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ISRI Execs’ Observations from Several Days in China

A note authored by ISRI Chair Mark Lewon and ISRI President Robin Wiener sent to ISRI association members details some of the lessons learned on a recent trip.

Executives from the Institute of Scrap Recycling Industries (ISRI) attended several days of meetings in Beijing last week with Chinese and U.S. government officials and other industry association leaders and have now reported some takeaways from those meetings.

A note authored by ISRI Chair Mark Lewon and ISRI President Robin Wiener sent to ISRI association members detailed some of the lessons learned on the trip.

It’s the latest development in the ongoing shakeout from China’s decision to crack down on 24 types of waste imported into the country. In its most recent filings with the World Trade Organization (WTO) last month, China’s Ministry of Environmental Protection (MEP) gave notice of adoption of new contamination standards. In the filings, the MEP laid out a standard of 0.5 percent contamination for various materials, including scrap plastics and paper.

‘’China is facing a serious environmental crisis, and the Chinese Government has made cleaning up the country's environment—and creating a 'Beautiful China'—its number one priority,” Lewon and Wiener wrote. “Their focus is not on any one industry, but across all sectors of the country's economy regardless of the impact on jobs and production. A wide-ranging series of actions—including closures, aggressive enforcement and the tightening of environmental controls—are being implemented in industries as far ranging as agriculture coal, oil and recycling.

Other takeaways from the trip as detailed in the ISRI letter:

  • These actions are coming from the highest level of the Chinese Government, and the agencies being forced to develop (MEP) and implement (AQSIQ) these new rules (including the ban and the carried waste thresholds) are being told to do so as quickly as possible without the time and resources needed to get it right.
  • The Chinese philosophy that "if you need something corrected, you go overboard and later correct" is very much in play here. This was repeated to us several times.
  • The Chinese are struggling to distinguish between what is waste (that they do not want in their country at any cost) and valuable resources, i.e., scrap (that they understand is needed as feedstock for Chinese manufacturing). And in their rush to meet President Xi Jinping's directive to develop rules to prevent "foreign waste" from entering their country, they have created terms and standards inconsistent with the global trade. During our meetings it was clear that there is little understanding within the Chinese government of the chaos they have created.
  • In meeting with AQSIQ in particular, it is clear that they are not prepared for the implementation of the ban for mixed paper and residential plastics scheduled to start on January 1 as they could not answer questions as to the meaning of the terms. Thus, the likelihood of individual inspectors at the ports understanding what they are inspecting – and what they are looking for – is very low.
  • The Chinese Government is listening to what ISRI is saying, which is the reason for the albeit modest improvement in the carried waste threshold proposed last month. However, they have limited time and ability to take in all the comments.
  • There is a working group of officials from the U.S., Canadian, UK, EU, Australian, New Zealand, and Japanese Embassies in Beijing coordinating strategy and speaking to the Chinese government on behalf of our industry. We briefed this group last week and were very pleased with the concerns expressed by each and their joint commitment to provide support.

Lewon and Wiener wrote that during meetings they “attempted to get clarifications to the Chinese government's definition of ‘carried waste,’ the specific scope of paper and plastics to be banned and the specific timing that these actions will come into force.”

The added that for carried waste, “it is very clear they do not want imported trash but are confused as to how to define what is trash and what is not. Beyond that, the government does not know the answers to our questions, which included very specific examples of grades that are typically exported to China. Furthermore, they have not fully prepared for the implementation of the regulations, and we believe even more confusion and inconsistency is yet to come.”

Coming out of the meeting ISRI had recommendations for members:

  • Keep trash/waste out. Do not load dirt, wood, concrete, rocks or anything else that doesn't belong in the container, as these will likely result in a rejection. This includes not scooping material from the bottom up – use other means wherever possible to load containers. Also, make sure that cardboard or aluminum cans, even though they are recyclable, aren't in loads that aren't cardboard or aluminum cans. Don't give the inspectors an easy way to reject your load. Be extra vigilant when loading!  We can't stress this enough.

  • Include more photos. Take more photos than what is required, and make sure they capture clean floors, properly sorted material, clean handling and loading, and quality/cleanliness of the material. Document the condition and contents of all shipments before export.

  • Be prepared for rejections. We anticipate a greater number of rejections of material before and after shipping, and it will not necessarily be related to scrap quality but unfortunately on misunderstandings by inspection officials as to what they are looking for.

It has also asked its members to keep records of experiences, including any reasons given for rejections.

The executives added that they are concerned that China’s actions may lead to similar rules being adopted in other countries.

“[S]o it is in all of our best interests to go above and beyond—to demonstrate our industry's commitment to responsible recycling and to differentiate ourselves from those market players that continue to be the lowest common denominator in terms of the supply of scrap to the global market,” the two wrote.

The next step in the process is that the deadline for comments to the WTO on China’s proposed rules is Dec. 15. ISRI, along with the National Waste & Recycling Association and the Solid Waste Association of North America, all are submitting comments, along with other industry stakeholders.

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