1 Metropolitan Washington Council of Governments Electronic Processing & Recycling May 20, 2004 Michael Keough President E-Structors, Inc.

2 The Problem –The Numbers –Environmental Compliance –Security The Industry Choices –Storage –Disposal –Donation –De-Manufacture –Destruction The E-Structors Solution –New Breed of E-Recycling

3 The Problem –The Numbers The latest projection estimates that more than 63 million computers will be retired in the United States by the year Recycling industry resources estimate that between 50-80% of the e- waste collected for recycling in the U.S. is not recycled domestically, but is exported to developing countries in Asia. As a result of HDTV technologies and plasma screens, an estimated 400 million televisions will become technically obsolete in this decade. Only 11% of the 315 million computers rendered obsolete by 2004 will be recycled in the U.S. (National Safety Council estimate).

4 The Problem –Environmental Compliance Electronic materials is a hazardous material as defined by the EPA in the 1980 CERCLA act, also known as the Superfund Law. The United States is the largest generator of e-waste in the world and the only country without the legislation in place to handle it properly. About 70% of heavy metals found in landfills (including mercury and cadmium) come from electronic discards.

5 The Problem –Security Anecdotal information (see article on North Carolina) –In January 2003, two MIT graduate students, Simson Garfinkel and Abhi Shelat, published their findings regarding data cleansing in the secondary market. They bought 158 drives from used computer equipment retailers and eBay-like auctions. 129 were functional, and of those, only 12% had been properly sanitized. The rest surrendered sensitive information to recovery techniques that are readily available to any skilled IT professional. Information consisted of 675 Word documents, 566 PowerPoint presentations, 5,000 credit card numbers, and 9,500 messages, as well as love letters, pornography, and highly sensitive corporate information.

6 The Problem –Security Costs of permanently deleting data from a given computer is cost prohibitive. –Aberdeen estimates that the data cleansing process will range from a low of $50 to an average of $126 per disk cleansed. Improperly disposing of IT Assets with software intact may violate agreements. –The watchdog group Business Software Alliance (BSA) weighed in on September 2003: “If a company breaches its software license agreements by copyright infringement, or if old software falls into unlicensed hands, the company getting rid of the software and the recipient could face legal action that includes paying penalties of thousands of dollars.”

7 Current Processing Alternatives Storage Disposal Donation De-Manufacturing Destruction

8 Industry Alternatives SolutionSecurityEnvironmentCosts Storage Warehouses, conference rooms, storage rooms, etc. Premise Security, in most cases, none. Critical Data is retrievable, Software licensing agreements are violated. According to the EPA and RECRA, more than 100 pounds of stored electronic components not intended for disposal or recycling is considered hazardous waste. Your cost per square foot. How can that space be better utilized? Handling and Insurance. Disposal Dumpsters, Landfills Critical Data is retrievable, Software licensing agreements are violated. About 70% of the heavy metals (mercury, cadmium) found in landfills come from electronic waste. If it does not enter the waste stream in the US, it is exported to landfills worldwide Under the 1980 CERCLA Act, also known as the Superfund Law, the EPA finds contaminated sites, finds out who is responsible and gives them the bill. Any company who’s PC is found in a landfill will pay. Hauling rates and penalty fees from waste vendors. Donation Schools, Churches & Non-profit Organizations Critical Data is retrievable, Software licensing agreements are violated. These groups want only the latest equipment and in many cases most donated equipment winds up in the nation’s waste stream or is exported. See Disposal Environmental issues above. Once your equipment has been donated, what is your exposure? See Disposal costs above. De-Manufacture Computer “Recyclers”, Asset Management Firms Critical Data is retrievable, Software licensing agreements are violated. Facilities are often un-secure These firms will manually extract any valuable components from these electronics, export them or sell them on E-Bay and toss the remaining material in the dumpster. Usually these firms have a minimum standard on the types of material they will receive, These firms are either free or may charge a small per pound processing fee. Some may offer rebates on collected material or in some instances pay for your equipment. Destruction E-Recycling Equipment and all associated data is shredded into 1.5” pieces and rendered irretrievable. Serial numbers and asset tags are either removed or destroyed in process. Facilities are often secure Once shredded, the material is separated and 100% recycled into future products. Nothing resulting from this process EVER enters the nation’s waste stream. Price per pound processing charge or flat pricing for monitors in some instances.

9 Why is E-Structors different? Mechanically destroys all materials No de-manufacturing No re-sale of materials No exporting of any materials 100% recycling of processed materials ESI owned transportation vehicles Local, Regional & Nationwide Coverage

10 E-Structors Processing Solution –Shredding System: Hydraulic Shredding Technology Designed to accomplish several objectives –Destroy Sensitive Information –Provide Particle Liberation Minimize labor needs while maximizing separation –Separation System: Eddy-Current & Magnetic Technologies Eddy-Current System –Rare earth magnets used to create electronic fields –Produces a negative charge on non-ferrous materials »Repels materials as the flow through the field »Separates based on material density Cross-Belt Magnets –Separates Ferrous Steel from other materials

11 Shredding System

12 Separation System

13 Finished Products Ferrous Metals (Steel) Non-Ferrous Metals E-Scrap (Non-metallic) E-Structors parent company, Integrated Waste Analysts, Inc. provides logistics support for all other materials being recycled.

14 Contact Information E-Structors, Inc.Mike Keough 6660 Santa Barbara RoadPresident Suite 25 Elkridge, MD phone fax