E-Waste: Criminal Verdict May Spell Tighter Regulation on the Horizon

In the first case of its kind, a Colorado jury has returned a guilty verdict in a criminal case against an electronic waste recycling company and two of its executives for illegally exporting e-waste.  Electronic waste, or “e-waste” as it is known, consists of discarded electronic devices such as obsolete computers or cathode ray tubes (CRTs). The implications of this case are broad and the convictions could serve as a catalyst for further regulation of e-waste.

On December 21, 2012, after an 11-day trial, the jury convicted Executive Recycling, Inc. and two of its executives on multiple criminal counts, including illegal hazardous waste export. Executive Recycling is an e-waste recycling company headquartered in Englewood, Colorado, which collects e-waste from businesses, government entities, and private households.  Although the company had stated that the waste would be safely and legally disposed within the United States, the government alleged that Executive Recycling sent more than 300 shipments of e-waste overseas, including more than 100,000 lead-containing CRTs.

The Resource Conservation and Recovery Act (RCRA), prohibits the export of hazardous waste from the United States without express permission from Environmental Protection Agency (EPA) and the receiving nation’s competent authority.  Although twenty-five e-waste recycling laws have been enacted at the state and local level since 2003, there has been no comparable e-waste-specific legislation at the federal level.  Two Congressional bills prohibiting the export of a large category of e-waste were introduced in the House and Senate in 2011, but remain in Committee.  Proponents of broader e-waste regulations are hopeful that the Executive Recycling case will spur federal legislative activity in 2013.

In the meantime, manufacturers and retailers of electronic devices would be wise to exercise careful due diligence when contracting with e-waste recyclers.  Some strategic options to consider include the following:

• Investigate whether EPA or any federal, state, or local agency has sanctioned an e-waste recycler for illegal exportation prior to engaging that recycler;
• Add provisions to service contracts with e-waste recyclers prohibiting the exportation of e-waste and indemnifying the customer from liability in the event that e-waste is nevertheless exported;
• Include an assessment of e-waste recycling procedures as part of environmental, health, and safety audits, with an emphasis on verifying that documentation from recycling companies reflects domestic recycling; and/or
• Provide customers and retailers that purchase electronic devices manufactured, assembled, or sold by your company with a list of recycling companies that are willing to certify that they will not export e-waste.

For a more extensive description of this case, go here.

UPDATE (4/10/2013): Criminal enforcement authorities have brought additional cases against companies for violating environmental laws governing e-waste. For more information, read here.

© Arnold & Porter Kaye Scholer LLP 2013 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.