Volume 12, Issue 1
Jan-mar 2015
Security Shredding News Serving the Security Shredding & Records Storage Markets
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Services for your business? If so, please check out these leading companies advertised in this issue: Collection & Storage Containers Bomac Carts – pg 7 Jake, Connor & Crew – pg 11
Deinking Paper Grade Shows Strongest Export Growth in 2014 By Ken McEntee
Equipment Financing TransLease Inc – pg 2 Lock & Locking Systems Lock America Intl. – pg 8 Mobile Truck Shredders Alpine Shredders Ltd – pg 6 Shred-Tech Limited – pg 5 Moving Floor System Keith Manufacturing – pg 15 Stationary Shredders & Grinders Allegheny Shredders – pg 16 Shred-Tech Limited – pg 5 Trade Associations NAID (National Association of Information Destruction) – pg 10 R2RIOS / ISRI – pg 12 Waste Commodity Purchasers Commodity Resource & Environmental Inc – pg 8 Web Design Chachka Group – pg 7
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f the six m a j o r recovered p a p e r grade classifications, chemical deinking grades, including Sorted Office Paper (SOP - PSI Grade #37) and other office generated grades, make up the smallest portion of the fiber generated in the U.S. Although their volume is miniscule compared to more robustly traded grades like old corrugated containers (OCC), deinking grades were clearly the strongest of all grades in terms of export growth in 2014. Because of increased demand from markets like Canada and China, U.S. exports of deinking grades last year were up 15 percent in 2014 relative to 2013, based on trade data from the U.S. Commerce Department. In comparison, overall U.S. scrap paper exports were up 1.3 percent last year, from 20.8 million short tons to 21 million tons. Deinking grade exports improved from 698,392 tons in 2013 to 799,051 tons in 2014. That volume accounted for only 4 percent of all recovered paper exported from the U.S. last year. In comparison, OCC, at 9.7 million tons, made up almost half of all the tonnage exported. In contrast to the 15 percent improvement in deinking grade exports, shipments of pulp substitute grades, which contain similar fibers, but from pre-consumer sources like printers and converting plants, were down 21 percent last year, from 1.5 million tons on 2013 to 1.2 million tons.
In terms of volume, exports to Canada showed the largest growth in 2014 over 2014. Exports to Canada - the second largest market for the grade - improved by almost 56,000 tons, for a total of almost 165,000 tons, a 51 percent gain compared to 109,000 tons in 2013. In terms of percentage of increase, China was the biggest growing destination among major markets for deinking grades. Exports
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Inside This Issue 4
Four to Watch
8
Ecological Paper Recycling Files for Chapter 11
11 HIPAA Business Associates: Understand Your Classification 13 Medical Identity Theft Up 21.7 Percent, Study Shows 14 Electronics Collection Yards Shut Down – Too Costly
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Deinking Paper Grade Shows Strongest Export Growth in 2014 Continued from page 1
PUBLICATION STAFF Publisher / Editor Rick Downing Contributing Editors / Writers Ken McEntee Ellen Ryan Sandy Woodthorpe 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.securityshreddingnews.com
For subscription information, please call 440-257-6453 Security Shredding News (ISSN #1549-8654) is published bimonthly b y D o w n i n g & A s s o c i a t e s. Reproductions or transmission of Security Shredding News, in whole or in part, without written permission of the publisher is prohibited. Annual subscription rate U.S. is $19.95. Outside of the U.S. add $10.00 ($29.95). Contact our main office, or mail-in the subscription form with payment. ©Copyright 2015 by Downing & Associates. Printed on Post-Consumer Recycled Paper
to China improved from almost 26,000 tons in 2013 to almost 58,000 tons in 2014, a gain of 136 percent. Exports to India, t h e l a rg e s t m a rke t for deinking grades, were up 11 percent, to more than 298,000 tons, accounting for 37 percent of all deinking grade exports. Ro u n d i n g o u t the top five markets for deinking grades, ex p o r t s t o M e x i c o dropped 1 percent in 2014, to almost 84,000 tons, while shipments to El Salvador doubled last year, to more than 28,000 tons. Only two other markets – the Netherlands and Peru – imported more than 20,000 tons of deinking grade fiber from the U.S. last year. Exports of deinking grades have been on a five-year growth trend, increasing by more than 51 percent since 2009. Bu t tho se num b ers remain considerably below the peak years of 2000 and 2001, when deinking grade exports topped 1 million tons each year. In 2000, South Korea was the largest importer of deinking grades from the U.S. The ensuing decline in exports through the next decade coincided with a major decline in Korean buying. From a peak of almost 1.2 million tons shipped in 2000, U.S. deinking grade exports plummeted to less than 560,000 tons in 2004. After a three-year bump up to close to 800,000 tons shipped from 2005 to 2007, exports once again slid downward to less than 528,000 tons in 2009. With the exception of a slight dip in 2012, exports have pushed back upward each year since then. Although China is the dominant export market for most major recovered paper grades, that isn’t the case for deinking grades. In 2014, China accounted for only 7 percent of all deinking grade exports. Although exports to China were up by 136 percent compared to 2013, they were still well below the average annual shipments through the decade of the 2000s. After exploding from around 32,000 tons in 2000 to 126,000 tons in 2001, deinking grade exports to China dropped to about 64,000 tons by 2003,
popped back up to around 116,000 tons in 2005, then leveled out at around 80,000 tons between 2008 and 2012. The volume then plummeted to less than 25,000 tons in 2013. Conversely, demand from India has been on a generally upward trajectory since 2002. Between 2000 and 2002, U.S. deinking grade exports to India fell from just short of 200,000 tons to less than 13,000 tons. Since that time, however, with just a couple of downward bumps, Indian demand has steadily improved from almost 13,000 tons in 2002 to almost 300,000 tons last year. The sharpest increases have been over the past four years, during which annual exports have improved 240 percent, beginning with about 88,000 tons in 2010. Likewise, after dropping from about 121,000 tons in 2010 to around 96,000 tons in 2011, deinking grade exports to Canada have been in a steady climb, culminating with a record of almost 165,000 tons in 2014. The opposite, however, has been the trend for exports to Mexico. Between 2001 and 2008, Mexico was the leading market for U.S. deinking
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These trends in information technology are changing processors’ access to the supply of electronics and their ability to return functioning devices to the marketplace.
Four to Watch
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By Ellen Ryan
rom the birth of the integrated-circuit microprocessor in the late 1970s to Google Glass, which puts smartphone tools on the frame of your eyeglasses, electronic technology is changing faster and faster—and those who refurbish or recycle it have had to change, too. For much of the last decade, a popular business model for electronics processors has consisted of selecting the most valuable electronic products, erasing their data, repairing and refurbishing them, and reselling them whole or in parts, leaving items that are older, obsolete, or beyond repair to be separated or shredded for their scrap commodity value. Some processors say up to 50 percent of their revenue comes from resale. But several trends in the purchase and use of electronics are making refurbishment and resale more difficult or more expensive, if not impossible. “If your business is only reselling equipment into the secondary market, it’s not going to last,” predicts David Daoud, managing director of Compliance Standards (Boston), a firm that provides advice and research on information technology asset disposition. At least four trends seem to have the potential to disrupt the viability of an electronics recycling business based on refurbishment and resale. Two are changes in how businesses purchase, use, and dispose of technology; the other two are changes in the electronic devices themselves.
Trend 1: Bring-your-own-device policies
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he first few decades of business IT were one-size-fits-all: Unless your job required specialized tools, you received the computer or mobile phone the company provided to everybody. For the company, such policies simplified purchasing, repair, and replacement. These policies were a boon to refurbishers, too, because they could count on receiving dozens, hundreds, or thousands of identical devices, typically only a few years old and most in good repair. These days, some companies are switching to “bring-your-own-device” policies for laptop computers, cell phones, and tablets. Employees enjoy the BYOD trend, industry experts say. They can purchase exactly what they need or want. And companies like it, Daoud says, because it can be cheaper to implement—the company and the employee often split the cost of the device. Today’s software and mobile applications can work seamlessly across operating systems and devices, allowing the IT department to be platform-agnostic. Refurbishers are less enthusiastic about BYOD, however. A business client that implements it might no longer be regularly turning over, say, 800 identical laptop computers or 500 BlackBerrys. That means less predictability, not to mention the loss of a single decisionmaker on asset disposition. Instead, employees replace their own devices when the device is lost, damaged, or no longer meets their needs. When these employee-selected devices are retired, they are likely to be older. Consumers tend to hold onto their stuff a lot longer than businesses do, says Walter Alcorn, vice president for environmental affairs and industry sustainability at the Consumer Electronics Association (Arlington, Va.). And when they stop using certain electronics, he says, they don’t necessarily recycle or resell them. They might just put them in a drawer. The result is that devices remain off the resale market longer, which lowers their value. Even if employees recycle their devices, they might not do so through the firm that has an IT asset disposition contract with their employer. With fewer devices coming from business contracts, refurbishers will be left with those from consumer collection. The result is higher costs and lower
4 Security Shredding News. January-March 2015
profits, says Kyle Wiens, founder and CEO of iFixit (San Luis Obispo, Calif.), which provides repair guides and sells tools and parts for repairing consumer electronics. “When you have 100 different tablets or phones on site, you need smarter repair techs who are more flexible and a lot more service parts on hand,” he says. “BYOD will create inefficiency in the market, with the result that more [devices] will be shredded rather than resold.” Is BYOD going to catch on and last? Sarah Cade, president of PC Rebuilders & Recyclers (Chicago), doesn’t think so. Corporations’ IT departments may not want to deal with dozens of makes and models to repair, she says. “There are problems of reliability, ensuring that the software’s all the same, repairs, data security, and more. Business-grade equipment is more durable. BYOD may be more trouble than it’s worth.” And then there are legal questions: “Who owns the data?” asks Daoud, about devices containing corporate data but purchased partially or entirely by the employee. “The enterprise owns the business, but the worker owns the device.” Jim Levine, CEO of Regency Technologies (Twinsburg, Ohio), which does IT asset management, recycling, and sales, says he decided against BYOD for his company’s 450 employees for legal liability reasons. Further, “from a corporate standpoint, tech support is better if everything is the same and on the same carrier. I would guess we’re not the only company coming to that conclusion,” Levine says. “For those reasons, BYOD doesn’t show up high on my radar as a concern in bigger businesses.” That assessment matches the experience to date of HiTech Assets (Oklahoma City), which provides IT asset disposition services. “Our top-five clients— leading American companies, Fortune 100 firms—have all done refreshes” of their equipment recently, says Lane Epperson, president and co-founder. “For example, energy companies we serve are buying a lot of smartphones and tablets,” he says. These sources suggest the trend might be taking hold primarily in smaller firms, which can be more flexible. But Daoud thinks the move toward BYOD will continue, and he warns that “refurbishers aren’t ready; they aren’t grasping the speed at which this is happening.”
Trend 2: Cloud-based computing
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ntil recently, most networked offices have had a corner, room, or closet with racks of computers and wires—the network server. Some are now moving their networks to “the cloud”—to a remote network hosting service across town or a continent away on a massive server farm. This is a long-term trend, so it won’t be felt tomorrow or even next year, Alcorn notes. If cloud-based networks become the norm, however, does this mean another type of equipment is out of reach of electronics refurbishers? Perhaps, but many are seeing this cloud’s silver lining. First, the server farms could be valuable customers. The cloud consists of large, consolidated data centers, says Mike Watson, strategic account director at Electronic Recyclers International (Fresno, Calif.). “As the cloud gets bigger, data centers get bigger. Refurbishers and recyclers have to step up and find this datacenter equipment. There’s more and more of it, even though it’s concentrated.” Second, Cade believes the cloud-based network trend means “a larger marketplace for refurbished computers.” Why? “People aren’t overbuying anymore,” she explains. “There’s more opportunity to use equipment that in the
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Security Shredding News Continued from previous page past would have been deemed to have insufficient specifications. Now that storage is in the cloud, those devices are more than suitable. Install a new operating system, upgrade some components, and reuse it. Reuse is the highest form of recycling.” Daoud agrees this is a possibility. “The secondhand [electronics] industry has been used to selling according to the capability of the device,” he notes. “As needs drop, people won’t need to spend so much on a complex device.” Third, electronics processors can look at this as an opportunity to change their business model to one that’s service-based instead of product-based, Levine says. In the past, he explains, electronics processors often provided services such as IT asset tracking, data destruction, and logistics to companies free in return for receiving their retired equipment. Companies still need those services, he points out, even when they have less equipment to retire. “So some firms are charging a service fee, and I expect that trend to increase in the future.” One concern that might slow the cloud-computing trend, Alcorn says, is data security. “Edward Snowden’s revelations caused a lot of people to question the use of anonymous data sources and storage,” he says. “This might be a counterweight to the overall trend, [and] not just in the U.S. market.” Companies moving toward cloud-based systems “might consider, ‘Are we confident that our data will be protected?’”
Trend 3: Solid-state drives
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otice how small and light tablets and laptops have gotten? One reason is that they no longer have a hard disk for data storage. Instead, they have a solid-state drive, also called flash memory. This storage medium offers advantages over the spinning hard disk in addition to size and weight: It can access items in memory faster, and it’s almost impervious to damage. But devices with SSD memory can be a challenge for refurbishers. The primary concern is data erasure. Some techniques used to verifiably erase magnetic storage media such as computer hard disks don’t work for SSD. A report published in 2011 by researchers from the University of California, San Diego, found that SSD manufacturers’ built-in sanitization commands were only completely successful in four out of their 12 tests. Even then, there was no way to verify erasure had taken place. The National Association for Information
Destruction (Phoenix) plans to conduct similar research, says CEO Bob Johnson. SSD technology is evolving quickly, however, as are the technologies and processes for data erasure. NAID believes it is possible to fully erase, or sanitize, SSD devices and validate that erasure has taken place, Johnson says. But it might not be as simple as erasing a hard disk. Previous efforts that attempted to remove data from cell phones but leave the operating system intact were “inherently risky,” he says, because the devices were not designed to allow targeted data removal. Also, SSD devices that are fully populated with data behave differently when being sanitized than devices with only partially full memory. “It’s much more difficult to [determine] whether or not your system did erase everything, or did it simply move [the data] elsewhere on the drive?” Johnson says. But forensic techniques can determine to what extent data remains on SSD-containing devices, he says. NAID is in the process of beta-testing an add-on to its certification for data sanitization that would specify a company is certified to sanitize SSD devices, he adds. Businesses concerned about data security might still insist their electronics processor destroy SSD-containing devices rather than refurbish and resell them— with the processor losing anywhere from half to 90 percent of their value in the process. “You’re always going to find someone who says you can’t be totally sure,” Levine says. Regency uses a three-pass overwrite method, which it can verify to ensure the data have been erased, says Julius Hess, Regency vice president. That meets the standards of the U.S. Department of Defense (Washington, D.C.) and the National Institute of Standards and Technology (Gaithersburg, Md.) as well as those of R2/RIOS™ certification, Hess and Levine say. “However, should a company still have concerns with regard to that method of data erasure, mechanical destruction—shredding—is always an option,” Levine adds. Certification can reassure customers that your processes are routinely evaluated on whether they meet current standards for data destruction. Both the R2 standard and the e-Stewards® standard for certification specify data destruction techniques must meet the requirements of NIST’s Special Publication 800-88, Guidelines for Media Sanitation, and/or the requirements of local, state, and national laws. R2 also specifies that a company that holds NAID’s Certification for Sanitization Operations meets that requirement.
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Four to Watch Continued from page 5
It’s hard to come up with meaningful instructions to the public on data cleaning because there are so many types and ages of devices and so many ways to do it, says Alcorn of the CEA. On laptops and desktop computers, “there may also be aftermarket accessorizing that you didn’t account for, such as external hard drives and communications accessories.” Still, Wiens urges recyclers and refurbishers to educate customers that device destruction is not the only way to ensure data destruction and to demonstrate “the environmental benefits of not shredding everything… . That’s an environmental disaster.” ERI’s Watson also urges electronics processors to participate in discussions of design for recycling and to engage and educate SSD manufacturers on the difficulties of data destruction.
Trend 4: Kill switches
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obile device kill switches, also called activation locks, are the hottest topic among electronics refurbishers and resellers. A kill switch remotely erases a phone or tablet’s data and disables the device. The goal of such technology is to deter mobile device theft by making the item as useless as a brick—in fact, the process also is called “bricking.” With one of three robberies nationwide—
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and 40 to 50 percent of robberies in major cities—involving theft of a cell phone, according to the Federal Communications Commission (Washington, D.C.), this technology is gaining wide support. Last June, Apple (Cupertino, Calif.), Samsung (Ridgefield Park, N.J.), Google (Mountain View, Calif.), and Microsoft (Redmond, Wash.) announced they have agreed to add kill switches to their mobile device operating systems. Since Apple added a kill switch to iOS last fall, iPhone robberies have plummeted 38 percent in San Francisco and 24 percent in London, according to a report from New York State Attorney General Eric Schneiderman. He has been pushing an initiative called Secure Our Smartphones, which urges manufacturers to implement kill-switch technology. Once Google and Microsoft fully implement this technology, some 97 percent of new smartphones available in the United States will have the feature, according to news reports. Even so, law enforcement groups and politicians are working to pass laws that require kill-switch technology on mobile devices. Lawmakers in six states have introduced 11 bills on this subject from January to July of this year, according to ISRI Legislative Analyst Justin Short. Minnesota is the only state to have passed a kill-switch bill to date. It requires all smartphones manufactured on or after July 1, 2015, and sold or purchased in Minnesota to come with a preloaded antitheft function or be capable of downloading such, at no cost to the purchaser. The law also places additional requirements on resellers. As of July 1, 2014, businesses in Minnesota that buy used wireless devices for resale must keep records of the transactions for three years, hold material for 30 days if requested to do so by law enforcement officials, and pay sellers only by mailed check or electronic transfer. Electronics refurbishers and resellers acknowledge cell phone theft is a concern, but they point out that as it exists currently, kill-switch technology also makes legitimate resale and reuse of these devices extremely difficult. Here’s why: Only someone with the original owner’s username and password can activate—or deactivate—the kill switch. When someone sells, trades in, or gives away a used mobile device, that information does not go with it. If that original owner activates the kill switch, there is no way for the new owner to make the device usable. The result, Levine says, is “a company like [ours] that follows the law—[and] we get thousands of phones monthly—will have no choice but to destroy them or potentially use them for parts at a greatly reduced value.” The phone manufacturers—Apple, Samsung, and the like—control the killswitch technology on their phones. They might be able to restore the phone or tablet’s functionality and data if a lost or stolen phone is recovered and returned to its owner. Or they can clear the phone and reinstall the operating system to make bricked devices usable again to resell them. But because they’re the only ones who can do so, this also gives them the power to keep such devices off the market altogether, forcing people to buy new. The movement toward kill switches and kill-switch laws was a matter of good intentions gone awry, says iFixit’s Wiens—to the detriment of the environment and to refurbishers, many of whom now have piles of useless devices they are stockpiling in hopes of a resolution. Original equipment manufacturers “should name authorized resellers” who can erase the phones’ data, restore the operating system, and keep reusable devices in the marketplace, Cade says, “in order to be able to reuse as much of this equipment as possible.” “Recyclers need to be noisy about this,” Wiens adds. “They are not understood or respected or factored into decisions” about kill switches. Electronics processors are tackling this problem in several ways. One approach is to work to ensure that device owners only activate the kill switch when the device is truly lost or stolen—not when they sell it, trade it in, or give it away. This means educating consumers and the companies that purchase or accept used mobile devices that enabling the kill switch is not the only way to wipe all data. “The trade-in program can disable the software for them right
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Security Shredding News Continued from previous page there at the counter,” says Eric Harris, ISRI’s director of government and international affairs. Even if that message does get through, however, it doesn’t help processors that handle devices returned via mail, drop-off bins, collection events, and the like. CTIA, the wireless association (Washington, D.C.), advises those recycling or donating a phone to “use data eraser apps AND reset the wireless device to default factory settings.” But speed-loving Americans are hitting the kill switch anyway, turning their phones into bricks. Harris estimates that about 3 to 5 percent of recoverable devices are affected, and the proportion is growing. Another approach that has the support of refurbishers and mobile communications service providers is a stolen device database. Each mobile phone or tablet has a unique international mobile equipment identity, or IMEI, number. The processor who receives a bricked device could check the database to find out if someone reported it lost or stolen. If it’s not in the database, they would have the ability to reactivate a bricked device and resell it. This could actually reduce the stolen-phone problem by recovering phones or possibly yielding clues that nab thieves, Levine says. And by bringing these phones back into the reuse market, it could make them affordable for more people, allow refurbishers to make a living, and keep perfectly good products in circulation and out of landfills. Late last fall, CTIA seemed to take a step in this direction when it announced a highly anticipated global smartphone database and a multicarrier plan to remotely disable phones reported stolen by blocking their IMEI number. “Refurbishers would be able to check the IMEI numbers via [the global wireless association] GSMA so that they can ensure that the phones in their possession are legitimate. And then they could erase the data on the phone and resell it to consumers,” according to a CTIA spokesperson. ISRI’s Harris calls the database “a step in the right direction,” but he has questions about how the system will work: Will there be a fee for gaining access? Will any refurbisher be able to access the database? Will there be limitations on that access? All parties have an interest in protecting the data connecting owners to their phones, he says, thus recyclers might be required to ensure they have certain data-security safeguards in place before they access the database. The bottom line, Harris says, is that recyclers need a way to reactivate legally acquired bricked devices. Otherwise, the electronics processor is at an unfair competitive disadvantage to the manufacturer. “It’s a property issue,” Harris says. When the phone is not stolen, “we should have access to disengage that [kill-switch] function and return this phone to its original use in the marketplace.” The ISRI board of directors adopted a policy statement to that end at its July 23 meeting in Minneapolis, stating the association’s support for “voluntary and legislative efforts that provide device owners, including recyclers and refurbishers, convenient and reasonable access to procedures and technology from telecommunication carriers and electronics manufacturers necessary to turn off or disengage any activation locks, ‘kill switches,’ carrier locks, or other locks for technological devices that are not stolen or lost in order to maximize the use, maintenance, and reuse of such devices.” No one thinks these are anything but uphill battles. Consumers like the idea of a kill switch for thwarting thieves or erasing data from a lost device, but they don’t consider the detrimental effects of preventing these devices from ever being used again, Levine and others note. Many consumers are not aware that they can sell their old phone or purchase a used, refurbished mobile device for a fraction of the cost of a new device. And device manufacturers and the mobile service providers could see resale of used devices as taking money out of their pockets. Though ISRI is making its case to various stakeholders that recyclers need reasonable access to reactivate non-stolen phones, it’s possible someone will invent a solution that will meet everyone’s needs, Harris says. He envisions an application that will “erase your data, restore your phone to its original state, and turn off the kill-switch function. It could be very convenient, and there is chatter about it.” Of course, it’s possible efforts to deactivate kill-switch technologies could “end up inviting some unscrupulous people to the party,” Levine says. “It’ll be like Prohibition: The good guys’ll scrap them or not take them, and the bad guys’ll find a way to circumvent the system and resell them.” This sets up a system that no one wants, he warns: not manufacturers, service providers, law enforcement, or, ultimately, the public. Ellen Ryan is a Rockville, Md.-based freelance writer. Scrap editor-in-chief Rachel H. Pollack contributed to this article. This article originally appeared in the September/October 2014 issue of Scrap magazine (www.scrap.org). Reprinted with permission.
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In the News Deinking Paper Grade Shows Strongest Export Growth in 2014 Continued from page 3
grade exports by a large margin. Between 2007 and 2009, however, annual volume dropped from almost 300,000 tons to less than 52,000 tons. Since 2011, exports to Mexico have leveled out at between 85,000 and 90,000 tons annually. Meanwhile, Mexican mills have ramped up their buying of pulp substitute grades from the U.S. from about 407,000 tons in 2012 to about 537,000 tons in 2014. While deinking grades accounted for 4 percent of U.S. recovered paper exports, they made up about 7 percent of the recovered paper used domestically, according to the American Forest & Paper Association data. Compared to pulp substitutes, about half of which are exported, about 77 percent of U.S. generated deinking grades are used at U.S. mills, according to AF&PA and Commerce Department data. Since 2007, domestic consumers have steadily used about 79 percent of the deinking grades available. Following a massive decline during the fourth quarter of 2011, prices for Sorted Office Paper (SOP) have generally stabilized. During 2013 and 2014, average national SOP mill prices stayed between a relatively small margin of $139 and $162 per ton, according to The Paper Stock Report. The average national price early in 2015 bumped up close to $165 per ton. That trend generally reflected export prices was well, based on Commerce Department data. According to Commerce data, which shows FAS prices for all deinking grades, rather than just SOP, export prices generally stayed within a range of $204 per short ton and $222 per short ton from January 2013 through November 2014, before showing a $20 hike in December. The exception was a one-month jump to $230 per short ton in January 2014. Ken McEntee is editor and publisher of The Paper Stock Report and Paper Recycling Online, which cover the paper recycling markets. For more information, visit www.recycle.cc.
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NAID Launches Service Provider Selection Dashboard
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he National Association for Information Destruction (NAID) has launched a new services selection dashboard, which is an enhanced online membership directory. The dashboard is designed to help customers better evaluate the qualifications and capabilities of companies providing destruction services. In addition, by graphically displaying members by location, the new site overcomes the geographic and listing challenges of the simple text directory of the previous version. “Customers have a regulatory burden to evaluate and monitor the qualifications of service providers that are allowed access to regulated information, said NAID CEO Bob Johnson. “As a result, we see the dashboard as serving an integral role in the process.” Johnson also said the new dashboard is only the beginning of what will be an ever-evolving project to help customers find qualified service providers. “This dashboard is extremely robust, allowing sorting by qualifications, service platform, related services and automatic monitoring of certification status,” said Johnson. “In the coming months, however, we’ll begin adding a number of additional features to enhance its usefulness to both members and customers. It will never really be finished.”
Ecological Paper Recycling Files for Chapter 11
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pa-locka, FL – Ecological Paper Recycling has filed Chapter 11 reorganization, according to an article on BizJournals.com. The Opa-locka company also has been doing business as Ecological Waste Systems. Founded in 2009, the company billed itself as the largest privatelyheld paper processing firm in South Florida. Ecological’s financial troubles began when it expanded into the waste and refuse collection services. The move to diversify contributed to losses because of high expenses, the company’s attorney told Bizjournals. The company had posted revenues of $7.92 million in 2014, but 2015 projections reduced that figure by more than 75 percent, based on early Q1 sales revenue of just $150,000. The company filed for bankruptcy in February. Assets of between $500,000 and $1 million were listed in the Chapter 11 filing, along with the following creditors: JPMorgan Chase Bank (secured loan of $2.22 million). Total of $1.64 million in unsecured claims is owed to: Ameri-Temps ($394,138), Waste Management ($334,881) and Florida Department of Revenue ($300,000). Ecological plans to reorganize by selling its waste and refuse contracts and refocusing on its core business of paper recycling and paper shredding. Contracts are in place with large companies for paper collection and processing at Ecological’s Opalocka plant. The company will sell the product to manufacturers of recycled paper products, according the attorney. The facility handles 2,000 tons of paper recycling per month and has 30 full-time employees.
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1/21/15 11:14 AM Security Shredding News. January-March 2015 9
In the News NAID Joins Coalition to Advance Records Management Initiative
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he National Association for Information Destruction (NAID), is one of a handful of records and information management organizations that were asked to join a coalition of key stakeholders to help the National Archives and Records Administration (NARA) implement the President’s 2011 Memorandum on Managing Government Records and the Office of Management and Budget and NARA’s joint 2012 Managing Government Records Directive. The coalition, formed by ARMA International, brings together industry leaders in records and information management, including those involved in the valuation, creation, storage, use, archiving, deletion, and security of records and information, to help NARA improve the management, preservation, and access to government records and to develop and implement new records management techniques to capture real-time interactions. “NAID is proud to be associated with these organizations on this project,” said NAID CEO Bob Johnson. “The private sector has the ability to test and try solutions based on real world experience that is often lacking in the public sector. It’s our duty to help when we can.” The coalition currently includes the Association for Information and Image Management (AIIM), American Health Information Management Association (AHIMA), ARMA, NAID, and Professional Records and Information Services Management (PRISM) International.
CEPI Says Paper Use is Stable
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ew data from the Confederation of European Paper Industries (CEPI) shows that recycling of fiber by paper manufacturers in Europe has remained stable. CEPI’s shows that the use of paper for recycling by CEPI members was unchanged at 47.5 million tonnes when compared with 2013. While the use of recycled paper in the graphic sector continued to fall in recent years, this was offset by more positive use of recycled fiber in both the packaging paper and board sector. The report shows that demand for newsprint in Europe is expected to fall by around 7 percent over 2013, while estimates for packaging grades show increases of 1.9 percent when compared to 2013. Following three years of economic decline in Europe, the overall consumption of paper and board in CEPI countries has been going up by between 0.5 percent and 1 percent compared to 2013.
Multi-State Identity Theft Ring Stopped
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allas, TX – A former Cintas employee accused of passing bank records to thieves has pleaded guilty to fraud charges, according to an NBCDFW.com article. Patrick Doucet, of Fort Worth, has pleaded guilty to fraudulent possession of identification, a second-degree felony. He faces up to a $10,000 fine and 20 years in prison. Doucet drove a truck for Cintas Document Management, an Ohio company that shreds documents for businesses, including banks and insurance companies. The arrest of a Georgia woman who had been writing fake checks led investigators to Doucet in North Fort Worth, Texas, where they found evidence of more fake checks in Doucet’s trash. Using a search warrant, police seized computers, cell phones and other items in Doucet’s home. Fort Worth detectives said they confirmed Doucet was a truck driver for Cintas and that the thefts involved Cintas customers that were on his route. A Seattle man who had reported someone trying to write checks in his name, said the problem began after he wrote a check to Allstate Insurance and sent it to the company’s Dallas processing center. Investigators found a torn-up check printed with the Seattle man’s name in Doucet’s trash. Doucet’s sentencing is set for May 8.
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10 Security Shredding News. January-March 2015
In the News Bob Gilmore Named Managing Director/CSO at Vecoplan, LLC
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ecoplan, LLC recently announced that Bob Gilmore has been appointed Managing Director / Chief Sales Officer at the company. As a Managing Director he joins Len Beusse, Managing Director / COO, on the strategic planning team charged with positioning Vecoplan LLC for sustainable longterm growth, as well as day-to-day management of the company. Mr. Gilmore’s responsibilities as CSO include the supervision of all internal and external sales staff, and overseeing the expansion of Vecoplan markets. The move was made in conjunction with Marty Kennedy’s decision to retire. One of the founding members of Vecoplan LLC, Mr. Kennedy, announced his retirement January 1. Formerly Member – Executive Vice President Vecoplan LLC, Mr. Kennedy’s responsibilities included overseeing sales at the company. He has agreed to continue working with Vecoplan, in a consulting capacity, during the transition.
HIPAA Business Associates: Understand Your Classification
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ashington, D.C. – This year, the U.S. Office for Civil Rights, (OCR) is going to focus closer scrutiny on non-medical businesses that provide services to healthcare providers, reports Tennessean.com. Armed with a $2 million budget, the OCR will be doing more investigations of healthcare “business associates” in an effort to protect patient privacy under Health Insurance Portability and Accountability Act (HIPAA). The business associate classification was added to HIPAA compliance rules in 2013 to hold accountable any business that creates, receives or transmits PHI, or anything that may identify a patient in a medical record or bill. As OCR’s second phase of enforcement gets underway in 2015, business associates (and their subcontractors) must understand how security and reporting rules apply to them. HIPAA law requires covered healthcare entities and their business associates to have formal agreements which spell out responsibilities and obligations, along with limits of liability regarding HIPAA obligations. For instance, many agreements may call for covered entities to pay for the risk assessment and address who responds to and pays for a breach. The types of services business associates provide range from billing, legal, actuarial, accounting, consulting, data aggregation and data storage to marketing, printing and quality assurance. Because HIPAA rules apply to business associates the same as any healthcare provider, they must assess technology and security risks and make sure they have the proper agreements, procedures and training in place. Not signing an agreement with the provider does not exempt the business associate from liability or compliance. Keith Dennen, attorney with the Nashville office of Dickinson Wright, emphasizes that HIPAA compliance is OCR’s main priority this year and that fines potentially costing hundreds of thousands of dollars — if not more – could be disastrous, especially for small firms. According to an AbovetheLaw.com article, the latest HIPAA rules dramatically change the legal landscape for business associates. Industry experts expect Business Associate Agreement (BAA) terms to become highly sophisticated and far more detailed (and more frequently negotiated) than ever before. For instance, healthcare providers may restrict business associates’ PHI access to domestic-only, or specific, cloud servers. Contract terms requiring business associates to comply with state privacy laws may be specified also. In situations where OCR notification is not required, such as with pings or other non-breach incidents, business associates will be contractually obligated to make reports to the healthcare providers. Doing business with healthcare providers will be nothing like it was in the past. Industry observers say to expect more entities and individuals who do not absolutely require PHI in order to do business avoid such involvement, and also begin posting disclaimers in their contracts and communiques. “We Do Not Create, Receive, Maintain or Transmit PHI” notification letters may be sent and “Information You Provide is not HIPAA-Protected” warnings may appear on “Terms of Use” websites or applications, according to Elizabeth G. Litten of the law firm, Fox Rothchild. Litten predicts, however, that as the overall creation, receipt, maintenance and transmission of data continues to grow exponentially and globally, efforts to protect the privacy and security of one small subset of that data, PHI, will undoubtedly slip and sputter, tangle and trip. “We will also undoubtedly repair and recast the HIPAA privacy and security net many times in 2015,” she says.
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Info Request #105
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www.recycle.cc Security Shredding News. January-March 2015 11
IS YOUR RECYCLER CERTIFIED? Do the right thing. Work with an R2/RIOS™- certified facility. The R2/RIOS™ difference is that reuse and recycling are the primary objectives in the lifecycle of electronics. This means fewer materials are sent to landfills. Further, R2/RIOS™ helps protect the environment by extending the life of equipment, parts and components. Tested, functional equipment is sent back into the marketplace for reuse. Each certified facility aims to protect a customer’s brand by: •
Requiring proper data destruction to wipe out confidential information
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Holding the highest standards for data protection, such as those mandated by HIPAA regulations
•
Offering the sole program that combines quality, environmental, health and safety requirements into a single management system
12 Security Shredding News. January-March 2015
As a company partnering with an R2/RIOS™-certified facility, you can have the confidence your electronics are being recycled with the highest regard for the environment and the health and safety of employees and the public. www.certifymerecycling.org/partner To find an R2/RIOS™-certified partner, visit: certifymerecycling.org/partner. www.certifymerecycling.org/partner
In the News Caraustar Industries Announces Closing of The Newark Group, Inc. Acquisition
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tlanta, GA – Caraustar Industries, Inc., a portfolio company of H.I.G. Middle Market, recently completed its acquisition of The Newark Group, Inc., a manufacturer of recycled paperboard, linerboard, industrial tubes, cores and other converted products including book covers and packaging solutions. Headquartered in Cranford, NJ, The Newark Group has approximately 1,500 employees and operates more than 20 manufacturing facilities across North America. “We are excited to add The Newark Group to our company,” said Caraustar President and CEO Michael Patton. “The combination of these two companies offers a compelling platform for future growth and will make us more competitive in the end-use customer segments we serve.”
Medical Identity Theft Up 21.7 Percent, Study Shows
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lexandria, VA – The number of patients affected by medical identity theft rose nearly 22 percent in the last year, an increase of nearly half a million victims since 2013, according to the Medical Identity Fraud Alliance (MIFA). The figures are reported in the Fifth Annual Study on Medical Identity Theft, conducted by the Ponemon Institute. “Over the past five years, we’ve seen medical identity theft steadily rising with no signs of slowing,” said Dr. Larry Ponemon, chairman and founder of the Ponemon Institute. “Our research shows more than two million Americans were victims of medical identity theft in 2014, nearly a quarter more than the number of people impacted last year.” Medical fraud is expensive and leads to many complications for victims. Sixty-five percent of victims surveyed have paid more than $13,000 in out-ofpocket costs to resolve the crime. “2015 will be a year of increased attention to the pervasiveness and damaging effects of medical identity theft. As we’ve already seen this year, the healthcare industry is and will continue to be a major target for hackers,” said Ann Patterson, senior vice president and program director at MIFA. “Stolen personal information can be used for identity theft, including medical identity theft and the impact to victims can be life-threatening.” The Ponemon study concluded: Unlike credit card fraud, victims of medical identity theft can suffer significant financial consequences. In 2014, medical identity theft cost consumers more than $20 billion in out-of-pocket costs. In the case of medical identity theft, victims are seldom informed by their healthcare provider or insurer. On average, victims learn about the theft of their credentials more than three months following the crime and 30 percent do not know when they became a victim. Of those respondents (54 percent) who found an error in their Explanation of Benefits, about half did not know to whom to report the claim. Due to HIPAA privacy regulations, victims of medical identity theft must be involved in resolution of the crime. In many cases, victims struggle to reach resolution following a medical identity theft incident. Only 10 percent of survey respondents reported achieving completely satisfactory conclusion of the incident. Consequently, many respondents are at risk for further theft or errors in healthcare records that could jeopardize medical treatments and diagnosis. Nearly half of respondents (45 percent) say medical identity theft affected their reputation in some way. Of those, nearly 90 percent suffered embarrassment stemming from disclosure of sensitive personal health conditions and more than 20 percent of respondents believe the theft caused them to miss out on career opportunities or lose employment. Although respondents are not confident in the security practices of their healthcare provider, the vast majority (79 percent) of respondents expect their healthcare providers to ensure the privacy of their health records. Forty-eight percent say they would consider changing healthcare providers if their medical records were lost or stolen. If a breach does occur, 40 percent expect prompt notification to come from the responsible organization. For a copy of the Fifth Annual Study on Medical Identity Theft, visit http:// medidfraud.org/2014-fifth-annual-study-on-medical-identity-theft. The Ponemon study was conducted with support from Kaiser Permanente, ID Experts, Experian Data Breach Resolution and Identity Finder, LLC.
New York Recycling Law Regulates Electronic Waste
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lbany, NY – As of January 1, 2015, electronics are banned from New York State landfills, reports WNYPapers.com The Electronic Equipment Recycling and Reuse Act requires manufacturers and consumers to be responsible for proper recycling of electronic waste. Manufacturers must have acceptance programs in place or provide instructions on how and where consumers can drop off discarded devices. The Act defines “consumer” as an individual, business, corporation, limited partnership, not-for-profit corporation, the state, a public corporation, public school, school district, private or parochial school or board of cooperative educational services or governmental entity located in New York State. Any entity involved in a wholesale transaction between a distributor and retailer is a consumer. In most cases, consumers will not be charged for the recycling or reuse of electronic equipment. Exceptions include data security services, refurbishment for reuse by the consumer, and other custom services such as at-home collection (other than mail back programs), data wiping, specialized packing and preparation for collection come into play. Under the new regulations, for-profit businesses with 50 or more full-time employees and not-for-profit corporations with 75 or more full-time employees may be assessed a charge for these services by manufacturers. According to New York State Department of Environmental Conservation figures, New York State residents generate an average of more than 4.5 pounds of trash per person per day, including electronics.
Archive Information Management, Inc. Buys Shred-Safe
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inston-Salem, NC – Archive Information Management Inc. (AIM) has acquired Shred-Safe, a document-shredding firm for an unspecified figure, reports Bizjournals.com. Thomasville-based Shred-Safe provides residential and on-site shredding services to more than 100 customers in the Thomasville, High Point, Greensboro, Concord, Salisbury, Mooresville, Lake Norman, Statesville and Winston-Salem areas. AIM provides records management and document imaging as well as shredding services for home-based businesses. According to the company’s website, shredded paper is baled and sent to a paper mill where 100% is recycled and used to make tissue paper, toilet paper and paper towels.
The R2 Leaf is Out - R2:2013 Recycling Standards Are In
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s new international recycling standards go into effect, the green leaf certification logo is no longer being recognized, according to Environmentalleader.com. Last year, Sustainable Electronics Recycling International (SERI) replaced R2 Solutions as the governing body that develops and promotes the R2 Standard for electronics recycling. As of January 1, 2015, the R2:2013 electronics recycling standard replaced the R2:2008 certifications. The transition affects more than 540 R2-certified facilities operating in 17 countries. According SERI, key differences between R2:2013 and the original R2:2008 standard include: • Tighter requirements on verifying the legality of exports • Increased accountability and due diligence throughout the recycling chain, particularly for “focus materials” that require greater care in managing due to their potential risk to human health or the environment) • Stronger requirements for data security • Strict testing and labeling requirements for electronic devices and parts destined for reuse • Certification to approved environmental health and safety management system. The vast majority of companies that were certified to the R2:2008 standard have successfully made the transition to the more rigorous certification requirements, a SERI official says. The organization plans to fulfill another mission this year - sponsoring and supporting electronics recycling projects in developing countries, as well as promoting education and outreach campaigns on the need for responsible recycling. For more information visit www.sustainableelectronics.org.
Security Shredding News. January-March 2015 13
In the News Electronics Collection Yards Shut Down – Too Costly
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rland Park, IL – A recycling station here that took in about 500,000 pounds of electronics last year has shut down because the fees charged by recyclers became unaffordable, reports ChicagoTribune.com. The popular recycling operation was run by the Orland Township Highway Department. Launched in 2012 when a state ban on dumping electronics in landfills took effect, the township’s program was an immediate success. Residents dropped off their discarded electronics and the firm used the proceeds from sales of the recyclables to raise money for college scholarships. According to Highway Commissioner Brian Younker, Orland Township is just one example of a trend he believes will continue to happen across Illinois unless lawmakers change the formula regarding electronics recycling. The Illinois Environmental Protection Agency (IEPA) reports that some 160 million pounds of electronics have been diverted from landfills since the ban took effect. The 2012 Electronic Products Recycling and Reuse Act makes it illegal to dump 17 electronic items, and requires manufacturers to fund recycling according to a percentage of the weight of new products they sell annually. Changes to the state law are being debated by Illinois state legislators because the weight-based formula has resulted in problems – mainly for the recycling centers. As electronics become more compact and/or lighter in weight, the weight requirements are met more quickly. Once the electronics manufacturers meet the state-mandated numbers, they are off the hook, fee-wise. That’s why recyclers began charging private and municipal collection centers to remove the piles of TVs, CRTs, computers and other gear. An IEPA representative pointed out that only recycling of metals and aluminum is profitable. All other recycling is subsidized by taxpayers or manufacturers. Some recyclers would like to see the weight requirements updated, increasing the current goal of 50 percent of weight sold to at least 80 percent and preferably
100 percent. With lighter items being sold, Illinois’ annual weight goals have decreased from 51.6 million pounds in 2013 to 42.2 million in 2014 to 36.8 million in 2015, according to the IEPA. The IEPA program had 152 registered residential recyclers and refurbishers last year. Now it has 111. Meanwhile, the number of collection sites in the state dropped from 700 to 500. The agency has begun soliciting public comments on revising the recycling formula and will conduct public hearings in August before presenting its report to the state legislature a year from now, an IEPA spokesperson says. Meanwhile, Orland Township is holding its annual March electronics recycling and personal document shredding event, the 2015 Go Green Scholarship Fund Drive. The township is asking residents to drop off their old electronics for free in addition to any personal documents they want to have shredded. Last year, the event resulted in $16,500 in scholarships awarded to 22 students. In Waukesha, Wisconsin a free electronics disposal site operated by the county has had to close its gates, but a spring electronics recycling event is planned for May in Muskego. According to a Waukesha Recycling and Solid Waste official, the cost of accepting old electronics increased dramatically over what it was about ten years ago when the collection facility opened. The company contracted by the City of Waukesha could not keep up with the volume of discarded electronics. Now, the City is considering contracting with a recycler that charges a fee to take the electronics away, even though this could mean charging residents. Discussions are underway between the Wisconsin Department of Natural Resources, other Waukesha County municipalities and the City of Milwaukee to come up with a solution.
Product/Equipment Profiles VS Security Products Launches Crunch 250 Data Destroyer
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Recycling Cart Line Features Ergonomic, Hinged Panel
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S S e c u r i t y P ro d u c t s re c e n t ly introduced the Crunch 250, a powerful and fast data destroyer that crushes Hard Disk Drives (HDDs) and Solid State Drives (SSDs) in seconds. Packed with unique features, including log system, the Crunch 250 is one of the most advanced destroyers on the market today. With over 30 years’ experience designing and manufacturing erasure and destruction products, VS Security Products understands how important security of data for disposal is. That is why the Crunch 250 also provides a solution for the destruction of Solid State Drives. The data destroyer is compact and suitable for the office environment, with inbuilt safety features. Simple to operate (destruction progress is shown on the LCD), the Crunch 250 destroys an extensive range of media: including HDD’s: SATA, PATA, SCSI, Fibre Channel, Notebook/Laptop (3 ½” and 2½” all formats and types up to 1.66” height) and 2 ½“ SSD’s. The destruction process takes just 9 seconds. This means that the Crunch 250 can destroy per hour 250 full height Drives and up to 500 laptop Hard Drives.
e e s e Orbitron Dunne r e c y c l i n g collection carts and trucks now include the company’s novel, ergonomic, hinged side panel as an option. Designed to reduce bending and reaching inside the cart, and to eliminate the need for workers to lift heavy items over the rim. Available on more than a dozen different recycle carts and trucks in a wide range of sizes, the ergonomic, hinged panel spans nearly the entire length of the rolling, plastic bin and opens and closes with an easy-to-use barrel bolt system that stays closed during transport. The plastic carts and trucks are also available with an optional, lockable security cover to prevent access through the hinged panel and support compliance with HIPAA. The line of recycling carts and trucks features rugged, rotationally molded, waterproof, plastic bins with the company’s signature poly base set atop premium, industrial-strength casters for high performance and long-term durability.
Further information about data destruction, technical sheets and photographs are available from marketing@vssecurityproducts.com.
For more information, contact Jack Smylie at 800-829-4535 or jsmylie@modroto.com or visit www.RecyclingCarts.com.
14 Security Shredding News. January-March 2015
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