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Computer and Peripherals Material Project

Prepared by Meinhardt Infrastructure & Environment Group
for Environment Australia
October 2001
ISBN 0642547734


5. Waste Equipment Pathways

5.1 Australian Manufacturers

Extended producer responsibility for waste computer and peripheral equipment has not yet been incorporated into the ethos of Australian computer manufacturers. While the international parent companies of many Australian manufacturers have implemented a number of environmental initiatives, product stewardship in the Australian computer industry is currently in its infancy.

International manufacturers' initiatives are outlined in Section 7.2, and include a range of features such as design initiatives, take-back schemes and refurbishment of used equipment, however many of these have not been implemented in Australia.

Design of computer equipment is undertaken by international parent companies, often with little input from Australian subsidiaries. Consequently the Australian computer industry benefits from environmental features incorporated into the design of the equipment initiated overseas; conversely, the ability of local subsidiaries to influence design features is limited.

Refurbishment and remanufacture of computer and peripheral equipment is also limited in Australia. As mentioned in Section 2.1, most computer hardware is imported from overseas rather than produced locally; at best it may be assembled locally from imported components. The lack of remanufacturing in Australia is a feature of the lack of computer manufacturing generally.

Recycling and take-back schemes are also limited in scope. The only collection scheme for obsolete computers currently in place is that established by Compaq Computer Australia with funding assistance from the NSW Environment Protection Authority. This scheme (known as the Computer Asset Recovery Service) commenced in January 2000 and focused on large corporations. It does not accept obsolete computers from domestic sources, and has limited geographical coverage of Australia. The NSW EPA advised that over a period of 15 months the service collected approximately 200 tonnes of computers, monitors and related equipment, including items such as fax machines which are outside the scope of this project.

Hewlett Packard also currently has a trade-in program in Australia, whereby old printers are taken back by the manufacturer when customers purchase a new laser printer. The old printers are either recycled or refurbished and resold. However the program is limited to certain models of printers, including limitations on the model of old printer accepted and new model purchased. The extent of participation in this program is not known.

Fuji Xerox Australia has a program for return of printer cartridges. Customers are provided with a recovery box which is collected by arrangement with Fuji Xerox when full. Ricoh Australia has also recently introduced a service for take-back and recycling of toner cartridges. While recovery of cartridges in Australia is more widespread than these two programs, these services are offered by recycling companies rather than the manufacturers. Recycling and disposal pathways are discussed in more detail in the following section.

5.2 Disposal & Recovery Pathways

The fate of waste computers and peripheral equipment following obsolescence will depend upon a number of factors. The use of particular disposal options varies both geographically and between sectors of the community, which is generally equivalent to the level of service provided by commercial, Government or non-Government entities.

Use of particular options also reflects the value placed on the equipment by the owner as well as the wider community. For example, there is often an expectation by an owner of the obsolete equipment that disposal involves further use of the item or its component materials as they ascribe a high value to the purchase and ownership of that equipment. Decisions by the owner of a particular item of equipment made according to these criteria (among others) will result in the computer being reused, stored for future disposal, disposal for recycling, and disposal to landfill.

Figure 5.1 overleaf indicates that each of the disposal options mentioned above is administered by a variety of distinct entities, each providing a service for either commercial or charitable purposes. The disposal path interactions between the various entities are complex, with a web of pathways resulting from overall flow of material.

Computer Equipment Segmentation

5.2.1 Storage

Storage is undertaken by consumers within all sectors, and is also prevalent within certain sectors of the disposal system (e.g. second-hand equipment retailers and non-profit refurbishers). Retention and storage of used equipment is principally related to the perceived or actual value of the equipment, either in fiscal terms or in opportunities for further usefulness.

Users may hold an item in storage out of a sense that the full value of their purchase was not realised before a replacement item was required. This may be influenced by the trend of rapid improvement of computer performance (and therefore premature obsolescence of purchased equipment) or by a company's asset management system. This latter factor may result in the retention of broken or obsolete computer equipment until its value has been fully depreciated. Anecdotal evidence suggests that some organisations continue to store material for considerable periods of time, despite having to pay storage fees for this reason and because of lack of awareness of appropriate disposal options.

Users may also retain equipment as a contingency, in case it may 'come in handy' later. Spare equipment and its constituent components may allow users to replace faulty equipment, either permanently or temporarily. This is particularly the case in organisations with dedicated information technology management units where maintenance and repairs are oriented towards minimising disruption to productivity by faulty equipment.

Second-hand retailers and refurbishers will stockpile materials to facilitate the repair and upgrade of equipment, particularly older components for which new replacements may not be readily available. Non-working equipment, particularly CRTs, may also be stored by refurbishers in response to the environmental and health risks associated with their disposal to landfill, in case economically viable alternatives to landfilling arise in future.

Equipment that has been placed in storage may either be sent for reuse, recycling or disposal. This may occur with or without the equipment being used in the interim. The period of time that may elapse before an item is taken from storage for further disposal will depend principally on the user's decision that it is no longer worthwhile to store the item; the decision to release the equipment from storage may be triggered by a number of factors including the value of the item or availability of storage space. Storage is rarely a viable medium- to long-term option.

The retention period and value of equipment usually follow an inverse relationship, with the value decreasing as the time in storage increases. This in turn will have a subsidiary effect upon the opportunity to dispose of equipment to particular pathways, particularly for reuse.

5.2.2 Re-Use

Re-use involves the reassignment or transfer of ownership for an item of equipment that results in its continued productive use. In many cases, re-use entails the provision of technology to individuals and organisations with lower technology needs or fewer resources than the original owners. Decisions as to the destination of reused computers may rely as much upon the ease and expediency of a particular option as it will on the perceived benefit to be gained by both the disposer and recipient. Re-use may take various forms, and may involve a 'closed' system operating within a user's immediate circle of influence, or an 'open' system involving other consumer sectors and either commercial or non-profit organisations.

Closed systems include household owners passing surplus equipment on to family members (e.g. to children for study and recreational use), and organisations selling surplus equipment to employees. Reassignment of computer equipment is also a closed activity, and occurs within organisations (e.g. computers are allocated to staff depending on their information technology needs, as well as their position within the organisation). Industry sectors may also operate closed re-use operations (e.g. the education sector transfers used computers that are surplus at well-resourced schools to those that are less well-resourced).

Open re-use activities entail the donation, return or sale of used equipment to a separate entity. This transfer of ownership may result in direct re-use (e.g. private sales or donation to local schools and community groups) or preparation and distribution for re-use to third parties by an intermediary organisation operating on a charitable (non-profit) or commercial (profit) basis. Both types of intermediary organisations are described in more detail below.

Nationally, there are a number of non-profit and community organisations involved in recovering waste computers. The activities of these groups generally focus on three things:

It is important to note that the social benefits provided by these groups are significant, and range beyond solely a function of waste computer management.

These organisations may be involved in both re-use and recycling of equipment, however the principal objective of those organisations consulted was the preparation of equipment for re-use, with the recovery of raw materials seen as a subsidiary yet important stage of processing.

Organisations often rely upon volunteer labour or in-kind support from a range of committed bodies and individuals in the community. Several organisations employ 'work-for-the-dole' staff, providing an additional social benefit to the community.

The age of equipment received can vary considerably, however the average standard of computers received is well below that of current 'entry-level' models, indicating an average age of 5 to 10 years. Principal materials received by non-profit organisations are monitors (usually no longer serviceable) and desktop PCs, with peripherals (e.g. printers and cabling) comprising a relatively low fraction of total stock.

Equipment is sourced from a mixture of consumer sectors, and many organisations operate their own drop-off facility or collection system to facilitate this. Other organisations operate out of landfill facilities to separate materials upon their arrival at the landfill, obviating the need for a collection program.

Organisations may send refurbished equipment to identified markets (e.g. disadvantaged children or overseas aid). The quantity of refurbished and dispatched equipment is influenced by the age and condition of received equipment, with one operation reporting that 647 complete PCs (including CPU/case, keyboard and monitor) were shipped using materials from 2,650 received PCs and equivalent components. Another organisation reported that 1,500 out of the 7,000 CRT monitors collected since 1999 had been serviceable.

The high proportion of non-functioning computers and peripheral equipment received by these organisations means that they often become responsible for disposal of large volumes of unusable parts. Since many of these charitable organisations rely solely on donations and small grants, the disposal cost may be beyond the resources of some of these groups. As mentioned in the previous section, re-use organisations frequently stockpile materials, including non-working equipment, particularly if an alternative to landfilling is not immediately available. However, this is dependent on space availability and throughput of materials. Some materials are recycled. There is anecdotal evidence to suggest that some organisations transport unusable parts to overseas countries for further processing and/or reuse.

The financial issue of disposal is further highlighted by the fact that some of these groups receive used equipment donated by large corporations. The corporations may receive some taxation benefits due to the donation to a non-profit organisation. However if the community groups are bearing the cost of ultimate disposal of large volumes of scrap computers, it could be argued that there is some abrogation of financial responsibility by the donor corporations for the (waste) equipment they generated.

The usefulness of reconditioned computers depends greatly on the ability to use particular software, not only in the sense of the hardware being of a sufficient standard to run a particular operating system or application, but also on the ability to afford the purchase of this software. This impacts on the ability to transfer data and to operate computers effectively by users having access to consistent software (i.e. either the same or similar enough to be compatible).

Often software licences purchased by large organisations may be for the whole company rather than each installation, resulting in the donated computers being without a license for the software that they contain breaching licensing laws. One Victorian non-profit refurbishing operation advised that they had recently been instructed by Microsoft to refrain from installing operating system and applications without paying license fees, despite the fact that the software being installed is so old as to no longer be supported by the manufacturer. As recipients of computers from non-profit organisations most often do so out of a lack of funds to purchase equipment, the cost of commonly used software is likely to be unaffordable and as such presents a significant barrier to equipment reuse.

Donation of computers and peripheral equipment directly to schools and other community education groups occurs particularly in regional centres. This pathway bypasses third parties (such as second-hand dealers) and relies on knowledge within the community of the need for this equipment by such groups. Conversely, schools may also be a source of equipment to the domestic market through notices in school newsletters, etc.

It should also be recognised that these groups can be in potential competition with businesses involved in the refurbishment and resale of computers for profit.

There are many companies selling second-hand computers and peripheral equipment within Australia, with the majority concentrated in the Eastern states (Table 5.1). The geographic distribution of individual businesses (e.g. in capital cities compared to regional centres) has not been determined, however it may be assumed that companies will be located where the concentrations of available computers and buyers are highest.

Table 5.1 Second-hand Computer Retailers by State/Territory
State / Territory No of Second-hand Computer Retailers
NSW 53
QLD 44
Vic 40
SA 19
WA 14
ACT 11>
Tas 6
NT 2
Total 189

Source: Yellow Pages

The age of equipment depends greatly upon both the source and market for equipment (e.g. one company may market its products to buyers seeking affordable but recent equipment, while another may serve buyers seeking replacement parts for old yet still-functioning equipment). Equipment is generally much younger than that destined for non-profit organisations, with an average age of 2 to 4 years and a range of up to 7 years.

The principal equipment received is desktop and laptop PCs, followed by printers, then other peripherals such as cabling and scanners. Equipment is primarily sourced from the corporate sector, and may include computer retailers and leasing firms. Materials purchased for resale rarely include unusable material and those items not sold immediately will often be stored; as such, few materials are sent to landfill from this sector.

Companies employ a range of sales methods to suit both the origins of their equipment and the principal markets. Auction houses provide a vehicle through which used computers and some peripheral equipment from large corporations are made available for sale to individuals and businesses. This is particularly important for organisations needing to dispose of equipment still considered as assets. Between 250,000 to 300,000 units per year can move through the larger ICT auction houses. The more ICT-focussed auction houses may offer other services such as collection, testing and secure removal or old (and possible confidential) data. In addition, companies may use the services of an auction house for convenience, despite the items having little or no value (older equipment) and incurring costs to do so.

Manufacturers may either operate or be in partnership with factory outlets to dispose of recently superseded models, as well as remanufactured returns (e.g. equipment returned under replacement warranty that has subsequently been repaired). These outlets wholesale to re-sellers and large companies, and retail to individuals and small offices. Retailers may purchase used equipment to re-sell whole computers or to provide spare parts for individual sale and repair stock. Commercial remanufacturers may also be involved in the recycling of equipment for their constituent materials.

Markets for second-hand or reassembled equipment exist overseas, however it is unclear what quantities are being exported. While this outlet was previously a commercially viable reuse option, the enactment of Commonwealth legislation requiring export permits for waste computer equipment (refer Section 6.1) has seen a reduction in this activity. The current extent is not known.

Reuse of cabling has been undertaken by some operations with attempts to sell cable back to electrical companies involved in data wiring. However, this outlet for cabling is limited due to the average length of cable being 20 metres, which is well below the preferred length of 100 metres. As a result, cabling is often stockpiled and sold in small lengths.

Several companies operate collection and re-use schemes for ink and toner cartridges, providing a cost-effective source of packaging for their principal product (the ink and toner). As the returned cartridges contain residual amounts of ink or toner, a significant issue for the re-manufacturing industry is the disposal of residue.

The quality and reliability of re-used cartridges has been a matter of some discussion, and the economic impact on sales by original cartridge manufacturers (which are usually printer manufacturers as well) has resulted in competitive schemes to induce customers to avoid purchasing re-filled cartridges in favour of new cartridges. However, some companies are moving to provide product guarantees after quality testing in order to address this issue.

5.2.3 Recovery

Recovery encompasses activities involving the disassembly of equipment into constituent parts, principally to recover the raw materials that have been used in their manufacture. The industry is comprised of a chain of different companies, from the originators of the source material to specialised commercial and charitable remanufacturers, to scrap metal processors and plastics granulators, to agents and finally to the purchasers of the recovered materials.

Recovery facilities may be operated by organisations that also re-sell and remanufacture equipment on a commercial basis. As a higher market value will be realised from resale of complete equipment, recovery operations are supplied principally with non-working equipment. Non-profit remanufacturers will often provide non-working material to recovery centres as their facilities, skills and financial resources are too limited to undertake substantial recovery operations themselves.

Advice from stakeholders indicates that higher volumes of material are processed by scrap facilities in Eastern states than in the rest of the country, however the quantity of waste computers and peripheral equipment processed is marginal in comparison to the total quantity of scrap from all sources.

The principal material recycled from waste computers and peripheral equipment is metal. Whilst some recovery operations separate PCBs, metals and plastics, others shred all equipment together and add it to piles of mixed metal, which is exported in significant quantities as well as being sold to domestic metal consumers. Purchasers may choose to sort this mixed metal to separate PCBs and other materials and recover the precious metals and copper. Separated materials are usually exported (e.g. PCBs are exported overseas to precious metal recyclers in Asia, and low-grade copper cable is sold to Canadian copper smelters as a refining agent).

Until recently, PCBs typically contained enough precious metals to allow for cost-effective recovery. The average computer contains approximately 0.25 - 1.0 gm of gold, with other metals recovered including platinum, silver, copper, steel and aluminium. However over the last several years, computer manufacturers have cut costs by reducing the use of precious metals by as much as 90% (MACREDO 2000). This makes it more difficult for computer recyclers to operate on a financially viable basis.

Plastic has the potential to be a significant commodity, however there are barriers to the provision of acceptable materials to agents and their buyers. Larger computer recovery operations sell plastics to other companies who granulate and sell it as 're-grind' (indicative value of $0.90/kg) or as 're-extruded' when additives such as colour are used (indicative value of $1.60 - 1.70/kg).

Other recovery operators, and a number of non-profit remanufacturers, currently stockpile plastics or send it to landfill because they are unable to grade and sort it in the manner required by plastic recyclers. This barrier is the result of a mixture of plastics being used in computers and peripheral equipment, both historically and across product types. Becoming more common is the clear labelling of plastic components to identify the type of plastic used, however this is not the case for older products and those made by some smaller manufacturers.

There is interest within the recycling sector to expand into the computer and peripheral equipment market. For example, a CRT crushing facility is being established in Albury-Wodonga, with a view to transporting CRTs to the facility from across Australia. Such a facility is likely to require fees being charged by the recycling company, rather than present payment of a purchase cost for the material.

Recycling of electronics is a very labour-intensive industry, particularly as some components must be manually disassembled to recover valuable materials. Concerns regarding the confidentiality of data on waste PCs held by originators of equipment in the Government and corporate sectors compounds the issue, requiring additional effort to remove sensitive data though erasure (and in some cases physical destruction) of storage drives. The industry must continually address occupational health and safety (OH&S) issues related to materials like lead solder and phosphors in CRT monitors. Insurances and costs associated with conforming to regulations on hazardous materials can be significant.

A small yet diverse section of the recovery industry involves the use of computers and peripheral equipment for artistic uses. Whilst these may provide a novel and entertaining use of waste computer and peripheral equipment (e.g. use of PCBs in jewellery making and old CRT monitor housings as a decorative surrounding for fish tanks), they are unlikely to result in the diversion of significant quantities of material from landfill.

In addition to companies providing collection and re-use services for ink and toner cartridges, a range of companies provide collection and recycling services. These companies collect the empty cartridges to recover the plastics for a variety of products such as furniture (e.g. stools, side tables), outdoor furniture (e.g. street benches, garden table settings, letterboxes), promotional products (e.g. rulers), and road and walkway products (e.g. ramps, signs).

Processing of empty cartridges can entail disassembly, cleaning and sorting into the different polymer types. The plastics are then granulated ready for moulding into new products. Many companies on-sell the granulated polymers but some also undertake the plastics moulding processes as well.

5.2.4 Landfill

Disposal of computers and peripheral equipment at landfills is widespread throughout Australia. The volume of space occupied by items of equipment can be considerable, particularly in the case of CRT monitors. Landfilling is undertaken due to lack of alternatives and the cost implications despite landfill fees.

In addition, certain groups often see landfilling as a preferable and secure means of disposing of waste computers that contain confidential information. This decision may often be made due to lack of awareness or confidence in the ability to remove stored information by the data security services offered by a number of commercial re-use and recovery operations. This is a particular concern for financial institutions and some Government departments. Anecdotal evidence from landfill operators around Australia has indicated that various Government departments continue to demand on a regular basis secure cells dedicated to deposition of computer equipment. This includes equipment such as CRTs which contain no data and cannot be considered as a security risk.

At many landfills, area has been set aside for recovery of waste material (including computer equipment), making the material available to the public via this mechanism. However, the area is not managed to optimise the reusability of equipment (e.g. uncovered areas allowing electrical equipment to get water damaged) and there may be no testing of equipment. Consultation with computer recyclers and landfill operators has shown that this practice can negatively impact on the reuse market, with equipment of little value finding its way back to the landfill after being returned. Availability of poor quality equipment can damage the credibility of remanufactured equipment.