2010-02-24 - Green Tech Gone Fake

Source: BusinessWeek (Rachael King)

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Reused electronics may be good for the environment, but they are feeding the counterfeit tech industry and poisoning some foreign workers

Recycling used tech gear—a practice generally considered good for the environment—has a far less desirable, unintended consequence. It is contributing to a rise in fake computer chips and other products that make their way into everything from satellites to weapons systems, medical devices, and routers that connect corporate networks. "Electronic waste has turned into an abundance of electronic components and microcircuits for counterfeit parts," according to a January 2010 report from the U.S. Commerce Dept.

A foremost destination for e-waste and source of resulting counterfeit parts is China, according to reports by the U.S. government and the United Nations. By 2020, electronic waste in China will have reached a level 200% to 400% over that of 2005, according to a UN Environment Programme report released on Feb. 22. That document cites the "alarming and increasing reports on the e-waste situation" in China and other nations. Much of the waste comes from inside the country: China produces about 2.3 million tons of its own e-waste each
year and has banned imports of it. Still, some electronic waste finds its way into China from developed countries via unscrupulous recyclers, according to environmental groups that include Greenpeace and the Basel Action Network. Some developed countries, including the U.S., do not bar exports of electronic waste. An estimated 50% to 80% of the e-waste collected for recycling in the U.S. is exported to developing countries, according to Greenpeace. Once at their destination, used electronics are mined for reusable parts and some are repurposed by counterfeiters. "The world is sending their e-waste to unregulated regions where e-waste is converted to counterfeits," says Debra Eggeman, general manager of Independent Distributors of Electronics Assn., a trade organization of distributors striving to meet high quality standards.

AT HOME, FAMILIES DISMANTLE E-WASTE
Tom Sharpe, vice-president at SMT, an independent distributor of electronic chips and other parts, watched the creation of counterfeit tech first hand as he traveled to Shantou, China, in July 2008. "Everything was being taken apart for chips and they were being sanded down and counterfeited while we were in Shantou," Sharpe says of an
area that lies near Guiyu, a town often called the electronic waste capital of the world. He watched scraps of computers growing into huge piles in the front and back yards of homes and saw women washing components in a river after they were sanded. "E-waste generates the feedstock for counterfeiters and as the e-waste problem grows, so does the counterfeiting problem," he says.
The environmental and health risks of improper handling of e-waste have been well-documented.
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