EXPORTING LEAD BATTERIES TO MEXICO

By : OK INTERNATIONAL & FRONTERAS

LEAD poisoning is one of the most serious environmental health threats to children and is a significant contributor to occupational disease. The World Health Organization (WHO) estimates that 120 million people are over-exposed to lead (approximately three times the number infected by HIV/AIDS) and 99% of the most severely affected are in the developing world.

EXECUTIVE SUMMARY

CONSIDERABLE attention has been paid in recent years to transboundary shipments of hazardous waste including used electronic products that are intended for recycling or disposal in developing countries with few environmental controls.

However, this report documents the growth of authorized exports from the U.S. to Mexico of a potentially more hazardous waste stream that has received very little attention or scrutiny. We examine the fate of used lead acid batteries (ULABs) that are being exported to Mexico for recycling and the potential impacts on public health and the environment.

Despite international agreements and treaties governing this trade and addressing environmental issues of mutual concern, we have found that these batteries are being recycled in Mexico under less stringent standards, resulting in significantly higher occupational and environmental exposures. Given the considerable differences in environmental and occupational regulations between the U.S. and Mexico, this report raises serious concerns about the contribution of ULABs from the U.S. to lead poisoning south of the border.

Our findings are summarized below:

This report documents how differences in regulations and enforcement have created an uneven playing field between the U.S. and Mexico. Given these major disparities in environmental and occupational standards,

government-to-government intervention under the NAFTA framework should be initiated. Additional enforcement is also needed to close unauthorized plants and to bring Mexican companies into compliance with existing laws on emissions reporting under RETC.

-In 2010, exports of used lead batteries from the United States to Mexico increased 112% from the previous year.

-Approximately 12 percent of used lead batteries generated in the U.S. are exported to Mexico.

-The regulatory level for airborne lead at lead battery recycling plants in Mexico is ten times higher than in the U.S. Actual airborne lead emissions reported by lead battery recycling plants in Mexico are approximately 20 times higher than from comparable plants in the U.S.

-Twice as much lead is exported to Mexico in used batteries than is exported in all the electronic waste (e-waste) exported from the U.S.

-The Permissible Exposure Limit for airborne lead in the work place is three times higher in Mexico than in the U.S.

-Average blood lead levels among workers as reported by a recycling plant in Mexico are five times higher than the average reported by a U.S. recycler.

-Less than half of all approved Mexican recyclers have reported any lead emissions to the RETC (Registro de Emisiones y Transferencia de Contaminantes). The lack of complete information has hampered efforts to assess the full extent of the problem in Mexico.

-Exports of used lead batteries to Mexico are not tracked with a waste manifest system and may be diverted to unlicensed recycling facilities.

INTRODUCTION

Concerns about hazards from lead battery recycling activities have grown in recent years as a steady stream of reports describing widespread lead poisoning from these operations emerge from many developing countries.

In the United States new regulations are forcing lead battery recycling plants to invest in advanced pollution controls to meet even more stringent standards for airborne lead emissions.

At that same time, the exports of used lead batteries from the U.S. to Mexico have increased significantly. The purpose of this report is to investigate the current state of lead battery recycling in Mexico and the role of the U.S. battery exports in this market.

Additionally, this report will provide background on the environmental, economic, and health impacts of the lead battery recycling industry in Mexico.

Finally we contrast U.S. and Mexican standards that apply to this industry.

The Mexican battery market is the smallest and least developed in North America. However, increases in battery demand in Mexico have outpaced the region as a whole over the past decade, due both to the nation’s population growth and extensive investment in automotive and other battery manufacturing plants by foreign firms.

The processing of used lead acid batteries (ULABs) for secondary lead has also grown in Mexico over the past decade. It is reported that around 80 percent of all ULABs in Mexico are recoveredand recycled.1 A significant number of ULABs are also imported into Mexico for recycling. Mexico prohibits imports of ULABs for final disposal into landfills, but imports are permissible if notification is given and they are sent to authorized recycling facilities.

In 2010, imports of ULABs into Mexico totaled 236,746,892 kg representing an increase of 112 percent from the previous year 2 While the U.S. and Mexico have regulatory structures requiring notification from companies on proposed shipments of ULABs across the border, facilities that recycle ULABs operate under far different standards in these countries.

Emissions from lead battery recycling plants in Mexico are approximately 20 times higher than from comparable plants in the U.S. In addition, occupational lead exposure standards are three times higher in Mexico than in the U.S. There is also concern that a portion of the exported ULABs entering Mexico may end up in unlicensed recycling facilities with even less stringent worker protections and environmental controls.

Lead poisoning is one of the most serious environmental health threats to children and is a significant contributor to occupational disease.

The World Health Organization (WHO) estimates that 120 million people are over-exposed to lead (approximately three times the number infected by HIV/AIDS) and 99% of the most severely affected are in the developing world. At least 80% of all lead production goes into batteries. Lead poisoning causes symptoms ranging from a loss of neurological function to death depending upon the extent and duration of exposure.

In children, moderate lead exposure is responsible for a significant decrease in school performance, lower IQ scores, increased aggression and violent behavior. The resulting irreversible mental impairment affects the ability to learn and is associated with a loss of lifetime income.

Adults also impacted by chronic and acute lead exposures suffer neurological damage, reproductive effects, anemia, kidney damage, high blood pressure and other ailments.

The information contained in the report was collected through exhaustive research conducted simultaneously in the U.S. and Mexico. OK International and Fronteras Comunes conducted interviews with government agencies, battery recycling company representatives, environmental consultants, nongovernmental agencies, and obtained information from public agencies through databases and publications.

Government documents were also obtained through the Freedom of Information Act (FOIA) from the U.S. Environmental Protection Agency (EPA) and through 34 requests to 21 Mexican ministries and local port authorities under the INFOMEX system of the Federal Institute to Access Public Information (Instituto Federal de Acceso a la Información Pública/IFAI).

From 2007 to 2009, Mexico’s total domestic primary lead production increased from 137,133 metric tons to 143,838 metric tons.5 Global lead production in 2009 totaled 4.29 million metric tons, 3.4 percent more than in 2008.6 However, Mexico only produced 3 percent of global lead production that year.

The top lead producing states in Mexico are Zacatecas (45.7% of total) and Chihuahua (30.1% total).

There is little data available on the secondary production of lead obtained from recycling ULABs in Mexico. However, in Mexico, the capacity of secondary lead recycling far exceeds reported primary production. Some of Mexico’s largest lead battery manufacturers operate their own recycling plants with the output used to manufacture new lead batteries.

Mexico ranks fifth worldwide in lead production and battery manufacturing accounts for more than 75% of Mexico’s lead consumption.

The largest lead battery producer in Mexico is Enertec with approximately a 75% market share in Mexico.9 Operating as a subsidiary of the U.S. Company Johnson Controls Inc., Enertec brands in Mexico include LTH, America, Full-Power, Diener and Cronos, Monterrey, Hitec, and Nation Wide.

Johnson Controls Mexico currently has four battery manufacturing plants and two recycling plants.

In 2007, an estimated 6.5 million ULABs were generated in Mexico. The exact number of these ULABs that were collected for recycling is unknown; however a 2007 report by the Commission forEnvironmental Cooperation (CEC) indicates that the majority of ULABs in Mexico are being recycled.

With the current price of lead on the international exchange at around $2,500/ton USD, and retail outlets offering a substantial incentive to consumers for returning ULABs, there are sufficient economic incentives to recycling ULABs in Mexico.

Enertec has recently opened the newest battery recycling facility in the country in Garcia, Nuevo Leon with a capacity of 252,000 metric tons/year. This next largest plant is the Corporacion Pipsa with a capacity of 104,760 metric tons/year.

Mexico has authorized 21 plants with a capacity of 864,003 metric tons of lead batteries to be recycled per year.

Although Johnson Controls manufactures lead batteries in both the U.S. and Mexico, it only has lead battery recycling facilities in Mexico at this time. In contrast, Exide, the largest lead batterymanufacturer in the U.S. has six recycling facilities in the U.S. and none in Mexico.

Modern recycling plants use mechanical means to crush lead batteries and then separate out components as follows:

a. The plastic casing and lead batteries are crushed, and the main components (polypropylene, lead oxide and lead metal) are separated. Water is generally used to separate these components.

b. The lead-containing components are melted down in rotary kilns.

c. Battery acid (and water used in the process) passes to the onsite water treatment plant and is often recycled.

By contrast, small recycling plants and informal recycling operations rely on manual labor to dismantle batteries, the waste acid is often dumped on the ground, and the plastic cases are often burned as a fuel additive or mixed with lead components in the furnace. Efficiencies of lead recycling operations vary greatly as do the adequacy of pollution control technology used to trap lead and other pollutants.

In contrast to most U.S. States, Mexico has no mandatory lead battery take back requirement. As a result a mixture of formal and informal mechanisms are used to take back used batteries.

We conducted an informal survey to determine the financial incentives being offered to buy back used lead batteries by large and small retail shops and small-scale waste collectors in April 2011.

Interviews with these businesses indicates that retail stores are offering a discount towards a purchase of a new battery ranging from $9.00 to $14.00 USD in exchange for turning in a used battery.

Waste collectors specializing in a range of recyclable commodities are also willing to pay for used batteries at rates in the upper end of this range. Large retailers, including U.S. companies Wal-Mart and AutoZone, are also all offering a significant financial discount to consumers for turning in a used battery at the time of sale or within a designated time frame (generally within 30 days).

In fact the rates being offered by retailers in Mexico are approximately twice that offered by the same retailers in the U.S. In the U.S. take back incentives for used lead batteries are based on mandatory incentives in individual state laws which range from $5.00 to $10.00 USD.13

For example, Comercializadora de Acumuladores y Metales S.A. de C.V. (CAMSA) in Mexico City is a large automotive battery distributor for Enertec in Mexico. CAMSA is also a SEMARNAT authorized battery collection center.

Johnson Controls sells batteries to CAMSA and has a policy that for each battery sold, one battery must be returned for recycling at a Johnson recycling plant. As an incentive, CAMSA provides a discount of $13.00 USD off of their sale price of batteries to their customers in exchange for returning their ULAB.

The company also collects ULABs from companies and individuals. For each ULAB that CAMSA delivers to Enertec, the recycling plant pays CAMSA $15.30 USD in return. Enertec must also cover the transportation costs.

Due to their dual role as a collector, CAMSA estimates that they sell approximately 11,000 batteries per month while they are sending around 60,000 ULABs to Enertec for recycling. CAMSA indicates that the quantity of ULABs that they are recycling has increased dramatically since they instituted this incentive system.

Recovering lead from used batteries provides further economic incentives in that it is much less energy intensive than producing primary lead from ore. The production of secondary lead requires 35- 40% less energy than needed to produce primary lead.

The creation of secondary lead by recycling ULABs further eliminates the need for importing lead ore from other countries. Recycling lead also greatly reduces greenhouse gas emissions associated with mining and primary smelting.

Despite the presence of an organized battery collection and recycling program with participation by large operators, lead battery recycling is still being done by informal sector businesses operating without government approval in Mexico.

For example, in the Guadalajara area (Tlaquepaque) we identified a lead battery recycling facility, Industria de Acumuladores de Jalisco, S.A. dE C.V. that has no current authorization according to SEMARNAT.

The plant is located in a mixed residential area and the site is adjacent to an outdoor food market

MANUFACTURING & RECYCLING BATTERY

Unfortunately, recycling lead from used batteries cannot be done safely unless adequate pollution controls are in place to minimize emissions and reduce employee exposures.

Based on the emissions data summarized in this report, and interviews with industry representatives, exposures from Mexican recycling plants are likely causing lead contamination in surrounding communities and workers are being over exposed.

DANGEROUS…. Perimeter wall of unauthorized lead battery recycling facility Industria de Acumuladores de Jalisco. Location of unauthorized lead battery recycling facility Industria de Acumuladores de Jalisco in mixed residential neighborhood in La Duraznera, Tlaqupaque.

In Mexico there have been at least three instances of widespread lead poisoning and environmental contamination around a primary smelter and two battery recyclers. In 2001, following reports of lead poisoning among children living in Torreon, Mexico near the Met-Mex Peñoles smelter, the U.S. Center for Disease Control (CDC) tested 367 children in the area surrounding the plant.

The agency found that 20% of the children had blood lead levels greater than 10 ug/dL, and 5% of the children had blood lead levels greater than 20 ug/dL. In the areas closest to the lead smelting site, 33% of the children had blood lead levels greater than 10 ug/ dL and 12% had levels greater than 20 ug/dL.

More recently exposure levels have declined to a geometric mean of 9.8 ug/dL among children age 2-17 – a level that is still approximately five times higher than the level in the U.S.17

Metales y Derivados, a U.S. battery recycler located outside of Tijuana, was closed in 1994 due to environmental violations. Following the closure of the plant, the site was abandoned and left contaminated with an estimated 6,000 metric tons of lead slag, waste sulfuric acid, and a mix of other heavy metals. Over 10,000 people were residing in the area immediately surrounding the abandoned plant.

In 1998 Environmental Health Coalition (EHC) and the Colectivo Chilpancingo Pro Justicia Ambiental filed a petition under provisions of NAFTA to the Commission for Environmental Cooperation (CEC) to examine the abandoned site. In February of 2002, the factual record was released to the public and validated community health concerns about site contamination from the abandoned recycler.

The record demonstrated that levels of lead in the surface soil at the site were 551 times higher than the U.S. Environmental Protection Agency Preliminary Remediation Goal for residential soil. In 2004 additional cleanup was initiated and the ownership of the property was transferred to the State of Baja California. The work was finally completed in 2009.

In 1991, the Alco Pacifico battery recycling plant, also in Tijuana, was closed by the Secretariat of Urban Development and Ecology(SEDUE) and issued an abatement and cleanup order. The company closed in 1992, leaving over 11,000 m3 of soil contaminated with lead and other heavy metals.

The owner of the plant and the RSR Corporation, the U.S. company that contracted for recycling lead batteries at the plant, were the subject of successful legal action in the U.S. courts which recovered some of the cleanup costs.20 Reports indicate that the site was never properly remediated.

No information was available on the status of the court sanctioned medical monitoring or the current site status.

Used batteries exported to Mexico are contributing to occupational and environmental exposures in excess of permissible levels in the U.S. Given the difference in regulatory standards, and the even larger disparities in performance identified between U.S. recyclers and their Mexican counterparts, we believe that ULABs are being exported by businesses to gain competitive advantage from operating in a less regulated environment.

It is more economical to recycle lead in facilities with fewer pollution controls and where workers are more highly exposed. It is unlikely to be coincidence that the cross border trade in ULABs increased rapidly since the U.S. lowered it ambient air standard in 2008.

The change in the U.S. law to lower the ambient air standard has incurred significant costs on lead battery recycling facilities who are investing millions to upgrade emission control equipment during the current phase-in period. If Mexico maintains its current regulatory structure, this disparity will likely impact the availability of ULABs and the ability of U.S. plants to operate efficiently.

Over time ULAB exports have the potential to cause further consolidation of the U.S. recycling industry as the supply of ULABs is further constrained.

The differences in standards outlined in this report may diverge further if the U.S. Occupational Safety and Health Administration (OSHA) moves to update the current occupational limits that came into effect in mid 1970s. Already Cal-OSHA has initiated a process to lower its lead standard.

CONCLUSION

In Mexico the continued growth in ULAB imports may have even greater impact by increasing the quantity of lead processed and subsequent emissions from recycling plants. Increasing exposures to workers and the general population imposes costs to society from the resulting increase in learning disabilities, mental retardation, loss of lifetime economic productivity, health care costs, and costs linked to behavior and violence that result in higher crime and incarceration.

These costs are not borne by recycling businesses benefiting from this international trade in ULABs.

Experience in the U.S. in recent years has shown that significant improvements can be made in reducing environmental impacts and occupational exposures associated with lead battery recycling.

This experience has demonstrated that controlling lead emissions is both technologically possible and economically feasible in this industry.

The disparity between U.S. and Mexican regulations, and the even larger differences in actual performance in key environmental measures, are resulting in unnecessary lead contamination and exposures in Mexico. We believe that governmentto- government intervention under the NAFTA framework should be initiated to narrow the gap in national standards governing environmental emissions and occupational exposures.

Action should be taken by the U.S. government to demand improvements in regulating lead recycling industries in Mexico. Additional enforcement action is also needed on the part of the Mexican government to ensure protection of worker health, reduction of pollution in impacted communities, full compliance with the required emissions reporting by all lead industries under the RETC law, and the immediate closure of unauthorized lead battery recycling companies.

(NOTE : Occupational Knowledge International (OK International) is a non-governmental organization (NGO) dedicated to improving public health in developing countries through innovative strategies to reduce exposures to industrial pollutants. The organization has experience working to improve environmental controls in lead battery manufacturing and recycling in India, China, Bangladesh, Vietnam, Cameroon, Senegal, and Mexico. OK International worked cooperatively with the lead battery industry and other stakeholders to develop the Better Environmental Sustainability Targets (BEST) certification standard to reward battery companies that meet minimum standards for emissions and product stewardship.

Meanwhile, Fronteras Comunes is a non-governmental organization (NGO) founded in 1998 in Mexico City to work for environmental justice. The organization’s focus is on issues related to environmental pollution caused by chemical substances and hazardous waste. Fronteras Comunes works to strengthen community participation to respond to environmental threats in order to achieve healthy and sustainable communities. Fronteras Comunes seeks to influence Mexico’s environmental management of toxic substances and to improve compliance with national and international laws that protect the environment and human health. It also participates in various national and international committees to help develop public policies that are economically viable, socially just, and environmentally sustainable).