1. Understanding and Examining the Impacts of Orphan Products and ‘White Box’ Products on Emerging Electronics Recycling Systems Jason Linnell, NCER Walter Alcorn, Alcorn Consulting Terri Linger, IMTS Stephanie Smith, IMTS

2. National Center for Electronics Recycling Mission: coordinate initiatives targeting the recycling of end-of-life electronics in the U.S. and support actions to move towards a national system Mission: coordinate initiatives targeting the recycling of end-of-life electronics in the U.S. and support actions to move towards a national system –Incorporated as non-profit in WV, 501 (c)(3) Part of Mid-Atlantic Recycling Center for End-of- life Electronics (MARCEE): other partners IMTS, PAZ, SDR Technologies, WVU Polymer Research Part of Mid-Atlantic Recycling Center for End-of- life Electronics (MARCEE): other partners IMTS, PAZ, SDR Technologies, WVU Polymer Research Manufacturer-led organization – leading companies on environmental initiatives on Advisory Committee Manufacturer-led organization – leading companies on environmental initiatives on Advisory Committee

3. NCER Initial Activities Initial Project Ideas: determined through survey of manufacturers Initial Project Ideas: determined through survey of manufacturers –Orphan/White Box –Multi-State Third Party Organization –Data Clearinghouse –News Articles

4. Why Orphan/White Box Research? Existence known, but not quantities/ characteristics Existence known, but not quantities/ characteristics Goal: improve identification of orphan and white box products, better understanding of impact Goal: improve identification of orphan and white box products, better understanding of impact ID helps ensure level playing field in electronics recycling systems ID helps ensure level playing field in electronics recycling systems

5. Orphan/White Box Definitions Orphan products: waste for which a manufacturer cannot be identified or waste for which its manufacturer is no longer in business Orphan products: waste for which a manufacturer cannot be identified or waste for which its manufacturer is no longer in business –Several definition variations in legislation White box: no agreed-upon definition White box: no agreed-upon definition –Usually products with a no-name brand from a non- major vendor by an assembler, or a custom-built computer with name-brand internal components –Defined for the first time in new Washington State legislation

6. Impacts of Orphan/WB on Financing Systems Orphans: Orphans: –Advanced Fee Systems (ARF): no impact if all covered product returns are funded –Producer Responsibility (PR) Systems: need to find responsible manufacturer or others costs raised White Box products: White Box products: –ARF: White box makers usually smaller sellers that may escape fee if not informed/enforced –PR: difficult to track history of smaller white box makers to determine if true orphan CA, ME, MD: laws now require brand label CA, ME, MD: laws now require brand label

7. Orphans in Existing Systems California ARF System: California ARF System: –No orphan provisions, collected products recycled regardless of brand Maine PR System: Maine PR System: –Strong orphan component, DEP required to ID, manufacturers billed for “pro rata share” Maryland Manufacturer Reg Fee System: Maryland Manufacturer Reg Fee System: –No orphan provision, no assignment of responsibility at time of recycling

8. White Boxes in Existing Systems California ARF System: California ARF System: –No definition, but brand label required, and all sellers must collect fee However, desktops not covered, only laptops/monitors for WB However, desktops not covered, only laptops/monitors for WB Maine PR System: Maine PR System: –Brand label required for covered products and desktops, WB laptop/monitor makers responsible for returns + orphans Maryland Manufacturer Reg Fee System: Maryland Manufacturer Reg Fee System: –Covers desktop computers, if WB manufacturers makes > 1000/year, registration required, brand label required

9. Forthcoming System in WA PR system signed by Gov on Mar 24, 2006 PR system signed by Gov on Mar 24, 2006 Defines white box manufacturer, limits their ability for individual plan: Defines white box manufacturer, limits their ability for individual plan: –“White box manufacturer" means a person who manufactured unbranded covered electronic products offered for sale in the state within ten years prior to a program year for televisions or within five years prior to a program year for desktop computers, laptop or portable computers, or computer monitors Requires orphan determination for calculation of “return” and “equivalent” shares of each manufacturer Requires orphan determination for calculation of “return” and “equivalent” shares of each manufacturer

10. Orphan-White Box Project Look at existing brand summaries Look at existing brand summaries –Determine possible brand responsibility Goal: improved identification of orphan products and better identification of products from "white box" manufacturers Goal: improved identification of orphan products and better identification of products from "white box" manufacturers Orphan Definition? Orphan Definition? –Usually a waste for which a manufacturer can not be identified or waste for which its manufacturer is no longer in business –Key question: does brand/manufacturer have a successor? Does Superfund-type successor liability apply?

11. Orphan-White Box Project Overview Solicited stakeholder participation in NCER Project Committee Solicited stakeholder participation in NCER Project Committee –Govt, industry, recyclers, NGOs Held conference calls, developed documents on: Held conference calls, developed documents on: –Orphan Definitions –Orphan Decision Tree –Top brands not claimed in Maine NCER Report on Orphan/White Box NCER Report on Orphan/White Box –Examine major issues, input from project committee

12. National Return Share Estimates http://www.electronicsrecycling.org/cdr/BrandSorting.aspx

13. Compiling Brand Data Four known sources of recent brand data Four known sources of recent brand data –Florida Electronics Brand Distribution Study (December 05 Updated Reports) – only ongoing program –Hennepin County, MN “Consumer Electronics Brand Tally” (2004) – largest sample size –Good Guys Electronics Take-back Pilot Project (2004, Washington State) – TVs only –Staples Reverse Distribution Pilot (2004, New England states) – smallest sample size Methodology: compile by desktops, laptops, TVs, monitors Methodology: compile by desktops, laptops, TVs, monitors –Average return shares from each study (different than ME method of combining unit totals to average)

14. Brand Data Observations Regional differences in brand return shares Regional differences in brand return shares –Apple monitors: 4.9%, 11.6% and 18.8% in 3 studies –Variations in sample sizes exacerbate regional differences –Compiling unit totals skews towards largest study (Hennepin County) Limited sample sizes from limited regions Limited sample sizes from limited regions –Is data representative of true “national” potential returns

15. Investigating Orphans

16. Maine DEP Orphan Determinations Required in 2004 Maine law Required in 2004 Maine law DEP publishes list of brands and their manufacturers DEP publishes list of brands and their manufacturers –If unclaimed, research directories, other public sources for information Regulations allow for “de minimis” shares Regulations allow for “de minimis” shares –If manufacturer has less than 1% return share, no pro rata share (i.e. orphan) needed –NCER data show, in TVs, 24 brands have at least 1% return, equals 86% of total returns

17. NCER Orphan Classifications “Orphan” includes many scenarios for particular brands returned “Orphan” includes many scenarios for particular brands returned –Need for more precise terms True Orphans: brand and manufacturer no longer exist, evidence thru bankruptcy records True Orphans: brand and manufacturer no longer exist, evidence thru bankruptcy records De Minimis Orphans: due to large number of brands returned in small quantities, tracking may not be possible or cost effective; can change with new info De Minimis Orphans: due to large number of brands returned in small quantities, tracking may not be possible or cost effective; can change with new info

18. NCER Orphan Classifications cont’d Non-Responsive Manufacturers (2 categories): Non-Responsive Manufacturers (2 categories): –Non-compliant orphans: manufacturer refuses to accept responsibility, “abandoned waste” –Disputed Brands: changing brand ownership over time, changing product lines, questionable brand lineage False Orphans: data error in brand counting, mis-identified “brands” from markings/labels on product False Orphans: data error in brand counting, mis-identified “brands” from markings/labels on product

19. Brand Data Management System Created as a result of NCER Orphan/White Box research Created as a result of NCER Orphan/White Box research –Could be national clearinghouse of brand return data Compilation of brand data sources Compilation of brand data sources –Standardized brand terms Publicly accessible and allows for multiple scenarios/conditions on data Publicly accessible and allows for multiple scenarios/conditions on data

20. BDMS Back-end Technologies SQL Server,.NET Platform, Reporting Engine Flexible database to allow for future growth Back end Administration tools for data entry and brand information management Welcome Page Welcome Page Navigation (lists, reports) Dashboard effect to quickly view rankings/ Brand Data Each Brand name is clickable leading to additional details about that Brand. Shows calculated Brand Return shares by Product Type and also the total number of Brands represented in each Product Category (e.g. 436 Television brands reported).

22. Brand Compliance ListBrand Compliance List Quickly view status of Brands in the system (Orphan, Claimed, Unclaimed/ Unknown, Unclaimed/Pending, Unclaimed/Notified Each Brand Name is a link leading to additional Brand Details Each Manufacturer name is a link leading to additional Manufacturer Detail AliasesAliases Column 2 shows Brand Aliases that have been identified for a particular Brand (e.g., Acer & Acer View) – prevents duplicate data counts Multiple ManufacturersMultiple Manufacturers List shows if Brand has been claimed by more than one Manufacturer (e.g., Advent) BDMS – Compliance List Above is a sample report using Maine Data –additional data will be incorporated as we receive it (e.g., Washington)

24. BDMS – Sample Report ReportsReports Sample Monitor Detail Report Sorted by highest unit return share Brand Name will link to Brand Detail showing breakdown of return % Use the Filter Options on all Reports to view data in a preferred format Customize views: Report Date, Data source(s) to include Product Type, Claimed/Regulated Brands vs. All Brands *Note: Above is a SAMPLE report - Return shares will take into consideration data sources selected along with products accepted within those data sources to ensure accurate overall return shares.

25. SAMPLE

27. BDMS Live to public June 2006 Live to public June 2006 Accessible via NCER/CDR web sites Accessible via NCER/CDR web sites –http://www.ElectronicsRecycling.org/NCER http://www.ElectronicsRecycling.org/NCER –http://www.ElectronicsRecycling.org/CDR http://www.ElectronicsRecycling.org/CDR Send BDMS feedback to Send BDMS feedback to –Jason Linnell, NCER jlinnell@electronicsrecycling.org jlinnell@electronicsrecycling.org

28. Lessons Learned Orphan/WB impact depends on financing mechanism Orphan/WB impact depends on financing mechanism Definitions unclear/informal Definitions unclear/informal –“Orphan” misnomer? Unclaimed Product Brand ownership info not readily available for numerous small quantity brands Brand ownership info not readily available for numerous small quantity brands Brand data limited in quantity and geographic coverage Brand data limited in quantity and geographic coverage –Region specific data does vary – possibly due to stronger retailers, education/business contracts, etc. –Need for more rigorous statistical analysis

29. Thank You!