Current Trade Flows in Recyclable Resources within Asia & Related ...

Chapter 1 Current Trade Flows in Recyclable Resources within Asia & Related Issues Michikazu Kojima

INTRODUCTION In recent years, international trade of recyclable resources (recyclable waste and secondhand goods) has increased. The outflow of recyclable waste destined for recycling from Japan to China and the rest of Asia has been on an expansionary trend. Exports of recyclable waste from the EU and the US to the region have also been growing, and these are going part way to meeting the demand for resources in China and other developing Asian countries. International flows of secondhand goods are also on the up. At the same time, pollution generated during recycling is creating problems, and there are also problems with waste that are unrecoverable, which are being exported as recyclable waste, and nonreusable wastes being exported as secondhand goods. By contrast, several major multinational corporations have initiated efforts to establish global recycling systems that involve the collection of used products from multiple countries, and disassembling of them at a single plant, followed by the reuse or recycling of components. The corporations that are instituting these measures have criticized the strictness of regulations governing the transboundary movement of recyclable wastes and the difficulty of conducting international trade even when the resources are being reused and recycled environmentally sound manner. In these connection, the Industrial Structure Council in Japan has established “Working Group on Enhancing International Recycling” which is charged with investigating measures to address these problems. This working group held five meetings between June and October in

2004 and has compiled a proposal titled “Toward a Sustainable Asia based on the 3Rs.” This proposal recommends effective utilization of resources in combination with efforts to curb pollution from recycling and illegal shipment of waste as the basic direction for achieving this objective. The 3R Initiative that was adopted at the June 2004 G8 Summit is targeting the establishment of a sound material cycle society via a global bid to reduce, reuse and recycle waste. The concept paper of the initiative expressed a view to reducing the barriers to international flows of and promoting the transboundary movement of recyclable resources (recyclable waste and secondhand goods). The competent ministers from G8 countries, several Asian countries and developing countries came together at the end of April 2005 for the Ministerial Conference on the 3R Initiative, with the objective of hammering out specific measures. Despite the fact that, in recent years, resource recycling has become increasingly topical at both national and global levels, not enough studies has been done to overview either the circumstances surrounding international trade flows, even within the Asia region, or the policies and regulations that apply and the problems facing the various countries within the region. One of the main objectives of this report is to focus on and analyze the various points outlined above; however, this chapter starts by providing an overview of the current state of trade flows within the Asia region and sets forth the issues that will be discussed in this report as a whole.

SECTION 1: WASTE, RECYCLABLE WASTE, SECONDHAND GOODS AND RECYCLABLE RESOURCES

First and foremost, it is necessary to define the

terms waste, recyclable waste, secondhand 3

Japan’s ‘wastes’

Valueless resources

Incl. hazardous substances

Controlled by the Basel Convention controls

Excl. hazardous substances

(household waste) Materials for nal disposal

Recyclable waste (materials that are recycled as resources / substances).

Note: In reality, it is believed that some valueless resources exist among the products and secondhand goods that are being reused. Source:Compiled by the author in reference to Terazono, Sakai, et al. (2004).

Some countries also consider valuable resources and secondhand goods to be ‘waste’

Valuable resources

Secondhand goods (products that can be reutilized (reused) in their original form (including parts)). Recyclable resources (materials used cyclically or those with the potential to be used cyclically)

Figure 1-1: Definitions of Recyclable Resources, Secondhand Goods, Recyclable Waste and Waste

Chapter 1

Current Trade Flows in Recyclable Resources within Asia & Related Issues

goods and recyclable resources, and to explain the interrelations that exist between them (see Figure 1-1). Japan’s definition of the term ‘waste’ differs slightly to that used throughout the rest of Asia. In Japan, the legal definition of waste does not include valuable discarded materials. However, under the Basel Convention (see below for details), which regulates transboundary movements of hazardous wastes, valuable discarded materials are incorporated within the definition of the term1. In many Asian countries, the regulations governing hazardous waste have been created in reference to the Basel Convention. And, as in the Philippines, in some cases the prior notification and approval set forth in the Basel Convention is required for imports of used household appliances, meaning that secondhand goods are deemed to fall within the classification of waste.

“Recyclable wastes” are those waste commodities that are reused in the form of material recycling, chemical recycling or heat recovery, and so forth. Both valuable and valueless resources are included. “Secondhand goods” refers to products that have been used, which are then reutilized (reused) in their original form. “Recyclable resources” constitutes of both recyclable waste and secondhand goods. Japan’s Fundamental Law for Establishing a Sound MaterialCycle Society defines recyclable resources as “those useful among waste, etc.” and this definition is adhered to. The notes on this law define “useful wastes” as “wastes that can be used cyclically or that have the potential to be used cyclically” which means that it is possible to refer to unused wastes that have been disposed of as a part of recyclable resources (see the dotted arrows in Figure 1-1).

SECTION 2: TRANSBOUNDARY MOVEMENT OF RECYCLABLE RESOURCES (1) Trade in recyclable waste Table 1-1 shows the net export volumes (export volume minus import volume) for major recyclable waste in 2003 for several Asian countries. Japan, with the exclusion of waste aluminum, is a net exporter. India is a net importer of all materials, as is China, with the exclusion of lead waste. South Korea is also a net importer, with the exclusion of waste plastics. All the countries of Southeast Asia are net importers of waste paper. The expanding import volumes of this resource are believed to be attributable to increasingly short supplies of the raw materials used for paper manufacture, which is associated with dwindling forest resources. Looking at the totals for these six recyclable waste, Japan is a net exporter, while the Philippines imports and exports comparable volumes; the other countries are all net importers. Table 1-2 gives a comparison of renewable resource imports in 1990 and 2003. Overall import volumes are on the increase. The country exception being Japan, where import volumes are falling, and the commodity exception lead 1.

waste, import volumes of which are shrinking substantially in Taiwan, South Korea and Indonesia, among others. One of the reasons for the drop in imports in Japan is increases in the volume of materials being recovered domestically. In Taiwan and Indonesia, lower lead imports are clearly a consequence of the introduction of regulations on imports of lead scrap such as waste car batteries after the environmental pollution generated during the recycling process were disclosed. Lead waste falls within the scope of the Basel Convention (detailed hereunder), and the necessity for obtaining prior approval of import from the government of the importing country is affecting import volumes. India tightened its restrictions on lead waste imports in 2000 and import volumes fell transiently, however, they have been creeping up again during the past few years. When examined comparatively, China’s imports of recyclable waste are conspicuously higher than in any of the other nations in 2003. Specifically, imports of waste plastics and copper scrap exceed 3 million tons, outstripping the figures for other nations by a considerable margin.

Under Japan’s Law on the Control of Export, Import and Management of Specified Hazardous Wastes and Other Wastes, which corresponds to the Basel Convention, valuable resources are also deemed to be subject to the controls on specified hazardous wastes.

5

1970

5719

307

69

12

Paper

Iron

Copper

Aluminum

Lead

7 ∆3157

∆59

0

1

∆44

10

94

∆0.4 0.1

0.1

∆647

3 ∆9290

307 ∆5906 11

1 ∆9381

∆1168

158

∆174

30 ∆2996

76

82

186

5479

1853

678

Gross Net exports exports

China

∆1106

74

0

59

75 0

∆56

∆5

118 ∆3058

15

137


Taiwan

0.5

20

20

494

7

25

0.5

18

∆11

475

∆367

17


Philippines

58

0.6

17

54

117

0.6

∆5

50

∆1162

3 ∆1095

59


Thailand

∆228

33

0.3

31

471 0.3

n.r.

253

294 ∆4824

1

60


Malaysia

15

0.0

13

22

37

∆0.7

8

19

∆927

17 ∆1997

19


Indonesia

∆50

∆82 0.3

∆37

0.5 ∆101

5

30 ∆2337

0.7 ∆1437

3


India

634

1047

117

340

Paper

Iron

Copper

Aluminum

0

113

121

240

117

2

2003

47

39

287

3876

1486

15

1990

0.4

175

153

6213

1326

6

2003

S. Korea

5

5

21

183

423

24

1990

0

653

3162

9293

9382

3024

2003

China

34

70

15

2563

1807

0

1990

0

115

80

3176

1121

63

2003

Taiwan

Note: n.r. (not reported). See note to Table 1. * India’s statistics for 1990 are based on the figures for April 1990 through March 1991. Source:Compiled from national trade statistics.

1.1

3

Plastics

Lead

1990

Wastes

Japan

15

0.6

0.0

64

252

23

1990

0

2

31

19

374

8

2003

Philippines

7

2

2.4

1101

214

0.8

1990

0.0

22

4

1279

1098

0.8

2003

Thailand

4

4

2

734

10

17

1990

0.0

n.r.

218

5136

229

27

2003

Malaysia

Table 1-2: Imports of Recyclable Wastes by Major Asian Nations (1990 & 2003)

35

0.1

1

946

462

28

1990

0.7

5

3

964

2014

4

2003

Indonesia

7

7

80

3152

385

13

1990

37

101

87

2367

1438

53

2003

Indonesia*

(Unit: thousand tons)

Note: n.r. (not reported): Statistics show large quantities of aluminum scrap being imported from the Philippines, but the figures do not tally with those in the Philippines and it is highly likely that this is an error in data entry. Source:Compiled from national trade statistics.

681



Plastics

Wastes

S. Korea

Japan

(Unit: thousand tons)

Table 1-1: Gross & Net Exports of Recyclable Wastes by Major Asian Nations 2003 (difference between gross exports and gross imports)

Chapter 1


Expanding trade flows of recyclable waste can be attributed to (1) the increased recovery of recyclable waste commodities in developed countries in line with the development of legislation on recycling, (2) the shift of various production bases from developed countries to China and other Asian countries and the developed countries have become unable to consume domestically all the recyclable resources they generate, and (3) since the economies of China and other countries within the region are expanding and export volumes are also growing, this is increasing demand for resources that cannot be met by domestically-generated volumes of recyclable waste alone.

(2) Trade in secondhand goods It is difficult to paint a precise picture of international flows of secondhand goods from existing trade statistics. Japan revised the HS Code2 stipulations assigning separate statistical code numbers to used cars and motorbikes, meaning that, since April 2001, it has been possible to gather statistics on the volume and value of used car and motorbike exports. However, other Asian nations have not assigned similar HS Codes in their trade statistics. Added to which, Japan has not assigned HS Codes to secondhand goods such as household appliances, car parts, and construction equipment, meaning that exports of these commodities are being listed in the same category as new products in trade statistics.

Meanwhile, some countries are reporting on imports and exports of hazardous wastes classified under the Basel Convention to the Convention’s Secretariat. These figures in 2001 are shown in Table 1-3. In quantitative terms, the volumes are considerably lower than the trade statistics for recyclable wastes given in Table 11. Indonesia imports the largest quantities of hazardous wastes for recycling, but the entire amount is lead acid battery waste, including waste car batteries. Up to 2002, imports of lead acid battery waste were treated exceptionally, but a ban was imposed in September of that year, hence the sharp drop in Indonesia’s imports of hazardous wastes in and after 2003.

Since it is not possible to directly apprehend trade volumes of secondhand goods from the statistics, two alternatives are available: either export destinations and monthly volumes can be used to gauge average prices from which it is possible to estimate the ratio of new to used, or surveys of exporters and distributors can be utilized as a means of estimating export volumes of secondhand goods. To date, several attempts have been made to estimate the volume of secondhand goods shipped from Japan (see Chapter 2), but such figures are virtually nonexistent for any other Asian countries.

Table 1-3: Trade in Hazardous Wastes Reported to the Basel Convention Secretariat (2001) (Unit: tons) Exports Total

Imports

For recycling Worldwide

Total

To Asia

Japan

1,515

1,515

294

China

2,841

1,241

95

Thailand

142

n.a.

Malaysia

2,675

2,075

Singapore

14,354

Indonesia Sri Lanka

For recycling Worldwide

4,326

4,320

From Asia 3,520

Not reported Not reported Not reported

n.a.

0

0

0

600

69,942

69,942

69,942

13,754

13347

0

0

0

2,100

2,100

1,000

240,220

240,220

62,000

24,000

24,000

24,000

n.a.

0

0

Notes: (1) Asia refers to the Asia Region, excluding the Middle East and Central Asia. (2) Exports of ‘other wastes’ not contained in the Basel Convention list of hazardous wastes are not reported. Source:Compiled from the Basel Convention website (http://www.basel.int/). 2.

Harmonized System Codes (HS Codes) are unified international codes of up to six digits that are used during customs procedures.

7

Chapter 1

Moreover, volumes of used cars and household appliances that are taken out of Japan as personal belongings by the crew of vessels that call at Japanese ports have reached levels that are

impossible to ignore. There is thus a need to compile statistics on the export as personal belongings in order to determine the reality of international trade in secondhand goods.

SECTION 3: TRADE RESTRICTIONS ON THE TRANSBOUNDARY MOVEMENT OF RECYCLABLE RESOURCES

(1) The Basel Convention Transboundary movements of unrecoverable wastes and hazardous recyclable waste are regulated by the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (the Basel Convention hereunder). The Convention, which entered into force in May 1992, is an international environmental agreement that was drafted against a background of the environmental problems being generated by exports of hazardous wastes to developing countries from US and the EU during the 1980s 3 . The Convention requires exporters of hazardous wastes to give prior notification to the government of the importer country and obtain their approval. It has also been ratified by many countries in Asia (see Table 1-4). Hazardous wastes regulated by the Convention are defined in Annex I as “waste streams” (clinical waste from medical care in hospitals, medical centers and clinics, waste mineral oils unfit for their originally intended use, and waste resulting from the surface treatment of metals and plastics, etc.), and “hazardous substances” (hexavalent chromium compounds, cadmium/ cadmium compounds, mercury/mercury compounds, and lead/lead compounds, etc.); “hazardous characteristics” are defined in Annex III (explosive, poisonous (acute), corrosive, ecotoxic, etc.). Furthermore, Annex II cites waste collected from households and residues arising from the incineration of household wastes as “categories of waste requiring special consideration,” meaning that these types of wastes are subject to controls even when not containing hazardous substances. Household wastes and residues arising from incineration of them are referred to as “other wastes” in the Basel Convention. Specific substances are defined as hazardous substances covered by the Convention in 3.

8

Annex VIII, List A, and wastes not covered by the Convention in Annex IX, List B (see Table 1-5). However, the Convention does not contain stipulations on leaching test methods for determining whether or not a waste product is hazardous or not, and definitions of hazardous wastes that are unique to specific countries are also allowed. Efforts have been made to tighten the controls of the Basel Convention because illegal trafficking of hazardous wastes continued even after it entered into force, and there were several developing countries that refused to ratify the Convention on account of the prior notification/ consent mechanism, which they consider to be too lax. In 1994, at the second Conference of the Parties to the Basel Convention, a ban was imposed on exports of hazardous wastes for final disposal from developed to developing countries. Further, the Ban amendment, which prohibits transboundary movements of hazardous wastes for recycling that are destined from developed countries(OECD, EC, and Liechtenstein) for developing countries, was adopted at the third Conference of the Parties to the Basel Convention in 1995. However, as of February 23, 2005, the Ban amendment had been ratified by only 55 countries, and it has yet to enter into force, despite the fact that almost ten years have elapsed since it was adopted. In Asia, the amendment has only been ratified by Sri Lanka, Malaysia and China (see Table 1-4). Meanwhile, some countries, such as Vietnam and Indonesia, while not ratifying the amendment, have imposed import regulations that are stricter than those of the Ban amendment. (2) Country-specific restrictions There are a number of regulations controlling transboundary movements of recyclable resources that exist outside the framework of the

A detail of transboundary movements of hazardous wastes during the 1980s is provided by the Center for Investigative Reporting and Bill Moyers (1990).


Table 1-4: Status of Ratification to the Basel Convention and Import Controls on Recyclable Wastes, etc. Country

Basel BAN Convention amendment

Japan

1993

Korea

1994

Russia

1995

China

1991

Other controls on imports of recyclable resources Requires completion of procedures under the Waste Management and Public Cleansing Law in addition to the Basel Convention methods for imports of ‘waste.’

2001

Requires pre-shipment inspection of recyclable waste and used equipment (food production, petrochemical industry equipment, etc.). Imports of used household appliances are, in principle, prohibited. The only recyclable wastes permitted into the country are waste paper, waste plastics, steel scrap and copper scrap.

Hong Kong

Has established procedures corresponding to the Basel Convention under the ‘one country, two systems’ rule. Has introduced controls corresponding to the Ban amendment.

Taiwan

Has not acceded to the Basel Convention, but similar mechanisms are written into national law. Imposed a ban on imports of mixed metals in 1993.

Philippines

1993

Imports of used vehicles are, in principle, prohibited. Likewise imports of used tires. Requires prior notification for imports of used household appliances.

Indonesia

1993

Imports of hazardous wastes and waste plastics are prohibited. Requires pre-shipment inspection of other recyclable waste and used capital goods / buses.

Singapore

1996

Malaysia

1993

Vietnam

1995

Cambodia

2001

Thailand

1997

Imports of used vehicles are only permitted for personal use. Requires pre-shipment inspection of used agricultural machinery. Imports of used household appliances less than 3 years old and used copiers less than 5 years old are permitted.

Bangladesh

1993

Requires pre-shipment inspection of used machinery with a remaining useful life of 10 years or more. Permits imports of used vehicles with a scrap volume of 1,649 cc or less and under 4 years old.

Sri Lanka

1992

India

1992

2001 Has applied a comprehensive ban on all trade in hazardous wastes except import of several reyclable waste.

1999

Prohibits imports of passenger vehicles with a new car registration date exceeding 3 years, and vans / trucks exceeding five years. Requires pre-shipment inspection of used machinery. Imports of used equipment that is more than 10 years old are, in principle, prohibited.

Note: Other Asian nations that have ratified the Basel Convention include North Korea, Myanmar and Laos. Source:compiled from the Basel Convention website (http://www.basel.int/), the JETRO website, etc.

Basel Convention. Pre-shipment inspections at exporting country are one such control. These inspections are mandated by law in importing countries as a measure to prevent entry of unrecoverable waste shipped as recyclable waste, and imports of practicably unusable waste as secondhand goods. Import of recyclable wastes such as waste plastics, scrap metal and waste paper, and secondhand equipment destined for food processing plants and the petrochemical

industry, etc. to China are subject to pre-shipment inspection. Meanwhile, Indonesia requires such inspections of waste paper and scrap metal, used capital goods and secondhand buses. There are also import regulations based on the year of manufacture, which are designed to prevent imports of secondhand goods that are liable to become waste a short time after import. In 2003, Thailand imposed a ban on imports of 9

Chapter 1

used computers and household appliances more than three years old, and on copiers more than five years off the production line. India prohibits imports of secondhand equipment with a year of manufacture exceeding ten years. Some countries also impose restrictions on imports of used refrigerators if such contain CFC coolant systems, from a perspective of ozone layer protection. With secondhand goods, some countries prohibit imports of used cars and electrical appli-

ances with a view to nurturing and/or protecting national industry, which represents a trade barrier from the perspective of international efforts to promote reuse. Even where no quantitative restrictions apply, stiff tariffs can complicate the import process (see Table 1-4). China, which imports recyclable waste on a massive scale, introduced an exporter registration system from January 2005 since pre-shipment inspections alone are failing to stem the flow of illegal traffic (for details, see Chapter 3).

SECTION 4: PROBLEMS ASSOCIATED WITH THE TRANSBOUNDARY MOVEMENT OF RECYCLABLE RESOURCES

There are two major problems arising with the transboundary movement recyclable resources; transboundary movements of unrecoverable wastes creating problems in the destination country, and (2) environmental pollution generated during the recycle process in the destination country. Meanwhile, although the reuse of used vehicles and electrical appliances and secondhand production equipment seems to be ecofriendly, higher energy consumption has the potential to increase environmental burden. (1) Improper transboundary movements of hazardous wastes Although the establishment of the Basel Convention represented the start of international efforts to control transboundary movements of hazardous wastes, there have been no signs of a significant decline in illegal traffic.

Philippines. Approximately 2,160 tons of industrial waste, including clinical waste, was exported as “waste paper for recycling,” a fact that was revealed at the Port of Manila where the container, which had been rejected by the Philippine contractor, was opened. The Japanese government used an administrative subrogation to have the container shipped back to Japan and the contents were incinerated. In April 2004, it was revealed that a consignment of waste plastics exported from Japan to Tsingdao, China contained large quantities of unrecoverable waste, in consequence of which the Chinese government imposed a temporary ban on waste plastic imports from Japan in May of that year. Besides these examples, a succession of illegal trafficking incidents have come to light in China (for details, see Chapter 3). An incident of unauthorized exporting of industrial waste from Taiwan to Malaysia was also revealed in 2004 (for details, see Chapter 6).

The death of Cambodian transport workers in December 1998 possibly due to Taiwanese shipment of hazardous waste containing mercury to Cambodia attracted international attention. Taiwan responded by taking steps to have the hazardous waste shipped back to the country. At the time, neither nation was a Party to the Basel Convention and they were thus not liable to execute the procedures set forth therein, but this event served as a catalyst, and in 2001 Cambodia acceded to the Convention (for details, see Chapter 5).

(2) Transboundary movements leading to improper recycling

In December 1999, problems arose with a Japanese shipment of hazardous waste bound for the

In some instances, recyclable wastes exported for recycling are generating pollution in the des-

4.

Similar examples are mentioned in Chapters 3, 4, 5 and 6.

10

As evidenced above, un-recoverable wastes and hazardous wastes are being shipped across international frontiers under the guise of recyclable waste not covered by the Basel Convention. The statutory prior notification and consent procedures are being ignored and international trade in hazardous wastes continues4.


tination country during the recycle process. Pollution generated during the recovery of lead from used lead acid batteries (car batteries, etc.) became an issue in the early 1990s. Lead acid battery waste was listed as hazardous waste in the Basel Convention. Tighter import controls, which, as mentioned in Section 2, has resulted in a significant fall-off in import volumes in the Asia region. However, lead pollution caused by the recycling of lead acid battery waste generated domestically continues to be a problem throughout the region, and it would be difficult to assert that the lead pollution issue has been eliminated5. It is also feared that waste car batteries are being illegally trafficked as secondhand batteries. Open burning of plastic coated cables and similar products, which is intended to separate the plastics and metals contained therein, has become a problem. Open burning of polyvinyl chloride coated copper wire is believed to produce hazardous substances such as dioxins, and calls to bring this under the Basel Convention are becoming increasingly vocal. However, soaring oil prices have sent waste plastic prices skyward, and there are signs of a significant decline in open burning consequent upon the diffusion of nugget treatment technologies and other separation processing technologies for clad plastics and copper wire that are introduced in developed countries. At the seventh Conference of the Parties to the Basel Convention, which took place in October 2004, a proposal from India to include covered conductors in Annex IX, List B, with the proviso such as open burning and lead-content be excluded, was adopted, and it was agreed that such items would not be subject to the prior informed and consent procedure (see Table 1-5). Improper recycling of printed circuit boards has also come into focus. Circuit boards equipped with IC chips are heated to melt solder, and the IC chips and solder are removed for reuse. Acid is also used to recover metals. These process causes both air and water pollution. In the case of televisions and computer moni5. 6. 7.

tors, some parts are reused the copper of electron guns are recovered, but cases of improper disposal of glass monitor screens, which contain lead, have been reported6. Pollution generated during the dismantling vessels has become a problem, and the International Maritime Organization (IMO), the International Labor Organization (ILO) and the United Nations Environment Programme (UNEP) began the work of compiling guidelines in the spring of 2005. The recycling of waste plastics, waste paper and other recyclable waste commodities that are not covered by the Basel Convention has the potential to generate pollution in recycling process. The recycling of waste paper carries the risk of water contamination. Also, used plastics require proper cleaning before they can be processed into re-pellets, etc. Water pollution will occur if the water are not properly treated cleaning plastics. (3) Concerns regarding movements of secondhand goods/production equipment Generally speaking, reuse conserves resources and helps to control environmental loads. Prolonging the product life of computers, which cause high environmental loads during production and relatively low environmental loads during use, as well as comparatively new cars and electrical appliances, through reuse is believed to lessen environmental loads. There has been a considerable discussion on the merits of the international reuse of such products as secondhand goods7. However, older household appliances have poor energy efficiency and could invite increases in energy consumption levels. Furthermore, older vehicles burn more fuel, which carries the risk of increasing air pollution due to exhaust gas. After secondhand goods are reused they are disposed of as waste, but in developing countries that lack disposal and recycling facilities, the chances of their being properly disposed of are low. The export of used refrigerator and automobile from developed countries to developing countries that lack technologies to collect CFC may increase emissions

A discussion of the lead recycling situation in India, the Philippines and Indonesia is given in Kojima (2002). Refer to the Basel Action Network and Silicon Valley Toxic Coalition (2002) or Toxics Link (2003). An example from Guangdong, China is also given in Chapter 3. For example, see Chapter 4 of Wada (2002), Kakuta (2004), etc.

11

Chapter 1

Table 1-5: Main Hazardous Wastes Regulated by the Basel Convention and Exemptions Hazardous Wastes Covered (Annex VIII, List A)

Wastes Not Covered (Annex IX, List B)

A1010 Metal wastes and waste consisting of alloys of B1010 Metal and metal-alloy wastes in metallic, non-dispersible form: any of the following: Antimony, Arsenic, Beryllium, Precious metals (gold, silver, the platinum group, but not mercury), Cadmium, Lead, Mercury, Selenium, Tellurium, Iron and steel scrap, Copper scrap, Nickel scrap, Aluminium Thallium but excluding such wastes specifically scrap, Zinc scrap, Tin scrap, Tungsten scrap, Molybdenum scrap, listed on list B. Tantalum scrap, Magnesium scrap, Cobalt scrap, Bismuth scrap, Titanium scrap, Zirconium scrap, Manganese scrap, Germanium scrap, Vanadium scrap, Scrap of hafnium, indium, niobium, rhenium and gallium, Thorium scrap, Rare earths scrap, Chromium scrap A1050 Galvanic sludge A1140 Waste cupric chloride and copper cyanide catalysts

B1070 Waste of copper and copper alloys in dispersible form, unless they contain Annex I constituents to an extent that they exhibit Annex III characteristics

A1160 Waste lead-acid batteries, whole or crushed A1170 Unsorted waste batteries excluding mixtures of B1090 Waste batteries conforming to a specification, excluding those only list B batteries. Waste batteries not specified made with lead, cadmium or mercury on list B containing Annex I constituents to an extent to render them hazardous A1180 Waste electrical and electronic assemblies or B1110 Electrical and electronic assemblies: Electronic assemblies scrap containing components such as consisting only of metals or alloys. Waste electrical and electronic accumulators and other batteries included on list assemblies or scrap (including printed circuit boards) not A, mercury-switches, glass from cathode-ray containing components such as accumulators and other batteries tubes and other activated glass and PCBincluded on list A, mercury-switches, glass from cathode-ray tubes capacitors, or contaminated with Annex I and other activated glass and PCB-capacitors, or not constituents (e.g., cadmium, mercury, lead, contaminated with Annex I constituents (e.g., cadmium, mercury, polychlorinated biphenyl) to an extent that they lead, polychlorinated biphenyl) or from which these have been possess any of the characteristics contained in removed, to an extent that they do not possess any of the Annex III (note the related entry on list B B1110) characteristics contained in Annex III (note the related entry on list A A1180). Electrical and electronic assemblies (including printed circuit boards, electronic components and wires) destined for direct reuse, and not for recycling or final disposal A1190 Waste metal cables coated or insulated with B1115 Waste metal cables coated or insulated with plastics, not included plastics containing or contaminated with coal tar, in list A, excluding those destined for Annex IVA operations or any PCB, lead, cadmium, other organohalogen other disposal operations involving, at any stage, uncontrolled compounds or other Annex I constituents to an thermal processes, such as open-burning extent that they exhibit Annex III characteristics B1200 Granulated slag arising from the manufacture of iron and steel A2010 Glass waste from cathode-ray tubes and other activated glasses

B2020 Glass waste in non-dispersible form B3010 Solid plastic waste

A2030 Waste catalysts but excluding such wastes specified on list B

B3020 Paper, paperboard and paper product wastes

A4010 Wastes from the production, preparation and use B3030 Textile wastes of pharmaceutical products but excluding such wastes specified on list B A4020 Clinical and related wastes; that is wastes arising B3040 Rubber wastes from medical, nursing, dental, veterinary, or similar practices, and wastes generated in hospitals or other facilities during the investigation or treatment of patients, or research projects Source:compiled from the Annexes to the Basel Convention.

12


of CFC, which destroys the Ozone layer8. Concerns have also been raised in connection with exports of old production equipment from developed to developing countries. The German Council for Sustainable Development requested to compile a report for Adelphi Research on exports of used equipment, etc. (Jacnischewsk, et al. (2003)), based on which the Council puts forward the following recommendations. 1. The Council recommends that the national foreign policy and the exporting industries recognize the significance of exported secondhand goods for sustainable development. Efficiency, environmental and safety standards which apply to their use on the domestic market or to the export of virg in equipment should be examined in terms of the applicability of exporting such equipment from the primary industry. An examination of this kind could give rise to a differentiated embodiment of export credits. 2. The product information on the technical specifications of exported equipment from the primary industry and energy industry as well as for road vehicles should include details on the specific forms of energy consumption. 3. An exchange of experience on technical standards form imported, used equipment,

machinery and vehicles between the importing countries should be promoted and focus placed on the purpose of development aid. 4. Due to the frequent lack of capital, the use of new, adapted instruments of capital aid for funding the purchase of virgin technology should be examined and specifically promoted. 5. The repercussion of modifying the export of secondhand goods or from aligning the building practices in developing countries to tally with the situation prevalent in the industrial nations and the world’s resources should become the focus of the analysis. 6. The Council also appeals to globally operating companies to consider the exportation of used equipment and machinery from the point of view of sustainability and to review their responsibilities as trendsetters and examples. These recommendations do not imply a need to prohibit exports of secondhand goods. They point to increasing export volumes of used production equipment and indicate the need to evalu a t e i n t e r n a ti o n a l t r ad e t h er e in f r o m a perspective of long-term sustainable development and for exports of used capital equipment to be given an appropriate position in trade policy.

SECTION 5: BARRIERS TO THE INTERNATIONAL FLOW OF RECYCLABLE RESOURCES As mentioned in Section 3, the Basel Convention and the regulations of individual countries are, in certain instances, hindering transboundary movements of recyclable resources, even when such resources can be reused and/or recycled appropriately. Any discussion of trade barriers tends to focus on tariffs, but in Asia, the tariffs on recyclable waste, with the exclusion of those applied in India and those applied to plastics, are comparatively low (see Table 1-6). In a number of countries imports of copper and other scrap metals are tariff-free. Tariffs on recyclable wastes do not represent a particularly high bar8. 9.

rier to international trade. Measures prohibiting trade of recyclable waste and secondhand goods, the cost of pre-shipment inspections and the time required to complete the procedures required under the Basel Convention, on the other hand, are restricting international trade flows. Vietnam had imposed a comprehensive ban on both imports and exports of wastes except import of a few recyclable waste9. China and Indonesia prohibit imports of hazardous wastes, and Hong Kong has introduced a measure ban-

See Chapter 2. According to interviews conducted with staff of Vietnam’s ministry of natural resources and environment during hearings held in June and October 2004, progress is being made on studies aimed at permitting exports via amendments to the Law on Environmental Protection.

13

Chapter 1

Table 1-6: Tariffs on Main Recyclable Wastes in Asia (most favored nation treatment) Country China Hong Kong India Indonesia Japan S. Korea Malaysia Philippines Taiwan Thailand Vietnam

Waste plastics 10.7% Free 20% 5% 4–4.8%* 6.5% 0–30%** 1–5%*** 6.5% 30% 10%

Waste paper Free Free 16% 0–15%† Free Free Free 1% Free 1% 3%

Scrap iron

Copper scrap

Aluminum scrap

0–2% Free 10% Free 0–4.7%†† 1% 0–5%††† 0–3% 0–3.8% 1% Free

1.5% Free 15% Free Free Free Free 3% Free 1% Free

1.5% Free 15% Free Free 1% Free 1% Free 1% Free

* However, when the general preferential tariff system is applied the rate is 0% (free). ** Applies some tariff discounts to imports from *** A 1% tariff applies for imports of waste polyvinyl resin. † 0% (free) is applied to imports for paper manufacture; otherwise the tariff is 15%. †† When the general preferential tariff system applies, the rate is 0% (free) for all sub-categories. ††† A 5% tariff is applied to re-melted ingots, though the rate is 2.5% for ASEAN nations. Source:Compiled by the author from World Tariff (database) search results current as of August 17, 2004.

ning imports of such wastes from developed countries. Taiwan, which has not acceded to the Basel Convention for political reasons, has, in principle, become unable to conduct trade in hazardous wastes with any of the Parties to the Convention10. In Vietnam, which had imposed a ban on all international trade in waste, tighter controls on imports of waste covered coated cables has forced a company, that intended to transfer environmentally sound technologies of coated cables, to withdraw from the country. And there is also a case of copper chloride scrap, which can no longer be exported as waste, being converted into copper oxide and exported as a raw material (see Chapter 6). Amita, a company in Japan, attempted to import copper scrap from Malaysia to Japan, but abandoned its efforts due to the difference of definition and the procedural time involved and ended up exporting to the US instead of Japan. Ricoh, which made efforts to export used toner cartridges from Hong Kong to Japan for reusing

10.

parts and recycling, ultimately abandoned its attempts after a year and half of preparations, because they need additional permit to handle waste in Japan11. In many instances, even where the export goal was ultimately achieved, the necessary procedures proved time consuming. Sanyo Energy (Suzhou, China) exports defective Ni-Cd (nickel-cadmium) batteries to Japan since it is not possible to recycle them properly in China. It commenced preparations in June 2002 and finally obtained permission from China’s State Environmental Protection Administration (SEPA) in January 2003. It reports that Chinaside procedures took 3–4 months, while those required by Japan took around two months to complete12. The outcome of such tough restrictions and the time required to complete preparatory procedures is that the recycling of some recyclable wastes is being hindered and companies are being forced to shoulder additional costs.

However, in line with the provisions of Article 11 of the Basel Convention, it is possible for Taiwan to trade in hazardous wastes if it enters into bilateral agreement with any of the Parties to the Convention. 11. This is based on a presentation given by Ricoh at a meeting of the Industrial Structure Council’s Working Group on Enhancing International Recycling held on July 29, 2004. 12. Based on a hearing conducted at Sanyo Energy (Suzhou) in December 2004.

14


SECTION 6: TOPICS & COMPOSITION OF THIS PAPER As seen in Section 4, in view of the fact that unrecoverable wastes are slipping through the regulatory barriers and being exported, and the occurrence of transboundary movements of wastes that are associated with improper recycling, it would prove difficult to simply ease the barriers to transboundary movements of recyclable resources. On the other hand, as stated in Section 5, stiff regulations are rendering transboundary flows more difficult than needs be, even when recycling processes are believed to be being correctly undertaken. What we should be aiming for is the appropriate recycling and reuse of recyclable waste and secondhand goods, and the creation of economic and social mechanisms that conserve resources and restrict environmental loads. Controls on transboundary movements of recyclable resources must be such that they promote proper reuse and recycling. This report considers the nature of measures needed to achieve these ends and examines what form the framework for assessing such measures, including recycling indicators, should take in reference to prevailing conditions in the Asia region. Chapter 2 examines current exports of recyclable resources from Japan, focusing on the ways in which trade flows are affected by the nation’s various recycling laws. Japan could be said to represent Asia’s exporter of recyclable resources. Chapter 3 reviews conditions in China, which imports vast quantities of recyclable waste commodities not only from Japan but from countries throughout the world. It points to the importance of cooperation with government of exporting country in the control of transboundary movements of recyclable waste. Chapter 4 takes up the case of Hong Kong,

which has become a throughway for recyclable waste bound for China and points to the significance of Hong Kong’s role in controlling illegal trade flows. Chapter 5 examines the case of Taiwan, which despite being a major importer of recyclable waste in the early 1990s used pollution as an opportunity to impose import restrictions on such consignments. Moves to ease the restrictions on imports of recyclable waste in response to the enactment of environmental regulations and advances in the recycling industry, could provide useful reference for other countries in the Asia region. Chapter 6 examines the regulations governing recyclable resources in Southeast Asia, providing an overview of cases of illegal trafficking, and evidences different stances on the transboundary movement of recyclable waste, hazardous waste and secondhand goods among the countries of this region. Chapter 7 reviews conditions in Europe, which appears to be achieving transboundary movements of hazardous and recyclable wastes with greater ease than Asia, and considers the orientation of inter-regional cooperation on international trade flows. It is difficult to assess how far cyclical economies and societies have come in line with global advances in recycling using the estimated recycle rates of individual countries alone. Chapter 8 thus examines the creation of evaluatory indicators in light of progress in the recycling industry worldwide. Chapter 9 investigates what steps need to be taken to facilitate the formation of a sound material cycle society in the Asia region in the context of a discussion of the issues raised in Chapters 1 through 8.

REFERENCES Basel Action Network and Silicon Valley Toxic Coalition. 2002. Exporting Harm: the High-tech Trashing in Asia. Center for Investigative Reporting and Bill Moyers. 1990. Global Dumping Ground. Seven Locks Press. German Council for Sustainable Development. 2003. Export of Used Goods and Building Practice for Buildings.

15

Chapter 1

Jacnischewski, Jörg; Mikael P. Henzler; and Walter Kahlenborn. 2003. The Export of Second-hand Goods and the Transfer of Technology—an Obstacle to Sustainable Development in Developing Countries and Emerging Markets? Adelphi Research gGmbH. Kakuta, Shinya. 2004. “Control of Exportation and Trade to Construct Global Material—Recycling Society.” Macro Review. Vol.17. No.1. 21–35. Macro Engineers Society of Japan (in Japanese with English abstract). Kojima, Michikazu. 2002. “Chuushou Kigyou oyobi Infoumaru Sekutaa no Kougaitaisaku – Namari Risaikuru ni okeru Nihon no Keiken to Ajia Shokoku no Mosaku (Pollution Controls Policy for Small and Medium Industries: experiences in lead recycling in Japan and Developing Asia).” In Dynamism of the Policy Process in “Development and the Environment”: The Experiences of Japan and and Problems in East Asia, ed. Tadayoshi Terao and Kenji Otsuka. Institute of Developing Economies (IDE). (in Japanese) Kyushu Bureau of Economy, Trade and Industry. 2002. Ajia Shigen Junkangata Nettowaaku Kouchiku Kanousei Chousa (Survey on the Feasibility of an Asian Resource Recycling Network). (in Japanese) Minato, Kiyoyuki; Atsushi Funasaki; and Shigeru Kajima. 2004. “Chuukosha Yushutsu to Eakon Furon Hasseiryo no Suikei (Used Vehicle Exports and Estimation of CFC Emissions from Air Conditioner).” JARI Research Journal. Japan Automobile Research Institute. Vol.26. No.2. 7–16. (in Japanese). Shinko Research. 2001. Heisei 12 Nendo Haikibutsutou Shori Saishigenka Suishin (Junkangata Keizai Kouchiku ni kakawaru Naigai Seido oyobi Keizai eno Eikyou ni kansuru Chousa) Chousa Houkokusho (Survey Report on Efforts to Promote the Treatment and Recycling of Waste Products 2000 (Survey of the Impact of Sound Material Cycle Society Creation on Domestic and International Systems and Economies)). downloaded from the Ministry of Economy, Trade and Industry website (in Japanese). Takahashi, Makoto; Osamu Kanazawa; Toshiyuki Hara; and Keiji Fujiwara. 2003. “Construction of Fujitsu’s Global Recycle Network.” FUJITSU. Vol.54 No.6. 491–497. (in Japanese with English abstract) Terazono, Atsushi; Shinichi Sakai; Yuichi Moriguchi; Bulent Inanc; Katsunori Suzuki; Yuko Yamamoto; and Keisuke Hanaki. 2004. Heisei 15 Nendo Haikibutsu Shori Kagaku Kenkyu Houkokusho: Ajia Chiiki ni okeru Shigen Junkan Haiki no Kaiseki (A Structural Analysis of Recyclable Resources and Wastes in the Asia Region: Report on Scientific Research into Waste Management 2003) National Institute for Environmental Studies, United Nations University/Institute of Advanced Studies, Tokyo University. (in Japanese). Terazono, A.; A. Yoshida; J. Yang; Y. Moriguchi; and S. Sakai. 2004. “Material Cycles in Asia: Especially the Recycling loop between Japan and China.” Journal of Material Cycles and Waste Management. Vol.6. No.2. 2004. Toxics Link. 2003. Scrapping the Hi-Tech Myth: Computer Waste in India. Wada, Naohisa. 2002. Chiiki Kankyou Zei (Local Environmental Taxation). Nippon-Hyoron-Sha. (in Japanese). Water Quality Bureau Research Group on Waste Issues, Ministry of the Environment. 1993. Baazeru Shinpou Q&A (Q&A on the New Basel Laws). Dai-ichi Hoki. (in Japanese)

16