Saturday, December 10, 2011

The Global Outsourcing of Electronic Recycling -- Profits at What Costs?

Yesterday's New York Times ran an article, which I shared with some of my collaborators and students, and one already responded with the following message: It breaks my heart whenever I hear this kind of news. A big powerful country should not take advantage of its position.

The article, "Lead from Old U.S. Batteries Sent to Mexico Raises Risk," focuses on the immense health costs and environmental damage from outsourcing of electronic waste recycling to Mexico, a practice that has grown over the past several years.

The article is filled with ironies.

According to the article: The rising flow of batteries is a result of strict new Environmental Protection Agency standards on lead pollution, which make domestic recycling more difficult and expensive, but do not prohibit companies from exporting the work and the danger to countries where standards are low and enforcement is lax.

Also, according to the article, "lead is gold" and the American car battery industry likes to boast that it has the highest recycling rate for any commodity — 97 percent of the lead is recycled — and most states have laws mandating that stores take back old batteries. Whether deposited at the store where they were purchased or with a local mechanic, used batteries are redirected to recycling plants, where the real goal is not environmental stewardship but extracting the precious lead that is the gold of a protean trading system where traceability is impossible.

By outsourcing electronic recycling to Mexico not only are domestic recyclers in the US being hurt economically, but Mexicans who reside near recycling plants that do not adhere to proper lead recovery standards are faced with extraordinary health risks and negative impacts. There are schools located close to such facilities and more and more children are being identified with high lead amounts in their blood. Lead leads to neurological disorders, delayed/stunted learning, and behavioral problems.

I have conducted research on environmental sustainability for about 15 years now and have written both papers and books on the subject with my doctoral students who continue to produce scholarship on this topic. One of my most heavily cited papers is a paper with my former doctoral student, Fuminori Toyasaki, who is now a Professor at York University in Canada.

The paper is: Reverse Supply Chain Management and Electronic Waste Recycling: A Multitiered Network Equilibrium Framework for E-Cycling, Transportation Research E 41: (2005) pp 1-28.

Several of my former doctoral students, who are now all professors at business schools, just had a co-authored paper accepted on closed loop supply chains that is also relevant to electronic recycling. The paper, The Closed-loop Supply Chain Network with Competition, Distribution Channel Investment, and Uncertainties, by Qiang Qiang, Ke Ke, Trisha Anderson, and June Dong, will appear in OMEGA -The International Journal of Management Science.

Another relevant article of ours, Environmental and Cost Synergy in Supply Chain Network Integration in Mergers and Acquisitions, co-authored with Trisha Woolley (nee Anderson) quantified synergies, including environmental ones, associated with mergers and acquisitions, a topic of clear relevance to this application domain.

Along with Dr. Toyasaki, Professor Tina Wakolbinger of the Vienna University of Economics and Business and I are now completing a study on outsourcing, regulation, and electronic recycling.

I lived in Mexico the summer between my graduation from high school and my freshman year at Brown University. That experience remains one of my most wondrous ones of living in another country.

Businesses must look at the entire product supply chain life cycle to ensure that it is socially responsible and environmentally sound. Outsourcing to countries with low environmental awareness and poor environmental standards monitoring is contrary to civilized business practices.

Besides, what is more important than a company's reputation!

For an informative and accessible presentation on e-cycling, delivered by my husband, who also provided the above collage of images, see: Our Campus - Our Planet at the University of Hartford Freshman Orientation (pdf)