Security Shredding & Storage News May/Jun 2012

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Volume 9, Issue 3

May / June 2012

Security Shredding Storage News

Serving the Security Shredding & Paper Recovery Markets Visit us online at www.securityshreddingnews.com

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Are you looking for Products, Equipment or Services for your business? If so, please check out these leading companies advertised in this issue:

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Mobile Truck Shredders

Independent Shred Companies Face Major Issues This Year

Alpine Shredders Ltd – pg 5 Shred-Tech Limited – pg 7 ShredFast – pg 10 Vecoplan LLC – pg 8

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Replacement Parts Dun-Rite Tool – pg 8 ShredSupply – pg 11

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BY P.J. HELLER

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igher fuel prices, coupled with lower prices for recycled paper and stiff competition from large nationwide companies offering their services at bargain-basement prices to gain market share are major issues facing the document destruction industry in 2012, according to a recently released industry survey.

Those are some of the major findings from the annual survey of independent document destruction companies conducted by Shotgun Capital Advisors, a Texas-based merger and acquisition advisory firm. The industry survey has been conducted since 2008.

Eighty-nine companies responded to the latest survey, which questioned them on everything from their growth rates and margins in 2011 to projections for the current year. A majority of those responding reported total 2011 revenues anywhere from less than $250,000 up to $1 million; three respondents reported revenues of more than $5 million.

By far, the biggest issues cited in 2012 were higher fuel prices, competition — “pricing each other out of business” and document destruction simply becoming a “commodity,” according to many respondents — and lower paper prices. Several also mentioned higher employee and labor costs.

“The shredding industry should quit cannibalizing itself,” one respondent said.

“Shredding prices should be going up, as there is greater demand for our services. The cost of most goods and services has gone up over time.

“There is all this lip service about security, safety and how valuable our services are and then we create an environment where cheap is all that matters,” the respondent said. “It was not too many years ago that we had to convince prospects that they needed to spend a little money and shred their things instead of throwing them away. We had to convince them that recycling alone was not secure.

“So what happens now that the general public is aware that things need to be shredded?

We have fools out there all but giving it away — commodity brokers with shredders, basically.”

Other companies generally agreed, with large national companies being singled out for their pricing policies.

Continued on page 3

Inside This Issue 4

China’s High-Fiber Diet

6 8 “Be-Attitudes” of Holding People Accountable 12 Does the Federal HIPAA Privacy Rule Go Too Far? 16 HITECH Rules Expected to be Operational by End of Year 18 DC Police and Fire Unions Dispute Record Burnoff Policy

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Security Shredding & Storage News

Independent Shred Companies Face Major Issues This Year Continued from page 1

PUBLICATION STAFF Publisher / Editor Rick Downing

Contributing Editors / Writers P. J. Heller Ken McEntee Bob Whipple

Production / Layout Barb Fontanelle Christine Pavelka

Advertising Sales Rick Downing

Subscription / Circulation Donna Downing

Editorial, Circulation & Advertising Office 6075 Hopkins Road Mentor, OH 44060 Ph: 440-257-6453 Fax: 440-257-6459 Email: downassoc2@oh.rr.com www.sssnews.com For subscription information, please call 440-257-6453 Security Shredding & Storage News (ISSN #1549-8654) is published bimonthly by Downing & Associates.

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Printed on 10% Post-Consumer Recycled Paper

“Big Shred is allowed to do predatory of the areas of recurring and purge services and pricing, thus creating an atmosphere of secure recycling sales compared to a year earlier. shredding being a commodity,” said one A majority said they expected revenues to respondent. “The general public is used to increase nearly 10 percent this year for recurring making three calls and going with the cheapest.” and purge services. Recycling sales were expected “Under-pricing by competitors,” another to remain the same as last year, according to the respondent lamented, adding, “It will destroy the survey. industry . . .”

“Because of a continued growth in sales, regular Another respondent contended that the large and purge, I would expect to see somewhere between national document destruction companies were an 8 percent to 11 percent increase in revenue,” one devaluing the industry. person wrote.

“When different companies are essentially equal However, another noted, “with the large in security and monthly service, then the customer national shredding companies moving into areas is usually going to contract with the cheapest rate,” and cutting prices to extreme lows — essentially the respondent said. devaluing our industry — the One respondent put cash-strapped businesses are it even more succinctly, going to respond by moving “The new competitors complaining that increased their business over to the have lowered their competition “has killed cheapest service provider. In the profit margin in the my opinion, recycling sales prices in order to industry. will not recover to the highs compete and it’s had a “The new competitors of 2011 during this year.” have lowered their prices in Companies said their very negative impact order to compete and it’s had profit margins before taxes in on everybody. You must a very negative impact on 2011 ranged anywhere from a everybody,” he wrote. “You loss to more than 40 percent. operate very efficiently must operate very efficiently A profit margin of 16 percent to even have a chance to even have a chance at these to 20 percent drew the most pricing levels.” responses (12.3 percent), at these pricing levels.”

According to one with margins of 1 percent respondent, companies were to 10 percent and 11 percent essentially “pricing each other out of business.” to 15 percent each receiving identical 11.2 percent The competitive nature of the business was responses. Those numbers were nearly identical to also evident with about 20 percent of respondents 2010, according to the survey. reporting they had lost a top-20 customer to a Margins this year were expected to increase less competitor in the last 12 months. Fifty percent of than 5 percent over 2011, respondents predicted. respondents, however, said they hadn’t lost a top“Our diversified service offerings position us 20 client. well in the market and we are expanding operations One respondent blamed the client loss on due to that demand,” commented one respondent. national competitors who offered extremely low “As the 2012 elections conclude, the economy will pricing. skyrocket.”

“How funny that they claim to be leaders in the A majority of respondents said on-site shredding industry but really are just market-share mongers accounted for 60 percent of their revenue, followed that devalue our industry,” he said. by off-site shredding, which represented about 35 Despite the concerns, a majority of respondents percent of revenues. Other revenue streams included said they were “confident” of their ability to records storage, document imaging, product maintain growth rates and profit margins over the destruction/electronic media destruction and next 12 months. However, they expressed slightly less recycling (other than paper sales from shredding). confidence in that ability over the next three years, “Along with having a security shredding with that level dipping a little further when looking business, we store many thousands of records,” one five years ahead. respondent said. “We have invested in digitizing “I expect to see an increase across the board equipment to scan files to pdf. And with our present due to an increase in sales,” wrote one respondent clientele we can offer this service. We have had many when asked how margins in 2012 would compare to outside enquiries from both legal and medical and the previous year, echoing the responses of several accountants. We are also investing in our staff with others. “However, we may suffer as the market for ongoing training in both records management and recycled paper has lost a considerable amount per scanning. We are also updating our websites and ton recycled.” targeting our marketing to lawyers, medical and “Although we expect an increase in business, accountants.” price pressure has continued to be the proverbial As far as marketing, a large majority of ‘thorn in our flesh,’” another added. respondents (51.6 percent) indicated that their top Respondents said they experienced a growth priority this year would be their company’s website rate of approximately 10 percent in 2011 in each Continued on page 9

Security Shredding & Storage News. May / June 2012

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Security Shredding & Storage News

China’s High-Fiber Diet With China receiving the lion’s share of U.S. recovered fiber exports, processors and traders worry whether Chinese mill expansions are outpacing demand.

BY KEN MCENTEE

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icture three trucks collecting scrap paper in the United States. One of them heads west and drives across the Pacific Ocean to China. Now picture three export containers of paper at a U.S. port. Two of those three export containers get loaded on a ship that also heads to China.

As the destination for 30 percent of all U.S. recovered fiber and 68 percent of U.S. recovered fiber exports, China looms large in the fortunes of this country’s scrap paper recyclers and traders. It’s fortunate, then, that most market watchers remain positive about the Chinese market despite some concerns. Even though the still-struggling global economy has affected China’s manufacturing sector, containerboard mills have less-than-ideal operating rates, and the Chinese paper industry is loaded with debt, exporters and industry observers expect China’s mills to grow even hungrier for recovered paper—and the United States is likely to remain the country’s largest supplier.

A Look at the Data

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efore 2001, Canada was consistently the largest export market for U.S. scrap paper. In 2000, for example, the United States recovered 47.3 million tons, according to the American Forest & Paper Association (Washington, D.C.), and it exported 11 million tons, according to the U.S. Census Bureau (Suitland, Md.). About 2.5 million tons of that material headed north of the border, and just 2 million tons went to China.

But in the mid-1990s, China began to increase its paper and paperboard production capacity in response to its growth as a manufacturing base for much of the developed world. Demand for product packaging drove Chinese containerboard production into an even higher gear in the 2000s, and that growth has continued ever since. Whereas in 2000 the United States produced more than twice as much paper and paperboard as China, in 2010 China produced 105.6 million tons compared with the United States’ 89.1 million tons, according to the United Nations Food and Agriculture Organization (Rome).

U.S. recovered paper exports have followed this growth in demand. In 2001, China first surpassed Canada as the top destination for U.S. recovered fiber, taking in 3.3 million tons to Canada’s 2 million tons. The export gap between China and the rest of the world has only widened from there. Fast forward to 2011, when the United States collected 52.8 million tons and exported more than 23 million tons, a record. About 15.8 million tons went to China—that’s about 23 percent more than in 2010—and 7.9 million tons went to the rest of the world, a drop of 6 percent year to year.

Driving last year’s record export volume were old corrugated containers.

OCC exports to China were up a whopping 44 percent, to 8 million tons, in 2011—that’s more than 77 percent of all U.S. OCC shipments. India, the nextlargest importer of this grade, took in only 650,000 tons last year in comparison.

China also dominated the market for old newspaper. Of the 2.4 million tons of ONP the United States exported in 2011, China received 1.5 million tons, up 16 percent from 2010. Its imports of other U.S. groundwood papers also were up 16 percent, to 2.5 million tons out of the 3 million tons exported. Of the 2.2 million tons of pulp substitute grades exported, about half went to China.

All told, China was the dominant market last year for all recovered fiber grade categories other than the chemical deinking grades, such as sorted office paper and ledger grades. The top market for those last year was India, which took in 151,000 tons. China was only the fourth-largest market, importing 83,000 tons.

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The Mixed-Paper Picture

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hina also dominated the market for U.S. mixed-paper exports in 2011, but shipments were down 10 percent from the previous year, from 2.8 million tons to 2.5 million tons. That’s a reversal of the trend that grade has seen since the beginning of the century. Mixed paper was at the heart of China’s skyrocketing demand for recovered fiber in the 2000s. That grade topped the list from 2000 to 2009 in terms of volume exported to China. In 2009, for example, 40 percent of all U.S. recovered fiber exports to China was mixed paper, whereas 33 percent was OCC. In 2010, however, OCC constituted 43 percent of U.S. exports, and mixed paper dropped to 22 percent. Their paths diverged further in 2011, when mixed paper fell to 16 percent of the total and OCC hit 51 percent.

Some sources attribute the trend, in part, to a growing dissatisfaction with the quality of U.S. mixed paper. As single-stream residential collection has spread across the United States, both U.S. and Chinese mills have complained about higher contamination levels in mixed paper and ONP. Others disagree that contamination is reducing demand. The mills have learned to deal with the lower quality of paper coming from single-stream collection, says Jimmy Yang of Newport CH International (Orange, Calif.), one of the largest recovered paper exporters in the United States. “The Chinese mills complain a lot about it, and I think the quality has deteriorated over the years,” he says. “But these days, the mills need the fiber, so they are learning to deal with the inferior quality.

And the new paper mills have invested in such state-of-the-art facilities, I feel like I could throw my desk in there, and they’d make paper out of it.” Industry consultant Bill Moore, principal of Moore & Associates (Atlanta), instead points to China’s rising labor costs, which have made it less economical to sort mixed paper into other grades. Another broker agrees that quality has little to do with the drop in mixed paper buying. Further, he says, Chinese mills’ demand for this material will most likely rise again. “In the first six months of [2012] there are going to be 2.2 million tons of new boxboard capacity, and [those mills] are going to need more mixed paper.”

Capacity Growth

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hat broker points to the most notable trend in the Chinese paper industry in recent years: production capacity that is growing rapidly, with no end in sight. Nine Dragons Paper (Dongguan, China), the country’s largest containerboard manufacturer, started six new paper machines and upgraded three others in the past year, bringing the company’s total annual production capacity to 11.5 million tons, most of which is linerboard and corrugating medium.

Six more machines are on the way. Nine Dragons says it expects to have about 14 million tons of annual capacity on 36 machines by the end of 2013.

At the same time, Lee & Man Paper Manufacturing (Dongguan, China), China’s second largest producer, has started two new paper machines, which it expects to boost its annual containerboard production capacity to 6.6 million tons by June. The Shanghai Taison Pulp & Paper Group (Shanghai), another leading containerboard maker, also has an aggressive expansion plan, says Dino Chiu, general manager of Cycle Link USA (Diamond Bar, Calif.), the group’s U.S. recovered paper supply division. “We’re adding three more lines this year.

We are also going to develop two other mill sites, but that won’t be until 2015.

We want to pace our growth alongside the global economic recovery.”

Those companies are only the top producers in a country with thousands

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Security Shredding & Storage News Continued from previous page

average selling price for corrugating medium—up nearly 27 percent over the first quarter of 2010— of mills of all sizes that use a wide variety of to “increasing customer demand and regional feedstocks to make paper. “There are areas that shortages in the supply of paper products caused have hundreds of paper mills,” says a U.S. broker by government-mandated closures of other, smaller who visits China frequently. “When you go down paper manufacturers.” the road, every driveway is another paper mill, one Most traders interviewed for this article believe right after the other—some large and some small.” the Chinese government is shutting down the All together, Yang says, “over the next two years, smaller mills to consolidate China is going to have [about] the paper industry and reduce 5.3 million tons of new board “What worries me competition for the larger production capacity coming mills—actions that have been online. Most of it will be is seeing so much in other industries as based on recycled fiber; a lot new capacity coming observed well. “I am certain that there of it is in containerboard.” online [while] mills are big guys being favored Though the Chinese mills seem confident in their are complaining it’s over small guys,” says one U.S. exporter. “It’s all about who expansion plans, others difficult to sell their you know … like anywhere worry about excess capacity, else.” But he and other especially with a still-sluggish finished products, traders note that the stated world economy resulting in and the prices are goals of modernization—to lackluster demand. Official dropping.” eliminate mills that pollute or Board Markets, a leading are inefficient in their energy industry index, recently use—are legitimate, too. As that trader puts it, “some reported that “sales and prices of finished products of this old capacity needs to be eliminated because have not been good, and the Chinese mills have been it isn’t doing the environment any good.” Moore operating only at cost,” Chiu notes. Further, mills are explains that “most of the mills being shut down are taking on significant debt to finance construction. based on agricultural residues and bamboo pulping In a 2011/2012 interim report released in February, systems that produce a lot of biochemical-oxygenNine Dragons announced a debt-to-equity ratio of demand pollutants.” It’s possible to pulp bamboo 115 percent, up from 73.9 percent in the 2010 fiscal and agricultural residues in an environmentally sound year. Chairwoman Cheung Yan said she expects manner, he says, “but these mills didn’t have the systems that ratio to increase even further this year before that come anywhere close to today’s environmental starting to recede in 2013. standards.” Chiu adds that smaller mills that pollute With the industry working on already-slim more due to outdated machines and technologies also margins, unable to raise containerboard prices, and have higher production costs, thus local competition looking at a likely future of higher costs along with also will drive them out of business. millions of tons of new capacity, how does a debtThat said, political issues almost certainly come laden company expect to survive? Economic growth into play, Moore says. “The big paper producers have is the key, Chiu says. Leading Chinese mills are been pushing the government” to close these mills, looking forward to a healthy global economy—as though the action “has been much slower than they well as a healthy Chinese economy—to support thought it would be.” At the same time, “the central their expansion. Yang is more wary, however. government did have some trouble shutting down “What worries me is seeing so much new capacity some of those mills because local governments often coming online [while] mills are complaining it’s have some ownership in the operations, and there are difficult to sell their finished products, and the always jobs at stake.” prices are dropping,” he says. “Yet everybody is buying new machines and increasing capacity. I think it can [result in an] overcapacity situation.”

Future Demand— Further, “I think the entire Chinese economy could and Supply be in a similar situation,” he says. The country is ith China’s nonstop expansion, most traders “constantly building infrastructure and increasing and industry observers believe the United capacity across various industries. Hopefully, the States will be sending more recovered paper economy [will grow] fast enough to sustain the to China in the years to come. “Without question, increase in capacity.” there is definitely going to be increased demand over there,” Yang says. “Chinese mills will be extremely Consolidation hungry, and they are going to need fiber.” Many ffsetting some of this growth are steps the believe the United States is approaching the practical Chinese government has taken to close some limit of OCC recovery, which raises the question of lines and mills in an effort to modernize the whether it—or any other country or region—will country’s paper industry. Last year it announced the be able to supply enough fiber to satisfy China’s elimination of more than 8 million tons of old and appetite. “I think the future is going to bring a very outdated production capacity by closing about 600 tight supply of recovered paper,” Yang says. mills. Among the closings were recycled fiber-based According to the most recent data from the pulp lines that produced less than 11,000 short tons United Nations, the United States supplied 42 a year. From 2005 to 2010, similar closures reduced percent of the total recovered paper China imported capacity by nearly 7 million tons. At least one mill in 2010 and about 40 percent of its imported OCC. believes such closures are supporting prices. In a Another 33 percent of the total recovered fiber and May 2011 first-quarter financial report, Zhenyong 39 percent of its imported OCC comes from Europe.

Liu, chairman and CEO of Orient Paper (Baoding,

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www.alpineshredders.com

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China), attributed that quarter’s increase in the

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8 “Be-Attitudes” of Holding People Accountable

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BY BOB WHIPPLE MBA, CPLP 3. Be Timely. If there is an issue with performance versus stated expectations,

frequent refrain of top managers is “we need to do a better job of holding people accountable.” Accountability seems to be the mantra for organizational get-well programs these days. One can agree with this in part, and yet there is an aspect of accountability that feels like a cop-out.

The key to leadership is to create an environment whereby people do the best they can because they want to do it. When employees know it is clearly in their best interest to give their maximum discretionary effort to the organization, managers don’t have to crack the whip as often. Imagine working in an environment where people do the right things not because they are expected, but because it is in their best interest. In that atmosphere, holding people accountable would nearly always be a positive occurrence rather than negative. How refreshing!

It is the actions, attitudes, and intentions of leaders, not the rank and file, that make the environment of either reinforcement or punishment the habitual medication for individual performance issues. Let’s examine 8 attitudes or behaviors of leaders that can foster a culture where holding people accountable is a precursor to a feeling of celebration instead of a sentence to the dungeon.

bring the matter up immediately. If you wait for a couple days before trying to bring up the issue, it just tends to cloud and confuse the person who did not meet expectations. If a boss says, “You did not answer the phone in the proper way last week,” how is the employee supposed to even remember the incident?

4. Be Kind. Always apply the Golden Rule liberally. If

you had a lapse in performance, justified or not, how would you want to get the information?

Keep in mind that some people are more defensive than others, so if you like your feedback “straight from the shoulder,” tone it down when dealing with a particularly sensitive individual.

5. Be Consistent. If

you are a stickler for certain behaviors, make sure you apply the discipline consistently. Coming down hard on Mike for being late for work can seem unfair if you habitually let Mary waltz in 45 minutes after the start of the shift. Always avoid the appearance of playing favorites.

Recognize that, as a human being, you do have differences in your attitudes toward people, but when holding people accountable, you must apply the same standards across the board.

1. Be Clear About Your Expectations. It happens every day. The boss

says, “You did not file the documents correctly by client; you totally messed up.” Then, the assistant says, “You never told me to file them by client, so I used my initiative and filed them by date because that is what they taught us in Record Retention.” Holding people accountable when the instructions are vague is like scolding an untethered horse for wandering off the path to eat grass.

6. Be Discrete. Embarrassing a person in public will create a black mark

that will live for a long time. If there is an issue of performance, share the matter with the individual privately and in a way that upholds the dignity of the person. This issue also refers to the Golden Rule.

2. Be Sure of Your Facts. A manager learned this painful lesson early in

7. Be Gracious. Forgiving a person who has failed to deliver on expectations

his career. He gave his administrative assistant a letter to type for a customer.

When he got it back, the letter was full of obvious errors. He immediately held her accountable for the sloppy work and called her into a conference room to let her know of his disappointment. When he told her about the errors, she said, “Well if you had taken the time to notice the initials on the bottom of the letter, you would have seen that I farmed that work out to Alice because I was busy with other things. I did not type that letter.” Gulp.

The manager tried to cover with, “I am glad, because your work is usually higher quality than that,” but the irrevocable damage had been done. If you are going to accuse someone of sloppy work, make sure it was done by that person.

is sometimes a way to set up better performance in the future. Get help for individuals who need training or behavior modification. A leader needs to be mindful of his or her personal contribution to the problem through past actions, like not dealing with a problem when it is small. If the current infraction is a habitual problem or one born out of laziness, greed, or revenge, then stronger measures are needed. People cannot be allowed to continually fail to meet expectations. The corrective measures will be based on the severity and longevity of the problem. One caveat: gracious behavior cannot be faked, so be sure you are calm and have dealt with your own emotions before speaking to the employee.

Continued on next page

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Security Shredding & Storage News Continued from previous page

8. Be Balanced. This is an incredibly important concept. There is nothing

written on a stone tablet that says all forms of accountability must be negative. In fact, most people love it when someone holds them accountable for all the wonderful things they have done along the way. If we view accountability as both a positive and a corrective concept, then we can remove much of the stigma associated with the word. When we hear a top manager say, “We need to hold our people accountable,” it means negative feedback in most cases. This is an easy thing to change by simply modifying our pattern of feedback.

Holding people accountable is a great concept if it is used in a consistent, kind, and thoughtful way. Try changing the notion of accountability in your work area to incorporate the 8 “Be-Attitudes” above, and you will see a significant improvement in your culture.

Bob Whipple is CEO of Leadergrow, Inc. an organization dedicated to growing leaders. He is author of the following books: The Trust Factor: Advanced Leadership for Professionals, Understanding E-Body Language: Building Trust Online, and Leading with Trust is Like Sailing Downwind. He can be reached at bwhipple@leadergrow.com, 585-392-7763, or through his website, leadergrow.com or blog, thetrustambassador.com.

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National Archives Missing 81 Misplaced Boxes of Data, IG Calls for Better Security and Record-Keeping

Info Request #157

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ashington, DC—The National Archives and Records Administration is missing from its Washington National Records Center in Suitland, MD, 81 boxes of classified government documents. These are from the Office of the Secretary of Defense, the U.S. Army Chief of Staff, the Commerce Department’s Bureau of Export Administration, the Atomic Energy Commission, the Department of Energy, the National Imagery and Mapping Agency, and four separate offices of the U.S. Navy, and contain data such as nuclear weapons data.

A three-year investigation conducted by NARA’s Office of the Inspector General that took place between 2007 and 2010 found the missing records weren’t stolen by thieves or spies. The Federal Bureau of Investigation has been notified of the missing classified material, per Department of Justice rules.

It would be the third such occurrence since 1998. The NARA Inspector General, Paul Brachfeld, is said to have conducted inventories of classified data in 1998 and 2004, finding many documents were unaccounted for. As of March 2011, the IG’s office reported that 2,757 boxes of documents, each holding up to five reams of paper, couldn’t be located, with 1,500 of these classified as holding confidential information.

In 2009, Brachfeld noted he found “an unacceptable and potentially dangerous status of classified records management and storage at the WNRC. The IG’s office called for an urgent reevaluation of the facility’s security measures, with classified records being left in unsecured areas or improperly shipped to the wrong federal office.

The report was released due to a Freedom of Information Act request by the Washington Times. NARA officials responded to the Washington Times that “bad data” is the reason the records can’t be located and that the 81 boxes are a very small fraction of the millions of records stored in Suitland. About a quarter million boxes of documents enter the WNRC each year, and the facility serves as temporary storage until they are destroyed or turned over for permanent placement in the National Archives.

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China’s High-Fiber Diet Continued from page 5

Moore says the United States will continue to be tons from all over the world.” Shanghai Taison’s China’s go-to source for recovered paper, even as experience might be typical: Its feedstock has shifted the supply gets tighter. “They won’t be able to get from 70 percent imported to 60 percent imported much more from Europe,” he says, because that recovered fiber, Chiu says. “The ratio will continue continent is “in the same to increase more toward situation we are, with domestic, but we are “Eventually, newsprint reduced availability.

I going to continue to Low-RPM, Single-Shaft Shredders think China will start need additional OCC mills here and in China Allegheny Cresswood Granutech to look at new sources, from the U.S.” Shred-Tech SSI Untha may have to go back to like the Middle East or As for other grades, Vecoplan Weima using virgin fiber again.” a significant portion of Russia.” At the fall 2011 Bureau of International China’s new and planned Recycling meeting, Paper Division President production capacity is in sectors other than the Ranjit Baxi of J&H Sales International (London) almost exclusively OCC-dependent containerboard, pointed out that Japan has surpassed Europe as the Moore says. Mills “are bringing on a lot of capacity second-largest supplier of paper to China. Japan for things like cartonboard/boxboard, which use a sent 3.5 million mt of scrap paper to China in 2010, mix of OCC, ONP, and, frequently, mixed paper.

Nobutaka Okubo of the Japan Recovered Paper Tissue capacity also is increasing rapidly, but that is Association (Tokyo) reported at that meeting. going to be mostly virgin pulp based,” he says. Along The Chinese government is working to increase the same lines, most traders say they expect ONP to its scrap paper collection, sources say, though most disappear as a grade due to less production in North doubt the country will ever be able to meet all of its America and quality issues related to contaminated recovered fiber needs. “China is already recovering collections. The result, Chiu says, is that “eventually, 44 percent of its paper stream, and the world average newsprint mills here and in China may have to go Manufactured in the Midwest is around 56 percent, so there is some [room for] back to using virgin fiber again.” growth for its domestic collection,” Yang says. The country doesn’t have “a sophisticated single-stream Ken McEntee is editor and publisher of The Paper residential system like we do, but [it has] a lot of Stock Report and Paper Recycling Online (www.

SSSN - Mobile scavengers out there collecting paper from wherever recycle.cc). This article originally appeared in the Message - “Sometimes Big Is Just...Weird!” they can find it. It is an industry over there. But May/Jun 2012 issue of Scrap magazine (www.scrap. they are going to still need to bring in additional org). Reprinted with permission.

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Independent Shred Companies Face Major Issues This Year Continued from page 3 and SEO (search engine optimization). That was followed by online advertising with Google Adwords (26.6 percent) and social networking, such as Twitter, Facebook and Linkedin (18.3 percent).

Companies reported that telemarketing was the most effective marketing method to generate new customers, closely followed by social networking, Yellow Page ads and direct mail.

“Seems that our best form of advertising comes from television ads,” one company said. “It gets our name out in the territories we cover. It is also a media that people can see what we are talking about and not have to try and figure it out by themselves.”

“Word-of-mouth is huge,” another respondent added.

Yet another insisted that networking was the most effective marketing tool.

Along with all those efforts, companies indicated that they expected to be making additional investments this year in areas including sales and marketing, employees, new business lines and on-site shredding trucks. Fifty-nine percent of respondents said they expected to add shredding trucks or equipment this year; a majority also said that on-site shredding would be the service of choice for customers in the future.

Despite economic uncertainties, a majority of respondents said they had no plans to either sell their business or sell a portion of it to a private equity or venture capital firm.

“Can never say never to selling a business,” one respondent noted.

Added another: “We have considered [selling]. As always if the price is right.”

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Security Shredding & Storage News. May / June 2012 11

In the News NAID CEO Scheduled to Speak

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s the association grows and data protection and privacy issues take center stage, the National Association for Information Destruction’s (NAID) CEO Bob Johnson continues to fill his schedule with speaking engagements to reinforce the importance of outsourcing data destruction services and service provider qualifications.

In the next few months, he has been tapped to present at the combined conferences of ASIS International 58th Annual Seminar and Exhibits and (ISC)² Security Congress in Philadelphia, Penn. Upwards of 20,000 physical and electronics security professionals are expected to attend this event. Johnson’s talk will be “The Role of Due Diligence in Selecting Data-related Service Providers.”

“The common theme of all my presentations is the importance of vendor qualifications,” said Johnson. “Not only because those qualifications provide peace of mind, but because the regulations require customers to verify them.”

Johnson will focus on NAID Certification and Downstream Data Coverage as examples of data-related vendor qualifications, including training tools available to the audience through their local NAID members. Johnson expects to add as many as four or five other major speaking engagements this year, not including the half a dozen NAID events already planned.

Does the Federal HIPAA Privacy Rule Go Too Far?

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he National Health Council (NHC) recently released the results of its focus group study on patient understanding of the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule. Their findings indicated that federal privacy laws are inhibiting medical research that could lead to new treatments and cures.

“The HIPAA Privacy Rule is necessary to protect sensitive personal medical information,” said Myrl Weinberg, NHC President. “However, the rule sets burdensome requirements that can delay essential research and do little to nothing to protect the security or privacy of patient records.”

The Privacy Rule defines and limits the circumstances where protected health information may be used or disclosed. However, after learning about how their personal health records can and cannot be used under the Privacy Rule, people who participated in the NHC focus groups unanimously agreed that the regulation needs to be changed in order to promote medical research.

“Adding insult to injury, patients were shocked to learn that while a detailed authorization process must be followed before their medical records may be used in records-based research, no authorization is required if their records are used by the provider or care facility for their own marketing purposes,” explained Weinberg. “The first step is to bring this complex problem to the attention of the patient community,” she added, “and then stakeholders – including patients – need to reach a consensus on how to address it.”

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12 Security Shredding & Storage News. May / June 2012

100,000 Tons Milestone Inspires Electronics Recycling Movement in Ontario

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milestone in electronics recycling was announced recently in Ontario.

Since April 2009, more than 100,000 tons of electronic waste have been collected, recycled and successfully diverted from landfills across the province. To put this number into context, imagine 12,222 tractor-trailer loads of out-of-use electronics parked end-to-end from downtown Toronto past Kingston.

“This announcement is about thanking Ontarians, including our service providers and network partners, for their role in surpassing the 100,000 tons collection milestone,” says Jonathan Spencer, Executive Director, Ontario Electronic Stewardship (OES). “Electronic waste contains harmful materials like lead, cadmium and mercury that do not belong in our water ways or ecosystems.

In the News Forest2Market Adds Sorted Office Paper Grade to Market2Mill Recovered Fiber Reports

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arket2Mill, Forest2Market’s recovered fiber price report and benchmark, will begin reporting Sorted Office Paper (SOP) prices and market trends beginning this month (June).

According to attorney James R. McGibbon, who rendered the anti-trust opinion that paves the way for the addition, the inclusion of SOP prices in Market2Mill will have significant impact on the industry: “There is very little transparency in sorted office paper pricing at present due to the lack of market reporting, and it seems quite possible that there are gross and unjustified discrepancies in prices of what are essentially commodity products.

Improved pricing data to both sides in a competitive market should lead to more accurate pricing based on economic factors of supply and demand, thus improving market efficiency.”

Launched in April 2011, Market2Mill has already undergone several expansions. While the initial reports covered DLK and OCC, Forest2Market quickly accumulated enough data to split OCC prices into two categories: those traded under contract and those traded on the open market. The addition of SOP to the reports follows quickly on the heels of a recent announcement that Mixed Paper pricing and trends will soon be added to the report.

According to Barbara Hudson, manager of Forest2Market’s recovered fiber practice; this addition further establishes Market2Mill as the industry standard. “Our recovered fiber business has experienced strong and consistent growth. We’ve doubled the number of products we report on in just one year and increased the segments of the recovered fiber industry that we serve. With the inclusion of SOP prices in our price report and benchmarks, document destruction companies will—for the first time—have the tools they need to compare their performance to, and improve their performance against, the market.”

“Export markets have been drawing high volumes of fiber away from the US domestic supply,” said Hudson. “The strength of demand coming out of Asia in particular has created a price differential between export and domestic markets.

By adding export prices to our reports, Market2Mill subscribers will have a global picture of the market.”

This addition is anticipated to occur sometime during the second half of 2012.

Albuquerque Shredder Expands, Employs, Renovates and Wins

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lbuquerque, NM—The Adelante Development Center has opened a new secure document center that will employ 110 persons with significant disabilities and become a centerpiece in the city’s downtown renovation. The nonprofit began offering Adelante Document Destruction Services seven years ago, and grew in that time to earn $1.6 million in revenues in 2011.

The document shredding services are now in a 30,000-sf warehouse following a $1 million renovation by architect Claudio Vigil and general contractor Hart Construction that added 60% to the building’s capacity and included electrical and insulation work, a new industrial power system, and skylights. The nonprofit also added a larger shredder, which enables a shredding capacity of 140,000 pounds per day.

Adelante serves local and national clients for its secure document shredding service, and sells shredded paper to paper companies after sortation. The operation now handles 271,000 pounds of shredding per month. It spearheaded a consortium of nonprofits, the Secure Document Alliance, in order to bid on national contracts.

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Security Shredding & Storage News. May / June 2012 13

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14 Security Shredding & Storage News. May / June 2012

More Than 130 Individuals Have Passed CSDS Exam

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ineteen individuals recently passed the National Association for Information Destruction’s (NAID) Certified Secure Destruction Specialist (CSDS) exam, increasing the total to 132. The last exam took place on March 30th at the NAID 2012 Annual Conference. The conference was held March 30 – April 1 in Anaheim, Calif.

The following individuals can now display “CSDS” as a professional title with their names: Chris Annis, CSDS Todd Barelmann, CSDS Ashby Boulware, CSDS Ed Cassidy, CSDS Joseph Coletta, CSDS Brandy Dyer, CSDS Allison Marie Green, CSDS Greg Hall, CSDS Denise Hammer, CSDS Jason Harris, CSDS Kelly Herneisen, CSDS Justin Hunkins, CSDS Gina Lentine, CSDS Bao Guo Luo, CSDS Craig Palz, CSDS Greg Talvola, CSDS W. Bowman Richards, CSDS Don Gerard, Jr., CSDS Matthew T. Vollkommer, CSDS The NAID CSDS exam is 300 questions about data protection legislation, physical security, risk management, operations and records management. The CSDS accreditation exam establishes an individual’s competency in seven subject areas. To prepare for the exam, NAID provides a CSDS handbook on the NAID website, a 10-session CSDS training webinar series and a sample exam after the webinar series ends. The next series of training webinars will be this fall and announced in the next few months.

“Earning the CSDS accreditation is a major accomplishment,” said NAID CEO Bob Johnson. “And, I am very proud to have these industry professionals counted among those who worked hard enough to achieve it.”

Also, as part of the CSDS requirements, individuals are responsible for their continued education. As such, NAID is offering continuing education credits for those that attended the conference. For more information about continuing credits, upcoming training, registration, and exam times and locations, contact accreditation@naidonline.org or visit www.naidonline. org.

NAID Gaining Membership

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ccording to the National Association for Information Destruction (NAID), 79 organizations joined the association during the 1st quarter of this year. This represents one of the largest quarterly growth numbers to date.

Of the 79, 10 were in the NAID-Asia region, one was in NAIDCanada region and three were in the NAID-Europe region.

Last year, NAID signed up 251 new members, just 13 shy of 2010 and 50 more than 2009. This growth can be attributed to the expansion into Asia, with five of the new member organizations attending the annual conference in March, and the recent concentration on European initiatives (i.e., the consumer attitudes study and the European Commission’s data protection directive).

According to NAID, its current rate of growth is on course to surpass last year’s number. NAID also reports that its membership growth is an indication that secure destruction companies are recognizing the importance of meeting industry standards as consumers demand more security for their personal data.

NAID is a non-profit trade association of the secure destruction industry, currently representing over 1,800 member locations globally. NAID’s mission is to promote the proper destruction of discarded information and to encourage the outsourcing of destruction needs to qualified contractors.

In the News CEA Issues Report on E-Waste Recycling Success

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ccording to the Consumer Electronics Association (CEA), the average American household owns 24 electronic devices, and recycling rates for these items are growing. The CEA, in its First Annual Report of the eCycling Leadership Initiative, says that the consumer electronics industry increased its recycling in 2011. According to the report, some 460 million pounds of consumer electronics were recycled, a 53% increase from the 300 million pounds recycled in 2010.

The eCycling Leadership Initiative, also known as the Billion Pound Challenge, was created in conjunction with the consumer electronics industry, recyclers, non-governmental organizations and national governments to deal with e-waste recycling challenges. According to the CEA, the initiative has led to an increase in the number of national recycling drop-off locations to nearly 7,500 from just over 5,000. Some 96% of the recycling was taken care of by third-party certified recycling facilities.

A national e-waste recycling program would eliminate the costly and confusing patchwork of state regulations. For the complete report, go to www. ce.org/shared_files/edm/2012/green/ ecyclingleadership2011.pdf.

Utah Medicaid Records Stolen for 182,000 Beneficiaries

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alt Lake City, UT—Hackers who broke into Utah state computers stole the medical records of 182,000 beneficiaries of Medicaid and the Children’s Health Insurance Program, with data including some 25,000 Social Security numbers of children who have received public assistance and other information. Each of the 25,000 files stolen contained multiple records. A new server at the Health Department had the usual multiple layers of security, but the new password wasn’t adequately secure.

Utah’s attack probably came from Eastern Europe, due to the IP code used.

The server was taken offline when the state’s security software recognized the problem. Claims come from clinics throughout Utah, and the breach extends from recent to year-old patients, due to filing schedules.

Clients whose information was stolen will be alerted, starting with those whose Social Security numbers were taken, and they will receive free credit monitoring for a year. A hotline has been created for concerned clients to call, and Medicaid clients are warned to monitor credit reports, bank accounts and other areas as well as to alert credit bureaus. Because so many victims are children, the state is working with the credit bureau TransUnion so children’s Social Security numbers can be registered and their credit frozen until they are of age. Victims can also file affidavits that will reduce the amount of time that identity theft victims need to spend fixing their credit.

California In-Home Support Agency Finds Records Lost in Mail

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iverside, CA—The personal records of some 700,000 caregivers and care recipients were either lost or stolen recently, says the California office of In-Home Supportive Services (IHSS), which provides health support to elderly and disabled people. The records dated from October to December 2011 and included data on names, Social Security numbers and wages for 375,000 workers and perhaps state identification numbers for 326,000 care recipients. It is not known whether the information was lost or stolen, but the state has begun an internal investigation and notified law enforcement. IHSS sent letters to those affected to notify them.

The loss was due to the fact that a physical package containing microfiche with thousands of entries of payroll data was missing from a damaged box that had been shipped by U.S. Postal Service to the State Compensation Insurance Fund in Riverside, CA. Data manager Hewlett Packard, which manages the data controlled by the office, notified the In-Home Supportive Services of the breach.

Other recent high-profile state-gathered information breaches included one in which hackers stole the records belonging to 181,000 recipients of Utah state health benefits and one in which IBM lost the records of 800,000 adults and children covered under the Department of Child Support Services.

Oregon E-Waste Recycling Adds Up

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ortland, OR—Under the Oregon E-Cycles Program, the citizens of that state recycled nearly 26 million pounds of electronic goods last year, which represents a 7% increase over the amount handled in 2010. The group has stepped up its expectations for this year, setting a goal for 2012 of 27 million pounds, an average of about 7.1 pounds per person.

The first year of the program was in 2009, when 19 million pounds were collected, The next year, 2010, saw just over 24 million pounds of electronic waste recycled.

Oregon E-Cycles is a network of more than 220 collection sites and recycling facilities statewide that accepts unwanted computers, monitors and televisions for free.

Oregon E-Cycles is funded by electronics manufacturers, with more than 160 manufacturers participating, who pay fees to the state. The Oregon Department of Environmental Quality administers four recycling programs that make up the effort, three of which are run by manufacturers, with the remaining one operated by the National Center for Electronics Recycling under contract with DEQ. DEQ is in the process of changing registration fees that manufacturers pay to fund the program’s administrative costs.

“We continue to streamline the program and make it easier for the public to use,” said Mary Lou Perry, DEQ solid waste specialist. “More Oregonians are aware of the program as it matures, and we’re confident of seeing continued gains in 2012.”

Texas Clerk Wins State Award for Records Recycling Efforts

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an Carlos, TX—Hidalgo County Clerk Arturo Guajardo has made it his mission to organize the county’s leaky warehouse of decades worth of paper records the court system, tax office and about 10 other county offices, in the process earning a Best Practices Award from the Texas Association of Counties, one of four given out among the Lone Star State’s 254 counties.

Guajardo, taking on the challenge in 2007 of cleaning up about 30 years of records, managed to find a new life for the documents by going green. The award was given to his office for an innovation in records management called “Record, Retain and Recycle,” which disposed of records beyond the state’s 20-year retention schedule.

Guajardo also began a program in the county clerk’s office to convert court records into electronic formats and found ways to recycle all documents on a schedule that recognized retention mandates. The recycling program made space in the warehouse, instituted better organization of documents and even created a small profit from the sale of shredded paper. It has recycled more than 85 tons of paper, saving about 1,500 trees, in its first year of operation. Says Guajardo, “As long as you stay on top with recycling, it saves space and generates some money.”

Iron Mountain Converts to REIT

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ivingston, NY—The document storage company Iron Mountain Inc, wants to convert into a real estate investment trust (REIT) in January, 2014, following a suggestion by hedge fund group Elliott Management.

After the former chief executive Bob Brennan departed, the current CEO Richard Reese agreed to evaluate shareholder proposals, including the demand for REIT conversion. Investors believe it makes sense for Iron Mountain to convert due to its extensive land holdings. The firm has warehouses that store and manage large amount of physical data for corporations. Iron Mountain will take a charge of $325 million to $425 million in one-time costs to support the conversion.

In the wake of the announcement, shares of the company recently rose 14% in after-market trade, trading at $32.41, post-market. This move would cut the company’s tax burden, said its advisors, but it would also mean that the company was forced to distribute at least 90% of its profits among shareholders. Iron Mountain would distribute between $1 billion and $1.5 billion to shareholders from their accumulated earnings and profits. The company also increased its quarterly dividend payments.

Iron Mountain is a world leader in information management services, assisting more than 140,000 organizations in 39 countries on five continents with storing, protecting and managing their information.

Security Shredding & Storage News. May / June 2012 15

In the News Impairment Resources Declares Bankruptcy Due to Burglary

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an Diego, CA—An unsolved California office burglary at its San Diego headquarters on New Year’s Eve seems to have ended operations for national medical records firm Impairment Resources LLC. Detailed medical records for some 14,000 people, including addresses, social security numbers and medical diagnoses, were stolen electronically, according to the firm, which is filing under Chapter 7 of the US Bankruptcy Code in the Bankruptcy Court in Wilmington, Del. Impairment Resources had reviewed medical records on workers’ compensation and auto casualty claims for about 600 insurance companies and other entities and had offices in Massachusetts and Hawaii.

The company, as required, had reported the breach to state attorneys general and the Department of Labor’s Office of Inspector General. The Department of Labor and others are still investigating.

“The cost of dealing with the breach was prohibitive,” Impairment Resources said, in an action that seemed to mean it plans to end operations and sell off assets worth about $226,000. This would not be enough to pay lender Insurance Recovery Group and its $583,000 loan, as well as any debt that may accrue from lawsuits over the privacy breach from those affected by the theft.

HITECH Rules Expected to be Operational by End of Year www.certifiedelectronicsrecycler.com

davidwagger@isri.org

W

ashington, DC—The U.S. Department of Health and Human Services is getting ready to implement stricter privacy rules under The Health Insurance Portability and Accountability Act that put in place more stringent security requirements for the healthcare and insurance industries. The American Recovery and Reinvestment Act included the HITECH Act or Health Insurance Technology for Economic and Clinical Health Act, to further safeguard health data with expanded administrative, physical, and technical precautions.

HIPAA rules now also apply to business associates, including subcontractors, of health providers rather than just to the healthcare system alone. The completion of the approval process for these HIITECH act regulations that amend the HIPAA privacy security and enforcement rules is expected to take place by the end of 2012.

The Omnibus final rule is now under review by the Congressional Office of Management and Budget to expand security tracking, create standardized breach notification and improve compliance enforcement for electronic protected health information. Once the Omnibus Rule takes effect, patients can also receive reports showing who can access their health information, and health care systems will need added awareness in monitoring and training employees to adhere to the new guidelines.

New York City Faces Paper and Metal Thieves

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www.chachkagroup.com chachka@chachkagroup.com

16 Security Shredding & Storage News. May / June 2012

ew York—As paper recycling becomes more remunerative, thieves are now beginning to steal paper and cardboard left on city curbs here as the value of the waste increases. The New York Post has reported that police have impounded 49 vehicles already in 2012 for stealing bags of mixed paper. The paper notes that mixed paper has gone from $40 a ton in 2010 to as much as $120 this year, due to consumer switch from paper to electronic communication. In 2011, some 40 vehicles were alleged to have been used to commit the same crime during the entire year, and that is up from under 10 vehicles yearly.

Taking a few tons off the street could amount to about $250, and the report says sanitation officials say the city loses $10 in revenue for each ton stolen, enough to make the city very eager to put a stop to the practice. Paper is a valuable commodity, especially to foreign countries. In 2011, the city made more than $1.5 million for paper recyclables from one vendor alone.

Metal recyclables are also being hit, says the Post article. Manhole covers can be sold about $50 each, which is problematic for the resulting safety hazard as well as the theft, and trash thieves are looting curbs for appliances; the city says that 46% of these set out for recycling last year were not there for pick up.

In the News CESE to Highlight Their CEO of the Year at CWRE

Carter Becomes Electrical Engineering Manager at VIC

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V

elebrating its 15th year, the Canadian Waste & Recycling Expo will be held November 14-15, 2012, at the International Centre in Toronto, ON. With more than five months before the opening of the event, CWRE is already 60% sold out and anticipating another successful event. Hundreds of exhibitors are expected to showcase their products and technologies at this year’s show.

CWRE will offer educational opportunities through its cooperation with the Ontario Waste Management Association. OWMA will produce the Canadian Waste Sector Symposium for the third year.

Complimenting its show floor presentation for the second time, the Council of Environmental Services Industry (CESI) will hold its “CEO of the Year” awards during the Canadian Waste & Recycling Expo (CWRE), on November 14, 2012, in Toronto.

“After a first edition in Quebec, we believe it’s important to honor Canadian CEOs who helped their business flourish over the years.”

Environmental industries are important, not only for the protection of our environment, obviously, but also as market participant, creating many jobs and generating wealth in many communities,” says Perry Niro, president and CEO of the CESI. Committed to the industry it serves, CWRE will showcase the sustainability iniatives supported by its chosen facility, the International Centre. The International Centre was named the recipient of the Leadership in Sustainabiltiy – Hospitality Award during the 2011 Partners in Project Green (PPG) Sustainability Awards which recognize the innovative and inspiring work of local businesses that are embracing sustainability.

With the unveiling of its highly anticipated Sustainable Event Guide and implementation of a Sustainable Procurement Checklist, the International Centre continues to promote the importance of a Greener Toronto. Visit www. internationalcentre.com/CSR for more information.

For additional details on the Canadian Waste & Recycling Expo, visit www.cwre.ca.

ecoplan Integrated Controls (VIC), a manufacturer of industrial control panels and plant-wide integrated control systems, has promoted Ron Carter to Electrical Engineering Manager. In addition to managing the engineering department at VIC, responsibilities of Carter’s new position will include overseeing the design and development of custom control panels and turnkey control systems integration for manufacturing plants. He will also oversee the manufacture and implementation of projects once the engineering phase has been completed.

In addition to his experience at VIC, Carter has a BSET from UNCC, and a combined 20 years of practical experience from stints at Commonwealth Brands, Lucent Technologies, and R.J. Reynolds Tobacco Company, as well as theoretical experience as the lead Electronics Engineering instructor at Rockingham Community College.

Franz Sunkler Joins UNTHA Shredding Technology America, Inc.

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NTHA shredding technology America, Inc. has announced that Franz Sunkler will be the company’s Application Engineer and Customer Service Manager, working from their United States’ offices in Hampton, New Hampshire. UNTHA America is a division of the Austrian-based UNTHA shredding technology GmbH, one of the world’s leading providers of size reduction equipment for the recycling industry. Sunkler, who joined UNTHA in 2008, previously held the position of Customer Service Manager at their corporate headquarters. He holds degrees in mechanical engineering and business, and has extensive experience providing customer service to clients around the globe, including Europe, Australia, Asia and Africa.

In his U.S. position, Sunkler will continue to provide maintenance support, technical support and assistance with upgrades and servicing, but as Applications Engineer, will also work closely with the sales team.

www.cwre.ca arnie.gess@cwre.ca

Security Shredding & Storage News. May / June 2012 17

In the News Luzerne County to Sue LRW for Mismanagement

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ilkes-Barre, PA—Luzerne County plans to sue its former records storage consultant, Wayne, PA-based LRW Solutions Group, aka Little Red Wagon, following advice from a county committee. This came in the wake of a forensic audit that showed detailed mismanagement of more than $900,000 of records-improvement funds from 2005 to 2009. The records committee and county commissioners agreed to hire LRW in 2005 to study records-improvement needs and provide a master plan, but LRW never finished the master plan. County commissioners initially approved payment of $107,000 to LRW. The new terms did not explain what work would be done, set a timeframe or cap payments. LRW invoices also lacked necessary information on services and expenses, said Maher Duessel, the accounting firm that did the audit.

The county stopped paying LRW for services in January 2010 because an agreement on an extension was never signed or executed.

The Federal Bureau of Investigation began looking into the LRW payments in 2010. As chairman of the records committee, former county Clerk of Courts Robert Reilly was responsible for setting up the payments. A company called Coronado was reported as submitting a lower bid, and Reilly could not say why LRW was chosen in the first place. He resigned from the county after admitting lying to FBI agents about receiving money from Barton Weidlich, a contractor for both the county and LRW. The county had paid LRW for bills from Weidlich’s construction company for security renovations to county facilities and shredding records, and the county failed to seek bids for those projects, the audit says. No employee of LRW has been charged.

Boston Hospital Fined for Data Breach in 2010

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oston—Boston’s South Shore Hospital will have to pay $750,000 for failing to protect the personal health data of over 800,000 people during a 2010 breach. In June 2010, the hospital sent three boxes of 472 unencrypted computer tapes to Archive Data, in Texas to be erased and recycled.

During transport, two of the three boxes were lost. The missing boxes were never found, but no illicit use of the data has been discovered due to the breach. A hospital investigation found that only a computer expert proficient in large network backup administration with sophisticated abilities could access the information.

The lawsuit was filed under the Massachusetts Consumer Protection Act and the federal Health Insurance Portability and Accountability Act. The fine includes civil penalties, a payment to the attorney general’s office to support a program on protecting health information, and monies that reflect security measures taken since the breach.

“Hospitals and other entities that handle personal and protected health information have an obligation to properly protect this sensitive data, whether it is in paper or electronic form,” said Massachusetts Attorney General Martha Coakley.

Her office says the hospital did not tell Archive that the tapes contained protected health information, including names, Social Security numbers, addresses, phone numbers, birth dates, and health plan information, violating both federal and state law for both the breach and for not making sure the contractor had procedures to protect the information.

DC Police and Fire Unions Dispute Record Burnoff Policy

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18 Security Shredding & Storage News. May / June 2012

ashington, DC—In May, a burnoff of Washington DC police and fire department records was conducted in trash bins at the firefighters training academy, with fire department training and medical documents found in an abandoned car close to the site and some documents discovered on the ground. Police and firefighter union officials are demanding an inspector general investigation into how the documents came to be burned at the site.

A police department recruiting official had told his staff a “file burn” would be held and that unwanted documents should be left in a hall. A previous email said documents to be burned were records concerning disqualified applicants from more than three years past, with the police chief saying the records dated back to the 1960s.

Union officials said the document burn appeared to have broken District of Columbia policies on document disposal, but District of Columbia Police Chief Cathy L. Lanier says it’s not out of the ordinary or illegal for the police force to burn documents. Her comments drew immediate objections from the police union leader, who objected to the way the document burn at the fire department’s training academy was conducted. The inspector general’s office has not yet commented on the investigation, and a fire department spokesman said the matter was still under investigation.

Product/Equipment Profiles

Busch Systems Introduces Cell Phone Collection Bins

SEM’s New Hard Drive Crusher is Quick, Quiet, Clean

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usch Systems offers containers that can be used to collect unwanted cell phones for recycling. The nine-gallon container is meant for smaller collection programs and is wellsuited for situations where open space is a concern. It has a capacity of up to 30 pounds and has a strong lid to prevent tampering.

The container weighs five pounds and is 13 inches high, 12 inches wide and about 17 inches long.

When ordering in bulk, the containers come in 280 per pallet.

A larger option is also available that includes a 10-gallon liner and is 16 inches long by 20 inches wide by 33 inches in height. It weighs 48 pounds and when ordered in bulk comes 14 per pallet.

Both are lockable and have a double turn lock for added security. Custom decals are available for both.

For more information contact Busch Systems at 705-722-0806 or visit www.buschsystems.com.

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ccording to Security Engineered Machinery (SEM), their new Model 0101 Sledgehammer Hard Drive Crusher destroys all computer hard drives regardless of their size, format or type, including 3.5” and 2.5” technology. A drive (or multiple laptop/notebook drives) is placed in the crusher, the safety door is closed, and at the touch of a button a conical punch inside the unit delivers a staggering 12,000 pounds of hydraulic force, causing the destruction of the hard drive’s chassis and its internal platter. Destruction takes only 10 seconds.

The Sledgehammer is compact and portable (22”H x 10”W x 19”D, 105 lbs.) and is virtually vibration free. A standard 120V wall outlet is adequate for its extremely low power consumption. To protect the operator, a safety interlock prevents the unit from functioning while the door is open, and an emergency stop button halts operation.

Quick, quiet, and clean, the Sledgehammer makes it easy for offices, hospitals, data centers, and other facilities to destroy large quantities of confidential/sensitive information in a timely manner in accordance with various government regulations and industry standards (HIPAA, FACTA, SOX, PCI DSS, etc.).

For more information, contact James T. Norris, Vice President, Norris & Company, at 508-510-5626 or jim@norrisco.com, or visit www.semshred.com.

ShredSupply Introduces Aftermarket Parts Options

Vecoplan Introduces NewGen Technologies at NPE

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ecoplan recently unveiled a new line of machines dubbed NewGen shredders. The new models include the VAZ 1300 M and the VAZ 1600 XL FF T. According to Kim James, Marketing Communications Director at Vecoplan, the Vecoplan machines offer a comprehensive range of size reduction solutions.

Their product line includes a VH shredder for lineal scrap, an FF for shredding film and fiber, an XL shredder for large bulky material, a “Shorty” for installations requiring a small footprint, a VNZ dual shaft shredder and the two NewGen models.

Mr. James added, “Innovations on the NewGen shredders improve performance, increase durability and decrease maintenance time.” These features and options include: cardan shaft drives, double sidewalls, reversible counter knives, hydraulic swing-up screen carriages, rotatable screens, and externally adjustable counter knives.

hredSupply recently i n t ro d u c e d the addition of after market wear parts available for the equipment in yo u r f l e e t ! Wi t h convenient locations in both Washington and Texas, their employees are now available at all times for parts and service.

Rocky Rajewski, ShredSupply President and Owner, states “Our main goal is to listen to the customers wants and needs, then give them what they ask for. I’m excited to open this line of goods and services as a positive alternative to the OEM. We are able to save our customers time and money now more than ever before.”

Rocky adds, “With the advantage of having multiple locations, we are ready to take on your challenges and turn them into positive experiences with our parts and services.”

According to ShredSupply, they have the ability to sell and service all makes and models, from simple PM maintenance to major refurbishment and overhauls.

For more information contact Vecoplan at 336-861-6070 or info@vecoplanllc.com or visit www.VecoplanLLC.com.

For more information contact ShredSupply at 866-520-8762 or info@shredsupply.com or visit www.shredsupply.com.

Security Shredding & Storage News. May / June 2012 19

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