July/August 1993
Canadian recyclers met at CARI's 52nd annual convention in May, focusing on growing government intervention in recycling at all levels as well as economic troubles.
BY JAMES E. FOWLER
James E. Fowler is publisher and editorial director of Scrap Processing and Recycling.
The annual convention of the Canadian Association of Recycling Industries (CARI), held May 21-23 in Banff, Alberta, found its members struggling with increasing government interference in recycling on all levels as well as difficult economic times—not only for recyclers, but also for their association.
Speaking at the association's annual general business meeting, CARI President John Kis, vice president and general manager of metal recycling for Intermetco (Hamilton, Ontario), said that the association is struggling with "financial problems," and that Stan Parker, CARI's executive director for the last 18 years, had been let go. He also noted that CARI has lost members "through attrition and because of the changing involvement of some of our members," but added that membership drives have brought some new participants into the group.
Noting that CARI's directors believe very strongly in the importance of the organization and the benefits that can be derived from its existence, Kis called on CARI members to get more involved within the association, asking for their help in strengthening chapter activities and fostering improved government relations, particularly at the provincial level. "We have to reorganize, refocus, and revitalize our association to be able to function, to go forward and serve the needs of the members," he added.
Flow Control Threatens
The convention's environmental session, entitled "Flow Control Perspectives—Will We Survive It?," highlighted tension between provincial government officials grappling with waste management problems and private recyclers concerned about public sector encroachment in their business. The program was moderated by Charlie Holt of Lake Ontario Steel Co. (Whitby, Ontario) and Barry Thompson of Intermetco Ltd. (Hamilton, Ontario).
Ron Dreidger, director of municipal waste reduction for British Columbia Environment, spoke at the session, outlining the provincial government's solid waste management efforts, formalized in 1989, aimed at reducing the per capita generation of solid waste requiring disposal in the province by 50 percent by 2000. Dreidger focused on the provisions of bills 58 and 29, two major recent amendments to the strategy, which he described as "a framework for greater partnership and cooperation with local governments in meeting waste reduction goals."
According to Dreidger, bill 58 requires the province's 29 regional districts to submit solid waste management plans by 1995, and bill 29 provides the regional districts with the authority needed to perform their solid waste management duties. Among the powers the latter law gives regional authorities, he said, is the ability to manage recyclable materials, govern operation of private facilities as well as municipal operations that handle solid waste or recyclables under their plans, and issue "operational certificates" to recycling and waste facilities. Bill 29 also establishes a municipal solid waste task force made up of representatives of local governments, industry, labor, and public interest groups.
Rick Coombs of Richmond Steel Recycling (Richmond, British Columbia), a private sector recycler who serves on the task force, sharply criticized bills 58 and 29 at the environmental session, noting that the task force has been ignoring his suggestions for a year. The government representatives appear to listen, but they don't hear or understand what's being said, Coombs complained. They refuse to accept the fact that scrap recyclers don't deal with waste, he explained, suggesting that the provincial government could use its mandate to "take over" the scrap industry.
The new laws impose burdensome record-keeping requirements, according to Coombs, who said the province wants to know everything about scrap businesses, including who their suppliers are, what production costs they face, what prices their scrap is sold for, and how much their employees are paid. This sort of information is being collected so the province can take over the scrap industry one step at a time, he warned, adding, if you don't comply, you'll be out of business.
At the close of the session, another CARI member from British Columbia said that if the province's move to "absorb" the scrap industry in the province is successful, Ontario and Quebec might make similar moves. He attributed the province's action at least in part to campaign promises government officials made to the Canadian Union of Public Employees that, if elected, they would provide the union with "waste recycling" jobs.
Basel, Other Proposals Menace Scrap Trade
Recyclers need to blow their own horns if they wish to protect international trade in scrap commodities, according to Brian Smith, metals recycling commodity specialist for the nonferrous division of the mineral policy sector of Energy, Mines, and Resources Canada. Smith spoke at the convention's nonferrous session, which was moderated by Brian Shine of Manitoba Corp. (Lancaster, N.Y.).
Smith based his remarks on the threats to international recycling posed by the Basel Convention on the Control of Transboundary Movement of Hazardous and Other Wastes. This international agreement was created by the United Nations Environment Program to control the international flow of hazardous wastes, but the lack of a distinction between waste destined for disposal and scrap headed, plus the fact that it prohibits trade in all "wastes" between countries that have ratified the accord (such as Canada) and those that have not makes the Basel Convention a much farther reaching accord, he noted.
Smith identified several reasons recyclers suffer from regulatory misunderstandings. Regulators, who are generally familiar with the primary metal industries, typically don't understand the secondary metals business, he said. Also, some environmental groups see "metal recycling as pollution by another name." And, he noted, the public gets nervous and calls for protection when told that recyclers handle "wastes" that may be hazardous. Yet the recycling industry has been very shy about getting its word out, according to Smith.
He pointed out that there will be a series of meetings held this year prior to the next formal gathering of the Basel signatory nations. These sessions will consider protocols on liability and compensation, determination of what is "environmentally sound management," and export bans to developing countries. Smith urged CARI members to contribute to Canada 's deliberations on these issues. He also suggested they contact their customers in less-developed countries for support in keeping trade channels open. Finally, he again urged all industry members to approach regulators, municipal officials, and provincial leaders—as well as recyclers' critics.
Cradle-to-Grave Stewardship `Unworkable'
Toronto Globe and Mail columnist Terence Corcoran also targeted government overregulation during his presentation as the convention's keynote speaker. "When the market is allowed to function, the economy and the environment benefit," said Corcoran. But, he added, "unfortunately the market is losing ground to the government around the world." He blamed the situation on the mind-set of environmentalists who refuse to accommodate the role of the market system and encourage additional government control.
Turning to focus on proposals aimed at cradle-to-grave product stewardship, which he called "the `Sovietization' of products," Corcoran said that proponents of this policy are making "a great corporate mistake, totally unworkable in any practical sense." And, he said, "One of the most disturbing aspects of this approach is that it is being developed with the consent of the private sector."
Corcoran concluded his remarks by observing that current trends threaten that the recycling industry will become licensed and registered, and government will become the ultimate owner of all recyclables in any jurisdiction. This type of central planning will mean that the government will control everything, he warned.
Shredders Must Run Like Manufacturing Plants
Scrap recycling companies must see themselves primarily as manufacturing facilities and draw on lessons available from the world of manufacturing in order to improve their performance, advised Scott Newell Jr., president of Newell Industries Inc. (San Antonio), which manufactures shredders and operates several shredding facilities. Speaking at a session dedicated to advancements in the operation of shredding plants, Newell added, "Scrap metal processing firms can no longer be considered primarily trading ventures. Scrap processing involves tremendous capital investment, fixed expenses, highly trained work forces, and sophisticated purchasing and sales organizations."
Newell provided convention delegates with a hefty set of guidelines, entitled "World's Best Practice Shredder Operation," which focus on a corporate commitment to continuous improvement and elimination of waste. He encouraged his audience to use the guidelines, including the detailed spreadsheets and checklists in the package, to study what really works and what does not. In using the guidelines, he advised recyclers to evaluate their operations as if "nothing is sacred," questioning all methods that are in place so they can "design a company that loses old baggage and that builds from a fresh basis."
Robert Kneale of Mandak Metal Processors (Selkirk, Alberta) moderated the session.
Canadian Steel's Bubble May Burst
"Where is the Canadian steel industry going?" investment analyst and consultant Jay Gordon of Credi Finance Securities Ltd. (Toronto), wondered aloud to open his presentation at the convention's ferrous session. Answering his own question, he said, "To hell in a hand cart."
Steel industry operating rates in Canada are currently strong because of shipments to the United States , according to Gordon, but U.S. mills aren't happy about it and say it has to stop. The problem is, he said, the Canadian domestic market is not big enough to absorb all this steel if the mills have to reduce their shipments south of the border. Gordon then posed a second question: "If we can't ship to the States and can't sell the steel domestically, what happens?" This time, he didn't have an answer. In fact, he pointed out, steel shortages in the first year of any industry recovery are unheard of, so there is no quick fix to the Canadian Steel dilemma. "The whole things is a great big bubble—it could be the mother of all bubbles—and it will end with a huge crash." In the short run, the prognosis for Canadian steel makers is limited access to the U.S. market, said Gordon. In the longer run, the industry will shrink, he told those at the program, which was moderated by Sheldon Kumer of IW&S Ferrous Ltd. (Hamilton, Ontario).
Shifting to examine demand for ferrous scrap, Gordon said that if the steel mills move forward with announced plans for thin-slab casting, there will be 6 million tons worth of production looking for high-quality scrap. But, he pointed out, current capacity of only 2 million tons in North America is already putting pressure on scrap supplies in theUnited States . And because mills making flat rolled items are seeing obsolete scrap as a less and less attractive feedstock, the North American scrap recycling industry could soon find itself between a rock and a hard place.
Canadian recyclers met at CARI's 52nd annual convention in May, focusing on growing government intervention in recycling at all levels as well as economic troubles.