May/June 2004
Recycling in Hawaii has its benefits, but it also comes with its share of challenges, as this look at Hawaii Metal Recycling Co. shows.
By George Furukawa
Jim Banigan has what you might call a recycler’s dream job: He manages a scrap processing operation in Hawaii. Tough life—recycling in a tropical paradise that others can only dream about as a vacation destination.
Appearances to the contrary, however, recycling in paradise is hard work—harder, in some respects, than recycling on the mainland, as Banigan can readily attest. For the past 12 years, Banigan has served as general manager of Hawaii Metal Recycling Co., the largest scrap metal recycling firm in the Hawaiian Islands. HMR was founded in June 1991 to address an abandoned-vehicle blight on Oahu and to help the state divert recyclable scrap materials from its critically tight landfill space. Every 10,000 tons of scrap metal recycled at HMR saves 2.2 million cubic feet of landfill space, according to Banigan.
HMR is based in Kapolei, Oahu’s second-largest city. The company, which is owned by Flynn-Learner Inc., an affiliate of Hugo Neu Corp. (New York City), opened its scrap plant on a six-acre site in the Campbell Industrial Park in Kapolei for logistical reasons. Some years ago, the state decided to move its dry bulk-cargo export piers from downtown Honolulu Harbor to Kalaeloa Barber’s Point Harbor, a man-made deep-draft harbor on the leeward, or southwest, side of Oahu. HMR wanted to be close to the export piers, so it set up its recycling plant in the nearby Campbell Industrial Park, where it now operates alongside a concrete manufacturer, a well-drilling company, and a machine shop. The firm is also within a half mile of a waste-to-energy plant, a can manufacturing factory, two refineries, a green waste recycling company, and a bulk fuel storage facility.
This proximity to Barber’s Point is important since HMR exports 100 percent of its processed scrap, shipping two to three cargoes a year of ferrous scrap and about 100 containers annually of nonferrous metal, Banigan says. Most of the company’s material heads to steel mills in China, Japan, Malaysia, Indonesia, Turkey, and India.
When HMR opened for business in 1991, the keystone of its operation was a 3,000-hp Newell 80/104 automobile shredder, which the firm upgraded to 4,000 hp in December 2000. In addition to the shredder, the company now has an Idromec 4200 portable baler, which it uses to process material it wins on bid, usually on neighboring islands. The company’s facility also features a fleet of eight Caterpillar 235 and 245 material handlers, three of which are equipped with LaBounty shear attachments.
Though HMR handles a variety of nonferrous scrap, the bulk of its business is ferrous. As a shredder operator, the firm processes all types of end-of-life vehicles, with most of this automotive scrap coming from private auto wreckers and dismantlers, some of which are contracted by the city and county of Honolulu. The firm also buys other common shredder feedstock such as white goods and sheet metal from peddlers and small scrap entrepreneurs, who contribute to the environmental welfare of the island by recovering scrap from illegal dumps.
HMR’s ferrous intake also includes structural steel from general contractors, builders, and its own demolition activities, says Banigan, who notes that the company has recycled sugar mills on Oahu and the Big Island of Hawaii in the past. HMR also pulls scrap from the other islands as well as military bases in Hawaii, though Banigan clarifies that the firm does not accept or demilitarize munitions.
Aside from its scrap recycling activities, HMR also operates and manages—but does not own—a green-waste mulching facility on the Big Island of Hawaii for the county of Hawaii.
Doing the Right Thing
While operating a scrap company in Hawaii has its obvious perks, it also presents some unique challenges and comes with a heavy environmental burden.
Hawaii is, after all, a fragile island ecosystem—not to mention a tourist mecca—that depends on environmental stewardship for its survival. Bani-gan understands this and, hence, has been a passionate advocate for environmental responsibility, trying to raise the recycling consciousness of Hawaii’s citizens and legislators. “I spend time at the state capital to educate legislators about this business,” he remarks. “I also bring legislators to my facility to help them understand the components of HMR.” The payback of such efforts is that “community leaders and the legislators know that what we do is important.”
This environmental ethic is evident within HMR as a company, Banigan says, stating that “a major part of our corporate philosophy centers on environmental responsibility. Especially in Hawaii, we have to be environmentally responsible. HMR is committed to ensuring that things are done properly. We focus on safe, reliable, effective, and comprehensive recycling.”
Hawaii’s limited land area as well as the high value of its land—both commercially and environmentally—make resource conservation and recycling a necessity. Simply put, the state has limited landfill space for disposal of any kind.
Yet, over the years, Hawaii has faced numerous challenges in its recycling efforts. In 1999, for instance, the Wall Street Journal published an article about derelict vehicles littering the island of Kauai. More recently, the Hawaii legislature’s Task Force on Waste Management and Recycling reported that more than 18,600 derelict vehicles were illegally abandoned on the islands of Hawaii, Maui, Molokai, and Kauai. There has also been a rash of illegal dumping on Oahu in recent months.
“It’s a mindset that people have,” Banigan bemoans. “Basically, it’s about them not wanting to do the right thing.” Such illegal dumping represents a serious concern given Hawaii’s desired image as a pristine tropical escape and its dependence on tourism. “Visitors don’t want to see derelict abandoned vehicles in downtown Honolulu or on the beach at Waikiki,” Banigan states, “and we don’t want visitors thinking that Hawaii is a garbage-dumping state.” That’s why businesses like HMR are so important for Hawaii’s environmental health. “We’re here,” he says, “to provide an outlet for people to do the right thing.”
The Pros and Cons of Paradise
As you might suspect, it’s not always easy to do the right thing when you have to collect, process, and ship scrap within a chain of islands. “Unlike on the mainland where scrap facilities can truck materials and where they’re able to transport scrap from other states into their facility, our challenge is that we have to go by water when we want to bring scrap to Oahu,” Banigan explains.
At first, HMR tried to ship material using general barge lines serving the islands, but it was subject to space availability, which didn’t always work with its preferred collection and processing schedule. To avoid such delays, HMR now charters barges from one of the three inter-island barge companies that service Hawaii.
Beyond the logistical challenges of moving scrap from island to island, “the costs are tremendous,” Banigan says, asserting that some steps could be taken to improve the situation. For starters, the state legislature could “reduce wharfage fees for cargo moved across Hawaii’s piers,” he offers. The fees, used to maintain pier facilities, are charged for every ton of cargo that is loaded or discharged from barges and ships. Though Hawaii’s wharfage fees are comparable to other ports, they are “still too high,” maintains Banigan.
Recycling in a tropical climate raises yet another question: Do the heat, humidity, and salty air adversely affect the physical condition, and hence the quality, of certain scrap materials? That’s not a problem, Banigan says. Though HMR processes all of its ferrous and nonferrous scrap outdoors, the tropical elements reportedly don’t affect its scrap. One reason is that the company doesn’t hold inventory long enough for the weather to work on the material. Nonferrous scrap, for instance, is loaded into containers and shipped as it’s produced, so a warehouse isn’t necessary.
How about the employment area—does HMR face unique personnel challenges or issues in its island-based operations? According to Banigan, HMR is “no different from any other company that has a diverse ethnic workforce.” The company’s 20 employees encompass a mix of Hawaiians, Filipinos, Portuguese, and Caucasians, and the firm is “proud of the fact that we have all kinds of races working here,” he says. How does HMR build an effective employee team out of these diverse backgrounds? “It’s like a marriage—compromise and communication are the keys,” Banigan says, noting that the company faces no language barriers among its workers. “All HMR employees can speak and read English, so there’s no need to translate information into multiple languages,” he points out.
HMR must be doing something right on the teambuilding issue because it has enjoyed low turnover in its em-ployee ranks over the years. One HMR worker has been with the company for 29 years, while another has worked there 25 years, Banigan notes.
HMR retains its staff, in part, thanks to a good pay and benefits package, according to Banigan. Specifically, the company has an economic value-based compensation system in which employees share in the overall profits if production goals are met. Among other benefits, HMR offers a scholarship program for the children of its employees.
HMR also invests in its employees by advancing their job skills. Offering an example, Banigan says that the firm brings in professional welders to show them how to weld. “We also bring in other skilled people that relate to our business and offer additional training opportunities for our people,” he adds. The company makes a special point to educate employees about such issues as safety awareness and—of course—environmental responsibility. It also tries to instill pride in its staff by reinforcing the message that HMR is the best at what it does.
Walking the Walk, Talking the Talk
Throughout its history, HMR has been heavily involved in recycling-related groups on the islands and abroad.
The company is a member of Hono-lulu’s Partnership for the Environment Advisory Board as well as the Recy-cling Industry Committee of the Gen-eral Contractors Association of Hawaii (Honolulu). That committee discusses such issues as how to educate legislators, how to encourage the public to recycle, and how to prevent illegal dumping or find recycling outlets for dumped material. If there’s a problem with the illegal dumping of concrete, for instance, one recycling firm could reclaim the concrete for reuse while the recovered rebar and structural steel could go to a scrap recycler like HMR.
When the industry can get such issues on the table, Banigan notes, common ground is established and some of the competitive nature among companies is set aside to focus on long-term goals. “We have our differences just like any marriage, but we learn to compromise,” he says.
Equally notable, HMR has been a member of ReMA since 1991, and it has actively supported the association’s efforts on issues like Superfund reform and—more recently—automotive mercury switches, which relates to ISRI’s Design for Recycling® concept. This concept, which HMR has adopted as part of its corporate philosophy, holds that manufacturers should develop their products with end-of-life recycling in mind and, to the extent practicable, make their products without hazardous constituents. Unfortunately, many manufacturers do not do this, which means that their products can pose problems and/or hazards when they arrive for recycling at a scrap operation like HMR.
Automotive mercury switches are a perfect example of this situation. These switches, used mostly to turn on convenience lights in a car’s trunk or hood, contain mercury, which can potentially create health and/or environmental problems under certain recycling conditions. According to Banigan, this problem shouldn’t even exist: Automakers don’t need to put mercury switches in their vehicles because alternative switches are available. For automakers, it all boils down to economics.
“It costs only a little more to put an alternative type of switch in,” he states, “but the manufacturers continue to use mercury switches” while auto dismantlers and scrap processors continue to be challenged by this material. To help rectify this situation, HMR is supporting ISRI’s efforts to enact legislation at the state level to make automakers responsible for the recovery and recycling of mercury switches. “That’s the responsible thing to do,” Banigan states. “If you create a need to develop a new product that’s environmentally safe, the manufacturers will do that. Currently, manufacturers aren’t required to do it.”
HMR’s recycling advocacy—both at home in Hawaii and abroad—has earned it many kudos over the years. In 1996, for example, the firm received the prestigious Kapolei Outstanding Achievement Award from the James Campbell Estate for its work to preserve the environment. Since then, HMR has also been honored by former Hawaii Lt. Gov. Mazie Hirono, state senators and representatives, and the city and county of Honolulu.
Looking ahead, the company has high aspirations for the next five to 10 years. According to Banigan, HMR desires to be an even better corporate citizen and even more involved in its community. The company wants to serve as the catalyst for educating citizens about their responsibility to preserve the aina (land) through recycling. It wants to be a driving force behind legislation that offers incentives for businesses to recycle more. Internally, HMR strives to continue to be “the best in the business,” Banigan says, including providing an ever-safer workplace for its employees and on-going training opportunities to ensure a well-educated workforce.
In the end, HMR’s recycling efforts come down to one theme: “We want to preserve the aina,” Banigan says. “That may sound like a cliché, but we take it seriously because we address problems that other people can’t handle. We walk the walk, and we talk the talk.”
George Furukawa is a freelance writer based in Pearl City, Hawaii.
Recycling in Hawaii has its benefits, but it also comes with its share of challenges, as this look at Hawaii Metal Recycling Co. shows.