option to trash e-waste for free, or they may choose
not to recycle at all.
Third Party Recycler Solution
An alternative solution to e-waste recycling is to
introduce a third party recycler, who performs as
the intermediary between consumers (source of
e-waste) and electronic vendors (recipient of
recycled items) to collect, inspect, recycle, and
distribute the usable parts of electronics as well as
dispose unusable parts properly. Figure 1 illustrates
the workflow of e-waste recycling through the third
party recycler.
Figure 1: Workflow of E-Waste Recycling through
Third Party Recycler
E-waste recycling starts with the consumer
(individual or corporate business), who generates
an order for his/her electronics. Such interaction
can be initiated through web sites, short text
messages on mobile phones, and phone calls made
through a call center of the recycler. Items to be
recycled will be picked up from the consumer, who
may also drop them off at any designated location.
Once arriving at the recycling center, items will
first be inspected to determine whether they should
be repaired or disassembled.. Electronics that can
be reused will be repaired with data cleaned. For

968 Hua Zhong, Shu Schiller
The 9th International Conference on Electronic Business, Macau, November 30 - December 4, 2009
those to be disassembled, a few options are
available. Refurbishment will be recommended if,
by replacing some key component(s), the item can
perform all functionalities successfully. Some other
parts of the disassembled items will be recycled
and returned to the original producers or other
manufacturers who are willing to take the
recyclable parts. Plastics and metals recovered
from recycled items can be used in new computers
and other products. After disassembling, some parts
can no longer be used and will be sent to the
disposal sites to be treated properly. Both repaired
and refurbished electronics will become available
in markets and shops selling used items, often at a
much lower price than a brand new piece of
equipment..
The third party recycler model allows
consumers to return used products for free, thereby
eliminating the consumers’ financial responsibility
for e-waste recycling. To operate as a
self-sustaining organization, the third party recycler
can make a profit by reselling repaired and
refurbished electronics to used-item markets and by
selling recycled parts to vendors, manufacturers,
and producers. (A more detailed analysis
demonstrating the profitability for the third party
recycler using economic models is presented in a
separate paper.)
Five modules of the E-Waste Recycling
Information System support the functionalities and
business operations of the third party recycler
(Figure 2). The Client Management module
provides a real-time, online inquiry of recycling
orders and the processing information. The
Recycling Processing module manages the
recycling center, documents the information of
repair, disassembling, refurbishment, recycling, and
disposal of electronics. Inventory is maintained in
the Inventory Management module. The
information system also includes accounting
functionalities to process, analyze, and report and
manage costs. The Logistics module collects,
processes, and presents information to support the
reversed supply chain through which producers are
now recipients of recycled items.
Following the conceptual framework of the
third party recycler information system presented
in this section, a development team will analyze
and design the proposed information system, to be
completed by March 2010. The information system
will first be prototyped and tested in mainland
China. Evaluation of system tests will be used for
future revision and improvements.
Figure 2: System Modules of the E-Waste
Recycling Information System
Conclusions
E-waste recycling has become an increasingly
important issue globally. Instead of letting millions
of tons of e-waste be dumped to landfills,
governments and organizations around the world
are now taking effective actions toward the proper
disposal and recycling of e-waste.. In this paper, we
propose a third party recycler model as an
alternative solution for e-waste recycling. The third
party recycler serves as the intermediary between
consumers (source of e-waste) and producers
(recipients of recycled items). By reselling repaired,
refurbished, and recycled electronics and parts to
producers, the recycler is able to maintain
profitability In order to be self-sustaining. The
recycling service thus is provided free of charge to
consumers including both individuals and corporate
businesses. References
[1] Burger, D. E-waste recycling is starting, The
Gazette (Montreal), January 18, 2008, Friday,
EDITORIAL / OP-ED, pp A16.

Recycling E-Waste: a Solution through Third Party Recycler 969
The 9th International Conference on Electronic Business, Macau, November 30 - December 4, 2009
[2] California Integrated Waste Management
Board, 2009, What is E-Waste, retrieved July
29, 2009 from
http://www.ciwmb.ca.gov/electronics/
WhatisEWaste/
[3] Electronics Take Back Coalition (a), E-Waste
Briefing Book: Overview of the e-waste
problem, retrieved July 30, 2009 from
http://www.electronicstakeback.com/legislati
on/Ewaste_Briefing_Book.pdf
[4] Electronics Take Back Coalition (b), Facts
and Figures on E Waste and Recycling,
retrieved October 15, 2009 from
http://www.computertakeback.com/Tools/Fac
ts_and_Figures.pdf
[5] Electronics Take Back Coalition (c), State By
State E
‐
Waste Law Summary, retrieved July
30, 2009
fromhttp://www.electronicstakeback.com/
legislation/States_Summary_2009.pdf
[6] Electronics Take Back Coalition (d), State
Legislation, retrieved July 29, 2009 from
http://www.electronicstakeback.com/legislati
on/state_legislation.htm
[7] Environmental Literacy Council, Cell Phone
Life Cycle, retrieved July 30, 2009 from
http://www.enviroliteracy.org/article.php/111
9.html
[8] EPA (Environmental Protection Agency),
Municipal Solid Waste In the United States,
2007, retrieved July 30, 2009 from
http://www.epa.gov/osw/nonhaz/municipal/p
ubs/msw07-rpt.pdf
[9] European Union. Directive 2002/96/EC of
The European Parliament of 27 January 2003
on Waste Electrical and Electronic
Equipment, Official Journal of the European
Union, 13.2.2003, pp L 37/24-L 37/38.
[10] Grow, B., Tschang, C., Edwards, C., and
Burnsed, B. Dangerous Fakes: How
counterfeit, defective computer components
from China are getting into U.S. warplanes
and ships, Businessweek, October 02, 2008.
[11] Hanselman, S. E., and Pegah, M. “The Wild
Wild Waste: e-Waste”, Proceeding of the
Association of Computing Machinery (ACM)
Special Interest Group on University and
College Computing Services (SIGUCCS),
October 7–10, 2007, Orlando, Florida, USA.
pp 157-162.
[12] Hung, L. Y. Go Green when Junking Gadgets,
The Straits Times (Singapore), April 10, 2007
[13] Jackson, N. M. New Lives for Old
Electronics, Waste Ag e, April 1, 2008, pp 84.
[14] J.D. Power and Associates, U.S. Wireless
Mobile Phone Evaluation Study, 2007.
[15] Pepper, D. Poor Indians Recycle Harmful
'e-waste' into Cash, The Washington Times,
August 11, 2007, pp A08.
[16] Plambeck, E. and Wang, Q. Effects of
E-Waste Regulation on New Product
Introduction, Management Science, 55(3),
March 2009, pp 333–347.
[17] Yu, J., Hills, P. and Welford, R. Extended
Producer Responsibility and Eco-Design
Changes: Perspectives from China,
Corporate Social Responsibility and
Environmental Management, 15, 2008, pp
111–124.
[18] Weiss, A. Can the PC Go Green? Networker,
11(2), 2007, pp 18-25.
[19] Wikipedia, E-Waste, retrieved July 30, 2009
from http://en.wikipedia.org/wiki/E-waste
[20] 倪丽. 浅析我国电子废弃物回收物流网络
优化及发展建议[J]. 市场周刊, 2007, (9),
pp 101-113.
[21] 家电报废高峰来临: 如何让电子垃圾走向
绿色, retrieved October 15, 2009 from
http://mobi.china.com.cn/info/detail/45-1385.
html