Dell Becomes First Computer-Maker to Offer End-Of-Life Recycling

Dell, Inc (NASDAQ: DELL). yesterday announced that it would start recycling any product with its name on it, becoming the first computer-maker to offer so-called cradle-to-grave recycling for its products. Previously, the company required either a new purchase or payment for recycling. The other major computer manufacturers offer similar incentives, though none offer no-questions-asked cradle-to-grave service. Like many who live in Austin, I once worked for Dell, and am proud of their new outlook, as it certainly differs from their environmental stance while I was an employee.

The move caps Dell's migration from environmental pariah to industry leader. Only a few years ago, the company was shamed (although Dell would not admit to being shamed) into meeting with environmental groups after activists picketed the Consumer Electronics Show in prison garb. The move was intended to highlight the company's reliance on a Chinese partner notorious for using prison labor to dissemble old computers.

E-waste is an often overlooked aspect of the country's fascination with gadgetry. When I was with the company, selling to the SMB segment, it was not uncommon for customers to have closets full of unused computers and monitors. It cost too much to have it hauled away. Even donating computers to charities was difficult, since the charities were too constrained to come pick up the machines. EPA rules prevent those items from being dumped in the trash or left by the curb, so they existed in a sort of limbo. Lead and cadmium in computers and monitors is toxic to the environment. Disposing of them properly takes expertise.

To share a funny story, when I was employed at Dell, I was asked to provide input on a new marketing promotion for the SMB segment. When I suggested offering recycling, I was nearly laughed out of the room. I thought that solving the "closet" problem would give us an entre to selling new computers, plus it would be the right thing to do. It looks now as if the company has come around.

Discrepancies in Apple Supplier Code of Conduct

Responding to accusations of horrible working conditions at the Chinese factories that churn out I-pods, Apple (NASDAQ: AAPL) promised quick investigations and pointed to their Supplier Code of Conduct as proof of their commitment to decent working conditions in their supply chain. Yet, Sustainable Log has discovered that the CoC contains language virtually identical to that of the Electronics Industry Code of Conduct (EICC). The problem is Apple is not, nor has ever been, a member of the EICC (click for a list of members). This raises the question: If their effort at coming up with a Supplier Code of Conduct amounted to a cut and paste job, how actively are they enforcing and auditing the companies making the hundreds of components for I-pods (and, for that matter, Macs as well)?

The EICC is a consortium of large electronics companies, including Hewlett Packard (NYSE: HPQ), IBM, Sony (NYSE:SNE), and Intel (NASDAQ: INTC). Interestingly, Foxconn is also a member. Responding to my email inquiry, Dunstan Hurst of Business for Social Responsiblity (the advisory group that helped formulate the EICC principles), acknowledged the discrepancy. "Foxconn is currently a member of the EICC but Apple is not, though you are right to conclude that the Apple Code is very similar to the EICC code." (In fact, it is virtually identical, right down to the lists of resources... this would have gotten a University student expelled)

Though nobody will argue that the EICC is a step in the right direction, one should recognize it's limitations. Since the guidelines are new, the organizations acknowledges that there are no enforcement mechanisms in place yet. They only require adopting members to formulate auditing procedures. In effect, they're on the honor system. Further, the principles provide some hedging room by indicating that they are subject to local laws. Of course, not even this applies to Apple since they have not adopted the principles.

Foxconn, for its part, denies the accusations. They, at least, have signed on to the EICC. A recent story in Business Week chronicles a surprise visit to Foxconn by the driving force of EICC adoption, HP's Bonnie Nixon-Gardiner. However, it is feasible to believe that Foxconn would gladly sign on to a bunch of principles with no mechanism of enforcement because it was a precondition to doing business with HP, Dell, Sony, IBM, and others. After all, other outsourcers such as Flextronics and San-Mina have signed on as well.

To summarize the controversy, the British Daily Mail published pictures of the so-called "I-Pod City" facility in Foxconn's Tzinghua factory. According to Foxconn's own releases, the Taiwanese company employs 1 million people, 200k of which are at this facility. This fact is itself amazing, considering that the company also provides room and board for the employees. As the Mail put it, as many people live and work in this facility as live and work in Newcastle, England. The article showed pictures of packed dormitories and morning exercise drills. Laborers indicated that they were forced to work overtime for a cumulative of about $50 USD per month. Foxconn denies that workers are forced to work overtime and says that the minimum wage for the province is $72.50.

With regards to the Apple-Foxconn imbroglio specifically, there may be nothing there. The blogosphere has latched onto the pictures and the emotional accounts of workers (mostly poor, rurual women). There is no telling at this point whether this life offers a better chance than subsistence agriculture in the Chinese countryside. However, I see Apple's defense as half-hearted at best. If there are doubts about Foxconn, what do we know about the dozens of contractors and subcontractors not on the EICC list?

Full disclosure: I had a brief period of employment with Apple's Education Sales Organization during grad school, but had no involvement whatsoever with manufacturing operations.

Summer Movies with a Social Conscience

Taking a step back from the more serious topics covered in this blog and newsletter, I want to take a look at the most abundant crop of movies and documentaries with a social conscious since ... well, ever. Michael Moore showed Hollywood left-wingers how to not only get their message across, but also make a cool hundred million or so. But, while giving no pardon to the other side's actions and tactics taking place at the same time, Fahrenheit 911 was a shrill piece of conspiratorial infotainment that did its part to take an ugly election year to the gutter. The group coming out this summer, including United 93, an Inconvenient Truth, Who Killed the Electric Car, The Republican War on Science, and yes, even Moore's upcoming Sicko will surely elevate the dialog. At least, we hope so.

I have seen United 93 and An Inconvenient Truth, and both were excellent. The former was a movie-going experience as gut-wrenching as I've ever seen. Directed by Paul Greengrass, the film recounts the horrifying story of the airplane that crashed in Western Pennsylvania on September 11. The film commits the ultimate Hollywood sin... no stars. For this, be grateful. There are no heroes, ala Wesley Snipes or Bruce Willis, who singlehandedly save the day while mugging for the camera with a stupid wisecrack. That would have been a disservice to the true story. There was a wide range of behavior among the passengers who were suddenly confronted with their imminent demise. Some were heroic, others less so. If it is still in a theater near you, you should see it. Own it when it comes out on DVD, and donate an extra one to a schoolteacher. Every kid in America should see it. The film is that powerful.

As Stephen Colbert put it, An Inconvenient Truth, is the world's longest Powerpoint Presentation. I say that tongue-in-cheek, not least because Al Gore used Apple's Keynote presentation software, not Powerpoint. It, too, is thoroughly researched, scientifically sound, and alarmist, but appropriately so, given the gravity of the situation. Salon.com has a great review on how accurately Al Gore presented the case, and as it turns out, it's pretty solid. Given the awesome complexity of the problem along with the difficulty of not boring moviegoers with a college lecture, the job was done commendably. This film, too, should be shown to every student.

Who Killed the Electric Car? comes out at the end of June, and it features the story of the General Motors' (NYSE: GM) attempt at building an electric car, the EV1. I have only seen the trailer, but I know a little of this story. In the mid-1990's, as I understand, the electric car was mandated by the state of California. While I gather that the movie is about the conspiracy of monied interests vested in the status quo, there was a multitude of technical problems. Unlike today's hybrids which run on electricity and gasoline, the EV1 only required electricity. From an emissions standpoint, that's great. Practically, the prospect of running out of juice while on the highway added more pain than the average consumer was willing to deal. Further, charging the battery required hours of wait time. If one got low on the highway, you faced the prospect of waiting four hours to get enough juice to continue. Everyone knows how inconvenient it is when your cell phone runs out of juice at the wrong time. I resided in California at the time, and the papers were full of horror stories about stranded motorists who weren't able to reach a power outlet in time.

The Republican War on Science does not yet have a firm release date. The movie is from Morgan Spurlock, who brought us the excellent Super Size Me and the TV show, 30 Days. I have not seen a trailer, but most of us know how willingly the current administration fiddles with scientific data to suit political goals. The public is woefully unaware of this issue, and if Spurlock can pull it off with the same gusto as Super Size, I can't wait.

While nobody doubts Michael Moore's talent as an entertainer, I have been less impressed with his ability to tackle an issue fairly. Yes, many people defend him by saying that as a documentarian, he is not obliged to cover anything fairly. In the upcoming Sicko, Moore explores a conspiracy between insurers, pharmaceutical makers, medical establishments, and of course, George Bush, to bilk the public out of trillions while we all collectively become sicker. I, of course, have not seen the movie, but I fear that the topic is more multi-layered than Moore will explore. His modus operandi has always been the super-charged emotional pictures along with the ambush. He could learn a lot from Al Gore.

Environmental Cred for Bush Treasury Nominee

The President nominated Henry M. (Hank) Paulson, a Wall Street banker with serious environmental credibility, to replace outgoing Treasury Secretary John Snow. Whether Paulson will hold enough sway to get his environmental views across to an otherwise intransigent administration remains to be seen.

Since 1999, Paulson has headed perhaps THE most envied and profitable Wall Street firm, Goldman Sachs (NYSE: GS). During his 20 plus career at the white shoe firm, he accumulated a personal fortune which the New York Times estimates at $700 million. He was the overseer of Goldman's transition from the oldest partnership on Wall Street to a publicly traded corporation.

At the same time, Paulson has eschewed one of the corporate perks of executive life, seats on other corporate boards, to chair the board of The Nature Conservancy. He also serves on the board of the Peregrine Fund, which seeks to preserve the habitats of birds of prey. He has certainly put his money where his mouth is, pledging $100 million of Goldman stock to a foundation benefiting conservation efforts. Besides environmentalism, Paulson seems to have a twin passion, China. He has personally courted China's heads of state and countless bureaucrats on behalf of both Goldman and his charitable projects. Both Goldman and the Chinese have profited handsomely from the relationship, as the firm has been a leader in retaining investment banking business from all of the state-owned spin-offs, IPO's, and restructurings. Indeed, Western money, of which Goldman's has been leading, has enabled China to convert its whole society from socialist to capitalist in a little more than a decade.

It would be fair to ask why anyone who headed the world's most powerful investment bank, reaping $38 million per year (last year's compensation, not including options), would want to step into the role of Treasury Secretary. The last two secretaries both came from Fortune 100 firms, and were both relegated to minor roles within the administration. The treasury secretary does not control the money supply, nor does it set tax policy. According to Business Week, the deciding factor was Bush's personal assurances that Paulson would be the head honcho in economic matters.

It is hard to know what to make of this appointment. On the one hand, Treasury has little influence over the administration's environmental policies, and even Bush supporters would have to concede that his picks for these posts have been cynical. Paulson will most definitely be in the position to utilize his relationships with the Chinese to benefit his old Wall Street buddies. Despite putting all of his Goldman stock in a blind trust while divesting, one never really leaves that club. Witness: another Goldman executive and Clinton's treasury secretary, Robert Rubin, returning to Wall Street as head of the Citigroup Executive Committee. Further, there can not be much distancing between Paulson and the oppressive Chinese regime. China’s president, Hu Jintao counts Paulson as a personal friend, and chose the banker to host him during his recent trip to the New York Stock Exchange.

On the other hand, Paulson will be in a position to show the world's businesses and governments how to think beyond bottom line figures, how a market-based approach to conservation can work, and how wholesale liquidation of our natural resources is a loser from both a market and aesthetic perspective. Concerning his close ties to the Chinese, insisting on someone who had no ties in this day and age would disqualify most serious contenders.

This will be one to watch.