Recently, Johnson Registrars and R2 expert Larry Belusz conducted an informational webinar to discuss some lessons learned from auditing the R2 standard. Below is an excerpt of the Q & A portion of the webinar.
How does the Program help profitability and do we have any examples of companies who went through this and have benefited more business?
Definitely. In particular, the organizations I audit that are involved in asset management and receiving materials from OEM’s benefit the most. OEM’s are very cognizant of the fact that they are typically on the radar screen. If there is a problem with downstream electronic waste, recycler A’s name has been mentioned on the news and someone saw OEM’s name on plastic. These OEM’s are specifically concerned about reputation here and are essentially saying to recyclers and assets managers that without some kind of effective management system R2 program and 3rd party outside verification that they shouldn’t expect to get any materials. Without materials to recycle, these guys don’t have a business. So yes, I think R2 is really helping profitability of these organizations.
What is the timeframe for R2 certification?
If someone was to say today, “I want to be R2 certified” and they had all the planning and documents in place, it would be a two month timeframe before you can actually get an audit team identified because auditors tend to book two months out. Otherwise, an organization should be able to get it done within 4-6 months, depending on the resources available to the recycling company.
Are all locations/sites of a company audited or just ones designated by company?
Right now for our R2 certification it’s a single site certification. That is, if you have a company that has multiple locations, each site is certified individually. There are no multi-site certifications until each site has been certified for at least 3 years. Then, you can move into a multi-site sampling period, but otherwise each site is individually certified at this point in time.
Will the CB expect the client to be able to produce a mass balance document to show that the client has an appropriate throughput tracking process?
I think mass balance is probably the word that everyone uses; we’re certainly not looking for 10,000 to equal 10,000. What we’re looking for is a process that shows that once you send material to downstream vendor A that downstream vendor A – through some process of your own – can account for the material you sent them.
We’re essentially looking to see if there is a waste matchup coming in and going out. We’re not looking for you to come up with, “11.2 pounds = 11.2 pounds,” we’re looking for something in general that says we can verify that materials are being shipped to these appropriate vendors. The problem that I see here is once you send your one ton of whatever it is to downstream vendor A, they’re co-mingling it with 100 tons from a variety of other recyclers and they may or may not be able to say that your load of 1 ton went out with a particular lot or shipment. Part of it depends on OEMs. Some OEMs want a very specific audit of where there things go and others don’t, so it really depends on the client or the customer the recycler is dealing with.
The issue of 3 year safety ratings for carriers has been a problem – as this information is online by government agency, carriers don’t keep history on file – are there any tips on this issue?
This information may be available from government agencies (e.g. federal motor carrier safety administration); sometimes they only have one or two years of data . It seems like most recyclers use brokers and that’s part of the problem. The issue here is to identify what the broker expects from their individual carriers and get a statement from the broker regarding safety data of their contracted carriers. Remember what it says in the standard, it says “the actual data from a 3rd party or a document that attests to the fact that a particular carrier has no significant violations” A broker can provide that letter saying that all of the carriers it uses have a satisfactory safety history rating and are measured on an ongoing basis, and so I think it becomes a doable audit point. Keep in mind that neither the states nor the federal government actually assign satisfactory or unsatisfactory ratings to carriers—they simply match a specific carrier against a national average in a variety of categories.
Does an R2 auditor review company financials?
No, we don’t review financials, but we do review what you’re charging client-customers to determine if things are being shipped to potentially hide the fact that they may be going for very little. For example, if you’re shipping out 200 laptops and you’re selling them for 50 cents a piece that would suggest someone is “cherry-picking” the product. They’re going to end up with one or two laptops and rest is going to go into a landfill. We look for reasonable pricing. We’re not looking to get into your bank account to see how much money you’re making – we’re looking to see if what you are doing makes some sense. We don’t want 99 percent of materials to end up downstream going to a landfill.
Larry Belusz is a renowned Responsible Recycling expert and frequent speaker on R2. Larry was instrumental in the development of R2 certification rules with ANAB He has conducted many R2 information seminars with industry leaders, including a PJR Symposium on R2 Lessons Learned. In the field, Larry has audited over 100 days on the R2 standard.