Redeeming E-Waste in Brazil

Around one million additional people in Brazil are becoming economically active each year and consuming electronic appliances and equipment to improve their way of life. This high consumption of electronics will lead to increased amounts of e-waste in the near future. With manufacturers now deploying initiatives, here's why electronic processing is becoming a big business in Brazil. by Vanda Scartezin In contrast to developed countries, any electronic product in Brazil follows a chain, passing from hand to hand before becoming a real disposable waste. Due to cultural behaviour it is common for used equipment and electronic appliances to be given to poorer people in the community. This of course generates a more complex process to really track back any of Electrical and Electronic Equipment (EEE) products to guarantee their final destination. Brazil has built a national strategy and transformed it into a legal framework to address the solid waste challenge based on the principle of Extended Producer Responsibility (EPR), shared with all participants in the value chain, including end users. The Brazilian Law 12305/10 is an overall legal framework on solid waste, and it attributes shared responsibilities throughout the value chain in the product life cycle. The law requires producers, sellers, consumers and discharge actors of selected products to appropriately collect and treat waste products. The law follows international approaches in implementing the concept of reverse logistical responsibility, and its Decree 7404 from December 2010 defines the shared responsibility of all those involved, including consumers and municipal authorities. The legal framework included a Sectorial Agreement with each industrial sector listed in the framework, including the EEE industry, which is responsible for e-waste. A Sectorial Agreement is now being developed by the two strong national associations – Abinee for professional EEE and Eletros for consumer electronic products. In February this year, the government published a normative for the Sectorial Agreement and is giving 120 days for associations to finalise the Agreement. The previous Decree defines only the framework related to the agreement, leaving it to the sector to define how they will implement the reverse logistics. However, to build such agreement is not an easy task and several challenges are there to be faced: 1. There is a huge past to acknowledge, with many 'orphaned' products such as end of life computers, televisions and household appliances, which nobody has responsibility for. Millions of old computers were individually assembled, refurbished with no branding, smuggled into the country or came from companies which have since closed operations in Brazil. 2. The country has a continental dimension and a huge economic gap between regions. A process which can be easily followed in more developed areas such as the South and Southeast regions will certainly face severe obstacles in more remote regions such as the North and several countryside areas of Northeast or Central regions. 3. Street collectors are the poor can be uneducated. They need to be trained, organised and registered to guarantee they will really follow the processes and will not become liability for companies if, for example, they do not follow the defined processed and become ill. This is an important part of any agreement to guarantee the expected advantages of generating thousands of jobs around the country. 4. According to several legal analyses the final responsibility - no matter which agreements are made to guarantee the whole chain will be following the process - will rely on the manufacture and/or importer. Hence some design on how these obstacles can be overruled shall be part of the national agreement with the government or there will be no real possibility to have an effective system. 5. Logistics is a key part of any agreement in Brazil. There are several bureaucratic process related to transport that will need to be rewritten to allow any agreed process to function across the country. While these points are real challenges, they also bring to light a wide spectrum of opportunities for new business and partnerships to explore this new market for Brazil. Opportunities Looking at each of these challenges it is possible to raise some interesting business opportunities. There will certainly be room for someone to assume the orphaned products and be paid for it. It will be part of the negotiation with the government, but any interested party can participate in this equation. The final responsibility for e-waste will lie with the manufacturers and importers Additionally training will be made available, with long distance education – especially using mobile technologies. There are around 250 million mobile devices in Brazil, which has a population of 190 million. Internet access in the slums has already reached some 85% of young people. While there will be a language issue, partnership with local organisations will reduce this barrier to zero. Refurbishing products is also an interesting new market, specially when looking for a side market in Latin America. Most of the refurbishing business in Brazil is in the hands of Not for Profit organisations, and while committed, the majority will not be able to handle the significant increase in demand when the law is enforced after the conclusion of the Sectorial Agreement. Processors Currently the country has a number of small companies specialised in dismantling, disassembly and recycling of electronic components, which are sent to external metallurgical processors. Even shredding is not done by these small companies due to cash flow issues arising from the need to wait for payments from processors. Just few manufacturing companies in Brazil do their own pre-process and send it directly to foreign metallurgical units. New metallurgical processors in Brazil will find interesting partners focusing on the Latin America market. Logistics Logistics will also be one of the most promising businesses around. Transportation is the major e-waste processing cost, about 50% of total process cost in Brazil. Stores around the country will certainly be the main collection point for used products and the logistics to and from these points in such a vast country is certainly an interesting business. Of course, Brazil has several logistics companies, but there will be room for many more. To have a more concrete view of e-waste in Brazil, it is important to know something about its most relevant States. Being a federation, with 27 states and a Federal District the States have their own laws under the federal framework, and to consider doing business inside the country in this area it is relevant to have, at least, an overview of these States. São Paulo São Paulo is the richest and most developed State in the country. It is part of Southeast region and is responsible for more than 30% of country's gross national product. The e-waste law follows the reverse logistic principle and states in its articles that EEE products and components considered e-waste must be sent to an adequate destination when disposed, in order that such action does not cause damage or negative impacts on the environment and the society. The State has established that the money raised from the application of this law will be used to finance selective waste collection programs and projects. Since the majority of producers and consumers are concentrated in this State the fact that it had previously started with an e-waste law will assist with the implementation of the Federal Law. The previous exercise with this State´s Law will allow the EEE industry to establish goals for the State as a priority, with a better knowledge on how to proceed. Rio de Janeiro Rio de Janeiro, one of the Southeast states, has no recent laws for either solid waste or e-waste. The only relevant initiatives on e-waste in the State are driven by the software companies. The Softex local Association is promoting a program called Reciclação and along with the Assespro Rio it is also promoting the awareness. Minas Gerais Minas Gerais, a Southeast state, was one of the first States to deal with the e-waste. The State developed a project in partnership with the Swiss State Secretariat for Economic Affairs (SECO) and the State Environmental Foundation, Fundação Estadual de Meio Ambiente, (FEAM) developed a detailed study on e-waste in Minas Gerais during 2008/9. There is legislation for solid waste, Law 18032 of 2009, but not yet a specific law for e-waste. There is however a bill, which is yet to be voted on at the local Legislative Assembly. As with the Federal law the bill is based on the reverse logistic principle. The proposed legislation also proposes that any product commercialised inside the State include disposal information and warnings on its packaging. Parana Parana is one of the three states in the South region. Parana´s border with Paraguay is an important entrance of illegal products, including mobiles phones. The state has promulgated a comprehensive law for solid waste - Law 1249322 in 1999. The law provides wide coverage for all types of waste and how to deal with them, including by landfill. The law focuses on the entire product life cycle and also has reverse logistics concept. Santa Catarina Santa Catarina is a state with significant industry, concentrated on the mechanical and weaving sectors, but also relevant EEE companies. The only law related to solid waste, Law Nº 15.112, of 2010, provides only for the prohibition of the disposal solid waste, recyclables or reusables in open landfill or even sanitary landfill. The Law also defines fees for penalties and fines for environmental protection and recovery. Rio Grande do Sul Rio Grande do Sul is the last state in the South, which borders Argentina and Uruguay and has several laws and Decrees on solid waste, starting with the Law 9,493/92 about selective waste collection. Law nº 9,921/93 provides for the management of solid waste, under the terms of the State´s Constitution. In 1997, another law, related to e-waste, provided for the final destination of rechargeable or no rechargeable batteries, fluorescent lamps and other products containing heavy metals – the law nº 11.019 from Sept 23th, 1997. The laws are also based on reverse logistics. Law nº13,306/2009 introduced an obligation for the vendor´s commercial channels, demanding them to provide adequate places for the return of e-waste by consumers. Bahia Bahia, is a large state in the Northeast region which does not have laws regulating solid waste. The tendency in this state is to define a program to regionalise the management of solid waste before publishing a law. A program - the 'Study of Integrated Management of Solid Waste as per an Agreement' – has been agreed between the State Government of Bahia (through its Secretariat for Urban Development) and the Ministry of Environment – MMA (through its Secretariat of Hydric Resources and Urban Environment signed in 2007. The study defined a Plan, which was adopted late in 2010, and included the division of the State into 26 regional units taking into consideration the quality and existence of roads and populationdensity to create focus points. Pernambuco Permanbuco, also a Northeast State, has a new policy related to solid waste which is a revision of the previous solid waste law and gives a new view for the social-environmental State tax (ICMS) criteria for solid waste. The State Law, the Federal Law 12305/2010 and its Decree are harmonised, contemplating reverse logistics, the shared responsibility of collection, transportation, treatment and disposal of solid waste in the State. The law also defines issues related to sanitary landfill. Ceara Another Northeast state, Ceara has a bill which addresses e-waste waiting to be voted on by the State's Legislative Assembly. In 1993, the State approved a law governing the selective collection and the recycling of waste, considering such activities ecologically relevant and within the public interest. Later, in 1999 another specific law was approved which provides for the discharge of small batteries up to 9 volts, mobile batteries and other products containing heavy metals, among other provisions. Finally, in 2001 a law was passed to provide for the State Policy for Solid Waste. Manaus Though issue of e-waste is not relevant in the State of Amazon, its capital, Manaus has a huge industrial park, mostly consisting of manufacturing plants for electronic consumer products. There is currently no specific legislation covering e-waste, but the city of Manaus concentrates the Eletros associated companies, one of the most important players in the definition of sectorial agreement. Business Models Right now in Brazil there are several interesting initiatives being deployed by manufacturing companies, which are operating with their own business models in order to decide how they will work when the agreement is signed and the Federal Law really starts to be enforced. Seven different business models related to reverse logistic are currently being used in the country. Each one has its own characteristics and is designed for a specific company's interest, but all are for profit. Funding The movement started by the publishing of the Solid Waste Law, required a funding strategy, which was also part of the Country's plan. The Banco Nacional do Desenvolvimento Economico e Social (BNDES) - the Brazilian Development Bank - joined the game, and defined some strategies to accelerate such movement. Bank's lines are not only for locals, but can also help accelerate external investments, build partnerships, fusions and acquisitions in the field. When thinking about e-waste business it is time to think of Brazil as the next big opportunity. Waste no time. Vanda Scartezini is a Brazilian electronics engineer and partner in Polo Consulting Associates and recently co-authored the World Bank's report Wasting no opportunity The case for managing Brazil's electronic waste e-mail: Vanda@uol.com.br More Waste Management World Articles Waste Management World Issue Archives