While the R2 Standard prescribes objective requirements for downstream vendors, it cannot determine the credibility of the information provided. It is the responsibility of each company to assess the information collected from downstream vendors, or from observations made during onsite visits, to determine if the recycler is qualified. It is not enough to simply gather information, you also need to determine whether it is logical and credible.
In this article, R2 Technical Director, Corey Dehmey, examines some situations that merit greater scrutiny during when conducting your due diligence. “From my own experience conducting due diligence,” says Dehmey, “there are red flags that should pique your interest about the validity of the information provided by prospective vendors.” Listed below are potential red flags that Dehmey has found in his past evaluations of downstream recyclers. While they do not necessarily disqualify a vendor, they should trigger additional investigation.
- Price — If it is too good to be true, it probably is. If you find a vendor who is paying more or charging less than other vendors, you have to question how they can offer a better price. Dig deeper. For example, we are now seeing that those CRT vendors who charged less than market prices are abandoning stockpiles of CRT glass. Consequently, companies may pay twice to process that glass – first to the vendor who abandoned the glass, and then again for the eventual site cleanup. Not a savings in the long run.
- Location — If it is not logical for a buyer to ship the equipment great distances, then it probably isn’t legitimate. Does it really make financial sense to ship printers from Florida to California at recycling prices? Or if a downstream vendor is purchasing electronics for recycling, but requires that you deliver the electronics to a port, make sure you verify the final destination.
- Not consistent with their type of business — If you are sending smart phones for “refurbishment” to a recycler (as opposed to a refurbisher), you have to question whether the recycler has technicians qualified to test and repair smart phones. It is likely they are reselling the devices to another company untested rather than refurbishing them. Another example: if you’re sending televisions to a scrap metal yard, can you expect the televisions to be processed by that yard?
- Sea containers — If you are selling electronics to a domestic company, but a sea container arrives at your door to be loaded with your material, you should be concerned about the true destination.
- EBay Sales — If their eBay site is full of material that is “untested,” “for parts only,” or “as-is,” you should further investigate the capabilities of the refurbisher to actually test and repair your electronics (and potentially notify SERI of the eBay sales).
- Residential – Google Earth is a great tool to get a visual of the company’s location. If the company’s address is a house, or if you can see that electronics are stored in an outside yard, you might reconsider your choice of this vendor.
- Certificate of Recycling or Destruction — This is a “feel good” piece of paper. Is it really worth the paper it’s printed on? Sometimes it is issued the day your load is picked up, which begs the question, “How could it be recycled or destroyed so quickly?” Get proof of receipt that the material was actually received by the destination(s) listed on the Focus Material recycling chain.
The bottom line: Due diligence is more than just asking questions; it’s evaluating and making an informed decision based on the answers. The more thorough your review of the vendors in your downstream, the better you can protect your company and your customers from the negative consequences of improperly managed electronics coming back to haunt you. The business relationships you establish and the downstream vendors you choose will impact your future not to mention your conformity to the R2 Standard, so evaluate thoroughly and choose wisely!