July/August 1994
Implementing an effective source control program is an integral step toward minimizing your exposure to potential environmental liability, as well as achieving environmental compliance. Here’s some guidance on doing just that.
By Robin K. Wiener
Robin K. Wiener is director of environmental compliance/assistant counsel for the Institute of Scrap Recycling Industries (ISRI) (Washington, D.C.).
As a scrap processor, you probably receive recyclables from diverse sources--maybe large and small industrial generators, commercial entities, government agencies, and the public--and, in many cases, you might know little about the inbound material before it arrives at your doorstep. In such instances, what you don’t know can hurt you, for accepting even one load of potentially hazardous material could expose your employees and grounds to contamination and put your business at risk under environmental liability laws.
Fortunately, you can minimize, even eliminate, such risks by establishing a source control program. This means taking steps to monitor and control the environmental quality of the scrap that enters your processing facility, steps that can include educating your suppliers and employees, implementing inbound inspection procedures, and requiring certification agreements.
Each of these steps, of course, can be tailored to meet the specific needs of your company based on its size, resources, geographic location, and materials processed. Regardless of how you apply these techniques, however, the goals are the same for all recyclers: prevent potentially hazardous materials from endangering your employees and operations, and achieve environmental compliance.
Working With Your Suppliers
An important part of making source control work is to go directly to the sources of the material-your suppliers-and instruct them about your need to set quality requirements for your inbound recyclables. The following suggestions, which apply to varying degrees to all suppliers, will give you some ideas on how to accomplish this task.
Send a letter to your regular suppliers listing the conditions under which you will purchase recyclables from them. (See the sample supplier letter at left.) If you're a shredder operator, for instance, you might specify that you won't accept car hulks that contain batteries, oil filters, or any non-automotive objects.
Your supplier letter should also list materials you won't accept under any circumstances, a category that might include tires, closed containers that haven't been rinsed and vented, radioactive materials, car hulks bearing gas tanks, and drums that contain residual materials or that haven't been triple-rinsed and had holes punched in the bottom. This list will be company-specific, of course, as it should vary depending on a facility's processing, handling, and environmental control capabilities.
Meet with your suppliers to discuss your concerns about material from their operations that, if improperly managed, could present a threat to human health and the environment. Make them aware that hazardous substances, if present in their materials, could make them liable under Superfund for future on- and off-site cleanups.
Request material safety data sheets (MSDSs) for incoming materials. Under the Hazard Communication Standard of the Occupational Safety and Health Administration, scrap recyclers are required to forward MSDSs with shipments and have them on their premises for use by employees, but MSDSs are often not available for inbound recyclables. For this reason, ReMA has created MSDSs for ferrous and nonferrous metals (including many precious metals), glass, paper, and three types of plastics-polyethylene terephthalate, high-density polyethylene, and polyvinyl chloride. (To order these forms, contact Resource Consultants Inc. at 800/338-2815.)
Each state might have additional MSDS reporting requirements, so you should check with your state environmental and transportation agencies to ensure compliance. Similarly, if your state has recycling regulations, make sure your suppliers know about them.
Post warning signs at your entrance/ scale area that outline your inbound material guidelines and clearly state the penalties if shipments are delivered with unacceptable items.
Draft written documents that summarize your company's environmental policies and associated guidelines, then send these documents to your suppliers.
If at all possible, visit your suppliers' facilities to see their production processes or, at least, the portion of their facilities where scrap is generated. This is especially important when dealing with a new, unfamiliar supplier. Conversely, invite your suppliers to tour your facility to give them a better understanding of your operations and underscore the need for inspection procedures.
In general, use extreme caution when bidding on shipments from government agencies or unknown suppliers if you haven't been able to inspect the material prior to shipment.
While educating your suppliers takes time, it offers a tremendous payoff once in place, and it makes sense for both parties. After all, it's in the best interests of suppliers, as well as recyclers, to deal with environmentally responsible operators and be considered environmentally responsible themselves.
Protection Through Inspection
Inspecting the contents of all inbound shipments is one of the primary ways you can reduce the risk of receiving materials that may threaten your personnel and operations. At the very least, inbound inspections enable your employees to spot and carefully examine potentially hazardous materials to decide if a rejection is called for.
To make your inbound inspection efforts as effective as possible, consider these recommendations.
Inbound shipments should be visually screened by scale personnel to ensure that obvious environmental hazards aren't present. Look for such potential problems as leaking containers and drums with labels indicating hazardous or radioactive contents. Likewise, when your own trucks pick up material from a supplier's location, your drivers should conduct an initial inspection before hauling the material. In general, if you can't identify the contents of a load, it's best not to accept it, following the adage better safe than sorry. (A detailed discussion of potential problem materials can be found in chapter 3 of ReMA's environmental operating guidelines.)
If potentially contaminated material is identified, you can either reject the entire shipment or ask the driver to wait while you unload the shipment at a designated area within your facility for a more thorough inspection. If any additional problems are detected, you can then reload the truck and reject the shipment in whole or in part or call the supplier to confirm the contents of the shipment. Of course, if your facility is equipped to handle the material, you also have the option to accept the shipment, perhaps on a downgraded basis. Some recyclers, for instance, might be able to safely process capacitors containing polychlorinated biphenyls (PCBs), but not lead-acid batteries.
After being weighed in, inbound shipments should be more thoroughly inspected by your personnel during unloading. If you have reason to believe there may be a problem--for example, if the supplier has a history of hiding problem materials at the bottom of shipments--the inbound scrap should be segregated to avoid potential cross-contamination with other loads and then inspected. If a problem is discovered at this stage, you can reject the entire shipment, stop unloading and reject only the unloaded material, or hold aside the problem material in an isolated, environmentally secure place in your plant, continue inspecting the shipment, and return only the unwanted materials to the supplier.
Consider installing radiation monitors at your scale entrance to detect inbound radioactive materials. (For more details on dealing with radioactive scrap, consult ReMA's manual titled Radioactivity in the Scrap Recycling Process.)
Look into the use of a two-way communication system, such as walkie-talkies, in your plant to enable employees to easily and quickly notify a supervisor if they run across potentially hazardous material.
Keep visual records of inbound shipments to help you identify suppliers of potentially contaminated materials. For instance, you can photograph inbound shipments or videotape loads from receipt through processing, both of which can be invaluable in the event of a later problem or dispute. You or your suppliers can also color-code containers or use other marks to match incoming loads with a specific supplier.
Emphasizing Employee Education
Your employees-including truck drivers, scale operators, supervisors, buyers, and operating personnel-are perhaps your most-valuable source control asset, so it's imperative to train them in proper inspection procedures so they can make informed judgments when evaluating inbound recyclables. Well-informed employees are better able to recognize potential problems and make intelligent decisions on environmental compliance issues.
As a first step, let your employees know the costs and liabilities your company could incur if it accepts contaminated materials. Then, of course, they must be trained to recognize such materials and know what to do after they identify them. (Appendix VI of ReMA's environmental operating guidelines contains a detailed list of inbound recyclables and their potential environmental concerns. The association also offers a videotape titled Identifying Potentially Hazardous Materials, which can be helpful to employees and suppliers.)
This training should take place in three stages: prior to job assignment, during job training, and throughout employment. Before beginning an assignment, employees should be taught the environmental risks associated with all materials they could handle. During job training, they should learn how to operate equipment safely, how to detect potentially hazardous materials, and what procedures to follow if they run across such materials. Ongoing education includes drills, updates on operations and cleanup practices, and compliance meetings with other personnel.
The (Limited) Benefits of Certification Agreements
Certification agreements containing warranties and/or indemnifications are another source control tool that you can use to reduce your chances of receiving potentially problem materials. (For suggested language for such agreements, see the sample contract at left.)
In a scrap transaction, a warranty would be a statement provided to the purchaser of materials from the supplier that guarantees, as part of the contract of sale, that the materials in question are free from defects or contaminants. If you handle containers and tanks, for instance, you might ask your suppliers to certify that these materials, when delivered, are totally empty and certified to be clean, or "empty" in accordance with U.S. Environmental Protection Agency (EPA) requirements. Similarly, if you don't accept white goods or other items containing PCBS, you might stipulate that incoming material can't have capacitors, ballasts, or like enclosed reservoirs containing PCB-bearing liquids or residues.
Violation of a warranty agreement with such stipulations would allow you to sue the supplier for breach of contract. In addition, if environmental injury to your property or your customers' property resulted from that breach of contract, consequential damages could also be claimed.
An indemnity statement included in such an agreement would serve as an enforceable offer from a supplier to stand behind you, hold you harmless, and pay for any costs that you may incur as a result of a breach of contract.
In certain circumstances--such as purchases involving electrical equipment, fuel tanks, storage drums, appliances, and turnings--the absence of a certification or a supplier's refusal to provide certification should be viewed with concern.
Keep in mind that even when there is such a contract, the protection it provides is limited, as a party's liability under Superfund for hazardous waste cleanup is absolute. The EPA, under the legal concepts of strict joint and several liability, can look to one or all parties related to an environmental cleanup to pay the costs, and no warranty/indemnification contract can shift this liability from one party to another.
Still, such contracts shouldn't be disregarded. Aside from putting suppliers "on notice," warranty/indemnification agreements can enable you to more-easily move against a responsible party in case of environmental liability and, perhaps, recover your share of the cleanup expenses and attorney's fees.
Bolstered by these source control measures, you should be able to greatly minimize, even eliminate, your chances of allowing contaminated materials-and their potential liability repercussions-to affect your plant. While it may be impossible to completely control all aspects of your inbound materials, having a good source control program can bring your operations at least one step closer to environmental Perfection and compliance.
Editor's note: Much of this article is adapted from ISRI@ environmental operating guidelines, a 200-plus-page manual on certain environmental laws and suggested management practices. For pricing and ordering information on it and other resources available from the association, contact ReMA's publications order department at 1325 G St.N. W., Suite 1000, Washington, DC 20005-3104; 202/737-1770, 202/626-0900 (fax).
Sample Letter to Suppliers
Dear [supplier’s name]:
Because of our interest in protecting the environment, and the increasingly stringent laws and regulations in this area, [your company’s name] does not accept certain materials for processing due to their potentially hazardous nature. In addition to strict regulation of hazardous waste, existing federal and state laws assign liability for the potential cleanup of many designated hazardous substances. This liability is strict joint and several, which means that any party, including you as a supplier, contributing to the release of a hazardous substance into the environment can be held totally liable for any necessary cleanup. For this reason, it is in our mutual interests to take appropriate steps to prevent the release of any hazardous substance.
Effective immediately, [your company’s name] will no longer accept the following materials:
[List potentially hazardous or dangerous materials that you won’t accept under any circumstances.]
If we pick up your material, any item offered that is on the above list, if discovered during inspection, will not be accepted and will not be removed from your premises. Materials are subject to additional inspection upon arrival at our facility.
If any of the above materials are shipped to us, we will contact you immediately and we will expect you to take prompt action to resolve the problem by removing the materials and, in required, conducting any necessary cleanup.
These measures are intended to protect our mutual interests. If you have any questions, please contact me.
Sincerely,
[Your signature]
Sample Certification/Indemnification Agreement
Notwithstanding any other warranty or limitation of warranty herein, seller warrants and represents to buyer that to the best of his or her knowledge, based upon reasonable inquiry, the scrap to be delivered under this contract of sale does not contain any “hazardous substances” (which shall be defined as those substances included in section 101(14) of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. section 9601(14), and substances that are toxic, ignitable, corrosive, and/or reactive, as defined in 40 CRF Part 261, Subpart C), except those “hazardous substances” that are integral constituents of the metallic fraction of scrap metal or that are contained in the electrolytic fluid in a spent lead-acid battery.
Seller will indemnify and hold buyer harmless from any and all claims, demands, and liabilities, including reasonable attorney’s fees, resulting in whole or in part from a breach of the foregoing warranty. •
Note: This language provides limited protection to both the seller and the buyer, as a party’s liability under Superfund for hazardous waste cleanup is absolute. Additional language may be added to this agreement to address facility-specific concerns and issues related to inbound materials. Also, other modifications may be made as deemed necessary by a company’s legal counsel or as required by local or state regulations.
Implementing an effective source control program is an integral step toward minimizing your exposure to potential environmental liability, as well as achieving environmental compliance. Here’s some guidance on doing just that.