Material Processing

I. Demanufacturing and Recycling Compliance Process

SSI performs detailed demanufacturing tasks and separates materials into over 50 major and sub-material categories. All the processed raw materials will be sent to audited and approved downstream processors (not brokers) for further processing and recycling. All the downstream processors were audited and approved by SSI’s management as part of our ISO procedures. This process will assure that no material goes into the ground and nothing pollutes the air. It is SSI’s goal to keep our environment safe and clean.

Nonhazardous:

• Ferrous Metal: steel, stainless steel, etc.
• Nonferrous Metal: aluminum, copper, etc.
• Plastic: ABS, ABS/PC, PS, PC, PVC, vinyl, etc.
• Packaging Material: foams, shrink wrap, peanuts, etc.

Hazardous:

SSI works closely with our customers’ approved downstream specialty processors to ensure safe and appropriate handling of all the followings items:

• Batteries
• CRT Glass
• Circuit Boards
• Lamps
• Toner

SSI’S General Demanufacturing Procedure

II. SSI Follows Responsible Recycling (R2) Standards for Electronics Recycling

SSI’s leadership in the industry is well-recognized by the U.S. EPA and was instrumental in establishing the important benchmark standards for the selection of responsible electronics recyclers. SSI was selected to be an R2 pilot testing site. The auditor concluded that SSI was exceeding the standards that were benchmarked.

R2 has more stringent standards than that of ISO 14001. The key requirements include:

• Focus Materials (circuit board, CRT glass, battery, lamp and toner) Management
• Export Control Management
• Compliance with EPA’s latest CRT Rules published in 2007
• Downstream Processor Due Diligence
• Data Security Management
• Environmental Management System
• Health, Safety and Security Management
• Facility and Personnel Security Management, etc.

III. Environmental, Health, and Safety Management System (EHSMS) for Recycling

SSI has detailed procedures written into our ISO-rized procedures on:

• Environmental Management
• Health
• Safety
• Security
• Record Keeping
• Management Review

SSI received its ISO 14001, 9001, IAER and NAID certifications. Every certification requires evidence of our EHSMS system. We always passed with high scores.

SSI focuses all the safety issues of our employees. They have to wear protective clothing and our EHS Manager regularly conducts a variety of trainings. For example: when our staff processes monitors and TVs, they must wear special full-protective clothing to cover their head, body and all the way to their shoes. They also have to wear cut-resistant KEVLAR gloves, respirator and face shield. When our staff retrieve toners, they are immediately stored in a gaylord box with cover.

We are regularly being audited by our current and new corporate customers. They all send their top environmental management to audit us. Many, including four EPA auditors prior to awarding SSI the prime contract, complimented that we have one of the best EHSMS management systems. It is our goal to constantly improve ourselves in this area in order to protect our environment and customers as well as staff.

IV. SSI Policy on Exporting and Landfill Disposal of the Collected E-Waste

SSI’s Export Management Policy adheres to the R2 standards. We do not export to non-OECD countries. The two materials that we export are (CRT glass to Thomson in Mexico and circuit boards to Umicore in Belgium); we have filed necessary documents with the U.S. EPA and have on file copies of their import licenses.

V. How SSI Handles Mercury Removal, CRTs, Circuit Boards, Batteries, Toner, etc.

What separates SSI from other recyclers is our capability in managing the “Focus Materials.” As per EPA R2, the “Focus Materials” include the following:

CRT Glass

It is critical to comply with EPA’s latest CRT Rules published in 2007. Recyclers must show evidence of compliance by submitting documents to the U.S. EPA on CRT glass disposition method and the name and address of the entities where CRT glass is sent for recycling. If the entity is in a foreign country, EPA needs to verify with the competent authority of the foreign country to ensure that this entity has a valid import license. SSI sends its CRT glass to the responsible and EPA-compliant CRT glass remanufacturing Thomson plant in Mexico at this time (Thomson is one of the few regulation-compliant CRT glass remanufacturing plants left in the world). We have complied with all the requirements stipulated in the CRT Rules as required by EPA’s along with approval document(s).

It is very important that the recycler UPS employs must show the evidence of compliance with the CRT Rules. Otherwise, UPS may be subject to violation of the law.

Circuit Boards

Circuit board is a major issue argued substantially at the R2 small-group discussions. It is one of the key reasons that caused two years of intensive negotiation. As circuit board contains hazardous components such as lead, cadmium and chromium, it has to be dealt with in a strict environmentally responsible manner. Most of the recyclers send the circuit boards to brokers which end in third-world countries. This violates the Basel Convention rules and international laws.

Another critical point for processing circuit boards is that some large recyclers with shredding systems, such as the one that HP’s processor uses, do not take circuit boards out before shredding. The processing boards usually have volatile and hazardous lithium battery on it. If not removed before shredding, it will make the whole shredded material as hazardous waste. In addition, it could cause fire hazard during the shredding process. In the R2 document, U.S. EPA specifically demands that batteries and lamps (from laptop and flat panel displays) should be removed prior to shredding. This was argued by HP’s contractor Sims Recycling so they can save labor costs.

However, EPA did not concede. Therefore, it is also very important to make sure that shredding operations remove batteries and lamps before shredding.

SSI has a lot of major global OEM customers (i.e., manufacturers). The circuit boards usually contain proprietary and confidential information. Therefore, it is important that we use the best smelter to ensure total destruction in the most environmentally sound manner.

SSI sends all its circuit boards to the world’s best smelter Umicore in Belgium which is in a developed OECD country allowed by the Basel Convention. We also have on file Belgium government’s import license issued to Umicore. (This is required by R2.) Umicore is ISO 14001 certified. It has passed SSI’s audit based on its stringent environmental guidelines and processing procedures, as well as its management capability in handling hazardous materials.

Before sending the circuit boards to Umicore, all the volatile lithium batteries on the processing boards are removed.

Batteries

SSI has well-organized Battery Processing Procedures in our ISO documents. Batteries retrieved from demanufacturing or remarketing process have to be managed as per the stringent procedures. We tape all the lithium batteries, 9-Volt batteries, etc. They are stored in fireproof containers with liners. We have audited and approved several battery remanufacturers in the U.S. for recycling different types of batteries.

Lamps

Lamps are usually retrieved from copiers, fax machines, multifunction units, laptops and flat panel displays. We use the best lamp recycler Earth Protection Services, Inc. (EPSI) to recycle all of our lamps. We purchase their lamp specific containers/boxes (U.S. DOT approved) and put all the lamps inside the containers secured with special packing tape before shipping.

Toner

Toner is a material that many recyclers do not know how to handle. Since toners are in many printers and copiers, UPS cannot take this issue lightly and must make sure that the recycler selected has a solid program in handling toners since it has significant health and safety issues. Since SSI services several major global copier manufacturers, SSI has established a stringent health/safety and processing procedure in managing toners. When our staff retrieve toners, they are immediately stored in a gaylord box with cover. All staff must wear special face mask/respirator, cut-resistant gloves.

We send the toners to the best waste-to-energy incinerator Covanta Energy for disposition. (Toner cannot be recycled at the present time. We hope a new technology can be developed in the future to recycle toner.)

VI. SSI Downstream Process Flow of Material

SSI has instituted in our ISO procedures a stringent downstream due diligence process as prescribed by the EPA’s Responsible Recycling (R2) standards. We have developed an in-depth audit form for the downstream to fill out. Our audit team will also perform on-site audits to validate the information in the areas of environmental, health, safety, security, data destruction and material handling methodology. We only use downstream audited processors approved by our management or corporate customers’ environmental department.

VII. Material Recovery/Recycling and Remanufacturing

SSI has in-depth knowledge on material properties and thoroughly understands how to demanufacture equipment to achieve 99% plus recovery rate. SSI has also instituted stringent downstream auditing procedures to select best-of-class secondary material processors in the fields of ferrous, nonferrous, plastic, CRT glass, circuit board and battery recovery. For plastics, SSI can use its customers’ materials to remanufacture into useful products.