A Capital CARI

Within sight of the Victorian towers of Parliament Hill, the Canadian Association of Recycling Industries (CARI) (Ajax, Ontario) gathered in Canada’s capital—Ottawa, Ontario—for its 59th annual convention. It was a fitting locale, given the increasing respect and recognition CARI enjoys within the circles of government and industry.
   “We’re constantly called upon by associations and government to help develop various policies,” noted outgoing CARI President Yves Beaudoin of Dominion Metal & Refining Works Ltd. (St. Constant, Quebec). “We certainly don’t always get the results we desired, but we’re now asked to contribute.”
   Held at the Westin Ottawa hotel, overlooking the scenic Rideau Canal, this first CARI meeting of the new millennium explored such modern issues as e-commerce, global warming, and stress management, as well as perennial concerns such as coping with government regulations and satisfying customers.

Legal and Commercial Challenges
During the session on “Business in the 21st Century,” Gordon Archibald, a lawyer with Fraser Milner Casgrain (Ottawa), examined the complicated and potentially confusing legal aspects of e-commerce, including ownership issues, jurisdiction for disputes, tax concerns, and the security and integrity of contracts generated throughe-commerce.
   Archibald warned that “you can’t rely on e-mail to create a contract.” E-mails can be too easily altered, and there’s no way to prove where a regular e-mail came from (unlike with faxes, which do have such traceable technology, he noted). Archibald related the true story of a company that received an e-mail request for $1 million worth of goods from what they assumed was a regular customer—only to discover after shipping the material that it was the customer’s son who had gone online with his father’s computer and placed a prank order. “They weren’t able to enforce the contract,” he noted.
   Though there are technologies available to create “digital signatures” to verify the authenticity of information transmitted online, Archibald noted that many B2B, or business-to-business, transactions that begin over the Internet are concluded with traditional paper contracts. Internet contracts should get a boost from Canada’s recently adopted Bill C-6, called the Personal Information Protection and Electronic Documents Act, which seeks to establish the binding legal nature of online transactions. (Similar efforts are being considered by the U.S. Congress.) But the C-6 law also establishes tough requirements for protecting the privacy of personal and business information—including, potentially, even the information that trade associations publish about their members in annual directories, he said.
   Archibald also warned about the potential impact of business process patents, a relatively new legal concept established in the United States but not yet recognized in Canada. Such patents have already produced numerous lawsuits over Internet issues such as asking questions in natural language and the one-click ordering process developed by e-commerce retailer Amazon.com (which briefly shut down a similar system used by Barnes & Noble for patent infringement, Archibald noted).
   Other potential legal hassles in e-commerce include the question of which courts will have jurisdiction if, for instance, a company in Ontario has a dispute with a company in Texas and whether a judgment issued by one court will be enforced by the other. To help avoid such problems, spell out such jurisdictional questions in the contract, Archibald advised.
   There’s also the confusing question of which province or state has the right to tax an e-commerce business if, for instance, the company is incorporated in Ontario but its board of directors meets regularly in Manitoba, while the firm’s Web server operates in Pennsylvania. And it gets even more complicated when dealing with Asia or Europe, Archibald added.
   John Robb, the Guelph, Ontario-based sales manager for RecycleNet Corp. (Richfield Springs, N.Y.), discussed how the Internet is changing the ways people do business. A recent survey noted that some 80 percent of respondents now prefer using e-mail rather than the regular mail and 72 percent have replaced faxes with e-mails, Robb noted.
   At the same time, only 45 percent preferred using e-mail to the telephone—a significant distinction, since Robb predicted the business world won’t see its most dramatic movement to the Internet until people do treat e-mail as a substitute for the phone.
   RecycleNet, which operates the Recycler’s World Web site, has seen “phenomenal growth” since going online in May 1995, Robb said. The company’s initial 1,000 page-views a month have since grown to more than 50,000 page-views a day, he noted. (A page-view involves downloading an HTML page and is a more accurate reflection of usage than a hit, which refers to downloading any file on the site, he explained.)
   Robb outlined the various types of e-commerce sites—such as auctions, reverse auctions, and exchange or listing-type systems like Recycler’s World—as well as the various payment methods for Internet transactions. While credit cards work fine for buying a book online, “How many people are going to put a load of scrap aluminum on their credit card?” he asked. 
   Credit itself isn’t broadly accepted in the traditionally cash scrap business, while paying with hard currency is not something the electronic marketplace can handle, Robb said. Some kind of escrow system offers possibilities, as does an electronic-cash approach, he noted.
   Overall, though, Robb stressed that e-commerce isn’t going away. “The market exists, it is real, there are people using it, and it is not a fad,” he concluded.

Consumer Views
E-commerce was also a hot topic at the consumer’s outlook panel.
   Craig Frankenberg from the base metals marketing department of Rudolf Wolff & Co. Inc. (New York City) predicted that the “manner in which [metals trading] had been conducted previously will be replaced by the new ‘dot.com point-and-click’ system. Trading will be executed via the Internet and e-mail rather than the boardroom and fax machine.”
   Focusing on the “substantial” cost efficiencies that e-commerce will bring to metals trading, Frankenberg pointed especially to savings in travel expenses and staff reductions. “We now have more potential customers accessing our Web site in a single day than we could have hoped to reach in a month of travelling and cold-calling,” he noted.
   The LME and Nymex will “undergo dramatic changes” thanks to e-commerce, Frankenberg predicted. Both exchanges are embarking on e-commerce ventures, with the LME planning to launch an electronic platform to operate outside the ring trading times while Nymex wants to use e-commerce to break into the over-the-counter (OTC) market.
   Ultimately, Frankenberg said, the LME and Nymex hope e-commerce will help them expand from being futures exchanges to futures and physical commodity exchanges, which will “directly affect all participants in the market, as it will facilitate liquidity, price transparency, and elimination of counter-party risk as well as net margining of open positions across futures and OTC markets.”
   E-commerce isn’t without its skeptics, though. At the same consumer’s panel, Dennis Luma, vice president of operations for Wabash Alloys L.L.C. (Wabash, Ind.), said his company has examined a half-dozen e-commerce sites but “hasn’t seen a benefit from purchasing material over the Internet.”
   Wabash Alloys will maintain an open mind about trading metals online, Luma added, but only with e-commerce sites that are low-cost, efficient, and “complete,” enabling the user to complete the entire transaction online. He was disappointed in sampling one site that made him spend more than half an hour online locating the material he wanted—and then informed him that he still had to contact the firm by phone, just as with any nonelectronic deal.
   On another issue—the problem of unspent air bag detonators in aluminum scrap—Luma noted that Wabash Alloys has experienced a number of detonator-related explosions, which, while individually minor, still pose a safety hazard to secondary aluminum workers. He called on CARI, ISRI, and the car dismantling industry to establish a “zero-tolerance policy” regarding such devices and pledged his firm’s help to find ways of keeping unspent detonators out of the aluminum scrap stream.
   “These detonators must be removed prior to flattening of the autos,” Luma said, adding that the unspent devices can even be reused in new cars.
   Turning to business, Luma was optimistic, pointing to predictions of an average 6 percent annual increase in aluminum usage by the automotive industry for the next several years. By 2005, he noted, forecasts call for anywhere from 400 to 1,000 pounds of aluminum per car.

Steelmakers’ Sense
A call for help with recycling electric-arc furnace (EAF) dust, blast oxygen furnace furnace sludge, and other iron oxides came from Brian Aranha, assistant director of purchasing for steelmaker Dofasco Inc. (Hamilton, Ontario). EAF dust can no longer be landfilled in Canada, Aranha explained during the consumer’s panel, and he predicted a similar landfill ban for the other materials. So he called on the recycling industry to find innovative solutions to recycle such “wastes,” though he conceded that all such efforts so far have been disappointing.
   Dofasco itself has been working to confront challenges such as the U.S. government’s call for cars that can achieve 80 mpg. The steelmaker has invested in technology for hydroform tubing, tailor-welded blanks, and galvanized steels—all aimed at the lower-weight, higher-strength demands of ultralight steel auto bodies. In addition, Dofasco has purchased car frames from its customers, conducted extensive research, and identified more than $50 million in annual savings that can be achieved for automakers.
   In turn, Dofasco is looking for its suppliers to develop new initiatives to meet the steel industry’s various challenges. For instance, Aranha hopes that more collaborative approaches and “relationship restructuring” between the steel industry and the recycling industry can produce “huge gains” in reducing logistics expenses while also ending what he called “aggressive and even predatory” scrap pricing.
   Attendees also heard Marcel Francoeur, vice president of Stelco McMaster Ltee. & Wires Operations (Contrecoeur, Quebec), discuss his firm’s efforts to increase steelmaking capacity from 538,000 tons last year to a projected 650,000 tons by 2002. While maintaining its position as a major producer of leaf spring flat bars, Stelco McMaster also hopes that a new bar mill and $33-million (Canadian) modernization effort will give it a leading role with special bar quality rounds.
   The steelmaker hopes to reduce costs by optimizing its product mix and size runs while increasing automation, Francoeur explained. Meanwhile, the company seeks to establish “a more solid presence” in eastern Canada and the United States to acquire and protect its supplies of all scrap grades while also making “strategic” use of DRI, HBI, and pig iron.
   With a twist on the old chicken-or-egg conundrum, William Heenan Jr., president of the Steel Recycling Institute (Pittsburgh), opened the environmental/health and safety session with the question: “Which comes first—new steel or old steel?” Or in other words: new cars ready to be sold or the scrapped auto hulks waiting to be shredded?
   Well, thanks to the success of recycling, especially scrap recycling, the answer is that both new and old steel come first, Heenan reported. “If it wasn’t for the old steel, we couldn’t make new,” he explained, “and if it wasn’t for the new steel, there wouldn’t be a demand for the old.”
   The success of steel recycling was evident in Heenan’s statistics, which compared total raw steel produced to total scrap consumed. Roughly 58 percent of steel cans in the United States were recycled last year, with even higher rates in Canada, he explained, while more than 77 percent of steel appliances, 91 percent of automobiles, and 95 percent of steel plates and beams were recycled throughout North America. Even rebar’s numbers were improving, reaching a 45-percent recycling rate, he noted.
   All told, the United States recycled some 67 million tons of steel in 1999, with Canada adding another 15 million tons to the total, Heenan said. And while conceding that it’s “green” to recycle, he took a practical, business view, noting that the financial benefits from recycling—in lower energy costs and fewer raw materials purchased—represent a “different color green.”
   Heenan also discussed four key market areas that will generate future demand for both new steel and steel scrap. The ultralight steel auto body, for instance, might use less steel than previous cars, but it also “protects a good market for us,” he noted. In fact, the actual percentage of steel to total auto body mass has remained fairly constant—about 55 percent—for the last 20 years. It’s just that the cars are getting lighter overall, which requires the steel industry to develop its own higher-strength, lower-weight products. “Fifty percent of the steels used today in Detroit didn’t even exist 10 years ago,” Heenan pointed out.
   Steel bridges and steel utility poles also offer an opportunity for growth, with the newer steels making all-steel bridges a cost-effective option while the galvanized steel poles provide a longer-life product than wooden poles and also preserve the nation’s forests, he said.
   Finally, steel framing in residential homes is another tree-saving alternative that generates new demand for steel products. Though still a small part of the market—only about 3 percent of new homes in North America—steel framing has grown from virtually nothing five years ago to about 200,000 tons last year and promises to grow larger as home builders learn about the benefits of steel, Heenan asserted.

Regulation and Radiation
Recent trends in recycling regulations were explored by Cindy Thomas, manager, market research, recycling department for Noranda Inc. (Toronto). She highlighted the concept of “extended producer responsibility,” which in Europe has produced various “take-back” laws in which manufacturers are required to pay for the ultimate disposal of their products. As a result, Thomas said, manufacturers are expected to “start designing their products so that they’re more recyclable at the end of their life” and “pass on the cost of the true life cycle” to consumers.
   Though there are no take-back laws yet in North America, Thomas believes it’s only a matter of time before the concept crosses the Atlantic.
So-called “environmentally sound management,” or ESM, is another hot topic in regulations, Thomas noted. But she warned that while the concept of ESM is “quoted fairly regularly in international and domestic laws, it hasn’t been defined yet.” Possible definitions range from a fairly benign mandate to follow ISO environmental standards to a highly complex model that would compare the cost-benefit of landfilling material in location A with the cost-benefit of transporting it to location B for recycling. “Can you imagine the red tape we’d have to go through to recycle any goods?” Thomas mused.
   She also explored the question of “wastes” versus “recyclables” versus “products,” as well as the trend toward labeling certain materials as “hazardous.” Within Canada, she explained, recyclables were long considered wastes, with a leachate test used to determine whether or not they were hazardous wastes. Those laws were recently amended to distinguish recyclables from waste, she noted, but the leachate test remains.
   On another regulatory front, Bob Schutzman, director of environmental affairs for steelmaker Ipsco Inc. (Regina, Saskatchewan), briefly discussed two recent reports on proposed federal legislation in Canada that would reduce the acceptable level of PCBs in automobile shredder residue (ASR) from the current 50 to 2 ppm. One of the reports warned that the proposed regulation “could devastate the industries involved with the collection and recycling of [scrap material with trace levels of PCBs] across Canada. In turn, this will result in reduced production of steel from scrap ferrous metal and an increased reliance on the energy intensive, hot metal production from iron ore.” Since electric-arc furnaces can’t switch to iron ore, the report predicted that Canadian minimills and certain Canadian scrap processors would relocate to the United States.
   With some 3,900 documented cases of misplaced, stolen, or improperly discarded radioactive material in the past 17 years, scrap processors must protect themselves against the threat of this potentially deadly material ending up in the scrap stream, warned Mike Mattia, ISRI’s director of risk management. Radiation detectors are a good front-line defense, he said, but at best such devices will catch only 95 percent of the potential radiation problems, given factors such as the inherent shielding ability of scrap itself.
   It’s the remaining 5 percent that could either shut down your scrap business or injure you or your employees—if the radioactive gauge, medical device, or other source is accidentally breached.
Thus, visual identification of radioactive material is especially critical—both in helping you determine exactly what your detector has detected and in finding the radioactive sources the detector might have missed. Training your employees to recognize potential radioactive material “may be your last line of defense before the material goes into the shear, the shredder, the baler, or the melt,” Mattia stressed.
   He explained how key words, shapes, and colors can warn scrap processors that a particular piece of scrap might contain a radioactive source. For instance, words on devices or labels that end in the “-ium” suffix often refer to radioactive material. Examples include thorium, radium, uranium, and others.
   “Isotope” is another key word. Also any one- or two-letter designation when combined with a number—either in the upper left-hand corner or to the right—can indicate a radioactive isotope. Terms like “alpha,” “beta,” and “gamma,” along with the Greek letters associated with them, are also potential clues to uncovering a radiation hazard, as are terms such as “curie” and “becquerel” or their abbreviations “Ci” or “Bq.”
   Words such as “disintegrations” or “counts,” especially when combined with designations like “disintegrations per minute” or “counts per second” and their abbreviations of “dpm” or “cps,” are also useful to recognize.
   Certain colors, like yellow, are often used to identify radioactive devices, Mattia explained. Also, the three-bladed symbol for radiation is often used on labels or etched into the device itself. And certain shapes—such as a C-shaped device through which material might have passed for measuring or a device with what looks like a bulbous head at one end—are common among radioactive devices.
   But remember, Mattia warned, these devices might have been used in a factory setting for years and could therefore be covered with corrosion or grease or have been damaged. There might only be a fraction of a warning label left intact or simply evidence that some kind of metal plate had once been attached to the device.
   The most prudent approach is to “err on the side of being careful and consider [something suspect] as radioactive until you prove otherwise,” Mattia advised. •