• Consumer electronics already constitute 40% of leadfound in landfills.

• About 70% of the heavy metals (including mercuryand cadmium) found in landfills comes from electronicequipment discards.

• Other toxics in computers and other electronicdevices include mercury, hexavalent chromium, PVCplastic and brominated flame retardants.

• The presence of these brominated flame retardants incomputer plastics may result in the formation of dioxinif the plastic is burned.

Apple’s Toxic Products—from iPod to iWaste

Design flaws & ineffective recycling expose company to consumer criticism, loss of brand image

Many manufacturers are addressing the problems associated with electronic waste, or e-waste. Apple,however, is compromising brand value and leadership by placing short-term financial gain over environmental concerns.

Apple products include toxics, and need special care.

1

• By 2008, the U. S. will have 10.5 million old Applesneeding recycling and/or disposal. These will containalmost 3 million pounds, or 1,400 tons of lead.

• Lead poisoning causes damage to the central andperipheral nervous systems, blood system and kid-neys in humans. Children suffer developmental effectsat even very low levels of exposure.

• When these computer components are illegally dis-posed and crushed in landfills, the lead is releasedinto the environment, posing a hazardous legacy forcurrent and future generations.

Why Apple is a Target

2

Apple should be a leader, not a laggard, in solvinge-waste problems

• Consumers and the public have high expectations ofa company that “THINKS DIFFERENT.”

• Fighting reasonable environmental rules can hurtbrand image and eventually market share.

• 50-80% of the e-waste taken to U.S. “recyclers” isactually shipped out to developing countries in viola-tion of international law. In China, India and othercountries, dirty electronics recycling has had horren-dous consequences—polluting the air, land and waterand endangering people’s health. Without an aggres-sive takeback system, including a commitment towork only with responsible recyclers, Apple is con-tributing to this growing problem.

Apple works actively to prevent effective solutionsto the e-waste crisis

• Apple lobbied against legislation requiring companiesto set up takeback programs for their own obsoleteproducts in Maine. (The bill passed.)

• Apple is currently opposing similar bi-partisan legisla-tion in Minnesota and Massachusetts.

• Apple complies with strong government policies inEurope, Japan, Taiwan and South Korea while fightingthose same standards at home in the U.S.

• Apple lags far behind Dell and HP in its policies orprograms to take back its own obsolete products.

• Some of Apple’s product designs (including the iPodand eMac) do not encourage product upgrades andreuse rather than disposal.

• When working on e-waste, people in prisons areunnecessarily exposed to hazardous toxics, such aslead, beryllium, and brominated fire retardants.

• Workers in prison are often forced to use inferiortools, denied adequate safety equipment, paid farbelow the minimum wage, have no rights to organizeand experience retaliation for speaking out about theworking conditions.

• Poor people and people of color are disproportionate-ly impacted by the unsafe and exploitive conditions inthese facilities. This is environmental racism.

• Federal, state and local prison work programs are pub-licly subsidized, and are exempted from minimumwage laws, unemployment insurance, and completeoversight for health and safety. These substandard pro-grams unfairly compete with responsible recyclers whorespect the rights of workers and the environment.

E-waste, Prisons and Environmental Racism

A disturbing growth trend in e-waste recycling is the use of prison work programs where super-exploited, under-protected captive workers are subject to toxic exposure. Without a system in place to ensure that Apple e-wastedoes not end up in prisons, Apple is contributing to this growing problem.

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Three Key Objectives of Producer Takeback

• To shift the financial burden for waste managementfrom local governments and taxpayers to the produc-ers and users of products by incorporating the cost ofwaste management into the cost of the product.

• Give producers and brand owners financial incentiveto “design for the environment” when developing theirproducts, including increased recyclability, less use oftoxic chemicals, more durable materials and reduceduse of virgin materials.

• To reduce the environmental impacts and costs of aproduct’s entire life-cycle, from resource extraction,through the end of its useful life, including manufac-turing, assembly, wholesaling and retailing.

Businesses Can Benefit from Producer Takeback

• Xerox runs a leasing program that allows the companyto take back at least 75 percent of the equipment itsells. By designing environmentally safe products thatthe company can take back and safely recycle into newmaterials, Xerox estimates that it has saved more than$2 billion, in addition to keeping 1.2 billion pounds ofelectronic waste out of landfills. Producer takebackcan help retain customers. When companies offerleasing and takeback programs, customers becomelong-term clients rather than one-time purchasers.

• Producer takeback policies harness the power of themarketplace to reduce the overall costs to society.

What is Producer Takeback?

Producer Takeback is a system that requires manufacturers or brand owners to take financial and/or physicalresponsibility for the collection, recovery, recycling and disposal of their products when they are discarded or nolonger useful. This system gives the manufacturer or brand owner an incentive to create products that are moredurable, recyclable and less toxic.

4

• E-waste is the fastest growing municipal solid wastestream in the U.S.

• In the U.S. alone, about 133,000 PCs per day arecurrently being retired and replaced by their originalowners. These systems contain plastic, lead, cadmi-um, chromium, and mercury that can contaminategroundwater when deposited in landfills. YetAmericans’ understanding of recycling and reuseoptions remains limited—only about 10 percent ofunwanted PCs in the U.S. are currently recycled.

• European studies estimate that the volume of elec-tronic waste is rising by 3% to 5% per year – almostthree times faster than the municipal waste stream.

• EPA analysts estimate that the amount of e-waste inU.S. landfills will grow four-fold in the next few years.

• Experts estimate that the number of obsolete comput-ers in the United States will soon be as high as 315to 680 million units.

• This year, one computer will become obsolete forevery new computer put on the market.

Apple’s Inaction Makes the National E-WasteCrisis Worse

Source: California Department of Toxic Substances Control March 21, 2001, Letter to Materials for the Future Foundation

The problem of obsolete electronics—e-waste—is serious and growing

“...when discarded, CRTs are identified as hazardous waste under both federal

and state law and are required to be managed in accordance with all applicable

requirements, including generator, transporter and facility requirements.”

5

Recycling rates for computers are low—and oppor-tunities are virtually nonexistent

• Apple provides consumers only limited and costlyoptions for recycling old products.

• Recycling options that do exist typically cost con-sumers $30 per unit.

• In California, estimates show that only 5% to 15% ofobsolete computers are recycled. This compares to a42% rate for overall solid waste and a 70% rate formajor appliances like refrigerators, washingmachines, and dryers.

Apple’s cool image at risk with UnApple policy one-waste

• Dell and HP have embraced principles and legislationthat pledge companies to work with consumers totake back their obsolete electronics products. Applehas not.

• Apple has failed to disclose ANY goals for e-wasterecovery and recycling, unlike its major competitors(Dell and HP). Based on their answers on theComputer Report Card, Apple recycles far less thanthese competitors.

Is this what Apple means by THINK DIFFERENT?

6

Potential for severe damage to Apple’s reputationand brand:

Apple management does not yet recognize that failureto address the problems of e-waste is starting to affectthe company’s image. Recent improvements to Apple’sfinancial situation are linked to the iPod’s brand imageas cool and well designed. As consumers becomeaware of the environmental problems Apple’s e-wastecreates, they are starting to question Apple’s brandintegrity. By failing to develop comprehensive, effectiveand environmentally sound programs to manage Applee-waste, the management risks losing customer loyaltyto other manufacturers with better takeback programs.Apple can’t afford to tarnish its image by being brandedan e-waste polluter.

Failing to use the same standards in the U. S. as inEurope and Asia invites potential legal liability

The European Union and its member states haveadopted stronger standards that require manufacturersto provide programs to take back obsolete electronicsfrom consumers. Apple complies with those programsin Europe and Asia. By intentionally opposing such pro-grams here in the US, Apple demonstrates that they arenot observing reasonable standards of care. This notonly creates risk to the company’s reputation and brandimage, but opens the company to legal risk shouldmembers of the public suffer injury or damages fromthe company’s e-wastes.

Institutional consumers are adopting strong lan-guage as part of procurement programs.

Major institutional customers in health care, education,and government are increasingly adopting green pro-curement guidelines, and will only do business withcompanies that have effective takeback programs, andthat sell computers with minimum toxicity. By failing toadopt strong takeback programs and greener designs,Apple management is risking losing ground in thisimportant market segment, and increasing the compa-ny’s over-reliance on its brand image.

Failing to act on takeback will limit growth inmarket share, and create risks to shareholder

value.

What Apple’s Annual Report Should Discloseto Shareholders

“What about iPod’s notorious lack of

endurance between recharges, the

sealed case that means you may have

to scrap the thing if the internal battery

dies, and the proprietary digital-music

format that joins you at the hip to

Apple’s iTunes online store?”

Source: Time Magazine Online, April 11, 2005. “Attack of the Anti-Pods.”

7

Apple Management:

1. Join other industry leaders, including Dell and HP,who have signed a Statement of Principles onProducer Responsibility for Electronic Waste.

2. Support legislation proposals, including those inMinnesota, Massachusetts and Rhode Island, thatwill enact the principles of producer responsibilityinto laws, and hold all manufacturers equallyaccountable.

3. Meet with representatives of the Computer TakeBackCampaign to discuss how Apple can provide stew-ardship for its products, from design to manufactureto end-of-life.

To see the Statement of Principles and effective statelegislation to curb e-waste and toxics challenges, turnthe page.

What We Can Do About the Problem of E-waste

Apple Shareholders:

1. Ask questions about these important issues at theAnnual Board meeting. See the TakeBackCampaign’s Statement of Principles on ProducerResponsibility for Electronic Waste (next page)and ask Steve Jobs why Apple hasn’t signed andacted on them.

2. Go to www.BadApple.biz and sign up on our petitionasking the Apple Board of Directors to sign theStatement of Principles and to take back Apple e-waste.

3. Tear out the postcard on the back cover of thisreport and send it to the Apple Board of Directors,asking them to direct Apple’s management to getserious about e-waste.

Consumers

1. Go to www.BadApple.biz and sign up onour consumer petition to Steve Jobs, ask-ing him to sign the Statement ofPrinciples and to take back Apple e-waste.

2. Tear out the postcard on the backcover of this report and send it to theApple Board of Directors, askingthem to direct Apple’s managementto get serious about e-waste.

8

This statement refers to the responsibility for the envi-ronmentally responsible management of the electronicwaste from products sold to all customers in the future.As for products sold in the past ("legacy" electronicwaste, including "orphan" products for which the rele-vant producer/brand owner is no longer in business),we advocate that all due measures should be taken toallocate primary responsibility to those who manufac-tured and sold these products in the first instance. Forthat orphan waste which cannot be allocated to pastproducers, we support the principle that current elec-tronics producers as well as those entering the marketin the future should share in the responsibility of man-aging this electronic waste based on an equitable costallocation related to historic market share. [See point 3of alternative policy section below]

We support the objective of producer responsibility tocreate incentives for producers to improve the design oftheir products to minimize their life-cycle impacts on theenvironment. In particular, we support activitiesdesigned to:

• Phase out the use of potentially hazardous sub-stances consistent with the recent European ROHSdirective and other worldwide standards as theybecome law;

• Improve options to upgrade equipment over thecourse of the equipment's life; and

• Increase the integration of non-hazardous recoveredmaterials into new products.

We believe that producer responsibility can operatemost effectively through the competitive marketplace,but that all stakeholders—consumers, producers, gov-ernments, and the general public—play an importantrole. All stakeholders need assurances that all produc-ers are held to the same high environmental standards.Therefore, we support a public policy framework in theU.S. that provides for individual producer responsibility,through mechanisms that assure proper end of lifemanagement of producers' own products sold in thefuture. It is expected that individual producers maychoose to cooperate with others in carrying out thisresponsibility in order to achieve efficiencies of scale.We do not advocate an "advanced recovery fee"approach to financing the management of electronicwaste, such as has been adopted through SB20 inCalifornia and which is under consideration within theNational Electronic Product Stewardship Initiativeprocess. We support an alternative financing modelwhich allows for responsible companies to avoid anAdvanced Recovery Fee and provides for cost internal-ization of end of life management costs by producers

Computer TakeBack Campaign

Statement of PrinciplesEndorsed by

We support the policy of producer responsibility in the U.S. for electronic products at the end of their useful lives,

wherein brand-name manufacturers/producers work with consumers and state and local governments to properly

collect and manage electronic products in an environmentally responsible fashion. Manufacturers and producers

accept responsibility for continually improving the environmental aspects of the design of their products and for the

end-of-life management of their products. This policy will have many benefits for consumers, electronics producers,

local governments, the public health and the environment.

for new products entering the marketplace combinedwith industry sponsored programs designed to offsetthe incremental costs borne by local governments andothers to collect discarded electronic products. We rec-ognize that in order to be viable and effective, this pre-ferred alternative policy approach includes:

1. ambitious, workable and progressive goals andtimetables to assure that both legacy and future elec-tronic waste will be properly recovered and managed;

2. effective and enforceable environmental standardsto assure that hazardous electronic waste will beproperly managed in strict compliance with interna-tional and domestic laws that govern export of haz-ardous electronic waste, worker safety, public healthand environmental protection, and the use of marketlabor rather than incarcerated labor;

3. a convenient, fair and equitable system of collectionthat does not create economic disincentives for con-sumers to participate and is premised upon financialparticipation by producers so that taxpayers, localgovernments, or others do not shoulder all the finan-cial burdens of recycling and disposing of electronicproducts. (Large institutions whose electronic wasteis regulated by federal law may be subject to fees tocover the costs of proper recycling and disposal oftheir historic waste.)

4. consumer awareness designed to optimize perform-ance of the system;

5. flexibility for producers to design and implementrecovery and recycling systems that best suit theirparticular business model while complying with allapplicable laws.

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Make it Clean. Take it Back. Recycle Responsibly.

The Computer TakeBack Campaign works to protect the

health, environment and well being of electronics users,

workers, and the communities where electronics are pro-

duced and discarded by requiring consumer electronics

manufacturers and brand owners to take full responsibility for

the life cycle of their products, through effective public policy

requirements and enforceable agreements.

We are a coalition effort of non-governmental organizations

across the United States working together for social, eco-

nomic and environmental sustainability in the high-tech

industry.

This report was produced by the following member organiza-

tions for the Computer TakeBack Campaign.

Basel Action Networkwww.ban.org

Center for Environmental Healthwww.ceh.org

Clean Production Actionwww.cleanproduction.org

Clean Water Actionwww.cleanwateraction.org.ma

Silicon Valley Toxics Coalitionwww.svtc.org

Texas Campaign for the Environmentwww.texasenvironment.org

Washington Citizens for Resource Conservationwww.wastenotwashington.org

Learn more at

www.computertakeback.com

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