Illinois-based RDI is banned from e-Stewards certification for two years after an investigation uncovered critical non-conformities in its downstream practices. RDI said the non-conformities are a misunderstanding. | donvictorio/Shutterstock
The Basel Action Network announced a two-year e-Stewards certification ban for RDI Inc., an IT asset disposition company that applied for certification but then withdrew after BAN found “critical nonconformities” in where the company was shipping e-scrap. RDI said it stems from a misunderstanding.
According to a letter BAN sent to e-Stewards-certified companies, RDI Inc. was in the process of getting e-Stewards certification for the first time, when BAN auditors discovered “likely e-scrap materials involved in transboundary movements to developing countries” and likely falsified shipment codes.
“When BAN brought the information to the attention of RDI representatives, RDI decided to withdraw from their pursuit of e-Stewards Certification,” the press release noted. “Attempts to engage with RDI Inc. representatives to accept, alter, or refute the allegations went unanswered.”
In a written statement to E-Scrap News, RDI said the company withdrew its application “because our corporate objectives were not aligned with the program structure while we focused on developing practical circular reuse models.”
“Our team supports responsible recycling but found that more flexible implementation methods within different frameworks would enhance our work,” the statement noted.
It added that “we recognize and admire the depth of experience that BAN brings to the e-waste sector, both in advocacy and oversight.”
BAN continued with the critical non-conformity investigation after RDI withdrew its application and ultimately issued two critical non-conformities. In line with BAN’s policy, that means RDI Inc. is barred from e-Stewards certification for a minimum of two years.
In addition, BAN notified all of its processors and certifying bodies that “all current e-Stewards Certified Processors utilizing RDI Inc. as a downstream vendor are warned that the continued use as a downstream vendor may put your organization at risk for a Critical Non-Conformity.”
In an interview with E-Scrap News, RDI Account Manager Vickie Wen said the company is still open to partnering with BAN in other capacities and respects the group’s work, but she feels that there were multiple misunderstandings in the process.
“We believe we’re on the right track, however, the way we’re operating is different than e-Stewards believed,” she said. “We recognized that there might be a misalignment.”
In the written statement, the company added that the “operations at RDI bridge the domains of recycling and reuse” and “take place in an environment that evolves through changing regulatory frameworks and international documentation standards alongside the dynamic nature of downstream markets.”
“Destination countries have unique compliance interpretations while customers introduce fresh requirements involving material classification or import specifications and documentation language,” it continued. “Effective navigation of these realities requires strict internal protocols in addition to flexibility and transparency as well as a dedication to continuous learning.”
RDI maintains R2v3 Certification, so BAN also informed SERI of the findings. In a statement, Corey Dehmey, CEO of SERI, said the organization is “aware of the allegations raised in the report from the Basel Action Network (BAN) regarding RDI.”
“SERI takes this and all leads about R2 Certified facilities seriously and will perform our own due diligence based on this new information to take the appropriate actions,” Dehmey said. “We are grateful for the information that BAN uncovers about suspicious activities in this industry that can undermine the great work that most are doing in electronics reuse and recycling.”
Alleged violations involve commodity identification codes
According to the investigation documents, BAN first noticed inconsistencies during a review of commercial tracking data, which showed 19 shipments made from RDI to unspecified downstream vendors in Malaysia between January 3 and March 7.
“Given the information known about RDI’s accepted items and processes, it can reasonably be assumed that shipments made downstream from RDI likely contain Materials of Concern, and potentially, Hazardous E-Wastes as defined under the e-Stewards Standard,” the letter noted.
Additionally, BAN was concerned about the Harmonized System (HS) codes in RDI’s paperwork. HS codes are a globally recognized commodity identification system for importing and exporting goods. They cover all types of commodities and include, as of a few years ago, codes that are fairly specific to end-of-life electronics.
BAN noted that “the data extracted revealed a pattern of RDI Inc.’s use of HS Codes unlikely to be utilized in the end-of-life electronics industry, including those for unwrought aluminum, spongy ferrous products, and silver ore.”
While it’s not possible to “determine the motivation for using such codes without discussion with RDI,” BAN noted, “it does appear due to the repeated nature, that the use of these incorrect codes is deliberate.”
Intentionally falsifying HS codes is potentially a criminal offense, the report noted, and by e-Steward standards, is considered “egregious dishonesty,” which can result in a critical non-conformity when repeated.
BAN attempted “to engage RDI to determine whether the company wished to contest the above findings and sanctions,” but did not receive a response by the June 11 deadline, the report noted.
RDI says situation involved ‘misunderstandings’
Wen said RDI did not respond to the further requests because it had already withdrawn its application.
The written statement noted that RDI maintains “that parts of the assessment likely stemmed from misunderstandings instead of deliberate noncompliance” and “our team is focused on refining internal procedures and increasing transparency wherever additional documentation or clarification appears necessary.”
“Historically, there have been instances where external parties made assumptions about our operations or export procedures without understanding our complete context or intentions,” the statement continued. “The way HS codes are interpreted depends on regional customs and customer requirements alongside end use, which may occasionally cause misunderstandings even though we follow standard procedures.”
The company noted the material it was exporting included scrap metal and various e-scrap components.
Jenny Cheng, RDI operations manager, said in the interview that just because material is shipped to countries such as Malaysia does not mean it is destined for dumping or mismanagement. RDI has many international connections, and many partners across Asia that are involved in building a circular, responsible economy for electronics, she said.
Wen added that external parties often “have a lot of assumptions” about end markets in certain countries. However, she said she appreciates the work BAN has done to stop bad actors from importing and exporting toxic materials.
In the written statement, the company added that “the strong partnerships and resources we have across Taiwan and Asia help us expand our Taiwanese operations while keeping active collaboration with both OEM and ODM companies.”
RDI is working on a communication platform to link major manufacturers from Taiwan with international stakeholders, the statement added.
“Our organization collaborates with certification bodies and regulatory agencies to create solutions which address evolving industry standards,” the statement continued. “Our team continuously interacts with government organizations to align global sustainability goals with regional implementation strategies.”
Wen said the company maintains its R2V3 certification and is happy to address any questions clients may have.
“RDI remains committed to continuous improvement,” the written statement said. “We maintain active involvement in industry-wide discussions that merge sustainability objectives with practical operational solutions even though our participation in the e-Stewards program has ended.”
The dispute comes against a backdrop of increasing global regulation of e-scrap shipments under the Basel Convention, a transnational treaty covering the shipment of end-of-life materials between countries. This year, the treaty expanded to cover an even wider array of electronics than it previously regulated, and countries are approaching the new rules in different ways.
Associate Editor Colin Staub contributed to this report.
This story has been updated to reflect that BAN shared information not via a press release, but via a letter circulated to certified processors.