eco-efficiency in a high-tech cluster a meta analysis of...

Eco-Efficiency in a High-Tech Cluster A meta analysis of the evolving high-tech electronics

Cluster Headed by Intel in Costa Rica

Jorge Vieto y Lawrence Pratt September, 1999 CEN 703

Working Paper. This work seeks to stimulate thought about: new conceptual frameworks; possible alternatives to framing problems; suggestions to put in place public policies; regional, national and sectorial investment projects; and, business strategies. It does not intend to prescribe models or policies. Neither does it make the authors or CLACDS responable for incorrect interpreation of its content, nor for good or bad management or public policy practice. The objective is to elevate the level of discussion regarding competitiveness and sustainable development in the Central American region. Under the prior stated conditions, CLACDS, and not necessarily its contributing partners, is responsible for its content. September, 1998.

TABLA DE CONTENIDO

EXECUTIVE SUMMARY

This thesis constitutes a meta analysis of the potential negative implications on the environment and human health that Costa Rica may face due to the development of a high-tech electronics cluster. Furthermore, this thesis gives the opportunity to take a second look to the so called "Intel's miracle" and aims to propose a series of strategies and recommendations for different stakeholders in order to prevent and minimize the potential implications for Costa Rica. First of all, this thesis includes a description of the most likely shape of the evolving industrial cluster, the primary material flows and the main potential environmental and human health concerns and impacts. Intel's operations in Costa Rica are taken as the central focus and serve as the basis for the definition of the most likely shape of the evolving cluster and the corresponding analysis of environmental and health concerns associated with the potential members. In order to demonstrate that this kind of industrial development may bring serious additional burdens to the environment and health of the workers and the general public, this thesis includes a brief description of previous experiences in other parts of the world concerning the development of high-tech electronics clusters. A preliminary assessment of the ability of Costa Rica to meet the new challenges foreseen ahead reveals some policy and regulatory failures and other weaknesses. Some of the most relevant findings in this regard are: ! A very lax regulation and a very poor infrastructure in the field of occupational

health and safety, ! The lack of a proper regulation concerning air pollution, ! A weak and incomplete policy and regulation capable of ensuring a proper

management and minimization of hazardous wastes ! Lack of adequate environmental technology and infrastructure ! Limited know-how and expertise about the environment aspects of high-tech

electronics industrial processes ! Limited availability of sources of information that can facilitate environmental

improvements Following various environmental strategies and concepts such as Eco-Efficiency, Cleaner Production, Industrial Ecology and Product Chain Management, this thesis ends with a series of recommendations for the members of the evolving cluster and other stakeholders. It also includes a series of policy measures that should be develop to ensure the protection of humans and the environment from the possible adverse effects of this type of industrial development.

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ACKNOWLEDGMENTS

⇒ I would like to thank hereby the following people for their valuable input and cooperation during the execution of this thesis:

! My two Tutors from the side of the International Institute for Industrial Environmental Economics (IIIEE), Professor Don Huisingh and Research Associate Sisher Kumra.

! My Tutor in Costa Rica, Lawrence Pratt, Associate Director of the Latin American Center for Competitiveness and Sustainable Development (CLACDS) at INCAE, Costa Rica.

⇒ I would also like to thank the following people for their help and support which made this thesis possible:

! Arturo Rodriguez from the Commission for Environmental Cooperation (CEC), in Mexico D.F.

! Mai Te Cortez from Colectiva Ecologista de Jalisco, Mexico. ! Luis Monestel, INCAE. ! Ratna Prassad Pullela, from the IIIEE. ! My wife and my parents, whose advises were always opportune and full of

wisdom. Lastly, I would like to thank CLACDS for the financial support provided for the execution of this thesis.

DEDICATION

Every single page, sentence and idea included in this thesis as well as all the efforts, worries and work that made this thesis possible are dedicated to my lovely wife, Maria Jose, whose love, support, patience and understanding were the biggest motivation during the execution of this project. I also want to dedicate this thesis to my mother and my father, who are continuously encouraging me to learn and become a better person, and who have introduced in me a great love and respect for nature. Lastly, I would like to dedicate this thesis to God, who makes everything possible and assisted me throughout the realization of this work.

TABLE OF CONTENTS

ACRONYMS...................................................................................................................................10

INTRODUCTION ............................................................................................................................11

OBJECTIVES .................................................................................................................................14

1. PARTI: HIGH-TECH ELECTRONICS CLUSTER DEVELOPMENT: THE CHALLENGES AHEAD ...........................................................................................................................................15

1.1 SECTION I: BRIEF INTRODUCTION TO THE HIGH-TECH ELECTRONICS INDUSTRY 15

1.1.1. THE GLOBAL ELECTRONICS INDUSTRY ...............................................................15 1.1.2. CLUSTERING TREND ...............................................................................................18 1.1.3. BACKGROUND OF THE ELECTRONICS INDUSTRY IN COSTA RICA..................18

1.2 SECTION II: INTEL INSIDE COSTA RICA AND THE LIKELY SHAPE OF THE EVOLVING HIGH-TECH ELECTRONICS CLUSTER................................................................19

1.2.1. INTEL'S ARRIVAL AND EXPECTED EFFECTS .......................................................19 1.2.2. DESCRIPTION OF INTEL'S OPERATIONS IN COSTA RICA AND ITS DEVELOPMENT PLANS........................................................................................................23

1.2.2.1. General Information.........................................................................................................23 1.2.2.2. Some Contractual and Operating Conditions ..................................................................24 1.2.2.3. Products ..........................................................................................................................24 1.2.2.4. Development Plans and Socioeconomic Aspects ...........................................................25 1.2.2.5. Manufacturing Processes ................................................................................................26

Inputs and Outputs .......................................................................................................................27 1.2.3. DEFINITION OF THE LIKELY SHAPE AND BOUNDARIES OF THE EVOLVING HIGH-TECH ELECTRONICS CLUSTER ...............................................................................32 1.2.4. ENVIRONMENTAL STAKEHOLDERS OF THE EVOLVING CLUSTER...................33

1.3 SECTION III: SOCIO-ECONOMIC AND ENVIRONMENTAL CHALLENGES: LEARNING FROM PREVIOUS EXPERIENCES.....................................................................................................37

1.3.1. ANALYSIS OF PRIMARY ACTORS AND THEIR ENVIRONMENTAL AND HEALTH IMPLICATIONS ......................................................................................................................39

1.3.1.1. Actors and Products Description .....................................................................................39 a. Printed Circuit Boards (PCBs) Manufacturing.....................................................................39 Semiconductors Manufacturing ....................................................................................................40 c. Semiconductor Packaging ...................................................................................................41 d. Passive Components Manufacturing ...................................................................................42 e. Board-level Assembly ..........................................................................................................43 f. Manufacturing of Other Electronic Components ..................................................................43 g. Manufacturers of Non-electronic Components.....................................................................44 h. Assembly of Electronics Consumer Goods..........................................................................44

1.3.1.2. Environmental Aspects, Impacts and Health Hazards.....................................................45 a. Material Inputs .....................................................................................................................45 b. Energy and Water Consumption..........................................................................................47 c. Primary Waste Streams.......................................................................................................48 d. Environmental and Health Impacts ......................................................................................49 e. Work place hazards .............................................................................................................51

1.3.2. ENVIRONMENTAL CONCERNS OF SECONDARY AND TERTIARY ACTORS .....53 1.3.2.1. Manufacturers of Support Materials.................................................................................53 1.3.2.2. Service Companies .........................................................................................................54

1.4 SECTION IV: LESSONS FROM PREVIOUS EXPERIENCES ..........................................57 1.4.1. EXPERIENCES IN THE SOUTHWEST OF UNITED STATES OF AMERICA ..........57

1.4.1.1. Santa Clara County: "Silicon Valley" ...............................................................................58 1.4.1.2. IV.1.2 Albuquerque, New Mexico: the "Silicon Mesa"......................................................60 1.4.1.3. Phoenix Arizona: the "Silicon Desert"..............................................................................61

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1.4.1.4. Austin, Texas: the "Silicon Hills" ......................................................................................62 1.4.2. SOME DOCUMENTED EXPERIENCES IN ASIA AND EUROPE.............................63

1.4.2.1. Japan...............................................................................................................................63 1.4.2.2. Scotland ..........................................................................................................................64

1.4.3. EXPERIENCES OBSERVED IN MEXICO WITH A SPECIAL FOCUS ON THE HIGH-TECH ELECTRONICS CLUSTER LOCATED IN GUADALAJARA .......................................64

1.4.3.1. Brief Introduction to the Electronics Industry in Mexico ...................................................64 1.4.3.2. High-tech electronics cluster in Guadalajara: The Silicon Valley of The South! ..............66 1.4.3.3. Environmental and Health Impacts of the Electronics Industry in Guadalajara and Other Places in Mexico ...............................................................................................................................69

a. Soil and Water Pollution.......................................................................................................71 b. Air Pollution..........................................................................................................................72 c. Hazardous and Toxic Wastes ..............................................................................................73 d. Resource Consumption .......................................................................................................76 e. Health Effects ......................................................................................................................77

1.4.3.4. Some Additional Lessons About Management of the Environmental and Health Implications Observed in Guadalajara ..............................................................................................79

1.5 SECTION V: POTENTIAL NEGATIVE IMPLICATIONS FOR COSTA RICA.....................80 1.5.1. SUMMARY AND PRIORITIZATION OF POTENTIAL ENVIRONMENTAL AND HUMAN HEALTH IMPACTS OF THE EVOLVING INDUSTRIAL CLUSTER ........................80

1.5.1.1. Hot Spots.........................................................................................................................81 1.5.1.2. Priority Flows...................................................................................................................84

1.5.2. PRELIMINARY ASSESSMENT OF THE ABILITY OF COSTA RICA TO MEET CHALLENGES OF THE HIGH-TECH INDUSTRIAL DEVELOPMENT .................................89

1.5.2.1. Policy and Regulatory Failures........................................................................................89 a. Occupational Health.............................................................................................................89 b. Hazardous Waste ................................................................................................................90 c. Atmospheric Pollution ..........................................................................................................91 d. Tariffs...................................................................................................................................91 e. General Aspects ..................................................................................................................92

1.5.2.2. Availability of Adequate Environmental Technology and Infrastructure...........................93 1.5.2.3. Availability of Information and Local Know-How for Environmental Protection................93

2. PART II: FACING THE POTENTIAL ENVIRONMENTAL AND HEALTH NEGATIVE IMPLICATIONS OF THE HIGH-TECH FEVER: THE ROLE OF CLUSTER ACTORS AND STAKEHOLDERS..........................................................................................................................94

2.1 SECTION VI: RESPONSE FRAMEWORK ........................................................................94 2.1.1. ECO-EFFICIENCY .....................................................................................................95 2.1.2. CLEANER PRODUCTION..........................................................................................96 2.1.3. INDUSTRIAL ECOLOGY............................................................................................96

2.1.3.1. IE Goals...........................................................................................................................97 a. VI.3.2 Industrial Ecosystem .................................................................................................97

2.1.3.2. IE General Approaches ...................................................................................................97 2.1.3.3. IE as an Intervention Strategy .........................................................................................98 2.1.3.4. IE as a Development Strategy.........................................................................................98 2.1.3.5. Policy Implications...........................................................................................................99

2.1.4. PRODUCT CHAIN MANAGEMENT...........................................................................99 2.2 SECTION VII: RECOMMENDATIONS FOR ACTION: THE ROLE OF THE ACTORS OF THE EVOLVING CLUSTER AND THE STAKEHOLDERS...............................................................................100

2.2.1. THE ROLE OF THE GOVERNMENT.......................................................................100 2.2.2. THE ROLE OF THE CLUSTER ACTORS AND BRANCH ORGANIZATIONS........103 2.2.3. THE ROLE OF THE ACADEMIC SECTOR .............................................................104 2.2.4. THE ROLE OF THE NGOs AND THE COMMUNITY ..............................................104

REFERENCES .............................................................................................................................105

APPENDIXES LIST......................................................................................................................109

APPENDIX I: SELECTED PROCESS FLOW DIAGRAMS....................................................110

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APPENDIX II: COMPOSITION OF SELECTED ELECTRONIC COMPONENTS ..................111

APPENDIX III: MOST COMMON CHEMICALS USED BY ELECTRONIC INDUSTRIES.........113

APPENDIX IV: ENVIRONMENTAL RELEASES AND TRANSFERS FROM SEMICONDUCTORS, PCBS AND CRTS MANUFACTURERS .................................................117

APPENDIX V: SUSPECTED CARCINOGENIC CHEMICALS AND OTHER POTENTIAL HAZARDS….................................................................................................................................119

APPENDIX VI: SUMMARY OF CURRENT SCIENTIFIC TOXICITY AND FATE INFORMATION FOR THE TOP CHEMICALS (BY WEIGHT) THAT ELECTRONIC INDUSTRIES SELF-REPORTED AS RELEASED TO THE ENVIRONMENT (TRI 1993)...........................................121

APPENDIX VII: HEALTH EFFECTS FROM SOME HAZARDOUS MATERIALS ....................129

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ACRONYMS

A/T Assembly and Test ABS Acrylonitrile Butadiene Styrene AGGIH American Conference of Governmental Industrial Hygienists of Uniteds States AyA Water and Sewage Utility Company of Costa Rica BGA Ball Grid Array CFC Chlorofluorcarbon CINDE Investment and Trade Development Board of Costa Rica COMEX Ministry of Foreign Trade of Costa Rica CP Cleaner Production CRT Cathode Ray Tube DCE Dichloroethylene EIA Environmental Impact Assessment IC Integrated Circuit ICE National Institute of Electricity of Costa Rica IE Industrial Ecology IIIEE International Institute for Industrial Environmental Economics IMSS Mexican Institute of Social Insurance IPA Isopropyl Alcohol IT Information Technology LCD Liquid Crystal Display MEK Methyl Ethyl Ketone MIBK Methyl Isobutyl Ketone MINAE Ministry of Environment and Energy of Costa Rica MINSAL Ministry of Health of Costa Rica NGO Non Governmental Organization OA Organic Acid ODS Ozone depleting substances OSHA Occupational Health and Safety Administration of United States PA Polyamid PCM Product Chain Management PP Polypropylene PS Polystyrene PWB Printed Wiring Board PVC Polymeric Vinyl Chloride RMA Rosin Mildly Activated SECC Single Edge Chip Carrier SEPP Single Edge Processing Package SMT Surface Mount Technology TCA 1,1,1-trichloroethane TCE Trichloroethylene TRI Toxic Release Inventory USEPA United States Environmental Protection Agengy VOCs Volatile Organic Compounds

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INTRODUCTION

Costa Rica is a small Latin American country whose economy has been largely supported by the agriculture sector and recently by tourism activities and the exports of non-traditional goods1. Nowadays, this country is beginning to experience a major change within its production sector. This change is mainly due to the results obtained from the government's decision and efforts to attract direct foreign investments of high-tech companies. Basically, this has been a key strategy for industrial development for the past years. The success of the implementation of this strategy is best reflected in the recent arrival of Intel Corp., a high-profile multinational corporation whose plans are to develop a large-scale manufacturing complex. Intel's arrival is considered as a great opportunity for strengthening and boosting the local industry in the medium and long run. Considering Intel Corp. as a large "anchor" manufacturing company, with significant power and prestige, many experts foresee that its operations in Costa Rica will motivate the arrival of similar high-tech firms, members and non-members of Intel's product chain that may seek to enjoy the benefits of a cluster-based economy. Certainly, the development of a high-tech electronics cluster can contribute to a great extent with the economic growth of Costa Rica. Unfortunately nothing is for free and this kind of industrial development does not only come with "low-hanging fruits" and long term benefits. The formation of a high-tech electronics cluster may also bring some very serious consequences that most people ignore in part because they are completely delighted by the potential economic boost that the development of the cluster may generate. Such negative consequences deserve the attention of policy makers, the industrial sector and the general public, now, before they occur. Previous experiences around the world demonstrates that the high-tech revolution, especially related to the electronics industry, has resulted in unparalleled technological advances but it has also generated new and serious threats to the environment, workers’ health and health of the people in the region2. Therefore, Costa Rican's should not just sit back and enjoy the benefits of this kind of industrial development. They must also face and become aware of "the potential dark side" of the current high-tech fever. Until now, the construction and beginning of operations of the new test and assembly facility of Intel has attracted the attention of various local environmental activists. However, in this small country only very few people are truly aware of the energy, materials and waste profile of the new kind of industries that Intel Corporation will most probably lead into the country. There is indeed, a great need for understanding new and different environmental strategies, with the purpose of managing and avoiding the potential consequences, and taking full advantage of this kind of industrial development. The challenges envisioned ahead and observed in other cases of high-tech clusters elsewhere in the world, suggest a review of existing institutional, legal and policy frameworks with the purpose of strengthening the country's strategy for development while avoiding and reducing the potential negative consequences. Furthermore, new and appropriate synergies among 1 Goods other than traditional exports such as coffee, bananas and sugar. 2 Smith, Ted. The Dark Side of High-Tech Development. Silicon Valley Toxics Coalition. Internet site: http://www.igc.apc.org/svtc/dark.htm,. Jan 20th, 1998.

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the different societal actors associated with the evolving high-tech cluster must be encouraged and developed. In the light of the issues discussed above, this thesis can be regarded as a basis and a starting point for the analysis of the concerns and responsibilities of many stakeholders interested in helping to ensure that Costa Rica continues to make progress in its "Sustainable Development Journey". This thesis does not constitute a cost-benefit analysis of the development of a high-tech electronics cluster. On purpose, this thesis focuses on the negative side of it, only seeking to derive a series of preventive measures. Moreover, this thesis does not address in depth the benefits that this type of industrial development may bring to Costa Rica, which many consider as out of the question and are assumed to be already discussed within the country. This thesis aims to propose ways to prevent, minimize and to internalize the “externalities” that this new cluster could create in order to guarantee that the benefits of this developing system would be higher than the costs. It also aims to maximize the value this cluster creates for the Costa Rican society, by preventing and minimizing the externalities. In more specific terms, the analysis included in this thesis is intended to answer the following questions: ! What is the likely shape of the evolving industrial cluster, the primary material

flows and the main potential environmental and human health concerns and impacts?

! What can be learned from previous and existing cases of electronics high-tech cluster developments elsewhere in the world?

! What opportunities and synergies could be developed among the main actors and what are the actions that could be taken by various stakeholders, which can result in improvements of environmental efficiency and economic profitability?

! What sort of policy measures should be develop to ensure the protection of humans and the environment from the possible adverse effects of this type of industrial activity?

The details of Intel's operations in Costa Rica are taken as the central focus of this study considering the power of Intel as an anchor company and because it makes sense to expect that a high-tech electronics cluster in Costa Rica will evolve along the line of business of Intel. This assumption serves as the basis for the definition of the most likely shape of the evolving cluster and the corresponding analysis of environmental and health concerns associated with the potential members. Furthermore, the analysis included in this thesis is built upon the consideration that the understanding of the interactions, material flows and the environmental implications of the evolving cluster can contribute to the development of synergies among its members aiming towards a better environmental performance. The cluster members or "actors" are viewed as active policy partners, capable of influencing the substance flow through the cluster and increasing the overall level of eco-efficiency. Lastly, this thesis is divided in two parts. The first one is an analytical one, which goes into the details of Intel's arrival and operations, and the likely shape of the evolving cluster. This part also covers the main environmental concerns and potential impacts

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associated with the different type of organizations and industries that may integrate the cluster, taking into account the experiences observed in similar clusters around the world. It concludes with a general review of the ability of Costa Rica's institutional, legal and policy framework to meet the challenges of the evolving cluster. The second part constitutes a response framework. It begins with a brief overview of current environmental strategies and approaches that can help to derive a series of recommendations designed to prevent and minimize the problems discussed in the first part. This part includes the actions and measures that can be taken by the different cluster actors and stakeholders.

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OBJECTIVES

The principle objective of this thesis is to provide policy and decision-makers of various sectors and organizations with an overview of the potential environmental and health implications of the evolving high-tech industrial cluster headed by Intel Corporation in Costa Rica. The study also aims to derive a series of recommendations and strategies to minimize the overall negative environmental impact of the cluster under analysis. Specifically, the study aims: ! to facilitate the understanding of the scale and nature of the environmental and

human health implications of the coming high-tech industries and the expected interactions among the different members of the industrial cluster;

! to identify the most evident weaknesses of Costa Rica in the light of the potential negative environmental and health effects that may be generated as the evolving cluster grows;

! to develop recommendations and strategies and define actions designed to maximize resource efficiency and to minimize the overall environmental and human health impact of the industrial cluster; and

! to study previous experiences elsewhere in the world, in similar cases of high-tech industrial development, as well as the possibility of implementing recommendations based on their examples;

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1. HIGH-TECH ELECTRONICS CLUSTER DEVELOPMENT: THE CHALLENGES AHEAD

1.1 Brief Introduction to the High-Tech Electronics Industry

1.1.1 The Global Electronics Industry

The electronics industry is very large and diversified. The Standard Industrial Classification (SIC) system uses code 36 and code 35 to classify the electronics/computer and computer equipment industries respectively, however, these industrial segments are usually combined to avoid possible overlapping problems. In general, the electronics industry involves various sectors such as telecommunications, computers, industrial electronics, consumer electronics, semiconductors and other electronic components. These sectors are quite interdependent and often share common manufacturing processes that change continuously due to the product innovations that demand updating and modifying of technologies. The electronics industry has experienced an explosive growth over the last decade. Nowadays it is considered as one of the world's largest and most rapidly expanding industries. In 1991 the electronics industry was the largest employer in the United States with over 2.3 million employees, while the number of worldwide employees was estimated to be four million in that year (USEPA 1995). As an example of the economic dimension of the electronics industry, the following figure depicts the volume and behavior of the global sales of the semiconductor industry, according to data gathered and estimated by the Semiconductors Industry Association. The estimate for 1998 already considers the effect of the Asian crisis since it is expected to restrict the growth of the industry compared to previous forecasts. Surprisingly, the sales of this subsector alone surpasses the net sales of the economic giant General Motors and the gross national product of Australia (CRT-SNEEC 1998). Perhaps, one of the main reasons for the impressive growth of the electronics industry is the increasing need for better access to information and faster communication which has driven outstanding developments in information technologies. Concerning manufacturers of electronics, the main producers of electronics are located in the United States, Japan and other Asian countries such as South Korea, Taiwan, Malaysia and Singapore. The high-tech electronics industry also has a major presence in China, India, Indonesia and some countries in Latin America.

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FIGURE I.1

GLOBAL SALES OF THE SEMICONDUCTORS INDUSTRY

Source: EIAJ Semiconductor. During the last years there has been a notable migration of European, Japanese and American companies searching for low wage rates, tax breaks, subsidies and often less stringent environmental regulations to developing countries (Ladou and Rohm,1998). Table I.1 shows some of the locations where large high-tech, electronics multinational corporations, have established manufacturing facilities.

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TABLE I.1

SOME LARGE HIGH-TECH ELECTRONICS INDUSTRIES AROUND THE WORLD

Company Primary Products

Plant Locations

Advance Micro Devices (USA)

Semiconductors USA, Japan, Malaysia, China, Singapore, Thailand, Germany

AT&T (USA) Computer hardware

USA, Venezuela, Brazil, Argentina, Jamaica, Canada, Hong Kong, Korea, Taiwan, Singapore, Japan, China, United Kingdom, Spain, Netherlands, Czech Republic, Belgium, France, Germany, Ireland, Russian Fed, Australia

Apple (USA) Computer hardware

USA, Singapore, Ireland, Netherlands

Fujitsu (Japan) Computer hardware

USA, China Thailand, Hong Kong, India, Korea, Japan, Indonesia, Vietnam, Singapore, Malaysia, Italy, Netherlands, France, Germany, Australia, New Zealand

Harris Semiconductor (USA)

Semiconductors and computer hardware

USA, Canada, Malaysia, Ireland, England

Hewlett-Packard (USA) Computer hardware

USA, Puerto Rico, Canada, Mexico, Brazil, China, India, Japan, Korea, Malaysia, Singapore, France, Spain, Italy, United Kingdom, Netherlands, Germany

IBM (USA) Computer hardware

USA, Canada, Mexico, Argentina, Bolivia, Brazil, Colombia, Viet Nam, Thailand, Taiwan, Singapore, Philippines, Korea, Japan, China, Belgium, Croatia, Czech, France, Germany, Hungary, Ireland, Greece, New Zealand , South Africa

Intel (USA) Semiconductors USA, Puerto Rico, Costa Rica, Malaysia, Philippines, China, Ireland, Israel

Motorola (USA) Semiconductors USA, Mexico, China, Hong Kong, Philippines, Japan, Singapore, Taiwan, Korea, Malaysia, France, Germany, Scotland

National Semiconductors (USA)

Semiconductors USA, Malaysia, Philippines, Singapore, China, UK, France, Germany, Italy, Netherlands, Spain

NEC (Japan) Computer hardware

USA, Canada, Mexico, Argentina, Colombia, Brazil, Venezuela, Chile, China, Malaysia, Philippines, Hong Kong, Singapore, Taiwan, Indonesia, Thailand, Japan, France, Netherlands, Germany, Spain, Italy, Ireland, UK, Australia, Saudi Arabia

Phillips (Dutch) Computer hardware

USA, Mexico, Brazil, Argentina, Venezuela, China, Taiwan, Philippines, Poland, Germany, Hungary, Netherlands, Russia

Samsung (Korea) Computer hardware

USA, Mexico, China, Singapore, Hong Kong, Japan, Taiwan, Korea, England, Australia

Toshiba (Japan) Computer products

USA, Canada, Mexico, Brazil, Panama, Venezuela, Singapore, Japan, Taiwan, Philippines, Thailand, Hong Kong, China, Malaysia, Indonesia, UK, France, Italy, Spain, Netherlands, Germany

Seagate (USA) Disks and disk drives

USA, Mexico, China, Singapore, Hong Kong, Japan, Taiwan, England, Australia

Source: Silicon Valley Toxics Coalition. Internet Site: http://www.igc.apc.org/svtc

http://www.igc.apc.org/svtc/dark.htm

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1.1.2 Clustering Trend

Professor Michael Porter originated the concept of "clusters" which according to him it consists of groups of industries related by links of various kinds. He argues that a nation's successful industries are usually linked through vertical (buyer/supplier) or horizontal (common customers, technology, channels, etc) relationships. He adds that once a cluster is formed, the whole group of industries becomes mutually supporting (Porter 1990). In general, the quest to reduce costs and increase competitiveness motivates companies to develop new groupings of related businesses. The enterprises of the electronics industry, which are on the cutting edge of innovation, have found numerous advantages of locating near customers and suppliers. This particular industrial sector has been very successful in forming clusters, creating new buyer-supplier relationships, a mutually reinforcing creative environment, labor pools and distribution networks in areas with less expensive, land, labor and utility rates. In general, companies in the business of servicing the high-tech industry prefer to be close to their customers (BizSites, Jan 1998). This clustering trend is taking place in non-traditional locations around the world and Costa Rica is one of the examples. In addition, there is a growing pattern for electronics high-tech companies to play off communities in an escalating competition to extract subsidies and concessions, in spite of the fact that sales are growing exponentially (Smith, Jan 98).

1.1.3 Background of the Electronics Industry in Costa Rica

This electronics industry is relatively new and small in Costa Rica, however there is a growing number of electronic industries and customer service support companies for the computer industry which are closely associated with other enterprises in the information technology business. There are already over 30 firms working in the field of electronics (i.e. Motorola, DSC Communications, Merrimac Inc., Bourns-Trimpot and Espion). The majority of these companies started operations in Costa Rica during the last five years. Most of them have been formed with US capital and they are also the result the implementation of the national strategy and policy for the attraction of foreign direct investment of high-tech industries. This strategy includes a mix of advantages offered by the country for the attraction of foreign investment. According to the Ministry of Foreign Trade, recent studies have concluded that in Costa Rica there is a favorable situation for the expansion of the foreign investment of the electronics industry. Furthermore, experts such as Michael Porter of Harvard University pointed out that Costa Rica should be specialized in product niches which require limited production runs and relatively high level of specialized work and quality verification (COMEX 1998). In general, Costa Rica offers a strategic location and political stability as well as many other ideal conditions for investments: a relatively stable and progressive economy, a very well educated human capital; good social services and infrastructure for the provision of electricity, water, telecommunication and transportation services. Most of the electronics industries are established under the "Free Zones" regime, which is perhaps the most important national initiative to stimulate foreign investment and

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exports. The Free Zones are custom and fiscal extraterritorial areas. They are developed to carry out economic operations based on import of products and raw materials, for the manufacture, assembly, or marketing of products and services for subsequent export. In Costa Rica, the free zones offer many benefits such as fiscal incentives, fast custom procedures, and on-site, free handling of foreign currency. Support services in some areas include couriers, post offices, banks, day care centers, message services, employment services and medical clinics (Procomer, May 1998). The exports of electronic components and goods in 1997 accounted for approximately 7.5% of the total national exports and around 36% of the exports from all the companies operating under the free-zone regime (Procomer, 1998). These figures are expected to increase substantially in the near future due to the recent arrival of Intel Corp., Photocircuits Corp, (supplier of Intel) and other companies such as EMC Technology (manufacturer of electronic components for satellite communications). This high-tech growth is also accompanied by a remarkable growth of software development companies. There are approximately 140 software companies that employ approximately 4.000 people. This sector is expected to export nearly $45 million in 1998, which represents an 80% increase over the previous year (Latin Trade, August 1998). Undoubtedly, Intel Corp is a new and powerful "driving" actor within the electronics sector of Costa Rica. The consequences of its presence over this industrial sector are discussed in the following section, which includes some details of Intel's arrival and its operations in Costa Rica.

1.2 Intel Inside Costa Rica and the Likely Shape of the Evolving High-Tech Electronics Cluster

This section begins with a brief reference to Intel's arrival and a description of those businesses and organizations that will be directly related to Intel in various ways. The definition of the boundaries of the evolving cluster is preceded by a brief description of Intel's operations in Costa Rica. This is intended to serve as an introduction to the definition of the boundaries and description of the likely shape of the high-tech cluster, which is expected to evolve and grow in a significant manner in the near future. The criterion used for defining the boundaries is based on the life cycle perspective of Intel's products. In general, the definition of the shape and boundaries serves as the basis for the analysis of the potential environmental and health implications of the high-tech industrial activity that the Intel CR is likely to lead into the country (discussed in detail in Section III).

1.2.1 Intel's Arrival and Expected Effects

Despite the limited local experience with high-tech electronic industries, Intel Corporation as well as other electronics companies in the past have found appropriate conditions and decided to break ground in Costa Rica. Intel's decision to start operations in Costa Rica was also encouraged by fiscal, lower energy tariffs and other benefits committed by the government to ensure Intel's arrival.

Section II - 20

"Componentes Intel de Costa Rica S.A.", herein after Intel CR, announced in public its arrival to Costa Rica in November 1996 and started assembling and testing some of its latest models of computer processors on March 16th of 1998. In general, the arrival of Intel Corporation to Costa Rica is perceived as a very positive "milestone" by the government and the industrial sector. It is expected to have a direct impact on foreign investments and the establishment of high value-added services and industrial activities. In addition, the local industry will most probably be benefited through the development of new business opportunities and the possibility to provide services and goods to these types of high-tech industries (COMEX, 1998). Intel CR is often regarded as the "tip of the iceberg" since several other companies are expected to come to Costa Rica to be near the assembly and test plants of the semiconductor giant3. In addition, Intel's arrival will likely create many new business opportunities for existing companies and will influence the formation of new linkages among companies, institutions and other organizations. The following diagram illustrates the type of businesses and other organizations that will be linked in various ways to Intel's arrival. Undoubtedly, the world-wide leader of the semiconductor business could be considered the "driving" or leading actor due to its power in the market, the scale of its operations and the complexity of its products. The diagram shows a preliminary and broad categorization of Intel related businesses. As explained before, some of them already exist in Costa Rica and will be linked to Intel or other members of the evolving cluster in various ways. On the other hand, those organizations included in the inner circle will most probably come to the country or arise as new firms or other kinds of organizations in the future. Table II.1 includes a brief description of the related companies and organizations.

3 Procomer-Cinde

Section II - 21

FIGURE II.1

CATEGORIES OF INTEL RELATED COMPANIES

TABLE II.1

DESCRIPTION OF INTEL RELATED COMPANIES AND ORGANIZATIONS

Type Category Description

Outside of Costa Rican borders

Foreign suppliers Manufacturers and distributors of chemicals, tools, packaging materials, electronic components (i.e. semiconductors, passive components and printed circuit boards) and other raw materials which are not manufactured in Costa Rica.

Wholesale distributors Intel or intermediate distribution companies responsible for selling and distributing the products in the international market.

Customers Direct or indirect buyers of computer processors. These may include large computer manufacturers that integrate Intel processors in their products (i.e. IBM, Dell Computers, Packard Bell, etc).

Waste handling Due to the fact that some wastes will be shipped abroad, there will be some companies that will treat, recycle, reuse or dispose the waste. This category also includes companies in charge of transportation and storage of the wastes sent abroad.

Already existing businesses and organizations in Costa Rica

Local Supplier Existing manufacturers and/or distributors of raw materials, electronic components, packaging materials, food and beverages, parts and other supplies needed for the operation of the production facilities of Intel and other members of the cluster

Customers

INTEL CR

LocalSuppliers

LocalSuppliers

ForeignSuppliers

PowerSupply

WaterSupply

Transportation

OtherIndustries

Other H-T Industries

WasteHandlingOther H-T

Industries

WasteHandling Waste

Handling

WholesaleDistributors

OtherServices

OtherServices

New businesses in CR

Outside CR borders

Already existing businesses in CR

BranchOrganization

R&D

TrainingEducation

Section II - 22

TABLE II.1

DESCRIPTION OF INTEL RELATED COMPANIES AND ORGANIZATIONS (FOLLOWING)

Transportation Companies that will transport raw materials, machinery, finished

products and employees. Power (energy) supply State owned companies that generate, transmit and distribute electricity Water supply State owned companies that extract, treat and distribute potable water

and collect and treat sewage waters Other services Maintenance, construction, cleaning and telecommunication service

businesses among others Branch organization Any existing organization that represents the interests of the electronics

industry and other industrial sectors. This category also includes trade organizations that support the development of electronics industry

Waste handling Local firms and organizations in charge of collecting, transporting, storing, recycling, treating and disposing of wastes

Other industries Existing industries of other industrial sectors that may interact with Intel or its suppliers in various ways (i.e. utilization of "by-products" resulting from the production processes of Intel, its direct suppliers or other high-tech industries)

Training / Education Existing training and education organizations that may provide specialized services to the industries that will serve the forming cluster.

Other high-tech industries

Other types of high-tech industries of the electronics sector that may share suppliers and customers or compete with Intel, with each other and with the companies that might come in the future. These kinds of industries may also be related with Intel or other companies through the utilization of various services like transportation and waste handling

New business in Costa Rica

New local suppliers Manufacturers and/or distributors of raw materials, electronic components, packaging materials, food and beverages, parts and other supplies needed for the operation of the production facilities of Intel and other members of the cluster which might come or arise in the future

Waste handling Local firms and organizations in charge of collecting, transporting, storing, recycling, treating and disposing wastes that might come or be created in the future in order to serve the electronics high-tech industry

Other high-tech industries

Other high-tech industries of the electronics sector that may come in the future which might also share suppliers and customers or compete with Intel, with each other and with the companies that already operate in Costa Rica. These kinds of industries may also be related with Intel or other companies through the utilization of various services like transportation and waste handling

Research and Development (R&D)

Possible organizations dedicated to the research and development of production technologies, materials and processes to handle wastes that may arise to serve the cluster of high-tech electronics companies

Other services Possible new maintenance, construction, cleaning and telecommunication service businesses among others

Section II - 23

1.2.2 Description of Intel's Operations in Costa Rica and its Development Plans4

1.2.2.1 General Information

Intel Corporation has planned to develop the new assembly and test plants in two stages. The first stage started operations on March 16th 1998 and the construction of the second stage is planned to take place after the year 2000 depending on the market conditions (see development plan below). Intel Corp. acquired 49.8 Ha of land located near an industrial area within the Central Valley of San Jose, 5 km from the main international airport of Costa Rica. The property was previously used for agricultural purposes (mainly coffee). Despite the resistance of many environmental activists, the manufacturing facility was built on top of three major aquifers from which the National Water Utility Company (AyA) obtains the water to supply various residential and industrial areas in the Central Valley. A relatively small archeological site was also found within the property boundaries and it was excavated and kept by corresponding officials in Costa Rica. A 230.000 V power substation was built within the area acquired by Intel CR to supply the electricity to the industrial facility. A second power substation of similar size will be built for the second phase of the project after the year 2000. These two substations are to be developed and operated by the Costa Rican Institute of Electricity (ICE), the nationally owned electricity utility. With the consent of the government but after several discussions and, practically ignoring and avoiding the opposition from the neighbors and environmental activists, the high-voltage transmission lines were installed through various residential areas. Community activists argued that this fact is a clear warning of the way government and industry tend to "get in bed together" to facilitate short-term gains at the expense of neighborhoods, the environment and the society in general. Near the plant, there are low-density residential areas, small shops and factories producing and processing beer, cigarettes, corrugated cardboard, polyester fabrics and coffee. There are also other companies such as slaughterhouses (chicken and cattle), a paper mill (Kimberly-Clark) and a tire manufacturing company (Firestone) among others around the location. A major highway connecting Alajuela City and San Jose as well as a river (Rio Segundo) surround the plant. In the region where the new plant is located, there are many other economic activities. There is an important and quite diversified industrial park located less than 5 km away where there are many small and medium size electronics enterprises. There are also many hotels, other industries, commercial centers, restaurants and tourism attractions in the region, located less than 15 km range from the Intel plant.

4 Based on information provided by Intel employees of the environmental department and information included in the Environmental Impacts Assessment (KPMG 1997). Also taken from information provided by Intel and government's officials and publicised in Costa Rican news papers.

Section II - 24

1.2.2.2 Some Contractual and Operating Conditions

Intel CR joined the "Free Zone" regime established by the Costa Rican government many years ago to attract foreign investment. Intel CR will not be subject to revenue taxes and is also 100% exempt from asset taxes during the first 8 years and 50% during the following 4 years. After the first 12 years of operations, Intel CR will keep enjoying other fiscal benefits. Intel CR also enjoys other "benefits" like lower energy tariffs compared with the normal tariffs paid by local industries. Concerning applicable environmental regulations, Intel CR will be subject to local wastewater discharge standards and the corresponding mandatory monitoring and reporting practices. Apparently, the government of Costa Rica requested Intel CR to follow the Californian air emissions standards since regulations have not been implemented in Costa Rica yet. Intel CR is also subject to the recent hazardous industrial waste management regulation, which were officially published at the end of the first semester of 1998. Realizing that Costa Rica still lacks an appropriate hazardous waste management infrastructure, the government requested Intel CR to send or export their hazardous wastes to the US in order to be properly recycled, treated or disposed. In this regard, Intel Corp. facilitated a bilateral arrangement between the US EPA and the Costa Rican Government to approve the export the hazardous wastes while an "environmentally-sound" alternative for handling hazardous wastes is being developed in the country. Besides meeting the current and coming hazardous waste management and transportation regulation of Costa Rica, Intel CR has proposed to recycle over 75% of the hazardous waste either in Costa Rica, in the United States of America or in other appropriate places (KPMG 1997). Concerning worker's health and safety protection, as an internal policy, Intel CR is apparently committed to follow the standards set by the Occupational health and Safety Administration of the United States (OSHA) and the American Conference of Governmental Industrial Hygienist (ACGIH). Intel CR is also subject to corresponding local standards in this regard (if applicable and existent) (KPMG 1997). Intel CR is also subject to the local Regulation for Rational Use of Energy (Law 7447) which requires companies consuming over 240.000 kWh/year of electricity and 360.000 lt/year of fossil fuels or a total of 12 TJ, to submit and implement energy efficiency programs and measures. The energy efficiency programs are only requested if the company exceeds the standard for energy consumption set for that particular kind of industry.

1.2.2.3 Products

Intel's facility in Costa Rica is intended to assemble and test computer components (primarily computer processors and processor "cores") for the world market. The company started assembling the Celeron™ processor (the newest member of the Intel Inside® brand family) and the Petium® II processor. The final products look like a small computer board (see CeleronTM Processor figure II.2). The "processing board" technology of the CeleronTM is known as Single Edge Processing Package (SEPP). The

Section II - 25

Pentium II processor board comes inside two covers, one made out of plastic and the other one made out of aluminum especially designed to dissipate heat (see figure II.3). This technology is called S.E.C.C. (Single Edge Chip Carrier). Intel CR will also assemble and test the processor "cores" where the main chip or integrated circuit (IC) of the processor is encapsulated. These cores are then attached to the processor boards. Most probably, part of the production of cores will be exported to other board-level assembly plants elsewhere in the world.

1.2.2.4 Development Plans and Socioeconomic Aspects

The development of Intel CR will take place in two phases. The first phase will be finalized by the end of 1998 and will include a SEPP/SECC mounting plant, an assembly and test facility (A/T for cores) as well as three administrative buildings and warehouses. The second phase will also include another SEPP mounting plant and an A/T plant. This phase will take place after the year 2000, most probably near 2004 depending on market conditions (KPMG 1997).

FIGURE II.2

CELERONTM PROCESSOR

FIGURE II.3

PENTIUM II PROCESSOR

Intel Corp. estimates that the total investment in Costa Rica during the following 10 years will be near 500 Million US dollars. The manufacturing equipment will represent approximately 75% of that amount. During 1998, the value of Intel exports will exceed coffee (US $544 million) and bananas (US $391 million) as the nation's top exports5. Intel CR annual exports are expected to be in the order of 3.5 US Billion Dollars by 20016. Early estimates consider that around 2100 people are needed to operate Phase I (one A/T and one SECC plant) and the total number of employees when Phase II is completed is estimated to be between 5400 and 6000. Around 95% of the employees are supposed to be Costa Ricans (KPMG, 1997). 5 Latin Trade, August 1998 6 La Nacion. March 16th, 1998.

Section II - 26

1.2.2.5 Manufacturing Processes

As mentioned above, the operation of Intel Corp in Costa Rica will assemble both the SECC and SEPP processor boards and the processor "cores". The processor boards are assembled in a facility named "SECC plant" which was already built and started operations in March 16. The cores will be assembled and tested in the A/T plant to be ready by November 1998 according to Intel officials. For the assembling of processor boards Intel CR uses a state-of-the-art "Surface Mount Technology" (SMT). This process implies the attachment of passive (i.e. capacitors and resistors) and active electronic components (i.e. cores and ram cache chips) to a silicon-based substrate commonly called "printed wired board" (PWB) also referred to as Printed Circuit Boards (PCBs), using highly automated and precise machines. The components are attached using a "no clean" solder paste mainly made out of lead and tin (approximately 37% Pb and 63% Sn) and containing other elements such as flux resins, Ag, Bi, Sb, solvents and surfactants. After the application of the solder paste, the boards are passed through a special type of oven where the solder is dried in a nitrogen atmosphere. Depending on the processor type, this process is followed immediately by inspection and test operations. However, the product may also require the attachment of additional components on the other side of the substrate so the previous process is repeated once again.. Rework may be needed in some cases for which there are various rework and manual soldering stations. The "core" is the main electronic component that is attached to the processor board. By the end of 1998, the "cores" will be assembled in the A/T plant of Intel CR. Until the new A/T plant is operating, Intel will continue to import the "cores" made at other Intel facilities in the world (i.e. Malaysia and Philippines). The assembling of cores involves cutting a silicone wafer into single chips (integrated circuits) also called "dies" and attaching them to a substrate (similar to a PWB). After a drying and a cleaning procedure to remove unwanted impurities (i.e. flux), the substrate containing the die is filled with epoxy resins and then inspected and tested. In general, the manufacturing of both processor boards and cores implies the continuous application of cleaning solvents and other chemicals to remove impurities and to clean the manufacturing equipment (i.e. stencils used to apply the solder paste). The production process at Intel runs 24 hrs per day and 7 days per week all year around.

Section II - 27

FIGURE II.4

SECC/SEPP ASSEMBLING PROCESS. SOURCE: LA NACION, MARCH 16, 1998

a. Inputs and Outputs

The inputs and outputs of Intel CR operations allow to understand the type of industries and service companies related to Intel (in and out of the product chain). Table II.2 shown in the following page describes the main inputs and outputs of Intel CR. The information shown is based on the EIA study executed by KPMG and data provided partly by Intel officials and other organizations that have a stake in the project (see table footnote). In general, the information obtained was found to be quite conflicting among the different sources, unclear and in some cases the information was very scarce or completely unavailable. It is important to highlight that the table corresponds to the operation of Phase I of the Intel CR project which includes only one A/T and one SECC plant. The quantities mentioned in the table are rough estimations and projections that may help to provide an idea of the scale of the operation and the kind of substances and materials "most probably" used or to be utilized by Intel when operating both plants at the same time. By no means is Table II.2 intended to provide exact numbers and information mainly due to the difficulties of obtaining precise and representative data. Furthermore, it is important to bear in mind that the figures are based on projections and not on actual data since the production operation is just beginning and has not reached full capacity. Construction activities are still going on and they might influence in a considerable manner, the figures of waste generation as well as power and water consumption.

Section II - 28

Concerning material inputs, wastes and emissions, some of the figures included in the table were given based on the operating conditions of a similar Intel A/T and SECC plants located in Asia. EIA figures refer to the worst case scenario considered by KPMG consultants when doing the EIA and were compared to the information provided by Intel's 1997 EHS Report for the location in Costa Rica. The EHS Report includes some projections of waste generation and chemicals consumption of the SECC plant that is currently under operation. However, these projections, as well as the data regarding energy and water consumption, are not representative of the expected normal operating conditions since the SECC plant is not running at full capacity and the A/T plant hasn't been completed. Figure II.5, presents the information included in Table II.2 in the form of process flows to facilitate the understanding of the process and its inputs and outputs.

Section II - 29

TABLE II.2

PROJECTIONS OF MAIN INPUTS AND OUTPUTS7 FOR ONE A/T AND ONE SECC PLANT TOGETHER (PHASE I ONLY)

INTEL INPUTS INTEL OUTPUTS Type Description Estimated

quantities (per year)

Type Description Estimated quantities (per year)

Current / expected Destiny8

Electronic and non-electronic

Surface mounted semiconductors (Integrated circuits like the cores, PBS and TAG Ram Cache chips)

Solid Waste Plastics (i.e. PC, PVC, PS, PE, etc)

40 Ton Landfill

components

Surface mounted passive components (i.e. resistors, capacitors, inductors)

Wood 500 Ton Landfill, reused or

burned Silicon wafers (containing the

dies to assemble the cores)

34,5 Ton

Metals (ferrous and non-ferrous)

220 Ton Landfill, recycling

Covers and thermal plates (made out of plastic and aluminum respectively)

34 Ton

Corrugated boards 550 Ton Landfill, recycling

Printed Circuit Boards (PWBs) 8,2 Ton Paper 95 Ton Landfill, recycling

Chemicals (solid, liquid

Fluxes (i.e. RMA, OA) 4 600 lt Fiber glass dust 5,7 Ton Landfill

and Soldering Paste (mainly No-Clean with 63% Sn, 37% Pb)

60 Ton WWTP sludge 16,5 Ton Not defined yet

gaseous) Epoxy resins 920 kg Acetone 530 lt

Others (including organic matter and desiccant (silica gel) pouches)

40 Ton Landfill

Isopropyl alcohol (IPA) 1 900 lt Hazardous solid, semi-

Solder paste (Pb 37%, Tin 63%, flux resin, Bi, Ag, Sn)

3 Ton

7 Sources: (i) The Intel 1997 EHS Report for the Costa Rican location. (ii) The EIA study, KPMG, 1997. (iii) List of chemicals used by Intel supplied by Intel to an External Environmental Monitoring Commission. (iv) Letter and list of hazardous wastes sent to the EPA by the former Minister of Health of Costa Rica communicating the type and amount of hazardous wastes to be sent to the U.S. for proper treatment and disposal. In some cases, mainly with respect to chemicals and wastes, the quantities varied notably depending on the source but the highest one is shown in the table. A question mark is shown when the related information was missing. 8 Especially at the beginning of the operation, most of the solid waste ends in a local landfill or dumpsite but Intel CR is working with local organizations and the Municipality to encourage and facilitate recycling of mainly metals, corrugated board, paper and wood.

Section II - 30

TABLE II.2 (FOLLOWING)

Nitrogen 37 000 lt solid and Lead sludge (tin and lead

hydroxide solid, Pb 10% max)

7,5 Ton USA

Stencil detergent (alkaline) 2 840 lt liquid waste Adhesives/epoxy (organic binders)

500 kg

Thermal Grease (organopolisiloxanos ad hexadimetisiloxano compounds)

30 Ton Paints and oils (with solvents and trace metals)

600 kg

Adhesives 2 770 kg Zinc oxide grease (Zn 20%)

300 kg

USA Suva 95 and Suva HP62 type of

CFC (with trifluoromethane, trifluoroethane, hexa-fluorethane, pentafluoroethane and tetrafluoroethane)

Data not available

Isopropyl Alcohol (IPA 100%)

?

HCFCs (R22) (for refrigeration equipment)

Acetone (100%) ?

Packaging material

Corrugated board (with and without anti-static coating)

Lead wipes/debris (8% Pb max)

2 Ton

Plastic bag (with and/or without anti-static Al laminate) (PE)

Wastewater discharges

Process wastewater (after treatment)

1 800 m3 River (Rio Segundo)

Plastic trays (PS, PC, etc) Sewage wastewater (after treatment)

Data not available

River (Rio Segundo)

Air VOCs 3 Ton

Others

Data not available

200 Ton

emissions NOx Energy and Diesel 1 520

lt/year SO2

Water Electricity 45 GWh only projected for 1998.

CO and CO2

Water 810 000 m3 HCFCs (R22) Others Food and beverages Lead particles Lubricants and paints HAPs

No represen-tative data available

Atmos-phere

Others Finished Products

Cores

SEPP processors SECC processors

Data not available

Others

No representa-

tive data available

World Market

Section II - 31

FIGURE II.5

MAIN INPUTS/OUTPUTS OF INTEL'S MANUFACTURING PROCESS

DieCutting

DiePackagingand Testing

PCBAssembly

Cleaning, inspect.covers placement

and boards cutting

Packaging

Siliconwafers

SOLID WASTE

STREAM

LIQUIDWASTE

STREAM

GASEOUSWASTESTREA

HAZARDOUSWASTE

STREAM

Deionizedwater Solder

paste

dies

Adhesive/Epoxy Resins

cores

ElectronicComponents

Flux

Acetone,IPA and

other cleaningsubstancesand tools

water

N2

Solderpaste Flux

water

N2

Electroniccomponents

StencilDetergent

PWBs

Assembled boards P

roce

ssor

Boa

rds

Acetoneand IPA

Cleaningtools

(i.e. paperwipes)

Covers andthermal plates

ThermalgreaseN2

Plastictrays

Corrugatedboards Plastic

materials

FinishedProducts

Adhesives / epoxy residuesIPA / acetoneLead-contaminated paper wipesSolder paste residuesWastewater sludgeOthers

IPA / acetoneLead-contaminated paper wipesSolder residuesOthers

VOCsNOxLead particlesHAPs

VOCsNOxLead particlesHAPs

VOCs

processwastewaters

processwastewaters

processwastewaters

Lead-contaminated paper wipesSolder paste residuesOthers

Silica gelPlastis (tapes, reels, trays, etc)Corrugated boardOthers

Silica gelPlasticsSilicon dustCorrugated boardOthers

PlasticsCorrugated boardOthers

Plastis Fiberglass dustCorrugated boardOthers

WW sludge

PlasticsCorrugated boardWoodOthers

A/T plant SECC plant

Section II - 32

1.2.3 Definition of the Likely Shape and Boundaries of the Evolving High-Tech Electronics Cluster

Intel CR has come to integrate and to lead an already emerging high-tech electronics cluster in Costa Rica, which is already comprised, in part, by a number of existing companies that have relatively similar processes, inputs, technologies and similar environmental impacts. Certainly Intel CR is a new powerful and driving actor within the industrial sector of Costa Rica. Consequently, the definition of the likely shape and boundaries of the evolving high-tech cluster is based upon the assumption that the presence of Intel in CR as a dominant actor will influence the shape of the cluster under analysis. Therefore, for the purposes of this study the "evolving high-tech electronics cluster will be integrated by: ! Those industries within Intel's product chain or similar (based on a life cycle

perspective), which may establish operations in the country, and also the already existing high-tech companies that have similar processes and products.

! Companies that provide materials and services to Intel CR and related high-tech industries. These "support" companies are essential for the development of this kind of industrial cluster and any improvement of their technology, productivity and competitiveness implies greater benefits for companies like Intel CR.

Following the above, Figure II.6 helps one to identify which members of the product chain should be included. It basically puts Intel CR in a much broader perspective and gives an idea of the life cycle of personal computers made out, in part, of Intel CR products. It allows one to look at the "big picture" and to understand what is "upstream" (before) and what is "downstream" (after) Intel CR. The diagram also describes the main category of actors involved in the designing, manufacturing, assembling, use and disposition of the final consumer goods (i.e. PCs) and the wastes generated throughout the life cycle stages. It also includes those categories of actors supporting Intel CR operations. Evidently, Figure II.6 is too broad and for various reasons not all the categories of actors presented are of concern for this study. In addition, only a few of those actors may have the possibility to begin operations in Costa Rica while other local operating companies will absorb the production and distribution of some of the raw materials and production supplies. The cluster under analysis is considered as "evolving" for various reasons. One of the reasons is that not all the actors mentioned above operate in the country at the moment. Also, the interrelations and synergies among the different actors included within the cluster boundaries are still weak or do not exist at all. Unfortunately, it is difficult to forecast with certainty which foreign companies might come and which other new businesses may be formed as a result of Intel's arrival to Costa Rica. The possible scenarios depend on several factors. Furthermore, it is also difficult to know which local companies may absorb part of the production and distribution of raw

Section II - 33

materials that Intel, related industries and its other direct suppliers, that might come, will require. Despite the difficulties in forecasting the possible scenarios of the evolving cluster, it is possible to learn from various experiences observed in other places in the world. Those experiences provide a good idea of possible configurations and cluster shapes. In this regard, Section III includes a brief description of a high-tech electronics cluster located in Guadalajara, Mexico. With the purpose of simplifying the analysis, this thesis does not consider specific companies, it is concerned about types and categories of companies or "actors" that may integrate the cluster. In addition, for the purpose of this thesis there is no distinction on spatial considerations. This means that all the actors are assumed to be local and operating in the same region. In order to maintain the focus of the study and to limit the scope of the analysis of environmental and health implications, the definition of the cluster members is based on the two considerations described at the beginning of this subsection. Furthermore, only those actors closest to Intel CR in its product chain and those actors that have a direct relation with Intel are considered herein as part of "Evolving High-Tech Electronics Cluster headed by Intel". These actors are as follows: ! Manufacturers of electronic and non-electronic components (members and non-

members of Intel's product chain). ! Companies in the business of board-level assembling (like the SECC plant of

Intel CR). ! Manufacturers of support materials (that do not form part of the final product, i.e.

packaging materials, process chemicals, etc). ! Electronic consumer goods assembling companies. ! Service businesses.

Some of the existing high-tech electronic companies fall into the type of actors listed above. Other companies such as large manufacturers of plastic resins, metals, chemicals and other raw materials used for the fabrication of electronics, have been left out to maintain the focus of the study. The type of actors listed above can be further classified into three main categories as shown in Figure II.7. This diagram provides a more realistic picture of the likely shape of the emerging cluster headed by Intel CR as considered in this thesis. The arrival or development of some of the actors depends on too many factors, which are difficult to foresee. This means that not all the actors included in the diagram will actually be included in the cluster.

1.2.4 Environmental Stakeholders of the Evolving Cluster

Indeed, there are several organizations, institutions and people who are and will be interested in various ways on the evolving cluster. The type of interest may vary

Section II - 34

considerably. They could be financial, political, social or business interests behind the development of the cluster. Nevertheless, since this thesis is concerned with the environmental and health implications of the evolving cluster, Figure II.8 only depicts the kinds of organizations, people and institutions that may have a stake in the environmental performance of the evolving cluster. The stakeholders could exert significant influence over the environmental performance and accountability of the entire cluster if they organize themselves, gather sufficient resources and become more aware of the situation and potential implications. The possible role that the stakeholders could play in this endeavor is discussed in the second part of this study.

Section II - 35

FIGURE II.6

PRODUCT CHAIN OF INTEL CR: A LIFE CYCLE PERSPECTIVE

Raw MaterialsExtraction

Raw MaterialsProcessing

Components Mfg. and Assembling

Board Level andothers Assembling

Consumer GoodAssembling Product Use End-of-life

Management

INTEL CR

SECC

Other Boardlevel Assemb.

Computers Assembly

Other ElectronicGoods Assemb.

PCBsManufacturing

PassiveComponents

Semiconductors Mfg. and Packaging

(silicone wafers, crystals , ICs, etc)

Including Intel A/T

Mfg. of otherProd. Supplies

Mfg. of otherElect. Components

Mfg. PackagingMaterials

W A S T E H A N D L I N G

R E S E A R C H & D E V E L O P M E N T

Consumers(final users)

Retailers,Wholesale Dist.

Recyclers/Shredders

Treatment /Disposal

Raw Mat.Extractors

Raw MaterialsMnaufacturing

ProcessChemicals

Manufacturers

Distributors(supplies, chemicals, packaging mat., etc)

Services(maintenance,cleaning,, etc)

Transportation Food Services

Power / WaterUtility Companies

Mfg. of other NONElect. Components

Supp

ort

Com

pani

es

Training Education Services

Section II - 36

FIGURE II.7

LIKELY SHAPE OF THE EVOLVING HIGH-TECH ELECTRONICS CLUSTER

INTEL CR

SECC

Other Boardlevel Assemb.

Computers Assembly

Other ElectronicGoods Assembling.

PCBsManufacturing

Mfg. of PassiveComponents

SemiconductorsManuufacturing and Packaging

Mfg. of otherProd. Supplies

Mfg. of otherElect. Components

Mfg. PackagingMaterials

ProcessChemicals

Manufacturers

Distributors(supplies, chemicals, packaging mat., etc)

General(maintenance,cleaning,, etc)

Transportation Food ServicesPower / WaterUtility Companies

Mfg. of other NONElect. Components

WasteHandling

Informative(ie. R&D andBranch Org.)

Board level AssemblingElectronic and Non-electronic Components Manufacturing

Assembling of ElectronicConsumer Goods

SupportMaterials

Services

Primary Actors

Secondary Actors

Tertiary Actors

Categories:

Training and Education

Section IV-37

FIGURE II.8

PRIMARY ENVIRONMENTAL STAKEHOLDERS OF THE EVOLVING CLUSTER

1.3 Socio-Economic And Environmental Challenges: Learning From Previous Experiences

The "emerging high-tech cluster" is in many ways and important key to growth and also a clear opportunity for the region and businesses alike. There is no doubt that the development of the cluster influenced by the presence of Intel CR will bring new economic and social opportunities as well as technical advantages. Just Intel CR is expected to generate around 2100 direct jobs during the first years of operation (KPMG, 1997). The evolving cluster will most probably boost the production of many local industries and service companies and the formation of new businesses while increasing the value and volume of Costa Rican exports. Moreover, as explained before, the arrival of Intel is expected to influence in a positive way the attraction of more direct foreign investment in Costa Rica (COMEX 1998). Despite the economic growth opportunities that this type of industrial activity will generate, it will also bring along new challenges and possibly negative implications to Costa Rican society. There will be new flows of materials and chemicals, a higher demand for energy, water and other natural resources which will increase the burden on the local environment and could harm the well being of the inhabitants.

Local industries

Other Businessesand Economic

Activities

Traning,Academic and

Research Institutions

BranchOrganizations

Employees

Neighbors GovernmentalAgencies

EnvironmentalNGOs

MediaOrganizations

EVOLVING HIGH-TECHELECTRONICS CLUSTER

Financial Institutions(Insurances-Banks)

Section IV-38

Previous experiences and studies reveal that the manufacturing and assembling of electronic components and the manufacturing operations of support companies may cause serious environmental and health problems. In addition, the risks associated with electronics industries go even beyond known risks and their production operations because the electrical and electronic equipment contains many rare substances that have not previously been used in production and whose effects on health and the environment are still relatively unknown. In this regard, the Swedish EcoCycle Commission (1996) states that the rapid introduction of new substances in industrial production has not been followed-up by equally rapid evolution and growth of knowledge as regards the risks to health and the environment. The continuous and increasing supply of hazardous substances present in electronics would represent a potential growing environmental liability that would greatly affect the environment (ECC 1996). Figure III.1 depicts some of the environmental concerns associated with the electronic products and components, which normally become critical at the end-of-life of the electronics products. Moreover, the faulty electronics components which are disposed during electronics goods manufacturing and use of the products also pose similar environmental concerns. The latter is an evident concern for Costa Rican society due, in part, to the increasing imports and use of electronics consumer goods and their continuous presence in the normal waste streams of the country. In addition, the local and inappropriate disposal of faulty electronics components manufactured as well as regular waste may also add further significant burdens to the environment.

FIGURE III.1

SOME ENVIRONMENTAL CONCERNS OF ELECTRONIC COMPONENTS AND CONSUMER GOODS (SOURCE: ENEA, 1995)

Plastic casings: account for large suppliesof chloroparaffin, brominated flame retardantsand antimony

Printed Circuit Boards: contain almost all elements, including precious and nonprecious metals and the hazardous substances such as lead, bromine, antimony, arsenicsilver, chromium, barium, mercury, cadmium and beryllium among others.

Old Capacitors: accumulatedproducts often contain PCBs (polychlorobiphenyls)

Cathode Ray Tubes:could ontain up to 2 kg of lead

Cables:normally made out of copper or aluminuim and PVCcontaining up to 17 elements used as stabilizers (based on organiccompounds), flame retardants and inorganic pigments (based onPb, Cd, Ti, Fe and Cr) .

Section IV-39

The assembly of electronic end-consumer goods constitutes a relatively small environmental burden compared to the other processes upstream, such as the manufacturing of electronic components9. The process of manufacturing and cleaning of electronic components can produce large quantities of waste in the form of effluents, air emissions, solid and semi-solid waste. Direct disposal of these may cause local environmental pollution, especially of surface and groundwater (Nordic Council of Ministers, 1997). In addition, the electronics production processes are well known for being extremely chemical intensive. They often involve the utilization of many suspected carcinogenic substances and many chlorinated organic compounds, some of which are well known for being ozone depleting substances (ODS) and responsible for various health problems (i.e. CFCs, HCFCs, 1,1,1 trichloroethane, carbon tetrachloride, dichloromethane, trichloroethylene and perchloroethylene. Even some of the ancillary processes such as production of high-purity-de-ionized water, chemical storage, air conditioning and power production may themselves have environmental implications that are frequently underestimated (UNEP-UNIDO 1993). In order to illustrate some of the challenges envisioned ahead, the following subsections includes a description of the critical environmental implications and health hazards of most likely members of the evolving high-tech electronics cluster as defined in Section II. Section IV includes an analysis of some of the experiences derived from the development of other high-tech electronics cluster in other parts of the world such as United States, Mexico and other countries. Among the examples shown in Section IV there is a description of the experiences observed in Guadalajara, Mexico, with the development of this sort of industrial activity and the respective environmental and health implications. As described below, in that city there is an already mature cluster of electronics industries. That city was, in fact, considered the second best alternative for Intel Corp. to locate the facility that it has just built in Costa Rica. Basically, Section IV allows validating the potential implications described in this section of the thesis.

1.3.1 Analysis of Primary Actors and their Environmental and Health Implications10

The analysis of the main environmental concerns is preceded by a brief summary of the actors' operations, materials used and products produced. Appendix I includes various process flow diagrams corresponding to some of the primary actors. This is intended to facilitate the understanding of their operations.

1.3.1.1 Actors and Products Description

a. Printed Circuit Boards (PCBs) Manufacturing

9 The electronic component manufacturing industry produces the "hardware" for electronic systems. This "hardware" comprises: semiconductor components, passive components (i.e. resistors), printed circuit boards (PCBs) and the board level assembly (UNEP-UNIDO 1993). 10 Sources of information: UNEP-UNIDO (1993); US EPA (1995); MCC (1996), ENEA (1995) and Freeman (1995)

Section IV-40

PCBs are the physical structure on which electronic components such as semiconductors and capacitors are mounted. They are the dominant interconnect technology. The combination of PCBs and electronic components is an electronic assembly also called a PCB assembly. Printed circuit boards consist of patterns of conductive material set on a non-conductive base. The conductor is usually copper, although aluminum, chrome and nickel are often used. The non-conductive materials include pressed epoxy paper, phenolic, epoxy glass resins, teflon glass and others.

There are various types of PCBs: single-sided, double-sided, multi-layer and flexible boards. The rigid boards are generally made of glass-reinforced epoxy resin laminate. The flexible type of boards is made of polyamide (PA) and polyester substrates. The multi-layer boards typically use materials such as platinum, palladium and copper to form electric circuits. Specialized PCBs may require nickel, silver or gold.

In general, PCBs are used in many electronic products such as toys, radios, television sets, electrical wiring in cars, airborne electronic equipment, computers, medical devices, digital imaging technology and industrial control equipment. PCBs are produced using three methods: (i) additive (used less often), (ii) subtractive or, (iii) semi-additive technology. The conventional subtractive process (most commonly used) uses copper-clad laminate on non-conductive board. Generally, the process of making a PCB involves bonding a conducting material such as copper onto a substrate to form copper-clad laminate. Holes are drilled through the laminate making those holes conductive. Moreover copper is etched off, leaving copper patterns that form the electric circuits that conduct electricity. The additive production process, mainly used for small interconnection components used in multi-chip devices, begins with a base plate upon which a dielectric material is deposited. An interconnecting layer of copper is plated onto the dielectric layer, which connects the layers of dielectric material and copper. Basic operations followed during the production of PCBs include lamination, drilling, cleaning, electroplating, imaging (photolithography and stencil printing) and etching. For a more detailed description see Appendix I.

b. Semiconductors Manufacturing

Semiconductors' manufacturing refers to the production of a "die" and the packaging into a discrete unit or an integrated circuit (IC). Semiconductors are used in computers, consumer electronic products, telecommunication equipment, industrial machinery, etc. The most typical functions of semiconductors include information processing, display purposes, power handling, data storage, signal conditioning, and conversion between light and electrical energy sources.

Section IV-41

They are produced by treating the semiconductor substances with "dopants" which provide the particular electrical properties. The most commonly used dopant materials for silicon-based semiconductors are antimony, arsenic, phosphorus and boron compounds. Other dopants include aluminum, gallium, gold, beryllium, germanium, magnesium, tin and tellurium. Concerning semiconductor substances, the most important are silicon dioxide and gallium arsenide. This kind of solid crystalline material is formed into a simple diode or many integrated circuits. A simple diode is an individual circuit that performs a single function affecting the flow of electrical current. Integrated circuits (s) combine two or more diodes. In other words, ICs are combinations of discrete semiconductor devices such as resistors, capacitors or transistors in a single semiconductor crystal. The semiconductor manufacturing process is quite complex and may require that several of the steps be repeated to complete the process. It often consists of over a hundred steps, during which many copies of an individual IC are formed on a single wafer (made out of "chemically pure" silicon). The process involves the creation of 10 to 20 patterned layers on and into the substrate, forming the complete IC. This layering process creates electrically active regions in and on the semiconductor wafer surface. The fabrication of the wafer is a central activity of semiconductor production. This process takes place in a clean room environment and involves a series of operations called oxidation, masking, developing, doping, dielectric deposition, metallization, etching and passivation. Semiconductor devices often fail due to contamination that means presence of any microscopic residue (including chemicals or dust) on the surface of the base material or circuit path. This is why the production of semiconductors requires high cleanliness standards and extensive capital investment in facilities and sophisticated equipment. Clean environment is crucial and cleaning operations precede and follow many of the manufacturing steps. In addition, wet processing, during which semiconductor devices are repeatedly dipped, immersed or sprayed with solutions is commonly used to minimize the risk of contamination (for more information see Appendix I).

c. Semiconductor Packaging

When wafer processing is done, the individual ICs (dies) are cut apart to be packaged and assembled. This stage of semiconductor manufacturing does not necessarily take place in the same facility where wafers are processed and thus can be treated as a separate process.

The dies may be passed along to be encapsulated in a protective coating or housing ("packaging") or be processed as "bare dies" for direct attachment to a substrate that connects the chips to metal strips (leads). The attachment of a single die to the package or "lead frame" serves as the thermal and electrical contact between the circuit and the package. The most important die attachment materials are eutectics, epoxy (thermoset plastic) and solder.

Section IV-42

Packaging is important for electrical connection and protection of the semiconductor device. There is a wide variety of packaging approaches but most often the IC is encapsulated either in a hermetically sealed ceramic or metal package or in non-hermetically-sealed packages usually made of plastic. The packaging technology is shifting from peripheral interconnection (lead frames) to area array connections, from two-dimensional to three-dimensional packaging and from single to multi-chip packaging. The driving force is the need to reduce package size in order to maximize the amount of active silicon attached to the PCB or other substrate. Thus, packaging approaches such as chip-scale packaging and ball grid array (BGA) may be dominant in the future. BGA eliminates the use of lead frame but introduce a small circuit board coupon to create fanout from the chip bond pads to the external package connections. The chip is bonded to the circuit board coupon and the chip/circuit board combination is then typically molded inside of a encapsulant similar to those used in more conventional plastic packages. Packed ICs are tested before attaching them to the PCBs. The packaging process or bare dies and also the testing procedures are the two processes that will be done in the A/T plant of Intel CR.

d. Passive Components Manufacturing

As mentioned before, passive components constitute part of an electronic assembly. These components have two terminals and the most common are resistors, capacitors and inductors. To some extent the manufacturing process of passive components is similar to the fabrication of semiconductors but much less complex. Resistors consist of a ceramic support in alumina coated with a conducting metal or a carbon glass mixture. The terminals are generally made of gold, palladium-silver or materials with the same properties. Normally, these components contain other substances and elements like copper-silver alloy, nickel-iron alloy, ceramic or glass and nickel-chromium resistance allow or carbon. Inductors consist of a copper wire wrapped around a ceramic or iron core. The inductors may be enclosed in an epoxy resin. The core iron may be sintered wit organic binders or alloyed with nickel and zinc. These components may also contain SM, Pr, Co or Nd. The most commonly used capacitors are the following: ! Metalized paper or plastic capacitors, which consist of

two strips of cellulose paper or plastic metalized on one side with a thin film of zinc or other metal with a low melting point.

! Ceramic capacitors are normally made of (among other things): (i) gold-plated nickel wire as leads; (ii) transfer-moldable rigid plastic such as epoxy or dially1 phthalate is used for encapsulant; (iii) the conductors plates contain platinum

Section IV-43

allow modified with Pd, Au and Ag; (iv) the dry ceramic is barium titanate modified with B, NA, Al and K as trace oxides.

! Aluminum electrolytic capacitors where the electrolyte is generally boric acid with glycol, salts and organic solvents added ( γ-butyrolactone, dimethylformamide or dimethylacetamide. Other substances added are: methylpyrolidone, ethylenglycol, apicid acid, nitrophenol and organic amino compounds. Some capacitors use black manganese oxide or special salts to form a conducting layer between the anode and the cathode.

! Tantalium electrolytic condensers, which use Ta2O5 for the dielectric layer and black manganese oxide as the electrolyte.

High-power capacitors and old small capacitors used in fluorescent tubes (for the compensation phase) and in electric motors for household appliances contain PCBs (polychlorobiphenyls) (See Appendix II).

e. Board-level Assembly

In the assembly process, electrical components are placed on the board, the boards are fluxed and the components are attached and soldered to the boards. The PCBs and individual components are cleaned trimmed and sorted for assembly. There are three basic technologies in use: (i) plated through-hole (PTH), (ii) surface mount technology (SMT) and, (iii) mixed technology (PTH/SMT). However, SMT is increasingly popular since it allows a higher packing density. Depending on the solder used, just before soldering a flux (see description of most common fluxes and solders in Appendix III) is applied to reduce the surface tension and eliminate metal oxides so the solder will flow evenly. The flux residues as well as other contaminants have to be removed from the board after soldering. There are a number of cleaning processes used to remove residues of fluxes and contaminants. These include chlorinated solvents (including CFCs), aqueous and semi-aqueous systems. There is an increasing demand for density and performance of electronic assemblies. There is also a fundamental transition underway from packaged ICs to unpacked ICs that are directly attached to boards. The latter is especially reflected in the emergence of multi-chip modules of various types as well as 3-D packages. Apparently, in the short run the ball grid array packaging approaches will meet these demands. In the longer run, direct chip attachment will become far more common and accepted. Furthermore, within the sector there is a growing concern about and trend to eliminate the use of lead-based solders.

f. Manufacturing of Other Electronic Components

Electronic goods constitute a wide range of products, thus a large number of different electronic components are needed. The list is very huge but among many other electronic components, there are: switches, connectors, relays, lighted indicators, hard and floppy disk drives, cathode ray tubes (CRT), transformers, sensors, liquid crystal displays (LCD), cables, breakers, etc.

Section IV-44

Due to the complexity and the number of different electronic components used in computers and other electronic consumer goods that fit in this category, this study will not present details of each product and manufacturer. Moreover, to some extent this kind of industries require similar chemicals, ceramic materials, precious and non-precious metals than the manufacturers of the components mentioned above. Thus, the environmental concerns and health hazards are in a way quite similar. Appendix II describes the materials contained in some of the components listed above.

g. Manufacturers of Non-electronic Components

Electronic products have other parts besides electronic. Generally, electronic goods require protective and support materials, they may also need to dissipate heat, vibration and noise among other things. For instance, one of the processor boards produced by Intel CR comes inside two covers. One cover is made out of plastic with a hologram attached to it. The other one is made out of aluminum (known as thermal plate) and helps to dissipate the heat generated by the processor when operating and thus ensure proper operating conditions. The installation of the other processor in a computer requires a so called "heat sink" attachment and other accessories (i.e. clips, screws, etc) for the same purpose. In addition, IT products (i.e. computers, fax machines, telephones, photocopiers, etc) and all electronic consumer goods (i.e. hair dryers) come inside plastic and/or metallic casings. Besides the protective and structural function these metallic and plastic structures also fulfill a "marketing" function since the outer part or the exterior of the electronics is what the customer and/or user normally perceives at first glance. In general, the most important non-electronic components of electronic goods are made out of plastics (mainly thermoplastics like PVC, PS and ABS) and metals (i.e. aluminum and steel). Injection molding is perhaps the most common process and technology used for making the plastic parts while is plastic extrusion technologies may also be used in certain cases. Various metal finishing and surface treating processes (i.e. lamination, galvanization, etc) are needed to give the metal parts the shape and specific properties required. Generally, the process of making plastic parts and components requires high capital investments and highly specialized technology. Moreover, plastic parts' manufacturing also takes place in a separate manufacturing facility where the appropriate plastic resin compositions are blended and prepared. The latter is also a separate process from the production of virgin resins. Thus, manufacturers of virgin resins, formulator of diverse formulations of resins and plastic components are considered herein as three different actors in the supply chain. According to the previous chapter, only the plastic component manufacturers are included in the cluster.

h. Assembly of Electronics Consumer Goods

The assembly and packaging of the consumer goods is the last step before the products are distributed to the final users. The process of assembly may involve wave or manual soldering of a few parts and components together. It involves a series of quality and performance tests, including destructive tests. Consumer goods' assembly can be a relatively manual operation, but depending on the scale and type of product it may

Section IV-45

involve the use of certain robots or automated machinery to perform very specialized, repeated and precise operations. Some companies that assemble electronic consumer goods may also produce the plastic casing or housing of the product, which requires the use of plastic injection technologies.

1.3.1.2 Environmental Aspects, Impacts and Health Hazards

Certainly, the production and assembling of electronic consumer goods may represent an important burden for the environment. The interactions of the primary actors of the evolving cluster with the environment could be expressed in terms of resource consumption, waste generation, emissions, human health hazards and risks for the environment. Thus, the following paragraphs and tables describe the main material inputs, a brief description of the energy and water consumption profile of the primary actors as well as the most relevant waste streams and health hazards.

a. Material Inputs

Table III.1 shown below depicts the main inputs of each actor described above. The table doesn't include the chemicals used in the processes, but Appendix III shows a long list of the most common chemicals used by each industry and it specifies the kind of control that each substance is subject to in the USA and Costa Rica. As shown in the table, the predominant materials' categories used by this kind of industries are plastics, precious and non-non precious metals and process chemicals. As described below, some of these materials represent a major threat for the environment and human health.

TABLE III.1

PRIMARY MATERIAL INPUTS OF THE PRIMARY ACTORS

Type of Actor Primary Inputs PCBs Manufacturers ! Laminated polymers in thermosetting resin and flame retardant, reinforced with

fiberglass (generally epoxy or phenolic, sometimes polyester, melamine, etc) and copper-lined.

! Inks and silk-screen pastes ! Photopolymers (polyester-based, acrylic-based, etc) ! Organic and inorganic chemical compounds (see list of chemicals in Appendix III

) ! Lead-Tin solder ! Precious and non-precious metals (including nickel, silver and gold) ! Flux oils and diluents ! Deionized water ! Protective varnishes ! Other materials (see Appendix II) ! Packaging materials (plastics and corrugated boards) ! Other chemicals like solvents, acids and electrolytes (Appendix III)

Section IV-46

TABLE III.1 (FOLLOWING) Semiconductors Manufacturer's (including packaging)

! Acidic cleaners ! Chlorinated solvents and/or CFCs ! Alkaline cleaning ! Deionized water ! Organic solvents ! Acids ! Silicon dioxide ! Gallium arsenide ! Dichloromethane and CFC-113 for nomenclature cleaning ! Epoxy resins ! Adhesives (organic and inorganic) ! Packaging materials (including plastic trays, reels and tubes made out of PS,

PVC and other resins as well as silica gel pouches) ! Nitrogen ! Light-sensitive photoresists (positive and negative) ! Other materials (see Appendix II) ! See other chemicals in Appendix III)

Passive components manufacturers

! Carbon glass mixture ! Ceramics ! Epoxy resins ! Organic binders ! Precious and Non-precious metals ! Acids and organic solvents (see Appendix III) ! Black manganese oxide ! Indium phosphide ! Gallium phosphide ! Packaging materials (PS, PVC, PE and PP plastic trays, tubes, reels, tapes and

anti-static bags as well as corrugated materials) Board-Level Assembling ! Electronic components (surface mount and through-hole components)

! Plastic and metal structures and attachments ! Solder pastes ! Molten solder ! Fluxes ! Chlorinated solvents or CFCs ! Aqueous and semi-aqueous cleaners ! Stencil detergents ! IPA and acetone ! Epoxy resins ! Other chemicals (see Appendix III)

Other Electronic Components Manufacturers

! Solvents, electrolytes and acids (see Appendix III) ! Ceramic materials ! Glass (including the kind of glass containing ray-absorbing metal oxides like PbO,

BaO and SrO for CRTs) ! Epoxy resins ! Metals (precious and non-precious) ! Packaging materials (plastics and corrugated boards)

Manufacturers of Non-Electronic Components

! Thermoplastic resins for injection molding and plastic extrusion with flame-retardant compounds

! Resins with inorganic pigments ! Ferrous and non-ferrous metals ! Solvents, acids and other chemicals for surface treatment (i.e. galvanization and

electroplating) ! Packaging materials

Electronic Consumer Goods Assembling

! Solder (pastes and molten) ! Electronic components (including PCB assemblies) ! Non-electronic components ! Packaging materials (plastics, corrugated cardboard, silica gel pouches, foams,

etc) ! Thermoplastic resins for injection molding with flame-retardant compounds and

resins with pigments ("master batch")

Section IV-47

b. Energy and Water Consumption

Water and energy are key resources for electronics manufacturing, plastics and metals processing. In the case of high-tech electronic industries, they are well known for turning tap water into "ultra pure" water through various methods including reverse osmosis, deionization, activated carbonation and UV treatment. A recent research of the Southwest Network for Environmental and Economic Justice and the Campaign for Responsible Technology (EIGNC and CRT, 1998) reveals, as an example, that semiconductors manufacturing facilities consume thousands of cubic meters of water per day. Between 60-70% of the water consumed goes toward the chip production while the remaining percentage is used for irrigation, cooling and domestic and utilities. Other industries such as those manufacturing PCBs and assembling electronic components on PCBs also demand a considerable amount of water. For instance, the total water consumption of the Intel CR facility alone, when fully operational, will be similar to the consumption of about 3000 households considering an average local consumption (KPMG 1997). Generally, the large amount of water required by this kind of industries motivates them to locate their production facilities in places where water is plentiful and of relatively good quality. Electronic components and consumer goods manufacturing is also an energy intensive activity. These production facilities are known for demanding large quantities and "high" quality electrical power. The later means that voltage fluctuations and power shut-off situations are highly undesirable. Therefore, high voltage transmission lines and power substations are normally built to deliver the quality and amount of energy required. Concerning the quantities of energy demanded by the electronics industries in general, it is difficult to estimate. It all depends on the scale of operations. For instance, Intel CR, in its first year of operations will almost occupy the first place as an energy consumer in Costa Rica. Intel CR estimates that it will consume almost as much energy during its first year of operation (43 000 MWh)11, which is not even representative of the expected energy consumption in the future, as each of the two major cement plants of Costa Rica consume per year (see Table III.2).

11 Intel CR projections

Section IV-48

TABLE III.2

PRIMARY INDUSTRIAL ENERGY CONSUMERS IN COSTA RICA

Main Industrial Energy Consumers of Costa Rica

Main Product Consumption in 1996 (MWh)

Consumption in 1995

(MWh) Incsa Cement 48 618 49 692 Cempasa Cement 45 806 48 084 Scott Paper (Kimberly-Clark) Paper products 31 997 32 148 Fertica Fertilizers 31 833 32 841 Vicesa Glass 29 341 31 168 Standard Fruit Company Food products 18 901 17 912 Olympic Fibers Polyester fibers 16 426 18 020 Recope Oil Refinery 15 216 12 832 Firestone (Ind. Ackron de C.R.) Tires 13 889 13 444 Dos Pinos Dairy products 13 557 13 581 Alunasa Aluminum products 13 040 11 040

Source: Costa Rican Institute of Electricity (ICE). "Comparative analysis of the variables related to the electricity consumption in Costa Rica". 1997.

c. Primary Waste Streams

The waste streams can be classified into three categories: (i) liquid, (ii) gaseous and (iii) solid and semi-solid wastes. The following tables describe the most common wastes of each category.

TABLE III.3

PRIMARY LIQUID, SEMI-SOLID AND SOLID WASTE STREAMS

Liquid / Waste Waters Solid, Semi-Solid Wastes

! Spent solvents (organic, chlorinated, etc) ! Spent resist removal solution ! Spent acid solutions ! Plating baths, solutions and rinse wastes ! Etching solutions and rinse wastes ! Spent developing solutions ! Spent resist materials and etchants ! Aqueous metals ! Flux residues ! Deionized water ! Waste rinse water ! Waste from alkaline cleaning ! Aqueous metals ! Paints and lubricants

! Plastic residues (i.e. vinyl polymers, PP, PS, ABS, etc) ! Packaging materials (i.e. plastics, corrugated cardboard,

foams, metal and plastic containers, wood, etc) ! Alkaline and acidic sludge ! Sludge and scrap board material ! Heavy metals bearing sludges ! Metals residues (aluminum, steel, tin, nickel, zinc, silver,

copper, etc) ! Organic matter (including organic sludges) ! Spent epoxy materials ! Glass

Section IV-49

TABLE III.4

PRIMARY GASEOUS WASTES

Pollutants Emitted Process and Operation Sources

Representative Compound Emitted

Acid and caustic gases, vapors and mists from wet chemical operations

Cleaning, etching, photoresist, stripping

Sulfuric acid, hydrochloric acid, phosphoric acid, nitric acid, chlorine, ammonia, acetic acid

Volatile organic compounds (VOCs) Solvent cleaning and photoresist stripping

Isopropanol, acetone, n-butyl acetate, trichloroethylene, xylene, petroleum, distillates, halocarbons

Toxic, reactive and other hazardous gases, vapors and particles from process exhaust (metals from mechanical cleaning and assembly processes). Gases vented during cylinder change. Metal vapors from electroplating processes.

Epitaxy, chemical vapor deposition, diffusion, ion implantation, oxidation, etching

Hydrogen, silane, arsine, phosphine, diborane, hydrogen chloride, phosphorus, tribromide, dichlorosilane, phosphorus, oxyclhoride, boron tribromide

Accident or emergency released of hazardous gases or vapors

Equipment failures, leaking gas cylinders, pipes or valves

Silane, phosphine, diborane, chlorine, organometallic materials, arsine

Source: UNEP-UNIDO 1993 Other relevant gaseous discharges from electronics manufacturing facilities may include CFCs, CO2, NOx and others. Nevertheless, compared to other industrial sectors some of these emissions may not be of relatively high importance. To illustrate the scale and nature of waste streams from three different manufacturers of electronic components (semiconductors, PCBs and CRTs manufacturers), Appendix IV includes information about releases or discharges of wastes to the environment. It also presents data about the transfers of toxic chemicals to other facilities for off-site disposal or treatment from in the United States (US). The information shown has been taken from the Toxic Releases Inventory database of the US for 1993.

d. Environmental and Health Impacts

Considering the complexity of operations and nature of materials used by the primary actors, it is hardly surprising that there are many potential risks involved. The negative effect could be local, regional and global. In general, the environment, the workforce and the surrounding population could be threatened if the operations are not properly controlled and if the process wastes are not managed appropriately (UNEP-UNIDO). ⇒ Air emissions (gaseous wastes)

The primary effects of gaseous wastes are summarized in Table III.5. The specific health hazards of the wastes are described in Appendixes V and VI. The solvents (VOCs) released to the air may be washed out in the rain and end up in water bodies and accumulate in groundwater and soils. According to UNEP-UNIDO (1993), acidification and heavy metal fall-out are not associated, to a great extent, with the

Section IV-50

electronics industry. However, this issue should not be ignored. Ozone depleting substances (ODS) like CFCs eventually reach the stratosphere destroying the precious ozone layer. How far these kind of industrial processes bear directly upon ozone depletion and global warming is still subject to scientific debate. But the evidence suggests that the maximum possible effort to eliminate certain questionable substances and process, should be taken.

TABLE III.5

GASEOUS WASTES EFFECTS FROM THE PRIMARY ACTORS

Pollutants Emitted Emissions Effects

Acid and caustic gases, vapors and mists from wet chemical operations

Corrosion of materials and property, visible hazard to personnel

Volatile organic compounds Hazard to personnel formation of photochemical smog and ozone

Toxic, reactive and other hazardous gases, vapors and particles from process exhaust (metals from mechanical cleaning and assembly processes). Gases vented during cylinder change. Metal vapors from electroplating processes.

Hazard to personnel, facilities and equipment

Accident or emergency released of hazardous gases or vapors Hazard to personnel, facilities and equipment. Hazard to general population in adjacent areas

Source: UNIDO-UNEP (1993). ⇒ Liquid wastes

Regarding liquid wastes the main concerns are certainly soil contamination, surface and groundwater contamination. The release of organic solvents into the aquatic systems can immediately poison fish and other living organisms. Similarly, the discharges of highly acidic or alkaline effluents into an aquatic ecosystems can alter the equilibrium of the water to the extent of killing fish and thereby reduce the diversity of the ecosystem. Unfortunately the impact of pollution of a water body and soils with liquid substances is not limited to the immediate effects on aquatic life. Certain organic solvents used by this kind of industries under analysis comprise long chain molecules that are resistant to natural biodegradation processes and thus persist in the environment. Some substances are bio-accumulative in fatty tissues of animals, and thanks to the bio-magnification process along the food chain, chemicals eventually reach birds, small mammals and humans. Furthermore, continuous discharge of effluent containing such solvents leads to irreversible damage of the aquatic ecosystems. Pollution of water bodies implies the reduction of water sources available for human and agricultural consumption. In addition, discharging solvent residues and other chemicals to sewage systems can inhibit the biological degradation processes that are part of the municipal wastewater treatment systems.

Section IV-51

⇒ Solid waste

Solid waste management practices may pose a serious threat to the environment, especially due to the fact that an important percentage of the solid wastes from this type of industries is contaminated with solvents, heavy metals and toxic substances. Even the treatment of gaseous and liquid effluents may generate solid or semi-solid wastes such as acid and alkaline sludges, solvent contaminated sludges, filter cakes, etc. These wastes may be hazardous and cause treatment and disposal problems. If solid wastes are deteriorated in conventional landfills based on poor designs, the release of contaminants such as heavy metals and organic materials into the environment would be possible. Incineration of plastics and other materials may also cause the release of hazardous and toxic substances such as dioxins and furans to the atmosphere.

e. Work place hazards

Employees of electronics industries and related companies are definitely subject to exposures to emissions in the workplace. These emissions may result from insufficient process control, poor ventilation, faulty equipment, inappropriate operation procedures, insufficient workers protection during handling of hazardous substances, etc. Considering the nature of substances utilized by this kind of industries, there are, undoubtedly, serious occupational, safety and health hazards. Table III.6 depicts the most important acute and chronic health hazards in the electronic industries.

Section IV-52

TABLE III.6

HEALTH HAZARDS IN THE ELECTRONICS INDUSTRY

Hazard Process Immediate Effect Chronic Effects

Acids

Electroplating Etching Crystal polishing

Skin burns Eye irritation

Lung disease Bone damage Erosion of teeth

Metals

Electroplating Etching Soldering Tinning Sealing

Breathing problems Skin irritation Headaches Insomnia Stomach pain Miscarriage

Cancer Liver damage Sterilization Dermatitis

Gases

Doping Crystal growing Cap testing

Dizziness Nausea Vomiting Diarrhea Coma and death

Anemia Jaundice Liver damage

Resins

Cutting Grinding Encapsulation Laminating Packaging

Breathing problems Skin irritation

Cancer Liver damage Allergies Asthma

Solvents

Basically every job and process: used as cleaning, degreasing and thinning agents

Skin irritation Cough Breathing problems Sore throat Dizziness Headache Nausea

Liver damage Kidney damage Heart damage Paralysis Cancer Allergies Menstrual disorders

Source: UNEP-UNIDO (1993). Appendix V and VI provide further information about toxicity and fate information as well as the potential hazard classification of a number of chemicals used by the industries classified as primary actors. Production facilities requiring the use of "clean room" environments are also of great concern. For example, the fabrication and handling of electronic components such as silicon wafers (including die packaging similar to the one to be done in Intel CR A/T plant) demand certain unusual accommodations by workers. These products are processed in clean rooms, which are designed to minimize deposition of airborne particles onto the product. According to Harrison (1993), almost all of the health problems currently observable among semiconductor workers are directly attributable to the "clean room" environment rather than to any of the process chemicals. He adds that some of the stressors are relatively easy to identify and to associate with their consequences.

Section IV-53

Clean rooms are described as hot, dry and windy. Process optimization requires close control of the temperature which is maintained at about 23.3 °C and humidity which is kept close to 35% to protect wafers from condensation of water droplets. This hot, dry air is moving constantly at about 30 linear meters per minute. These three conditions, especially the extremely low humidity, dehydrate the stratum corneum and can interfere with its ability to protect the underlying epidermis and dermis that constitute the skin. Besides the latter skin problems, skin sensitization or increased risk of irritation is caused by this kind of work environment. Upper respiratory problems (recurrent epistaxis, sinusitis and laryngitis), asthma problems and eye irritations are constant complaint of clean room workers. Even clean room garments and other factors such as the illumination and noise are associated with many health complaints by employees that wear them (Harrison 1994).

1.3.2 Environmental Concerns of Secondary and Tertiary Actors

There is a great diversity of secondary and tertiary actors and their environmental concerns vary considerably according to the nature of products that they produce. The discussion of environmental concerns is divided in two parts, one corresponding to suppliers of services and the other one dealing with manufacturers of "support" materials that do not constitute part of the final products but are needed during production and transportation stages.

1.3.2.1 Manufacturers of Support Materials

This category includes producers of packaging materials, process chemicals and a number of production supplies. Process chemicals constitute the biggest concern due to the hazardous and toxic substances involved. Solder pastes, cleaning substances, acids solvents, abrasives, adhesives, epoxy resins and fluxes are the main type of chemicals required by the primary actors. Products such as acids and solvents are usually manufactured in very large chemical manufacturing complexes which, in a way, reduces the probability of bringing to the country, the associated risks of their production operations. These chemicals are normally imported and distributed by local businesses (tertiary actors) which buy large quantities and keep enough stock to supply the regional market. In some cases, these businesses may also do some dilutions and small preparations to deliver the chemical product with the right specifications to their customers. On the other hand, products such as solder pastes, fluxes, abrasives and adhesives are relatively easy to prepare. In this regard, Costa Rica counts with sufficient industrial infrastructure and expertise to blend, prepare and manufacture these kinds of materials. In fact, there are already various local businesses that supply some of these chemicals to other local industries and they could easily expand their operations and absorb the production of such products for the emerging cluster as the demand increases and justifies higher investments. The manufacturing, handling, storing and distribution these chemicals pose similar risks to the environment and human health as the ones mentioned in the analysis of the potential environmental and health impacts of the primary actors. Employees are exposed to the hazardous and toxic substances during the production and handling as

Section IV-54

they are during the use. Perhaps the risks are even higher since a large quantity and diversity of chemicals could be concentrated in a single place. In addition to the risks posed by the manufacturers of process chemicals, there are further environmental burdens associated with the manufacturing of packaging materials, mainly corrugated board for boxes, and plastics for trays, tubes, reels, tapes and foams used for transporting electronic components and consumer goods. Energy and water consumption, wastewater discharges, air emissions and solid wastes are the key environmental issues. The local industry, the government and the community in general are quite familiar with this kind of environmental aspects since this type of manufacturing facilities already have a long time of operating within the country. Thus, this section does not attempt to go deeper on the analysis of potential negative effects but stresses the importance of becoming aware that the impacts of these industries will increase as the production volume increases providing that the current state of pollution abatement technologies and production methods remains unmodified. Despite the possibilities of using recycled materials (i.e. plastics and corrugated board), it is important to bear in mind that there are always both negative and positive environmental impacts associated to recycling practices. There are relevant environmental costs that arise from the use of resources in material's collection, sorting, transportation and reprocessing. There is a generation of emissions and the possibility of concentration of potentially hazardous substances in sludge and other residues resulting from recycling activities.

1.3.2.2 Service Companies

As mentioned before, the importation of process chemicals also pose a serious risk to the environment and human health. Handling, transporting and storing hazardous and toxic substances used in manufacturing facilities represent a serious risk (see description of potential environmental and health impacts in Appendixes V and VI). As the cluster grows, there will be a considerable increase in transportation of raw materials, finished products, wastes and construction materials, which generate additional indirect and direct environmental and health problems. There will also be greater problems of air pollution (i.e. formation of photochemical smog), noise as well as more road and air traffic congestions and related accidents due to the limited infrastructure available in the country for air, land and maritime transportation. This situation will not only generate environmental problems but will also cause direct negative impacts to other economic sectors as well. In order to illustrate the scale of the impact of transportation services, the following figure describes the case of transportation services demanded by Intel CR during the first months of operation and includes some aspects about the expected situation when the Intel CR is fully operational. The illustration included in Figure III.2 only makes reference to the transportation services demanded by Intel CR, which is just a piece of the emerging cluster.

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FIGURE III.2

INTEL CR TRANSPORTATION SERVICES

Due to the nature of wastes resulting from the primary actors' operation, waste management services become a great concern for the environment and health of the operators and population in general. Once the toxic and hazardous substances enter the country in the form of chemicals and other raw materials, there is a risk of contamination and negative effects on human health. Furthermore, waste streams bearing these toxic and hazardous substances and stemming from primary actors as well as from manufacturers of support materials cannot be managed with conventional waste handling technologies. They require special waste management technologies currently unavailable in the country. However, even an appropriate process of treating, disposing, recycling and recovering hazardous and toxic wastes represents a significant threat to the environment. As an illustration the potential risk associated with toxic waste handling, the following figure contains a brief case of a toxic waste management company in the United States named Romic. According to CINDE, this company might establish operations in the country and provide services to Intel CR and other high-tech companies12.

12 CINDE. Internet Site: http://www.cinde.or.cr/intel2.html. September 15th, 1997.

Raw Materials and Finished Products Transportation Required by Intel CR Estimated for 1998

! Projected average number of monthly trips (transportation services) = 370 ! Projected average distance traveled per month: 5140 Km ! Projected average monthly consumption of diesel = 3240 liters ! Estimated CO2 emissions per year: 3.4 Tons# ! Estimated SO2 emissions per year: 0.5 Tons## ! Estimated NOx emissions per year: 0.55 Tons### ! At least one daily flight only to export finished products (does not include flights

bringing materials from abroad) This figure is expected to increase up to 20 cargo flights per day when Phase II is completed.

Source: KPMG (1997) and Fast Cargo Services, company hired by Intel CR to provide a large part of the transportation services needed.

Notes: The figures presented above are just representative of what Intel CR is doing and will do during the rest of 1998. It is important to consider that the production process in the SECC plant is not running at full capacity and the A/T plant will just begin at the end of 1998. Furthermore, KPMG (1997) estimates of expected number of heavy trucks movements required by Intel CR per day, when Phase I (one A/T and one SECC plant) is fully operational, will be 60 (50% arriving and 50% departing). # 1 liter = 88.6 gm of CO2

## 1 liter = 12.86 mg of SO2 ## # 1 Liter 14.144 gm of NOx

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FIGURE III.3

TOXIC WASTE HANDLING CASE

Food services are basic for large manufacturing facilities where a significant number of employees is concentrated. This situation does not necessarily mean a greater demand of food products but it does imply a concentration of them in specific places. The latter involves mostly solid waste, comprised of organic matter and packaging materials (more plastics, paper, glass and cardboard). Nevertheless, when looking at he other side of the coin, it is be possible to consider that the concentration of solid waste in one place may in fact represent an advantage for proper waste handling, reuse and recycling of materials. Energy utility companies also generate additional burdens to the environment. A mix of different power generation facilities, including renewable and non-renewable sources is used to provide electricity in Costa Rica. As the already existing gap between renewable power supply and power demand increases, Costa Rica's dependence on thermal energy (burning imported fossil fuels) continues to grow. Leaving aside the impacts associated with the development of renewable power generation facilities, additional requirements of power in the short and medium run will definitely imply greater consumption of fossil fuels with the consequent release of more air pollutants to the environment. This is an indirect impact of the development of a high-tech electronics cluster and any other industrial activity. However, it may be wise to take such effects into account since high-tech electronics industries appear to be quite energy demanding. Furthermore, this helps to call the attention upon the fact that it is important to consider

ROMIC Violations of Health and Safety Regulations Romic Environmental Technologies handles toxic wastes from companies such as Hewlett Packard, Intel, National Semiconductor, NEC electronics, Xerox, Seagate, 3M, Dow, DuPont, etc. During a court settlement in San Mateo County in 1997, Romic admitted to continued violations of the law concerning 21 health and safety regulations especially related to confined spaces, even after a major tragedy which left a worker permanently brain damaged in February 1995. Romic routinely requires workers to enter confined spaces such as rail cars, trucks, tanks and reactor vessels that contain hazardous wastes. Romic also admitted failure to label hazardous chemicals, to store incompatible substances properly and to have a lack of a trained fire brigade. These violations apparently endangered workers, residents, schools and daycare centers within the neighborhood. Specialists state that the toxicity at Romic varies with each and every shipment. There is a great need for regular and timely monitoring data to select appropriate protective equipment. Source: Santa Clara Center for Occupational Safety and health, August 1997.

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the costs of environmental externalities caused by fossil fuel consumption when pricing electrical power.

1.4 Lessons from Previous Experiences

This Section is intended to describe various cases of the environmental impacts and health problems caused by various High-Tech companies in other locations around the world. It also aims to share the experiences observed in other locations concerning the management of the environmental implications of a high-tech electronics industrial cluster. Thanks to the availability of well-documented information, four cases of negative environmental implications with high-tech electronics industry development in the southwestern part of United States are taken into consideration. This part of the United States has a great experience with electronics industry, starting with the well-known "Silicon Valley" in Santa Clara county in California. The experiences of Mexico and especially the city of Guadalajara, which already hosts a great number of interdependent high-tech electronics industries, are also discussed herein. The case of Mexico and in specific, Guadalajara, were chosen considering the state of cluster development and the similarities with the Costa Rican context at the time that this country experienced the electronics industry boom.

1.4.1 Experiences in the Southwest of United States of America

According to the Southwest Network for Environmental and Economic Justice (SNEEJ) and the Campaign for Responsible Technology (CRT) (1997), any doubts concerning the true costs of high-tech manufacturing can be answered with an in-depth look at the experience of the original Silicon Valley in California, since the first technology boom of the 1960s. Over the past 20 years, as the price of land escalated and over development caused traffic gridlock, and as California strengthened environmental and labor regulations to clean up the industry's mess, corporations have sought out other southwestern sites as new technology growth centers. The representatives from the organizations mentioned above claim that many corporations' manufacturing operations are fleeing the Silicon Valley, leaving behind a legacy of pollution and exploitation. They add that many of the new manufacturing sites are now located in poorer communities of color, where people have little or no power to withstand the clout of multinational computer giants. Generally, around the new locations there are communities which tend to be less organized, less politically and economically powerful and are therefore more vulnerable to manipulation and exploitation (SNEEJ-CRT, 1997). The environmental impact of the high-tech electronics industry and related businesses is clear as illustrated in the examples included below. The impact is not limited to the external environment, the workers of these industries have also suffered health problems since they are also exposed to considerable threats to their health. For example, three separate studies have clearly identified a relationship between miscarriages and workers in the industry. According to Southwestern Organizing Project (SWOP 1995), Digital Equipment Corp (DEC) commissioned a study executed by the University of Massachusetts School of Public Health to do a study published in 1986. IBM contracted with John Hopkins University for a study reported in 1992, and the Semiconductor Industry Association (SIA) contracted with the University of California Davis which

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published its results in 1992 as well. These studies compared the rate of miscarriages by women employed in the semiconductor industry with the rate of a control group. The results of the studies are dismal and unanimous. The DEC study found a miscarriage rate for women in the industry at double the rate of women not exposed to the chemicals. The IBM study disclosed a 33% miscarriage rate for women exposed to glycol ethers. The SIA study, which included Intel and the SIA, identified a 40% greater rate of miscarriages for female workers exposed to glycol ethers.

1.4.1.1 Santa Clara County: "Silicon Valley"

Since the mid 50s and over the next 30 years, Santa Clara County in California, became the world's most important center for computer design and manufacturing and it achieved the highest density of electronics firms in the US. In the early years of the high-tech industry, various communities such as Mountain View, Cupertino, Santa Clara, Sunnyvale and Palo Alto became the locations of choice for semiconductor companies such as Intel, AMD, Hewlett Packard, National Semiconductor, Raytheon and Teledyne. Other companies such as IBM and Fairchild Semiconductor found their place in South San Jose (SNEEJ-CRT 1997). This type of industry was considered a money-making, non-polluting paradise. Thereby, it is still common to find a semiconductor manufacturing plant despite the fact that they use immense quantities of highly toxic chemicals within residential areas. The costs associated with turning an ingot of pure silicon into a highly conductive wafer was not completely understood. When compared with other industries like oil refining, steel smelters or chemical manufacturing, the electronics industry was preferred by municipalities to expand their industrial tax base. Apparently everything seemed well during the beginning of this industry (1960's and 1970's). Since high levels of soil and water contamination were discovered in 1980's the electronics industry was no longer hailed as the "clean industry". For example, as early as 1978, the plant where IBM manufactured disk drives in south San Jose started leaking VOCs and chlorinated solvents into the groundwater. Nevertheless, it was not until 1982 until the pollution caused by IBM was reported to the public. Significant levels of TCA were found in various aquifers and the pollution spread several kilometers. By 1986 the contamination had already affected about 25 public and private wells making around 100 thousand residents potentially exposed to the chemicals (SNEEJ-CRT 1997). According to the SNEEJ-CRT 1997, in January 1982, toxic chemicals from Fairchild's south San Jose semiconductor manufacturing plant had contaminated a municipal drinking that supplied much of the south San Jose area. Scores of birth defects, still births, and other serious health problems were soon reported in the contaminated neighbourhood. Based upon Fairchild's side of the story, it was estimated that over 220 m3 of hazardous solvents were sent down a drain into a leaking solvent tank, which presumably leaked into the aquifer between April 1977 and December 1981. The residents claimed injuries such as rare and life-threatening congenital heart defects, childhood cancers, thyroid, liver and autoimmune disorders. Many were compensated after being settled during the mid 80's. Clean up of TCA and 1,1- DCE polluted aquifers stills going on. Meanwhile, another vital drinking water source was indefinitely lost to the residents of Silicon Valley.

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Intel Corp. and AMD (Advance Micro Devices) are tied in the first place of number of Superfund sites (three each). Other sites have been found to be polluted by chlorinated solvents but they haven't reached the Superfund status. The underground contamination site of Intel in Mountain View is the second largest in Santa Clara County. This plume was found in September 1981 and contains TCE, xylene, 1, dichloroethylene (DCE) as the result of leaking underground storage tanks. By 1991, less than 40% of the plume was contained and the EPA estimated that it could take up to 60 years to fully clean up the plume. A second contaminated site by Intel was found in July 1982 containing TCE and Freon 113 due to accidental spills and overflows. The third site was also discovered in 1982. Even a supplier of the semiconductor industry, Applied Materials, was responsible for the contamination of groundwater in Santa Clara. The chemicals used and found under ground were very similar to those used by semiconductors industries. Four additional Superfund sites have been caused by chemical manufacturers, distributors, disposal and recycling facilities (i.e. Van Waters, Rogers, Jasco Chemical Corp and Solvent Services and Lorenz Barrel and Drum waste recycling facilities) (SNEEJ-CRT 1997). The following table includes a list of high-tech companies which have contaminated groundwater so extensively that they were put on the National Priorities List of the most contaminated sites in the US.

TABLE IV.1

HIGH-TECH COMPANIES WITH SUPERFUND SITES IN SANTA CLARA COUNTY (AS OF 1996) SOURCE: SNEEJ-CRT 1997

Company Number of Sites

Intel facilities in Mountain View and Santa Clara 3 Advance Micro Devices facilities in Sunnyvale 3 Fairchild Semiconductor facilities in San Jose and Mountain View 2 Hewlett-Packard facilities in Palo Alto 2 IBM facilities in south San Jose 1 National Semiconductor, in Santa Clara 1 Raytheon, Mountain View 1 Siemens, Cupertino 1 Teledyne Smiconductor, Mountain View 1 Signetics (Phillips) in Sunnyvale 1 Synertek, Santa Clara 1 TRW, Sunnyvale 1 Intersil (Siemens), Cupertino 1 CTS Printex, Mountain View 1

As illustrated above, the original Silicon Valley in Santa Clara County, California has experienced a series of environmental tragedies associated with the computer industry.

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As of today, this county has more "Superfund" sites than any other county in the US. The number of Superfund sites reach 29 and as of 1996, silicon wafers manufacturing facilities and other high-tech electronics components directly caused 20 of the 29 sites in Santa Clara County (SNEEJ-CRT 1997). Unfortunately, the County relies on groundwater for about half of its drinking supply, therefore, the extent of damage done by those facilities listed above has been considered as very severe. In addition, in the city of Santa Clara, the high-tech electronics industry alone used almost 24% of the city's water in 1994/1995. Of the top wastewater discharging companies in Santa Clara County in 1994, 65% were electronics companies.

1.4.1.2 Albuquerque, New Mexico: the "Silicon Mesa"

Despite the fact that New Mexico is the third most arid state in the US, local politicians, agencies and others are welcoming electronics industries. In this place, the high-tech industry happens to be relatively new and there has been a recent boom during the last 5 years. As compared to Silicon Valley, mechanisms to mitigate the environmental problems were put into place since the risks associated with contamination of groundwater were already well-known. Unfortunately, the available pollution abatement and prevention technology has not been sufficient to avoid some serious problems, which threatens the residents of New Mexico. Perhaps, besides some cases of soil and groundwater contamination, the most critical environmental problem posed by the electronics industries in this location is the rapid exploitation of the limited water table and the consequent water shortage faced by other economic activities and residential areas. As an example, while the residential water use in the Albuquerque area dropped by 4.4% in 1995, industrial use shot up 18%. Up to 87% of the water used by the top industrial users in Albuquerque area is consumed by five high-tech companies: Intel, Philips, Sumitomo, Motorola and Honeywell (SNEEJ-CRT 1997). This situation is further encouraged by water subsidies given to high-tech companies and the fact that due to the economic power these companies have, they are able to obtain water rights from other less powerful members of the society. What seems right from the market perspective ("buying rights for resource exploitation ") may imply negative consequences from the social perspective and may destroy the local culture and eliminate traditional economic activities that built the local community. The following table depicts the increases of high-tech water usage in the Albuquerque area from 1994 to 1995.

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TABLE IV.2

HIGH-TECH INDUSTRIAL WATER USAGE IN ALBUQUERQUE

Company 1995 Annual Use (m3)

Change from 1994

Honeywell 105 220 Up 3,2% Intel 4 542 000 Up 30% Motorola 110 520 Up 4% Philips 1 672 970 Up 32,3% Sumitomo 121 877 Start up on city wells

Source: SNEEJ-CRT 1997. The fast growth of the city due to the arrival of several employees from outside the state has also added new burdens to the environment and the real benefit from this type of industrial development has never reached the local longtime residents. In contrast, the longtime residents are experiencing constant increases in many of the living costs, starting from the price of water due to the shortage problems and the new policies adopted in the city aiming to ensure the arrival of high-tech companies. Especially local farmers are facing serious and increasing difficulties in obtaining water from their usual sources. Furthermore, as a result of high-tech development, Albuquerque is not free from contaminated groundwater sites and hazardous wastes. According to the SNEEJ-CRT (1997), there are at least four contaminated groundwater sites in the area which were caused by high-tech production plants. Among the cases that have caused more serious consequences is the GTE-Lenkurt tragedy. The abandoned GTE facility was found to be damaged by solvents dumped into the soil threatening the water table. Furthermore, over 20 years, hundreds of workers, primarily women of color were poisoned due to exposure to the chemicals employed along with the workers. Around 225 workers have been involved in a series of lawsuits against the company and the insurer over a 9-year period. As of 1993, 25 of the 225 former workers are dead, 75 have cancer and 75 are totally disabled (SWOP 1995). Various surveys among high-tech workers in the region reveal that some of the health effects suffered by the workers include: carpal tunnel syndrome, nerve problems, reflex sympathetic dystrophy, headaches, fatigue, memory loss, encephalopathy (degenerative brain disease), hypothyroidism, adrenal gland failure, cancer, menstrual problems, cervical precancerous tissue, depression, etc. (SWOP 1995).

1.4.1.3 Phoenix Arizona: the "Silicon Desert"

Just like the case of Silicon Valley, the high-tech industry in Phoenix, Arizona, was developed before the costs associated with this industry were revealed and understood by the general public. Thus, similar consequences as those experienced in Silicon Valley have been observed in this region. Furthermore, despite the fact that the water is very scarce in this region, the city continues to attract water-intensive companies like high-tech industries. It is expected that the water demand will exceed current supply by

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2010 at current growth rates raising costs of water services to the people of Phoenix (an indirect subsidy). (SNEEJ-CRT 1997). A very large plume of contamination is present in groundwater underneath Phoenix. This has reduced 25% of the overall availability of groundwater, which is vital for many activities including agribusiness and the urban areas. According to SNEEJ-CRT 1997, this ground water contamination is linked to seven Superfund sites in the Phoenix area and three correspond to high-tech electronics manufacturing plants, including Motorola who polluted a key aquifer with TCE. In addition to the Federal US EPA's Superfund Program, the State of Arizona has its own listing of highly contaminated sites. This listing is called Water Quality Assurance Revolving Fund (WQARF) which includes sites that are contaminated which did not make it on the Superfund list, but which require clean up of polluted waters caused by past activities. SNEEJ-CRT (1997) reveals that there are eight additional WQARF sites in Phoenix area not related to the massive plume caused by Motorola. Among the companies responsible for this sites are Intel, Applied Metallics, California Microdevices, Motorola and Honeywell Information Systems. Furthermore, the semiconductor and circuit board manufacturing industry is responsible for 17 or the 33 contamination sites in the Phoenix area which accounts for approximately 75% of all the contaminated are yet discovered (SNEEJ-CRT 1997). The contaminants present in the groundwater include TCE, PCE, DCE, 1,1,1-TCA, trichlorofluoromethane, 1,1-DCE, etc. In 1990, Motorola face a fine of several thousand dollars given by Phoenix for dumping toxic chemicals into the wastewater system and for failing to report discharges. In 1993, various organizations protested against Motorola after its decision to move the production line that was fined to Guadalajara, Mexico. As a matter of fact, the US EPA reports that glycol ether bearing chemicals were transported from the Phoenix plant to a Motorola facility in Guadalajara where more semiconductors are produced (SNEEJ-CRT 1997). Intel Corp. has also left a deep track in the state of Arizona. In 1985, this company was also involved in the pollution of the perched and regional aquifers that surrounds Intel's facilities in Chandler, Arizona. These aquifers, used by the City as a public drinking source and for domestic and industrial supply sources, presented high levels of benzene, 1,1-dicholoroethane (DCA), 1,1-Dichloroethene (DCE), TCA and Freon TF.

1.4.1.4 Austin, Texas: the "Silicon Hills"

Around 17 major high-tech electronics companies are located in the Austin area in Travis County. These companies include IBM, Samsung, Texas Instruments, Motorola, Sematech, Apple, AMD and 3M among others. The SNEEJ-CRT argues that one of the main reasons why high-tech companies continue to move to Austin is the quality of its water. The US EPA toxic release inventory registered that high-tech industries located in Austin legally emitted over 330 Tons of toxics into the environment in 1989. Almost 100 Tons were disposed of by underground injection. By 1991, industries in Travis County generated around 3000 Tons of toxic chemical waste. Approximately 84% of that quantity was transported off-site via transportation to be burned, buried or recycled.

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About 12% were discharged into the air while 4% were discharged to the Austin's wastewater system. In 1991, only IBM and Motorola together accounted for 75% of theses chemical waste releases. Unfortunately the TRI information doesn't cover all the discharges since only those companies consuming above certain quantity of listed chemicals are obliged to report. The TRI data for 1993 showed a 45% decrease in discharges of toxic chemicals to wastewater treatment plants (SNEEJ-CRT 1997). Travis County and the City of Austin have also witnessed a series of environmental tragedies concerning high-tech electronics companies. Out of 150 contaminated sites that existed in the City of Austin in 1994, 19 were associated with high-tech companies (SNEEJ-CRT 1997 from Texas Groundwater Protection Committee).

1.4.2 Some Documented Experiences in Asia and Europe

The impacts of the high-tech electronics industry have reached other sites besides United States of America. The globalization of this industry has brought the associated risks to many other places. Asia and Europe are no exception but the public and documented information is still very limited. Below are two cases of environmental and health related problems associated with the electronics industry.

1.4.2.1 Japan

The July 1998 issue of The Economist magazine presents a burning issue concerning toxic waste as well as soil and groundwater contamination in Japan involving some of the primary high-tech electronic companies in Japan like Toshiba and Matsushita. The same document mentioned above reports that after a recent study which revealed that a large number of incinerators of industrial waste were making Japan the "dioxin center" of the world by failing to meet the respective standards, the public got anger with industrial polluters. Thereafter, many details about the frightening condition of some production sites have been published. According to The Economist, the first to come clean was Toshiba after they reported the presence of high levels of trichloroethylene in the groundwater beneath four of its domestic factories. Inspectors have also found toxic waste outside its factory in Nagoya last October, thus health studies are being carried out. The consumer-electronics giant, Matsushita, reported harmful tetrachloroethylene levels in the groundwater beneath four of its factories in the Osaka area and near the Hokkaido plant. Both Matsushita and Toshiba have voluntarily surveyed their sites for toxic problems and gone public with their findings. The latter has originated a lot of pressure on similar industries. Parallel to the recent findings on the environmental impact of these industries, The Economist reports that there is a general trend among Japanese manufacturers to adopt the international standard ISO 14000. By February 1998, around 730 industrial sites in Japan had become fully compliant, compared with 525 in Great Britain and 110 in United States. According to The Economist, half of the plants that have been certified with the new ISO standard are in the electronics sector since they are top exporters and are

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concerned about their market position and image. After all, this trend is encouraging Japanese firms to clean up their act.

1.4.2.2 Scotland

Various activists of Scotland are calling the attention of the international community due to the serious occupational health problems suffered by workers at National Semiconductor in Greenock, Scotland. Among the most critical problems there are miscarriages, reproductive cancers, vision problems and respiratory ailments. The same situation has been experienced among the workers of a BBC television production site in the same area. Unfortunately, as in most of the countries, labor unions are completely prohibited among the workers of this kind of electronics industries. This limits their power and the possibility to protest for their rights (CRT, 1998).

1.4.3 Experiences Observed in Mexico with a Special Focus on the High-Tech Electronics Cluster Located in Guadalajara

1.4.3.1 Brief Introduction to the Electronics Industry in Mexico

The electronics industry in Mexico started in the late 50's producing consumer electronics goods. In that period there was a strong policy for import substitution applied to consumer goods which allowed this industry to grow. However, the national industry was oriented to satisfy the closed internal market and the development of production chain and product innovation was not encouraged. This resulted in a poor competitiveness of the Mexican electronics industry in the international market (Sanchez and Rodriguez 1998). During the mid 80's the electronics industry suffered a crisis and was restructured but its economic relevance declined considerably. Furthermore, the removal of imports barriers previously established in line with the import substitution policy basically eliminated the local components industry. Consequently, the percentage of integration of the electronics industry with the national industry or local value added declined from 80% to 10%, becoming largely dependent on imports. As a result, the "maquiladora" industry, primarily involved in assembling of electronics consumer goods among other products (i.e. textiles, plastic and metal parts), became very important within the electronics sector. This type of industrial activity, which is characterized for being labor intensive was promoted during the mid 60's with the purpose of generating jobs along the border with United States, where many "twin plants", one on the US side and one on the Mexican side were located (Eco Frontera 1998). Due to the international nature of these industries, leading production technologies were introduced and the demand for highly qualified personnel increased as well. Nevertheless, as compare with Asian "maquiladora" industries, in Mexico the maquiladoras haven't contributed to a significant extent with the development of production chain and strong local suppliers. These industries are basically "final" industries oriented towards the world market, almost completely separate from the national economy. In fact, the local value added is less than 2% and most of the goods required by these maquiladora industries are brought from abroad, mainly North

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America. (Sanchez and Rodriguez 1998). There are over 2600 maquiladora operations that employ over half million people. Approximately, 85% of this type of industries are located near the border with United States (EcoFrontera 1998). In general, the electronics industry (including the electronics "maquiladora" companies) is considered strategic for the economy of Mexico mainly because the potential to develop the production chains contributing to the development and strengthening of other industrial sectors. In this regard, Figure IV.1 presents a series of indicators, which illustrate the economic relevance of the electronics industry (including electronics maquiladoras operations). In addition, Figure IV.2 depicts the rapid growth in Mexican electronics exports. Nowadays, the electronics sector in Mexico is comprised by various subsectors which include products such as consumer goods (i.e. electric appliances, audio and video equipment), semiconductors and electronic components, telecommunication equipment, electronic office equipment, computers and computer equipment.

FIGURE IV.1

SOME INDICATORS OF THE ELECTRONICS INDUSTRY IN MEXICO (INCLUDING MAQUILADORAS OPERATIONS AND ELECTRONICS INDUSTRIES)

! In 1997 the electronics industry was responsible for 28% of the total Mexican

imports ! In 1997 generated 30% of the Mexican exports (1st place among the exporter

sector) ! 21% of the maquiladora industries in 1997 were in the field of electronics ! Generated about 34% of the jobs within the maquiladora sector (over 300 000

jobs) ! The electronics sector registered a 10.39% growth between 1989 and 1996

1995 1996 Contribution to the National GNP

0,5% 0,81%

Contribution to the manufacturing GNP

3,0% 4,1%

Source: Sanchez and Rodriguez 1998, CANIETI

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FIGURE IV.2

EXPORTS OF THE MEXICAN ELECTRONICS SECTOR. SOURCE: BANCOMEXT. HTTP://MEXICO.BUSINESSLINE.GOB.MX/SECTORIAL/ELECT.HTM

Foreign investment in the field of electronics has also been strong in Mexico. For example, Figure IV.3 (see next page) illustrates the location of some of the foreign high-tech electronics companies that have established manufacturing facilities in Mexico and contributed to the development of electronics clusters. As shown in the figure, the computer and the telecommunications subsectors are located primarily in Guadalajara and the surroundings of its metropolitan area.

1.4.3.2 High-tech electronics cluster in Guadalajara: The Silicon Valley of The South!

Far south of the "maquiladora" electronics industry along the U.S.-Mexico border, investors have poured more than US$ 1 250 Millions over the last 3 years into Guadalajara, the second largest city of Mexico with more than 4 million inhabitants. Tens of thousands of "high-tech" jobs have been created as a result of this huge investment (Los Angeles Times, March 1998 and Proceedings from the 3rd Congress of the Electronics Industry in Mexico). Indeed, Guadalajara, self-proclaimed the "Silicon Valley of the South", has been fast in achieving a critical mass of cutting-edge production facilities. The city officials are determined in creating an integrated high-tech industry that does more than bolt machines together. The companies, the academic institutions and the government agencies are working to develop the entire production chain in the region. As of 1997, the local value added on the exports reaches 20% and is expected to reach 30% this year (Los Angeles Times, March 1998). Table IV.2 describes a few of the high-tech industries already established in the city of Guadalajara.

0

5000

10000

15000

20000

25000

30000

35000

1991 1992 1993 1994 1995 1996 1997

Section IV-67

Figure IV.3: Clusters of Electronics Industries in Mexico ("final companies") Source: Bancomext

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TABLE IV.2

SOME HIGH-TECH ELECTRONICS AND RELATED COMPANIES OPERATING IN GUADALAJARA

Company Main Activities Number of Employees

Hewlett-Packard Research and development for paper-handling components for laser printers, assembly of personal computers and components, contract manufacture of scanners, automobile LEDs and printers

1 400 at two plants

Phillips Consumer Communications-Lucent Technologies (Joint Venture)

Manufacturing of wireless conventional and cellular phones, answering machines and pagers

Over 5 000

Kodak Manufacturing of single-use cameras, writeable CDs, and film

2 400

SCI Systems

Manufacturing of circuit boards for keypads

Motorola Manufacturing and assembling of semiconductors

1 500

IBM Assembling of desktop and laptop computers, manufacturing of state-of-the art electronic components

1 200

Tecnologias NEC de Mexico Assembly of cellular phones and display pagers

850

Siemens Assembling of electronic and auto components

720

Solectron de Mexico Assembling of printers, computers, cellular phones and telecommunication systems

900

Natsteel Manufacturing of circuit boards 1 000 Jabil Circuit Manufacturing and assembling of circuit

boards and electronic components 250

C.P. Clare Mexicana In-bond assembly of electronic equipment 830 Cumex Electronics Manufacturing and marketing of electronic

components (printed circuit boards) 220

Flextronics de Mexico Manufacturing of electronic components and equipment

140

Fair-Rite Products Manufacturing of electronic components 500 Electronica Pantera Manufacturing of cables and assembling of

harnesses for the computer industry --

LNP Engineering Plastics Manufacturing of thermoplastic engineering compounds for the electronics industry

200

Molex de Mexico Manufacturing of harnesses and boards assembling

1 700

TriQuest (recently incubated in the University of Guadalajara)

Manufacturing and assembling of electronic components and plastic injection molding

180

Source: AMCHAM-Gdl and Los Angeles Times (1998). Some of the companies listed above initiated operations in Guadalajara more than 20 years ago (i.e. Motorola) but during the last 6 years, since the beginning of the NAFTA, the electronics industrial sector has grown significantly. The latter is

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reflected on the recent arrival of large multinationals and the development of local suppliers. The exports of the electronics sector reached US$ 4 Billion in 1997 and is expected to be in the order of US$ 7 Billion in 1998 (Los Angeles Times, March 1998). As of 1993, 74.6% of the manufacturing and assembly of computer equipment was made in Jalisco and 9% near the border with United States. With respect to electronic accessories and materials and telecommunication equipment, 46.8% and 40.4% respectively were produced in Jalisco, in the Metropolitan area of Guadalajara City (Sanchez and Rodriguez 1998). As of today, approximately 90% of computers and 70% of the telecommunication equipment manufactured in Mexico are now made in Guadalajara (AMCHAM). The majority of the electronics industries are associated in a few commerce and electronics chambers that support their interests before different sectors and the government. They also interact with other sector chambers (i.e. plastics) to promote common activities and objectives. The interaction with the seven local universities and the 164 technical schools is also strong, mainly with the purpose of developing sufficient technical expertise among the workers of the region and executing some R&D projects.

1.4.3.3 Environmental and Health Impacts of the Electronics Industry in Guadalajara and Other Places in Mexico

In Guadalajara as in other places in Mexico and other countries, the high-tech electronics industry has been perceived as a money-making and non-polluting paradise which can generate thousands of jobs and thus strengthen the local economy and improve the social conditions. Therefore, it is easy to find semiconductors and other electronics components manufacturing plants located in the middle of neighborhoods. However, after the years and as some of impacts began to be disclosed, even the perception of the government about this type of industries is changing. In this regard, Mr. Eduardo Sanchez, subdelegate of the National Secretary of the Environment (SEMARNAP) in Jalisco, argues that when the high-tech companies started to arrive to Guadalajara, everyone welcomed and considered them as "inoffensive" from the environmental standpoint. He adds that as the time passes and environmental issues gained importance in the region, various initiatives in the field of environmental management and auditing that involved large electronics multinationals, the academic sector and the government, revealed serious occupational health problems especially related to the substances used in the processes. Considering the above and together with other issues discussed below, Mr. Sanchez considers that the Secretary has begun to be more "cautious" in the light of the potential arrival of additional high-tech companies. In general, the environmental and health related problems associated with the electronics industry in Mexico are basically similar regardless of the location, but just like the social conditions, the extent of the impact vary according to the location. The same happens with the availability of information, which is partly influenced by the level of awareness of the general public in the area. For example, the electronics industry in the US-Mexican border is much older than the one in Guadalajara and other regions of Mexico. Thus there is more experience in this region concerning the environmental and health impacts. Furthermore, the proximity with US and the fact that several tragedies have been disclosed in the US side, mainly in the southwestern states mentioned before, have awaken the public attention in the side of Mexico about environmental and health related issues. Consequently, a series of

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studies, primarily concerning occupational health aspects have already been carried out in the North of Mexico, revealing important information about the extent of the impact on the health of the workers. On the contrary, the public awareness about the environmental and health impacts of the high-tech electronics industry in Guadalajara is still very weak, as it is the political interest in addressing them. Unfortunately in Mexico there is no requirement for companies to disclose information, which makes it very difficult to the public and other sectors to know and understand what is really happening in terms of health and environmental issues. Furthermore, the environmental and health related information that reaches the government from those electronics companies that do comply with their duty to communicate certain aspects of their environmental performance is kept confidentially between the government and the respective enterprises. Moreover, when the government publishes some information, it does it in a very aggregate manner, making it very difficult to correlate the impact with the sectors and the specific industries that cause them (Mai Te Cortez, Colectiva Ecologista de Jalisco). Basically, the governmental institutions approach the industries with respect to environmental and health issues in a delicate manner, trying not to harm the image and interests of their business, which could also affect the local economy. This is why since a few years ago various voluntary regulatory programs and schemes have been implemented and a good number of the high-tech multinationals have participated. However, the results from these programs are also kept under confidentiality and only good and positive results are shared with the general public. In spite of the lack of documented information, there is a general consensus among government officials, relevant academic staff, NGOs and the communities of Guadalajara, on the fact that this type of industrial activity has brought additional and significant environmental burdens to the region in addition to technological advances and economic growth. Motivated by the international "environmentalism" movement and the efforts towards sustainable development, various academic institutions in the city of Guadalajara have been involved in recent studies about the impact of different industrial sectors including the electronics sector. For instance, the ITESM (Monterrey's Technical Institute for Higher Education) at Guadalajara, executed a very comprehensive study called "Jalisco 2000" which assessed the strengths and weaknesses of Jalisco in the light of the potential areas for economic development. Environmental issues were also considered and a number of stakeholders, including technical and environmental experts where consulted to determine what would be the extent of environmental impacts if certain economic sectors were further developed in various regions of the state. The metropolitan area of Guadalajara was among the regions evaluated and the electronics industry was one of the economic sectors that the city has a good potential for development. The group of specialists that participated in the "what-if" assessment first concluded that the electronics industry already has a high impact on the local environment13. Later the group concluded that further development of this sector would imply a "great" impact. The electronics sector occupied the third place in the ranking of potential environmental impact after the metallurgy and textile sectors, according to the scale used for categorizing the impact of each sector. Similarly, as part of a territorial-zoning project done for the local government and executed by the University of Guadalajara, the extent of environmental impact of the electronics sector was also considered as high in relation to other traditional sectors. 13 Under this study, the concept of "environment" refers to species, habitats, ecosystems, water and soil resources and the regional atmosphere.

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Mr. Sanchez from SEMARNAP stated that when the first high-tech companies established manufacturing operations in Guadalajara (before 1988), there was no environmental legislation and nothing is known concerning the performance of this companies before that time. Recent studies like the ones mentioned above as well as additional existing documented information and a series of interviews with various stakeholders in Guadalajara, demonstrates that there are significant threats associated with the high-tech electronics companies and related businesses. The following paragraphs summarize the most relevant findings concerning environmental and health aspects and impacts of these industries. Some examples of environmental and health impacts in other parts of Mexico are also included. In order to facilitate the understanding of the impacts of the high-tech electronics industries, the discussion has been divided in five parts: soil and water pollution, air pollution, hazardous and toxic wastes, resource consumption and health effects.

a. Soil and Water Pollution

The extent of surface waters pollution resulting specifically from the manufacturing activity of high-tech electronic companies and related businesses in Guadalajara is extremely difficult to assess. The latter is mainly due to the fact that every industry, whether it complies with the water discharge standards or not, discharges the waste waters into the municipal sewer. The sewage system carries all the wastewater generated in the city and as of today, there are no municipal wastewater plants in Guadalajara at all. All the municipal sewage and the industrial waste waters run, untreated, through the municipal sewage system and end in the largest river nearby called "Rio Grande de Santiago", flowing all the way to the Pacific Ocean. Consequently and according to government officials, this river is heavily polluted. Furthermore, the impact of this pollution on the farming activities located downstream hasn't been assessed either. The industrial wastewater discharged into the sewage systems is so polluted that, for example, at the end of the past decade, a man working very close to the sewage system of the El Salto industrial corridor died from intoxication from the gases released from chemical substances present in the wastewater. This particular industrial corridor hosts many high-tech electronics companies besides other plants that process pharmaceutical products and chemicals (Dr. Fco. Rivera, IMSS). Since a few years ago, companies are obliged to report the quality of their wastewater periodically to the Government. However, only a small fraction report and basically only the large manufacturing companies have water pollution abatement technologies in place. (Figarola, ITESM and Hernandez, COESE) Again, this information is not available for the general public. In this regard, Mai Te Cortez, from a Jalisco-based NGO comments that when the Motorola's illegal discharge of chemicals into a municipal sewage took place in Phoenix, the neighbors helped by local environmental activists tried to access the information about the quality of Motorola's wastewater, located in the municipality of Zapopan in Guadalajara. After many attempts, the neighbors and activists didn't succeed but were able, through other political contacts outside the state, to access some sort of environmental report submitted by Motorola to the government in 1993. This official report (normally not accessible to the public) didn't address the wastewater issue but revealed a long list of chemicals used and several processes descriptions pointing out the sources of contamination. Although this initiative did not succeed in revealing the extent of wastewater pollution caused by Motorola, it helped to call the attention of the general public.

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Unfortunately the local government does not have enough resources to do a systematic monitoring of soil and aquifers' pollution. Therefore, the state of soil and groundwater pollution is basically unknown (Sanchez, SEMARNAP). However, the government suspects high levels of hydrocarbons in many industrial areas due to the fires and explosions experienced 6 years ago in some areas. Unfortunately, as in that case the source of the flammable hydrocarbons present in the soil was difficult to prove due to the lack of monitoring and the quantity of actors involved. In that particular case, PEMEX (Mexican Petroleum Company) and a vegetable oil processing factory were assumed to be responsible for the incidents. In any case, the government is aware of the fact that primarily a large number of small and medium size electronics companies discharge toxic and hazardous substances in the municipal sewage system and that their chemicals handling practices are not necessarily the optimum. Thus they claim that potential soil and groundwater pollution is indeed possible from this sort of manufacturing operations (Sanchez, SEMARNAP and Hernandez, COESE).

b. Air Pollution

Air pollution is one of the main concerns for the environmental agencies of the Mexican government. This is particular influenced by the strong problems that are constantly lived in the city of Mexico D.F. The situation of air pollution in Guadalajara is not very far from the situation of Mexico D.F. The city of over 4 million inhabitants has reached the limit of International Air Pollution Standards set for cities a couple of times (Hernandez, COESE). Nevertheless, the difficult situation of air pollution is primarily blamed on the non-point sources such as vehicles and other transportation systems. The pollution from non-point sources is so big that it basically overshadows the impact from point sources including high-tech electronics companies. The government has implemented a few years ago a very advance on-line air quality monitoring system in many places of the city. This monitoring system allows them to understand the behavior of the airborne pollutants. However, they have not made any correlation with point source like electronics companies. Mr. Olegario Hernandez from the State Ecology Commission (COESE), institution in charge of operating the monitoring system, said that when a certain industry is suspected to be releasing more pollutants than the allowed by the federal standards, a mobile monitoring station is placed in the surrounding areas to measure the extent of pollution. Mr. Hernandez did not recalled any experience with high-tech electronics industry in the near past. However, he argues that it has been measured high levels of hydrocarbons and other air pollutants near the two main industrial zones in Guadalajara, the Guadalajara Industrial Zone and the Industrial Corridor El Salto where many of the electronics industries are located. Similar to the case of wastewater discharges, companies are expected to report their air emissions to the government. Again, not all the companies comply with their information duty so there are no accurate statistics from the pollution of industries and other point-sources (Sanchez, SEMARNAP). The following table shows the latest inventory of emissions prepared by the government. It clearly shows that the contribution of the industrial sector is not as critical as the contribution of transport sector is. As mentioned before, this might be, to some extent, a misleading information due to the poor information available concerning the industrial sector. However, the information included in Table IV.3 explains why the government places

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so much importance on non-point sources and do not concentrate enough resources on industrial emissions. In addition, the industry information presented in the table may be misleading due to the poor information available from the industries.

TABLE IV.3

EMISSIONS INVENTORY (TONS/YEAR)

Sector TSP SO2 CO NOx HC Pb

Industrial 1 595 5 506 1 322 3148 4 269 ? Services 40 118 729 218 57 248 0 Transport 5 845 2 461 895 991 33 820 82 318 0 Soil and vegetation 29 4304 0 0 0 0 115

Total 30 1784 8 085 898 042 37 186 143 835 115 Source: SEMARNAP

c. Hazardous and Toxic Wastes

Mr. Eduardo Sanchez, Subdelegate of SEMARNAP in Jalisco considers that the generation of hazardous and toxic wastes is one of the three most critical environmental aspects associated with the high-tech electronics companies and related businesses. During an interview in his office he stated that when the first companies arrived during the 70's and 80's to Jalisco, this state and the other states of Mexico did not have the appropriate infrastructure for handling these wastes. The law concerning hazardous wastes appeared until 1989 when many technical norms where converted in to technical regulations. Before the law arrived, Mr. Sanchez commented that most of the hazardous residues ended in conventional solid wastes dumpsites but the damage to soil and water bodies has not been assessed. An incipient and weak infrastructure for handling hazardous and toxic wastes was developed after the legislation came out, especially in the North of Mexico, but the demand for management services still is higher than the supply. Thus, costs for proper disposing became out of scope for most of the medium and small enterprises that generate this kind of wastes. As a result, several clandestine dumpsites began to appear in many places of Jalisco and the rest of Mexico (Sanchez, SEMARNAP and Sanchez AMCRESPAC). The situation of the large high-tech multinationals and the electronics maquiladoras is a bit more positive. The latter is due to the fact that the first ones often return most of their hazardous wastes to the country of origin while the maquiladoras are obliged to return all the hazardous wastes resulting from any imported hazardous substance. Mr. Sanchez, from SEMARNAP, adds that there is a tremendous problem of control in spite of the existence of a specific legislation in this matter. From approximately 1200 companies registered as generators of hazardous wastes in the state of Jalisco, only 25% of them report their amount of wastes to the government. The rest of the companies fail in their duty to report which makes it difficult to have a good estimate of the total quantity of hazardous wastes generated in the sate. According to Mr. Sanchez (SEMARNAP), early estimates of hazardous waste generation in Jalisco concluded that the state generated over 235 000 tons, most of them in liquid form. Recent statistics prove that the latter amount is higher than 1 million tons per year. In addition, the most frequent hazardous wastes generated in

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Jalisco and other places of Mexico are: spent solvents, paints, resins, wastewater sludges, oils and lubricants, soldering residues, acids and alkaline substances (see Figure IV.3). The contribution of the electronics industry in Mexico to the total generation of hazardous wastes is described in Figure IV.4. This figure demonstrates that after the chemical, petrochemical and metal industries, the electronics industry is one of the main generators of hazardous wastes. At this moment, it is important to highlight the fact that in Costa Rica, the chemical, metal and petrochemical industries are not strong. This means that if the electronics industry continues to grow as it is expected, its contribution to the hazardous waste problem in Costa Rica would be quite relevant. In general Mexico faces a critical situation concerning hazardous wastes. The Mexican Association for Management and Control of Hazardous Wastes (AMCRESPAC) says that only 26% of the approximately 8 Million Tons of hazardous wastes generated per year in Mexico are handled in a proper way (ACMCRESPAC 1998). The rest is accumulated by the industry or disposed following inadequate procedures. Table IV.4 describes the type of existing infrastructure for handling hazardous wastes. Most of this infrastructure has been developed in the North part of Mexico. Furthermore, Mr. Jorge Sanchez, President of AMCRESPAC, in some cases, the existing hazardous waste handling facilities do not comply with the technical and operational standards and there is a lack of governmental control on their operations. As a result, he adds, many sites have been heavily polluted.

FIGURE IV.3

MOST COMMON HAZARDOUS WASTES GENERATED IN MEXICO (1994)

Source: SEMARNAP 1996

0 5 10 15 20 25 30 35

Percentages

Others

Plastics

Inks

Silicon

Sludges

Freon

Adhesives

Heavy Metals

Oil derivatives

Acids

Resins

Soldering

Paints

Oil/Lubricants

Solvents

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Mr. Eduardo Sanchez from SEMARNAP in Jalisco, considers that one of the main weaknesses the country has in relation with hazardous wastes is the lack of know-how and "culture" with respect to this type of wastes. He argues that most of the people do not know what they are handling and the potential consequences on their health and the environment. Unfortunately, he adds, there is a lack of well-trained personnel in the government to monitor the performance of the companies and the impact on the environment. The overall environmental impact of hazardous and toxic wastes in Mexico is still unknown. Due to the increasing amount of this type of wastes, SEMARNAP is currently executing a comprehensive research to determine the state of soil, water and groundwater pollution in Mexico resulting from mismanagement hazardous wastes.

TABLE IV.4

HAZARDOUS WASTE MANAGEMENT INFRASTRUCTURE IN MEXICO

Number and type of Facility Year Handling Capacity CPU CP IRP RM RA RS RE TIR RFC

1990 270 M Ton/ year 3 4 2 6 4 7 0 0 0 1994 880 M ton/year 2 1 2 5 11 12 3 12 3 1997 2080 M ton/year 2 2 5 11 15 20 6 16 5

CPU: Public Confinement CP: Private Confinement IRP: Incineration RM: Metals Recycling

RA: Oils/lubricants recycling RS: Solvents Recycling RE: Energy recovery TIR: On-site treatment

RFC: Recycling and formulation of alternative fuels

Source: AMCRESPAC, (1998).

FIGURE IV.4

GENERATION OF HAZARDOUS WASTES PER INDUSTRIAL SECTOR IN MEXICO (1994)

Source: SEMARNAP 1996.

0 5 10 15 20 25

Percentagesddad

Pharmaceutic

Plastic

Textil

Leather

Food

Chemical (secondary)

Basic metals

Chemical (basic)

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Lastly, in Jalisco as in other places in Mexico, another type of hazardous waste associated with the high-tech electronics industry is the "electronics waste" which contain several substances that are harmful for the environment. Electronics assembly plants dispose considerable amounts of electronics parts, components and products that do not meet the quality specifications or come out from obsolete inventories, etc. The local newspaper in Jalisco, El Siglo 21, published an interesting report on August 8th, 1995 concerning this matter. Based on a local survey that involved 5 major high-tech electronics companies, they researchers found that in many cases the electronics waste stream end in incinerators or local dumpsites. As explained in Section III, there are serious environmental and health impacts associated with this kind of practices. In addition, part of the waste is segregated and shredded to recover mainly precious and ferrous metals. Another part is sent abroad, mainly the US where electronics recycling facilities are already operating.

d. Resource Consumption

According to Mr. Eduardo Sanchez from SEMARNAP in Jalisco, the other two most important environmental aspects of high-tech electronics companies are water and energy consumption. Although he did not have figures on hand, he assures that both energy and water consumption is extremely high in comparison to other sectors. The situation of water supply in Guadalajara seems to be critical according to Mr. Sanchez. El Nino effect and other factors have reduced the supply capacity. Most of the water used in Guadalajara is taken from the largest lake in Mexico, lake Chapala, whose level is diminishing and the quality of water is very deteriorated because of pollution generated along the rivers that discharge the waters in the lake. In addition, the groundwater sources are very limited and users must have exploitation rights. In spite of the lack of water sources and the efforts for proper industrial zoning, most of the newest high-tech industries have located their facilities as near as possible to the oldest and large electronics manufacturing facilities where the water is already very scarce, especially groundwater. However, the latter also has some positive environmental attributes. Since this type of companies demand a very good quality of water they tend to use the groundwater which is the cleanest. In addition, because the groundwater exploitation rights are already given away, the high-tech companies are obliged to purchase the rights from other users which are generally small local farmers. In short, the high-tech industries are displacing traditional agricultural activities in the surroundings of Guadalajara. Furthermore, the accelerated demand of water attempts against the well-being of the city inhabitants because of possible potable water shortages that may occur in the future. (Sanchez, SEMARNAP). The situation concerning energy consumption is different but also critical. Around 70% of the electricity consumed in Guadalajara comes from Manzanillo, mostly from thermal power plants. The rest of the power is generated by a local hydro power plant (Sanchez, SEMARNAP). The government's interest in further developing the high-tech industrial cluster and ensuring a good and sufficient quality of energy supply to the existing companies, is forcing it to find new sources of energy. One of the primary potential alternatives which has not been discussed very much in public is the exploitation of the geothermal energy sources located in on of the most important forest reserves near Guadalajara. Mr. Sanchez fears that the political interest in attracting these powerful and energy demanding industries to the city may

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imply an incredibly high costs for the environment and future generations, especially if this forest reserve is sacrificed with the purpose of ensuring sufficient and high quality energy supply.

e. Health Effects

Dr. Federico Rivera from the Mexican Institute of Social Insurance (IMSS) and president of the Mexican Society of Labor Medicine in Jalisco, argued that the impact of the high-tech industries and related businesses is just beginning to be assessed in Guadalajara. The latter is primarily due to the fact that occupational health legislation and technical norms applicable to this type of industries are very recent as well as the efforts in the field of epidemiological vigilance and work place hazards and risk assessment. In addition, Dr. Rivera stated that the explosive growth of electronics industries started just 6 years ago and the most relevant health effects are chronic, which demand a long time to be assessed; therefore, it is very difficult to make scientific assertions concerning the impact on workers' health. According to Dr. Rivera there are other factors which impede the gathering of data about the impact of the high-tech industries. For instance, the large high-tech industries have their own medical center from which no information leaks out. They are capable of handling most of the occupational health problems associated with their operations and do not report the incidents they have. Very seldom and only when the cases are extremely difficult to handle by these private medical centers and the affected workers must get specialized medical services, the information goes out to the public and health authorities. For example, Dr. Rivera recalls only 2 cases of intoxication at IBM during the last 5 years. Large manufacturing companies are also reluctant to report occupational health incidents to avoid higher insurance premiums. Unfortunately, there are no statistics available yet and the existing information is hardly accessible to the general public. Furthermore, the statistics that do exist about health problems are seldom associated with the possible causes (Dr. Rivera). Despite the lack of documented information accessible to the public, as a previous adviser to the industries, Dr Rivera recalls various occupational health related cases involving high-tech electronics industries which he had personally witnessed and heard from other colleagues. For example a year ago he remembers various cases of dermatitis caused by workers exposures to chlorinated solvents at Lucent Technologies - Phillips. Four years ago he was informed by lead intoxication cases at former Bourroughs-Unysis. Seven years ago he observed serious menstrual problems among women working in clean room environment conditions at Motorola. Dr. Rivera stated that before 1988, most of the industries used to send the occupational health related cases to the IMSS to be assisted in the public facilities. However, the situation changed after that year and most of the industries began to take care of the health problems themselves. A clear example of this is the case of a zinc-lead car battery industry in Mexico that between 1984 and 1988 reported 75 cases of lead intoxication. Contradictory and without experiencing a major change in manufacturing technology and working conditions, the same industry reported only 12 cases between 1988 and 1998. As many other people interviewed in Guadalajara, Dr. Rivera also considers that the large multinational electronics companies are not the main problem with regards to health and environmental impacts since they compete in the global market and have a "good and responsible" corporate image to protect. These large companies usually

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have the resources, the know-how and management practices capable of preventing and minimizing the potential impacts. Instead, the small and medium size enterprises that supply the big industries and that have absorbed many of the polluting production activities from the large manufacturers are the main concern. Most of these industries do not have the same resources that the large manufacturers do. Consequently, Dr. Rivera considers that their impact might be significant. The occupational health situation along the US-Mexican border is very different or at least much better studied. As mentioned before, the electronics industries (mostly maquiladoras) have been in that region for a longer period and the general social conditions as well as the proximity to the US have attracted the attention of many researchers. Thus, there are already various studies about the workers health and working conditions. Some of the documented results of these studies are presented below. The cases presented herein focus on women's health because women are preferred over men for many of the production line jobs (mainly electronics assembly) which required certain ability that women have and men don't. ⇒ Case 1

! Maquiladoras and women on the US-Mexican border: a benefit or a detriment to occupational health?. Jasis M. and Guendelman S. in Salud Publica de Mexico. Nov-Dec 1993, vol 35. Nº. 6.

! This article examines the impact of work conditions on the health of women working in assembly plants known as "maquiladoras". A sample of 480 women residing in Tijuana and with similar low socioeconomic conditions was studied. The sample included 120 electronics workers, 120 textile workers and 120 women with no history of labor-force participation. These groups were compared on physical and psychosocial health outcomes, including depression, nervousness, functional impediments and sense of control over life. Data were obtained from interviews conducted in the communities where workers reside. Although high levels of depression and low sense of control over life was observed, maquiladora workers --particularly in the electronics industry-- suffered less functional impediments and nervousness than service workers. However, maquiladora workers were at higher risk of delivering infants of low birthweight.

⇒ Case 2

! Women who quit maquiladora work on the US-Mexico border: assessing health, occupation and social dimensions in two transnational electronics plants. Guendelman, S., Samuels s., Ramirez M. School of Public Health, University of California, Berkeley, USA. (PubMed Query: http://www.ncbi.nlm.nih.gov/).

! This cohort study of 725 women examined the health, occupational and social factors that contribute to quitting work in two transnational electronics maquiladoras (assembly plants) in Tijuana, Mexico. The estimated cumulative probabilities of quitting were 68% and 81% by 1 and 2 years of employment. After adjusting for other factors, women who had a history of smoking or surgery and those who returned to work after a paid leave due to illness were more likely to quit. In contrast, women with a history of chronic illness had lower quitting rates. The nationality of the company and the work

http://www.ncbi.nlm.nih.gov/

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shift also significantly influenced quitting rates, but demographic characteristics and health care visits did not have a significant effect. Women selectively leave maquiladora employment, often due to health-related events. The healthy workers effect is difficult to measure in a mobile population with high turnover.

1.4.3.4 Some Additional Lessons About Management of the Environmental and Health Implications Observed in Guadalajara

The following are some additional lessons that can be gathered based upon the experiences observed in Guadalajara: ! The regulatory and policy framework to address most of the environmental

and health problems associated with the electronics industry is quite developed. However, there is a lack of political will and the government lacks of trained personnel, equipment and other resources to reinforce the legislation. This proves that the existence of regulations is not a guarantee for the protection of human health and the environment. In general, the government does not have to limit itself to the definition of regulations and other things. It must also set aside enough resources to make sure the companies are in compliance with the law.

! The latter situation is aggravated by the fact that the companies that apparently show the worst performance are the small and medium size companies that supply the large industries. As mentioned before, these companies have become in charge of some of the most polluting processes previously done by the large high-tech manufacturers. This has increased the toxic dispersion and the difficulty to control it. In most of the cases, these small and medium size enterprises lack of good environmental practices, technology and know-how. The scarce resources that the government has make it very difficult to control their performance.

! This means that the government has had to rely on other means and strategies to make sure the performance of these companies improves. One of the strategies that have been used by the government is to obtain the participation and help from the large companies who can exert some influence on them and may be able to transfer technology, know-how, and can facilitate the development of their environmental management system.

! The power division and duty distribution among the three government levels (federal, state and municipal) generates a critical sense of confusion on who is responsible for what and who has certain information, etc. Furthermore, cooperation and communication among the corresponding environmental and health organizations of these three levels seems to be very poor, reducing the effectiveness of the enforcement of the law.

! The "Right-to-know" issue seems to be critical for other stakeholders to exert additional pressure on the performance and accountability of the high-tech industries and related companies. As it is now, in Jalisco and other parts of Mexico, the scarce information that exist concerning the environmental and occupational health performance of the industries remains between the government and the companies. Neighbors, NGOs and employees cannot access such information and thus are unaware of the details that are needed to stimulate actions.

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! The environmental partnerships developed among the high-tech companies seem to be very successful in bringing about new solutions for environmental problems and the exchange of technology and know-how. One example of this sort of partnerships is the Health, Safety and Environment Working Group integrated by 5 large high-tech manufacturers in Guadalajara.

! Industrial zoning is another hot issue. Not only the government has faced problems and complains concerning the geographic location of some high-tech companies within the metropolitan area of Guadalajara, but also new incompatibility problems have arose inside industrial parks, which are out of the scope of the government.

! The financial sector hasn't contributed in a significant manner to the improvement of the environmental performance of this industrial sector. Furthermore, the instability of the Mexican economy has reduced the usefulness and applicability of various financial support programs sponsored by international financial organisms.

! Depending on how the hazardous waste legislation is define, it can easily discourage and impede the development of an appropriate infrastructure.

1.5 Potential Negative Implications for Costa Rica

The analysis included in Section III and the lessons from other experiences with high-tech electronics industry confirm that there are serious threats to the environment and health of humans. What looks like a relatively clean and very attractive industry has proven to be a major concern from the environmental and human health standpoint. Costa Rica is no longer free from such threats. The proof is that there are around 30 companies manufacturing and assembling electronic components and consumer goods in the country, whose environmental and health implications are often ignored and/or neglected by government officials, the industrial sector and the public in general. This should draw the attention of many local stakeholder because it certainly implies that a number of environmental and health problems discussed in Section III are already a reality in the country. Nevertheless, the scale and nature of the negative environmental implications for Costa Rica will increase to unprecedented dimensions as the cluster develops greatly influenced by Intel's arrival. The following subsection includes a brief discussion and summary of the most relevant potential negative implications of this kind of industrial cluster in Costa Rica.

1.5.1 Summary and Prioritization of Potential Environmental and Human Health Impacts of the Evolving Industrial Cluster

As the cluster evolves and grows it is possible to expect a significant increase in hazardous and toxic materials and chemicals consumption, hazardous and toxic wastes generation as well as in water and energy consumption. Unless the necessary measures are taken into account, the increases mentioned before will imply a proportional increase in occupational health and safety problems and other related environmental adverse effects, similar to the ones described in Section IV. The following table (Table V.1) summarizes the primary concerns and the potential direct and indirect impacts. It also attempts to describe who would be affected by the

Section V - 81

unwanted externalities if they are not prevented, minimized or controlled in a proper manner. Table V.1 also presents a preliminary prioritization of the environmental and health aspects. However, since the high-tech electronics cluster in Costa Rica is still in the early stages of its development process, it is quite difficult to forecast what will be the relative weight or importance of each environmental/health issue. Therefore, the impacts rating and classification shown in the Table V.1 is based upon the opinion of various "experts" in environmental issues and representatives of various organizations who are acquainted with the electronics industry, support businesses and their related environmental concerns in various parts of the world. These people and organizations are as follows: ! Mai Te Cortez, Colectiva Ecologista de Jalisco ! Walter Ramirez, Center for Environmental Studies, University of Guadalajara ! Oswaldo Nuno, Center for Environmental Studies, University of Guadalajara ! Nazira Gonzalez, UNA, Costa Rica ! Julio Cesar Rojas, UNA, Costa Rica

The time response and spatial considerations of the impacts included in Table V.1 depend on too many factors which are not possible to consider herein. Nevertheless, where and when the cluster will cause impact is not the main concern of this study. The critical issues under analysis are the negative implications that Costa Ricans can expect as a result of the development the emerging high-tech electronics cluster.

1.5.1.1 Hot Spots

Based on the categorization presented in Table V.1, it is possible to conclude that the most important environmental aspects that demand close attention by the cluster's stakeholders are: ! Chemicals use. ! Chemicals storage and handling. ! Hazardous waste generation and handling. ! Air emissions. ! Wastewater emissions. ! Water and energy consumption.

Furthermore, the primary potential impacts that deserves higher attention are: ! Acute and chronic health effects (from occupational hazards, EMF impacts,

etc). ! Groundwater pollution. ! Soil contamination. ! Air pollution from both local and global scope pollutants. ! Surface water pollution. ! Groundwater depletion.

Section V - 83

TABLE V.1

SUMMARY OF MAIN POTENTIAL ENVIRONMENTAL AND HEALTH ASPECTS AND IMPACTS OF THE EVOLVING ELECTRONICS CLUSTER

Potential Impacts Stakeholders that may be affected by the impacts

Environmental/Health Aspects

Chro

nic H

ealth

Effe

cts

Acute

healt

h effe

cts

Fir

e and

explo

sions

Surfa

ce w

aters

pollu

tion

Loca

l/regio

nal a

ir po

llutio

n effe

cts*

Grou

nd w

ater

conta

mina

tion

Grou

nd w

ater d

eplet

ion

Soil c

ontam

inatio

n

Land

scap

e alte

ratio

ns

Oz

one l

ayer

dep

letion

Glob

al W

armi

ng

Loca

l and

regio

nal

neigh

bors

Loca

l and

regio

nal

busin

esse

s and

indu

stries

Gene

ral p

ublic

Wor

kers

Regio

nal a

nd lo

cal

agric

ultur

al ac

tivitie

s

Othe

r phy

sical

prop

ertie

s an

d lan

d

Air emissions M M H H M D D I I I I

Wastewater discharges M M L H H H D D I I I

Solid waste (conventional) L M M M I

Generation of hazardous and toxic wastes (liquid, solid and semi-solid) H H H H H H D D I D I I

Storage and handling of toxic and hazardous chemicals and wastes M M H H H H D D I D I

Energy consumption M** H M** I

Water consumption H D D I D

Toxic and hazardous materials and chemicals use H H H H H H I I I D

Working environments (i.e. clean rooms) M M L D

Electromagnetic fields H L D D I D I

* Refers to the formation of photochemical smog, acid rain and the consequent soil and water acidification problems ** Depends on the source of power Potential impacts rating: H = high impact M = moderate impact L = low impact Effects on stakeholders: D = direct I = indirect

Section V-84

1.5.1.2 Priority Flows

It is quite evident that the environmental concerns of this type of industrial cluster are directly dependent on the type and scale of materials, energy, water and waste flows. As mentioned above, the development of the high-tech cluster under analysis will generate new flows of materials, energy and wastes. In general, materials, wastes and energy flows could be classified in the categories shown in Figure V.1. Again these flows will be created and/or increased as the high-tech electronics cluster evolves. By looking at the cluster as a "black box" as in the following Figure V.1 it is possible to observe that whatever goes "in" will go "out" in the form of wanted products or unwanted wastes. Thus, if the cluster requires hazardous inputs, it will also produce hazardous outputs. In this regard, it is important to note that from the environmental and health standpoint, the relative importance of each flow varies considerably. Thus, not all the material flows should receive the same kind of attention by cluster actors and by the policy makers interested in protecting the environment while supporting the competitiveness of the evolving cluster. Following this line of thinking and considering the expected volume, value, nature and relevance for the cluster, the flows that pose the greatest environmental, health and economic concerns are: (i) inputs and outputs containing hazardous and toxic substances (chemicals and heavy metals bearing materials), (ii) plastics, and (iii) energy. Table V.3 presents a brief description of the flows content, their associated concerns and the actors involved. In addition, Figure V.2 illustrates an example of the flow of a common material that poses both great environmental and health concerns: lead. The figure depicts the most common ways of how lead flows through the cluster and its fate. It does not take into consideration local actors involved in recovering and recycling lead, which will eventually integrate the evolving cluster. Some of the existing electronics companies sell the lead wastes to foreign companies that can make other lead solder products for other manufacturing operations that do not require a high quality standard. The figure also facilitates the understanding the complexity of the materials flows. It may also help to provide a basic idea of who shares responsibilities for the potential impacts and who may have some level of control over the occurrence, volume, direction and fate of lead flows.

Section V-85

FIGURE V.1

CATEGORIZATION OF WASTE, MATERIALS AND ENERGY FLOWS WHICH WILL BE AFFECTED BY THE EVOLVING CLUSTER

It is evident that the greater the volume of flows the greater the associated environmental and health impacts will be. Thus, the immediate question that arises is how to avoid, minimize, control or substitute such flows for others that cause less environmental impacts. There are several possible answers to this question. Some of them are mentioned below in the discussion of the strategies and recommendations to increase the eco-efficiency of the evolving cluster.

High-TechElectronics Cluster

Energy(electrical powerand fossil fuels)

Hazardous andToxic Substances

(i.e. chemicals andheavy metals bearing

compounds)

Plastics(thermoplasticand thermoset)

WaterMetals

(heavy, precious non-precious)

Ceramics

Air emissions

Wastewaterdischarges

ConventionalSolid Waste

Hazardous andtoxic liquid

waste

Electronic Products(containing

metals, ,plasticsand ceramics)

Solid and semi-solid hazardousand toxic waste

Others(organic and

renewable resources)

Heat

Section V-86

TABLE V.2

PRIMARY FLOWS INFLUENCED BY THE EVOLVING HIGH-TECH ELECTRONICS CLUSTER

Flow Environmental Risks and Health Aspects Actors Involved

Raw materials, wastes and emissions containing hazardous substances like:

• CFCs, dioxins and furans

• Hg, Pb, Cd, As • Zn, Cr, Ni, Sn, Cu,

Sb, Be, Th, Al • Brominated organic

compounds • Chlorinated solvents,

acids, inks, oils and other chemicals

The health and environmental effects of most of these substances are described in detail in Appendixes V and VI. Furthermore, Appendix VII includes a brief description of the four major elements (Hg, Cd, Ps and As) as well as a description of the nine minor hazardous substances (Zn, Cr, Ni, Cu, Sb, Be, Th and Al) which are normally used by the electronics industry. Normally, chronic and acute health effects are the result of human exposure to these substances. They are also toxic to animals and other living organisms. Some are persistent and may accumulate in living organisms and enter the food chain affecting the human health in the long run.

• Process chemicals manufacturers

• Distribution companies • Electronic components

manufacturers • Waste handling companies

(i.e. chemicals treatment and recovery businesses, metals recyclers, landfills, public wastewater treatment systems, etc)

• By-product users (those companies that may do something useful with the waste stream and are not necessarily part of the cluster under analysis).

Plastics Previous studies reveal that the electronic goods are very heterogeneous and the proportion and types of plastic both vary not only from one product category to another, but also among similar products manufactured in different years (ENEA 1995). Some of the most commonly used resins are polystyrene (PS), copolymer acrylonitrile butadiene styrene (ABS), polymeric vinyl chloride (PVC), polypropylene (PP), polyethylene (PE), polyamide (PA), etc. Many other substances such as antioxidants, photostabilizers, metal deactivators, lubricants, binders, sealers and reticulants are added to the resins and contribute to the final composition of a plastic component. The most common critical materials added to plastics are organometallic alloys and heavy metals (i.e. Pb, Cd, etc), included in stabilizers and pigments, diazoic dyes and plasticizers containing phosphoric esters. Flame-retardant additives based on organochlorides, organobromides, phosphoric esters and derivatives, inorganic salts (i.e. antimony trioxide

d i t l b t ) d i i i i t

• Plastic resins distribution companies

• Blenders of plastic resins • Electronic components

manufacturers • Waste handling companies

(i.e. plastic recyclers, energy recovery companies, landfills, etc

• By-product users (those companies that may do something useful with the

Section V-87

and various metal borates), and organic-inorganic mixtures. Concerning flame-retardants, most of the reactants that have been used for that function are polychlorinated paraffins and polybromodiphenyl derivatives. One of the most common compounds is tetrabromobisophenol-A (TBBA). According to the Silicon Valley Toxic Coalition, methyl bromide, a pesticide classified as category I acute toxin and a potent ozone depletion substance in the US is a byproduct of TBBA. This gives another idea of the environmental concerns associated with plastic additives. Further environmental and health effects of plastics and substances contained in plastic products are presented in Appendixes V, VI and VII. Plastics also represent a solid waste management problem and the increase in plastic flows could aggravate the critical municipal solid waste management situation that prevails in the country. If incinerated, plastics release to the atmosphere some of the toxic substances that are part of them and may facilitate the formation of others.

plastic wastes and are not necessarily part of the cluster under analysis).

Energy (electrical power)

Disregarding the environmental problems associated with electricity generation, the distribution of power is a hot issue that has already generated multiple discussions in Costa Rica since the arrival of Intel required the installation of high-voltage transmission lines and new power substations. Based upon many epidemiological studies around the world, the main concerns associated with the distribution of energy are chronic health effects such as childhood leukemia and other cancers due to the generation of electromagnetic fields (EMFs).

• Power utility companies involved in the business of energy distribution

Section V-88

FIGURE V.2

DIAGRAMATIC REPRESENTATION OF LEAD FLOWS WITHIN THE EVOLVING CLUSTER

Mfg. of LeadSolder Pastes

Mfg. OtherLead Solders

Mfg. ofElectronic

Components

PCBAssembly

Companies

Mfg. ofElectronic

Components

ElectronicsConsumer Goods

Assembly

Mfg. of LeadSolder Pastes

Mfg. OtherLead Solders

SolderDistributors

Solid WasteManagement

LocalHazardousWaste

Management

HazardousWasteManagement

Mfg. of leadcompounds

Notes: The figure assumes that all lead-based solders enter the cluster through a distributor and are not imported directly by the users In order to simplify the picture, the actors involved in lead recovery and recycling are not shown, however, they are expected to integrate the cluster as it evolves and as the quantities of waste bearing lead increase. The lead that reaches the local environment may come from all actors involved.

Exports

Exports

Local Environment

airemissions Waste

Water

Solid andSemi-solid

WasteEvolvingCluster in

Costa RicaAlready existing flows

Evolving flows

Section V-89

1.5.2 Preliminary Assessment of the Ability of Costa Rica to Meet Challenges of the High-Tech Industrial Development

If the potential negative implications of the high-tech cluster development discussed below are managed correctly, there is no reason to believe that the negative externalities might be kept to a minimum. However, can a country like Costa Rica bypass some of the heavy polluting development phases that the high-tech development may bring in the transition to a modern industrial society? Thus, immediate question that arises in the light of the potential negative impacts is whether or not it is possible to prevent and/or minimize them. Secondly, it is important to analyze whether the country fostering such type of industrial development, in this case Costa Rica, is prepared to handle the potential negative implications. It also becomes relevant to identify the possible roles that some actors and stakeholders could play in this endeavor (see Part II of this document). Therefore, the following subsection includes a brief analysis of the ability of Costa Rica to face and minimize the potential negative implications discussed above. It includes a brief discussion of the most relevant policy and regulatory failures in various fields, which constrain the capability of the country to prevent negative implications and to ensure appropriate environmental responsibility of the companies that will integrate the evolving cluster. In addition, other aspects such as the availability of proper and sufficient environmental technology, information, know-how and infrastructure are discussed below.

1.5.2.1 Policy and Regulatory Failures

a. Occupational Health

The legislation concerning risks at work and occupational health was developed in 1984 and only a few articles, specifically related to the sanctions, have been modified since then. In general terms, this legislation is very lax. The existing regulation fails to address many of the potential problems that may affect the health of the workers. As an example, there are no technical regulations concerning the human exposure limits to gases used in many electronics industries and related businesses. Although in Costa Rica there are some technical norms that address many of the potential sources of health and environment related problems in the work place, they do not have any value from the legal point of view. In general, the occupational health norms, including the one that covers the limits for human exposure to toxic gases developed in 1997, have been defined by the National Institute of Technical Norms (INTECO) upon request of the National Insurance Institute, the state owned insurance company (INS). This last institution is the only one that can exert some pressure on the companies to follow the technical norms as a prerequisite for being eligible to the obligatory workers' health insurance policy. However, the INS has limited resources and tools to monitor and enforce the implementation of the technical norms that exist.

Section V-90

In a way, the current legislation in Costa Rica favors more the employer than the employee. For instance, if an employee presents a job-related chronic disease, he or she must prove before the court that the illness was acquired in the work place. This of course has to be validated by the authorities, which lack of sufficient and well-trained personnel. In contrast, the corresponding law in Mexico places the burden of proof on the employer who is guilty of any incident until it demonstrates the contrary to the authorities. Unfortunately, a common behavior among employees is to avoid suing their employers in the light of potential measures against them or the fear to loose the job they need to support their families. The latter situation is aggravated due to the fact that most of the time the employees do not know to what type of risks they are exposed to, and ignore the source of their illnesses. At the same time, employees very seldom associate their health problems to their work conditions. Furthermore, the cause-effect relation in the case of chronic health effects is particularly difficult to assess. As a result, in countries like Mexico and Costa Rica, workers with chronic diseases are most of the time assisted by the national social system, which is basically free and very accessible. According to Mr. Alberto Pinto from the National Council on Occupational Health, the services provided by the social system are reactive and oriented towards "effect-pill" instead of "cause-effect", meaning that the causes are seldom analyzed and the medical analysis focuses on the symptoms and the possible cures. In the end, the companies responsible for many of the health related incidents do not cover the social costs of the externalities and the working conditions remain the same. Mr. Pinto claims that in Costa Rica there is a very limited expertise in the area of Occupational Health and there is a great lack of familiarity with the health hazards associated with the high-tech electronics industries. According to Dr. Julio Rojas, besides the lack of resources to prevent the negative health consequences and the reactive nature of the social system and the occupational health legislation, the social system infrastructure is not prepared to handle the potential negative implications from the high-tech industries. He adds that the country is very weak in the field of epidemiology and toxicology and that additional expertise in these fields is definitely required. The are very few educational programs and courses in the field of occupational health. Moreover, in most of the technical and administrative educational programs, the occupational health issues are missing (Pinto, CSO). Concerning occupational health incidence studies, the National Institute of Insurance is the one that keeps the files of all the job-related illnesses and diseases in Costa Rica. There are no serious studies carried out for specific industrial sectors with the exception of the banana industry, which has presented several problems due to the use of pesticides. Many of the files have no medical value because the incidents were not assessed properly by a physician. Moreover, the information available is not readily accessible and is basically useless for decision making.

b. Hazardous Waste

As mentioned in Section IV, the contribution of the electronics industry in terms of hazardous waste generation may become quite important in comparison to the

Section V-91

contribution of other industrial and service sectors. In this regard, the most evident proof of the critical situation concerning hazardous wastes in Costa Rica is the fact that the corresponding regulation was defined just a few months ago (May - June1998). The new regulation defines the characteristics of the hazardous wastes, their codes and establishes the limits based on substance content to determine whether or not certain residue is hazardous. The regulation also sets the guidelines for proper management and handling of the residues. In addition, it sets the responsibility on the generator who should strive to minimize the hazardous wastes and must inform the government and keep information about the sources, type and quantity of wastes. The regulation also defines 7 types of treatment that can be applied to the wastes. Exportation or sending the waste to another country is one of the alternatives, which is only allowed for proper treatment and disposal. The new regulation might be considered as a good start but it is far from being complete and clear. In general, if the regulation is subject to a careful analysis, one can conclude that many necessary aspects are missing and that some statements are a bit misleading or confusing. Undoubtedly, it will take time before the industrial sector gets familiar with the new regulation and can follow the guidelines. Similarly, the government will have to develop the capacity in terms of resources and the technical expertise to enforce this regulation. Also, the government must gather proper data about the sources, properties and quantities of hazardous wastes generated in Costa Rica. The information available in this regard is very scarce and not representative of the real situation. Unfortunately, the definition of the hazardous waste regulation does not seem to be accompanied by other clear policies and initiatives aiming to minimize and prevent the generation of this kind of residues, and to foster development of an appropriate recycling, treatment and disposal infrastructure within the country. In addition, technical regulations concerning the construction and operational conditions of hazardous waste handling facilities ought to be developed to guarantee that the infrastructure that might be created in the country meets the most environmentally safe standards.

c. Atmospheric Pollution

In short, there is no regulation that applies to air emissions in Costa Rica. There is only a proposal, which is being developed by the Ministry of Health. This is perhaps one of the weakest points of the environmental regulation of Costa Rica.

d. Tariffs

Some tariffs placed on the consumption of natural resources such as water and on some public services like municipal solid waste management do not take into account the corresponding environmental externalities. In fact, they actually encourage poor efficiencies and the over exploitation of valuable resources. For example, when a company obtains its water from the utility company it only pays for the service of extraction, treatment and distribution of the resource. Moreover, if the company decides to extract water from a well, it only pays a representative administrative costs defined according to a formula that considers the type of water use

Section V-92

and the flow to be consumed but the final cost of water is insignificant (MINAE, Water Department). A similar situation occurs in relation to solid waste management. The majority of the solid waste dumpsites available in the country are managed by the state. The government defines the tariff that municipalities should charge to industries and residents for collecting and disposing the solid waste. Currently the cost of disposal of 1 Ton of conventional solid waste is approximately US$ 8 which is almost insignificant and does not consider the environmental costs, it only takes into account the administrative and operational costs of the system (ARESEP). The relatively low cost of water (especially groundwater) and the low cost of solid waste management discourages many initiatives aiming to save this scarce natural resource and to reduce the waste streams going to conventional dumpsites respectively. This situation should be of great concern in the light of the high-tech electronics industries are big consumers of groundwater and generate lots of solid waste.

e. General Aspects

Other general aspects of the policy and regulatory framework that may constitute a weakness before the potential negative implications associated with the development of a high-tech electronics cluster are as follows: ! There is a lack of awareness and understanding in the general public and

among the public employees and high-tech workers concerning the environmental implications associated with high-tech electronics industries.

! Economic growth is the primary concern among the politicians, even over environmental and human health protection. It is possible to observe a lack of political will to address the negative implications as they should. Meanwhile, the high-tech companies receive all the high-level support needed for their successful and fast arrival to the country.

! The latter is aggravated by the fact that there is a lack of resources for proper enforcement the existing regulation and the constant and confusing changes of institutional duties. This is the case of the hazardous waste regulation, which was defined by the Ministry of the Environment and Energy (MINAE) of the previous administration, who according to the regulation has a strong responsibility over the enforcement. However, after the administration changed the responsibility seems to be on the hands of the Ministry of Health who is actually trying to integrate this regulation into a more broad and general law or wastes. The lack of communication and coordination between these two institutions contributes to the problematic situation.

! There is a general ambiguity in the environmental legislation. Also, the poor design of environmental regulations and policies and scarce resources to enforce them (lack of staff) reduces the possibility to generate changes in environmental performance of the business (Pratt, 1998).

! In general, the environmental legislation is very reactive and has a strong focus on controlling the impacts and not the sources.

Section V-93

! The government has very little control over the use of hazardous substances and the occupational health problems associated with them. Monitoring of these two aspects is extremely poor and the information is not readily available for decision making.

! The example of Intel CR and others demonstrate that environmental issues have very little weight on industrial zoning.

! There is a lack of experience in valuation of natural resources in Costa Rica which limits the scope of the sanctions in cases where regulations are violated and accidents take place.

1.5.2.2 Availability of Adequate Environmental Technology and Infrastructure

In a few words, Costa Rica is not ready to handle the hazardous wastes that this new cluster and other industrial activities may generate. There is not technical expertise and experience in this field. The latter includes sampling and testing wastes to determine their hazardous properties. If the situation concerning conventional industrial and municipal solid waste has not been solved despite the fact that this issue has been on the top of the government's agenda for the past 8 years, who can assure that the hazardous waste won't become a problem at all?. And how about electronics waste? Costa Rica has no infrastructure for handling electronics waste despite the amount of electronics imported to the country and the fact that it is one of the countries that has more computers per capita in the continent. Costa Rica has not even been able to develop a proper infrastructure for handling the conventional solid waste. Many of the existing dumpsites are already out of capacity and continue to be used. Indeed no one wants the garbage in its backyard and this will be the case with hazardous waste regardless of the type of facilities (i.e. treatment, accumulation or final disposal). The conventional recycling infrastructure available in the country is still very limited and very informal. The recycling industry is particularly affected by the low tariff place on the disposal of solid waste. Consequently, this industry is often begging for incentives to reduce their costs and to increase their capacity. In general, the pollution prevention and pollution abatement technology and monitoring infrastructure available in Costa Rica is very scarce.

1.5.2.3 Availability of Information and Local Know-How for Environmental Protection

In general, very few people are familiar with the high-tech electronics industry and the associated environmental and human health concerns. There is a lack of sources of information and technical advice for the prevention, minimization and control of the environmental aspects, especially associated with the electronics industry. Not even the local NGOs have the appropriate knowledge and the resources to demand enough environmental responsibility from this type of industries.

Section V-94

2. FACING THE POTENTIAL ENVIRONMENTAL AND HEALTH NEGATIVE IMPLICATIONS OF THE HIGH-TECH FEVER: THE ROLE OF CLUSTER ACTORS AND STAKEHOLDERS

2.1 Response Framework

The establishment of a high-tech industry has potential social and environmental problems which stakeholders and policy-makers ought to be aware of. It is necessary to define a series of strategies and recommendations aiming to prevent and minimize such problems while ensuring a high level of competitiveness. Therefore, this section includes a brief description of various environmental strategies, approaches and concepts, which can help to identify possible synergies among the cluster actors aiming to facilitate environmental improvements and to increase the overall level of eco-efficiency of the cluster. The environmental strategies, approaches and concepts described herein are based on three key issues, which help to understand the applicability of such strategies. These issues are: ⇒ Most of the environmental and health related problems caused by high-tech

electronics industries and related companies have to do with the nature (type) and quantity of materials and energy flows. Thus, four different environmental approaches should receive higher priority when seeking to define policy recommendations. These approaches are the following (in order of priority):

! Substitution of environmentally harmful substances and materials. This implies motivating to implement cleaner alternatives wherever technically and economically feasible.

! Reduction of resource consumption, including energy, water, harmful substances and other resources.

! Re-use and recycle resources as much as possible. This includes the smart and convenient utilization of valuable by-products instead of disposing them and treating them as non-valuable wastes.

! Proper disposal of wastes, specially hazardous wastes that despite the efforts to substitute, reduce and re-use they still have to be disposed following adequate standards.

⇒ The solutions to the type of problems described in previous sections demand sufficient cooperation, partnerships and joint actions among the different cluster actors and stakeholders. Cluster actors must also recognize their role and position within the cluster and the different product chains. In this way, they might be able to understand the possibilities they have to influence other's performance and to cooperate with other actors.

⇒ It is nearly impossible to manage environmental problems at cluster scale and it is not wise to speak about environmental improvements or environmental performance improvements unless certain key aspects are monitored properly and continuously.

Section V-95

Following these three key issues, the strategies explained below may lead environmental analysts, policy makers and business people to look beyond the specific characteristics and nature of individual firms and consider them as part of a broad industrial system. The understanding of the interactions, materials, energy and information flows within industrial systems is considered crucial in order to facilitate further developments with respect to the protection of the environment. In addition, the role of the industries and service companies in reducing the environmental burdens throughout the product life cycle is subject to analysis since corporate entities are considered key actors. Although there are many strategies for resource conservation and waste minimization, this response framework gives priority to waste prevention and reduction strategies. Nevertheless, it may not be possible to avoid the generation of all type of wastes, thus reuse, recovery and recycling practices should be encouraged as well (Coté et. al. 1994).

2.1.1 Eco-Efficiency

First of all, it is important to define the concept of eco-efficiency which is often regarded as a management philosophy that encourages businesses to become more competitive and innovative while increasing their environmental responsibility. It is also considered as the primary way in which business can contribute to the concept of sustainable development (WBCSD, 1995). Eco-efficiency implies producing more from less, reducing wastes and pollution and using fewer energy and raw materials resources. It encompasses process efficiency as well as product enhancement to increase the service intensity of the goods. The concept of eco-efficiency was first conveyed by the Business Council for Sustainable Development (BCSD) in the well known book "Changing Course" written by Stephan Schmidheiny in 1992. Later in 1993, it was further defined as the "delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological impacts and resource intensity throughout the life cycle, to a level at least in line with the earth's estimated carrying capacity" (UNEP-WBCSD, 1994). The WBCSD mentions seven success factors for eco-efficiency, which to some extent could help as indicators of environmental improvements within the industrial cluster under analysis. These factors are14: ! Reduction of the material intensity of goods and services. ! Reduction of the energy intensity of goods and services. ! Reduction of the toxic dispersion. ! Enhancement of material recyclability. ! Maximization of sustainable use of renewable resources. ! Reduction of material durability. ! Increase of the service intensity of goods and services.

14 UNEP-WBCSD 1994

Section V-96

2.1.2 Cleaner Production

Cleaner production (CP) is defined as "the continuous application of an integrated preventive environmental strategy applied to processes, products and services to increase eco-efficiency and reduce risks for humans and the environment" (UNEP-WBCSD, 1994). CP captures the idea of pollution prevention and reduction at the source through process changes instead of end-of-pipe approaches. CP implies changing attitudes, responsible environmental management, creating conducive national policy environments and evaluating technology options. Just like the concept of eco-efficiency, CP represents a win-win situation for businesses since the actions resulting from the implementation of the concept generally make "business sense" thanks to a positive gain in the bottom line. In general, Cleaner Production applies to (UNEP-WBCSD 1994): ! Production processes: conserving raw materials and energy, eliminating toxic

raw materials and reducing the quantity and toxicity of all emissions and wastes ! Products: reducing negative impacts along the life cycle of a product, from raw

materials extraction to its ultimate disposal ! Services: incorporating environmental concerns into designing and delivering

services

2.1.3 Industrial Ecology

IE it is a rapidly growing field of science that allows to examine local, regional and global flows of materials and energy in products, processes, industrial sectors and economies (Lifset, 1997). IE is defined as follows:

"The design of industrial infrastructures as if they were a series of interlocking man-made ecosystems interfacing with the natural global ecosystem. Industrial Ecology takes the pattern of the natural environment as a model for solving environmental problems, creating a new paradigm for the industrial system as process" (Tibbs, H., 1993).

The concept of Industrial Ecology is founded upon an analogy between an industrial system and a natural ecosystem where the first one should function as the second one. The "ecology" within and industrial "ecosystem" is defined by flows of materials and energy as well as information among the firms comprising the industrial ecosystem. Sagar and Frosch (1997) add that the industrial production units do not necessarily have to be in close spatial proximity to each other. Furthermore, IE is rooted in "system's analysis". It treats environmental problems as "systematic problems" and thus require a systems approach to recognize the relations between industrial practices/human activities and environmental/ecological processes (NPPC, 1994).

Section V-97

2.1.3.1 IE Goals

In general terms, IE seeks to promote sustainable development, to protect ecological and human health and to achieve intergenerational and intersociety environmental equity. IE aims to change the current linear nature of our industrial system, where raw materials are used and products, by-products and wastes are produced, to a cyclical system where the wastes are then used again as energy or raw materials for another product or process. IE seeks to identify and trace the flows of energy and materials through various systems. The latter is also referred to as "Industrial Metabolism" originally developed by Robert Ayres in 1989. The concept of industrial "metabolism" is considered a precursor to the IE approach, which has dealt more with tracing the flow of materials through the economy (Sagar and Frosch, 1997). The mass balancing of these flows and transformations can help to identify the associated negative environmental impacts on natural ecosystems (NPPC, 1994).According to Sagar and Frosch (1997), IE should be perceived as an analytical approach, instead of a prescriptive one, that can be applied in the context of environmental and other goals. They consider as one of the primary objectives of IE the development of a new paradigm of operation for industrial systems to allow them to close materials loops, and, ultimately conserve materials and energy and safeguard the environment. In addition, following a systems perspective applied to the analysis of the complex industrial ecosystems may facilitate the understanding of the interactions between the various entities, and their overall interactions with the natural environment.

a. Industrial Ecosystem

A natural ecosystem is defined as a community of different species interacting with one another and with the chemical and physical factors making up its non-living environment (Miller, 1997). Within the Industrial Ecology framework, the analogue to a natural ecosystem is an "industrial ecosystem". It refers to a network of industries and other organizations that interact by exchanging and making use of byproducts and/or energy. Coté and Smolenaars (1997) comment that natural ecosystem is characterized by the existence and maintenance of food chains, webs and cycles. Analogously, in an operating industrial ecosystem, product and decision-making chains are of great importance. According to Lowe (1997) from Indigo Development there are two main line of efforts to create industrial ecosystems, one considers the industries located within boundaries of a specific industrial park or estate and the other one considers the industries in a much broader space like a municipality or a region.

2.1.3.2 IE General Approaches

One of the goals of IE mentioned above is to close materials loops or develop cyclical industrial systems. In this regard there are some strategies generally recognized. For example, one focuses on products themselves through product policy, life-cycle assessment, design for environment and product-life extension. Action in this mode is independent of location and tends to focus within a company or industry. The second IE strategy seeks to optimize materials and energy flows among facilities within specific regions or industrial ecosystem (Lowe, 1997).

Section V-98

FIGURE VI.I

BY-PRODUCTS EXCHANGE

Source: US EPA

2.1.3.3 IE as an Intervention Strategy

The concept of IE could be applied within a network of existing industries whose wastes may be exchanged among each other. This type of practices commonly referred to as "industrial symbiosis" or "by-product synergy" may result quite profitable while being convenient for the environment. Many successful examples of this approach exist around the world but the implementation in industrial complexes may be hindered by technical, social, economical and other factors. This approach could be considered as an intervention strategy since it implies fixing a "negative situation" that already prevails or making good things out of something that is valuable. One of the main criticisms of this type of practices is that it may promote "technological stagnation" of production processes since there might not be any incentive to minimize or avoid waste at their sources.

2.1.3.4 IE as a Development Strategy

As opposed to the intervention perspective, IE could be applied to promote the formation of ecologically compatible industrial clusters. Wallner (1997) states that a particular feature of these clusters is the active networking on the basis of materials and energy flows. Wallner adds that the materials and energy networking of enterprises will generally make environmental sense only in certain cases (i.e. depending on the process units to be networked). He warns that the company clustering strategy (eco-

Section V-99

cluster formation) for the purpose of sustainable development should be pursued in an extremely selective manner. In this context, Lowe (1997) considers that the existence of a major anchor tenant that may attract other firms to be its suppliers or customers due to its power and prestige is very convenient. This anchor could help to develop the by-product exchange practices and to define the search for the next round of companies capable of using its by-products or simply supplying it with theirs. Indeed, the formation of regional and local network of industries (more often called eco-industrial parks) is another application IE.

2.1.3.5 Policy Implications

The implementation of by-product exchange practices and the formation of eco-industrial parks or "industrial ecosystems" may require the modification of regulations as well as permitting and zoning policies (Lowe, 1997). Politicians and regulators must begin to apply this new kind of integrated industrial development perspective. In general, the regulatory and policy framework should allow some flexibility and encourage companies to meet performance goals. It should also facilitate the attraction of companies which can fill niches and complement other businesses. Furthermore, the application of economic instruments is recommended to discourage waste generation and pollution (Coté and Cohen-Rosenthal (1997).

2.1.4 Product Chain Management

According to a recent study conducted by researchers of the International Institute for Industrial Environmental Economics, the National Consumer Center of Finland and the Helsinki School of Economics (1998), Product Chain Management (PCM) is a an evolving policy concept originally developed and employed in the Dutch environmental policy. The study reveals that "product chain approach" focuses on actors at the various stages of a product's life cycle (i.e. raw materials extraction, manufacturing of finished goods and waste management). The PCM concept recognizes the importance and role of the actors in controlling the physical substance and energy flow at different stages of the chain and also in influencing each other through the product range that they offer, the information that they provide and their purchasing requirements and decisions. The environmental problems are considered as the result of the flow of materials and products through the economy and not by the actions of individual point-source polluters. Therefore, the environmental evaluation of suppliers is becoming quite common and is included in environmental policies and management practices. This environmental approach or strategy assumes the presence of an organization that is able to control or to at least influence the flow of materials. Based on the results obtained in the study cited above, the "chain manager" must have a better understanding of the way that the other actors behave and make decisions. The decision of a "strong" actor could notably influence the possibilities for others to reach environmental goals. In addition, the exchange of environmental information between product chain actors is important in order to define what environmental aspects need to be highlighted and to link these aspects to market transactions.

Section V-100

As opposed to life cycle assessment or substance flow analysis, the product chain approach goes beyond the physical material flows and considers the decision-making process of the actors involved, which may lead to cooperation among the various actors. PCM considers the actors as policy partners that need to accept and actively implement the policy measures agreed upon in order to achieve environmental goals (Pripp and Thidell et. all, 1998). The study mentioned above considers various factors that influence the success of environmental improvements that could be obtained through the PCM approach. These factors are: ! The level of consensus on environmental goals and priorities in the product

chain. ! Systems for collecting environmental information about products along their life

cycle and passing this information onward to other product chain actors. ! The level of demand for environmental improvements, and the effectiveness with

which it is passed on by actors in the supply chain. ! Actors' views of their roles, responsibilities and abilities in environmental

improvement. ! Actors' abilities and willingness to cooperate with one another on environmental

issues.

2.2 Recommendations for Action: The Role of the Actors of the Evolving Cluster and the Stakeholders

This final section includes a series of recommendations for the different stakeholders of the evolving high-tech electronics cluster, aiming to apply some aspects of the strategies described in the response framework described in the previous section. These recommendations also seek to ensure proper environmental performance and enough environmental accountability of the members of the evolving cluster. The recommendations also take into account the experiences observed in other places of the world, where similar type of high-tech electronics clusters have been developed.

2.2.1 The Role of the Government

⇒ In general, the government should be involved in the development of local environmental know-how and infrastructure, in the establishment of information sources as well as in the definition of a number of policies and regulations that promote pollution prevention before pollution control and ensure proper environmental accountability of the potential polluters. The following are some of the actions that the government can implement:

! Develop an appropriate system for monitoring of human and environmental impacts. This should focus on, but not be limited to the most important environmental and health impacts described in Section V (i.e. groundwater contamination and draw-down, chronic occupational health effects, etc)

Section V-101

! Set aside resources for the continuous research and development regarding the short and long term environmental, human health and social consequences of the negative implications of the evolving cluster

! Establish obligatory and/or voluntary programs for epidemiology vigilance and proper monitoring of work place hazards.

! Implement a system for proper monitoring of toxics dispersion. This should include proper measurement and control of the consumption and the use of hazardous substances respectively. In addition, the government should keep close attention to the generation of hazardous wastes and maintain a good and updated data base of the sources and fate of the waste streams. This information should definitely be accessible to the general public.

! Establish a baseline reference concerning chemicals use and the generation of hazardous wastes in order to measure the impact and contribution of the development of the high-tech electronics cluster in the country.

! Utilize or promote the use of high-tech tools such as geographic information systems to analyze both toxic dispersion and environmental and health impacts and make the corresponding statistical correlations between the sources and the impacts.

! Set aside resources and implement proper education and training programs for governmental staff, to ensure that they are thoroughly knowledgeable about the technical processes, materials used and associated health and environmental implications, so they become aware of the reality surrounding the high-tech electronics industry.

! Improve the existing policy framework and control concerning hazardous substances. As a general rule, the "substitution principle" should be an important part of this policy framework, making the companies responsible for using less toxic substances wherever possible and feasible.

! Support and facilitate the development of CP clearinghouses and the execution of demonstration projects, especially involving small and medium size enterprises who often lack of resources and technical expertise to address the environmental issues.

! Strengthen the environmental and occupational health legislation starting by the elimination of the existing regulatory and policy pitfalls discussed in Section V, especially those concerning occupational health, air pollution and hazardous wastes.

! Facilitate the development of an appropriate hazardous waste management infrastructure, especially focusing on proper accumulation, treatment and recycling activities through the implementation of fiscal policies co-investing with the private sector. In addition, the government should gather and facilitate the information concerning hazardous waste generation, which is essential for the analysis of infrastructure investments.

! Define appropriate contingency plans and develop the environmental remediation expertise within the governmental staff.

! Strengthen the local capacity in epidemiology and toxicology by setting aside funding for research and the development of educational programs in coordination with the academic sector.

Section V-102

! Review and correct the tariffs placed on certain resources and services. If the costs of certain resources such as energy and water and some services such as solid waste management are neglectful, the users do not have an incentive to conserve such resources and to reduce the amount of wastes sent to the municipal waste stream. Thus, the government should define proper tariffs for this kind of resources and public services taking into account the environmental externalities associated with them.

! Establish voluntary waste minimization and environmental management programs which involves and integrates large manufacturers as well as medium and small size companies (industries and services) and their suppliers

! In cooperation with appropriate branch organizations, the government should award in public those high-tech electronics companies that are best-in-class concerning environmental performance and the integration of their suppliers into their environmental management system.

! Ensure that new companies establishing operations in the country bring environmentally efficient production technologies and infrastructure.

! Oblige large high-tech multinationals to meet their corporate standards with respect to those environmental issues for which the country has not yet defined regulatory standards or wherever the corporate standards are stricter than the local ones.

⇒ Support the development of by-products exchange initiatives and the development of the necessary infrastructure by:

! Defining proper zoning policies ! Encouraging the development of companies that can fill niches and complement

other businesses using fiscal policies and setting aside resources for special funding of these types of businesses.

! Defining appropriate tariffs on wastes ! Allowing sufficient regulatory flexibility wherever necessary to facilitate the

development of by-product synergies ! Supporting the branch organizations with the development of a good by-

products information system. ! Revising and changing, if possible, any regulation that may constitute an

obstacle for by-product synergies, starting from the legal definition of waste, that should be considered as a valuable resource.

! Executing a proper environmental and economic valuation and characterization of wastes, primarily hazardous wastes to foster the appropriate management and use of the wastes.

! Study and develop alternative and complementary mechanisms to the liability system such as compensation and guarantee funds for cases when the traditional liability law, combined with insurance (if any), is at all able to provide for the compensation of the environmental damage. This type of mechanisms might help to ensure that high-tech companies and related businesses become fully responsible for their environmental liabilities.

Section V-103

2.2.2 The Role of the Cluster Actors and Branch Organizations

Obviously, the members of the evolving cluster can do a lot if they comply with environmental regulations and standards (corporate or local). However, with good cooperation and integration of their environmental management practices, the members of the cluster, in cooperation with branch organizations and other sectors, can minimize beyond the levels encouraged by the current environmental standards, the materials and energy intensity of the products and services produced within the cluster. They can also contribute to the minimization of toxic dispersion and related environmental and health problems. In general, companies must go beyond "their four walls" and become less compliance oriented. In contrast, especially those powerful companies should recognize and use their possibilities to influence the environmental performance of other members of the cluster and the companies that are members of their supply chain. The following are some of the actions suggested to the cluster actors and branch organizations: ! Establish a good environmental communication system among members of the

cluster and members of the different supply chains. This can facilitate the exchange of information and experiences in addressing environmental issues in a successful way.

! Include environmental criteria in their procurement and suppliers' selection policies

! Through contractual terms, powerful companies should demand certain environmental standards and levels of environmental performance from their suppliers.

! Wherever possible, organize, coordinate and centralize the procurement and distribution of common goods that have negative environmental consequences such as various chemicals, solder pastes, fluxes, etc. This can help to reduce toxic dispersion.

! Large anchor companies should co-invest with the government in the development of hazardous waste management infrastructure. According to the experiences observed in Mexico, this is how things concerning hazardous wastes have worker out better.

! Anchor companies should facilitate the attraction or development of companies needed to fill niches and thus encourage a better utilization of by-products. One option is through the support of the formation of technology based companies that can make something useful out of hazardous wastes or can recover valuable but toxic materials for their reuse.

! Development of environmental partnerships oriented towards the minimization of wastes and the substitution of toxic substances (i.e. DFE related projects). These partnerships should also aim to transfer environmental technology and know-how throughout the cluster and product chains.

! Support private and public educational programs in the field of environmental management and occupational health protection.

Section V-104

! The branch organizations should develop "corporate codes of conduct" to be signed by their members and award their environmental performance.

2.2.3 The Role of the Academic Sector

The academic sector is between the government and the companies. Thus, this sector can support the development of environmental initiatives facilitating the exchange of knowledge and information. In general, this sector should: ! Strengthen existing environmental and occupational health related programs

and include environmental and health issues in technical programs specifically oriented towards the high-tech electronics industry.

! Participate and encourage the development of voluntary programs. ! Foster the execution of benchmark studies aiming to award the best-in-class

with regards to many environmental and health aspects. ! Invest in environmental R&D and participate in the incubation of technology

based companies that can fulfill niches required to foster by-products exchange initiatives.

! Act as clearinghouses and sources of information. ! Collaborate with demonstration projects and other cluster initiatives.

2.2.4 The Role of the NGOS and the Community

The main duty of the NGO's is to make people aware about the potential negative consequences of the high-tech industrial development. These organizations can also help to enforce the law and motivate industries to become better corporate citizens. Some of the actions that can be followed by NGO's are: ! Inform the community and workers about the potential threats to their health and

the environment in which they live. ! Monitor performance of suppliers of large anchor and multinational companies

whose image might be affected by the disclosure of inappropriate environmental performance of any supplier.

! Lobby for enough freedom of information. In general there is a direct relation between citizen access to information and the ability to ensure sufficient environmental accountability. Once a systematic and concerted transfer of knowledge is assured, there can be full and informed community involvement in decisions pertaining to corporate investment proposals. The "right-to-know" is an essential prerequisite to public participation and legal remedy. Freedom of information means: open public access to all government files and statistics, film, video and computer information relevant to any company.

Section V-105

REFERENCES

! AMCRESPAC (1998). "Residuos Industriales en Mexico: una torre de Babel ecologica". Ed. CESPEDES, Mexico.

! Coté, R. and Smolenaars, T. (1997). "Supporting Pillars for Industrial Ecosystems". School for Resource and Environmental Studies, Dalhousie University. In: Journal of Cleaner Production, Elesvier Science Ltd.; Volume 5, Number 1-2, 1997

! Coté, R. et. al. (1994). "Designing and Operating Industrial Parks as Ecosystems". Canada.

! Coté, R and Cohen-Rosenthal (1997). "Designing Eco-Industrial Parks". Paper presented in the 4th European Roundtable on Cleaner Production. Oslo, Norway.

! Freeman H. (1995). "Industrial Pollution Prevention Handbook". McGraw-Hill. USA

! Harrison M. (1994). "Semiconductor Manufacturing Hazards". Reprinted from Hazardous Materials Toxicology. USA

! Heiskanen, E., Karna, A., Niva, M., Timonen, P., Munk af Rosenchold, E., Pripp, L. and Thidell, A. (1998). "Environmental Improvement in Product Chains". The International Institute for Industrial Environmental Economics; National Consumer Research Centre of Finland; Helsinki School of Economics.

! Italian National Agency for New Technology, energy and the Environment (ENEA, 1995). "Priority Waste Streams: waste from electrical and electronic equipment". Information Document. Third Draft. Italy.

! KPMG (1997). "Environmental Impact Assessment of Componentes Intel de Costa Rica S.A.".

! LaDou, J. and Rohm, T. (1998). "The International electronics Industry". Journal of Occupational and Environmental Health. Ed. Jan-Feb 1998, SVTC.

! Lifset, R. (1997). "A Metaphor, a Field and a Journal". School of Forestry and Environmental Studies Yale University. In: Journal of Industrial Ecology, MIT Press; Volume 1, Number 1.

! Los Angeles Times (March 8, 1998) by James F. Smith. "Salsa and Chips" ! Lowe, E. (1997). "Creating By-Product Resource Exchanges: strategies for eco-

industrial parks". Indigo Development. In: Journal of Cleaner Production, Elsevier Science Ltd.; Volume 5, Number 1-2, 1997

! The Microelectronics and Computer Technology Corporation (MCC, 1996). "1996 Electronics Industry Environmental Roadmap". USA.

! Miller, T. (1997). "Living in the Environment: principles, connections and solutions". Wadsworth Publishing Company, 10th edition. USA

! Ministry of Foreign Trade (COMEX 1998). "Estrategia Nacional de Atraccion de Inversiones (National Stratety for the Attraction of Invesments)".

! National Pollution Prevention Center for Higher Education (NPPC, 1994). "Industrial Ecology: an introduction". University of Michigan.

Section V-106

! Nordic Council of Ministers (1997). "Environmental Impact of Consumer Goods: a guide for specific assessments". TemaNord 1997:609. Copenhagen, Denmark

! Porter, Michael (1990). "The Competitive Advantage of Nations". The Free Press, New York

! Pratt, Lawrence. (1998). "Environmental Management as an Indicator of Business Responsibility in Central America". Latin American Center for Competitiveness and Sustainable Development, INCAE. Costa Rica

! Sagar, A. and Frosch, R. (1997). "A Perspective on Industrial Ecology and its Application to a Metals-Industry Ecosystem". Center for Science and International Affairs, John F. Kennedy School of Goverment. In: Journal of Cleaner Production, Elsevier Science Ltd.; Volume 5, Number 1-2, 1997

! SEMARNAP (1996). "Programa para la Minimizacion y Manejo Integral de Residuos Peligrosos en Mexico 1996-2000". (Mexican Program for the Hazardous Waste Minimization and Integral Management 1996-2000). Mexico

! SNEEJ-CRT (1998). "Sacred Waters: the life-blood of mother earth". Four case studies of high-tech water resource exploitation and corporate welfare in the Southwest.

! Swedish EcoCycle Commission (ECC, 1996). "Producer Responsibility for Electrical and Electronic Equipment". ECC Report 1996:12. Sweden

! SWOP (1998). "Intel Inside New Mexico: a case study of environmental and economic injustice". In collaboration with the Electronics Industry good Neighbor Campaign. USA

! Tibbs, H. (1993). "Industrial Ecology: An Environmental Agenda for Industry". Global Business Network, California

! UNEP-UNIDO (1993). "Environmental Management in the Electronics Industry: semiconductor manufacture and assembly". Technical Report No. 23.

! UNEP-WBCSD (1994). "Eco-Efficiency and Cleaner Production: charting the course to sustainability".

! USEPA (1995). "Profile of the Electronics and Computer Industry". EPA Office of Compliance Sector Notebook Project. EPA/310-R-95-002. Washington DC.

! Wallner, H.P. (1997). "Industrial Ecosystems as Activity Centers for Sustainable Development of Industry". STENUM Gmbh. Paper presented in the 4th European Roundtable on Cleaner Production. Oslo, Norway.

! WBCSD (1995). "Eco-efficient Leadership for Improved Economic and Environmental Performance".

Section V-107

INTERNET SITES VISITED

! Smith, T. (1998). "The Dark Side of High-Tech Development". Internet Site: http://www.igc.apc.org/svtc/dark.htm. Silicone Valley Toxics Coalition. May 25th, 1998

! PROCOMER (May 1998). Internet Site: www.procomer.com May 20th, 1998 ! CINDE. Internet Site: www.cinde.or.cr July 4th, 1998 ! BizSites (Jan 1998). "Emerging Clusters". Internet site:

http://www.bizsites.com/clusters/clusterintro.htm. April 3rd, 1998

! Sanchez, German and Rodriguez Juan Carlos (1998). "La Industria Electronica Mexicana en el Contexto Internacional" (the Mexican Electronics Industry in the International Context). Internet Site: http://148.228.111.91/economia/t1_german.html July 29th, 1998

! EcoFrontera (1998). " Industria Maquiladora y Medio Ambiente". Internet Site: http://www.uacj.mx/cema/num3/ecofront.html July 29th, 1998

! Intel (1998). Packaging Databook. Internet Site: http://developer.intel.com/design/mobile/packdata/packbook.htm June 21st, 1998

! EIAJ Semiconductor. Internet Site: http://www.eiaj.org/fact_fig/semi_up.html July 4th, 1998

PEOPLE INTERVIEWED

⇒ In Costa Rica:

! Dr.Julio Cesar Rojas, UNA ! Floribeth Rodriguez, UNA ! Guillermo Pereira, FORTECH ! Luis Barrantes, BALMACO S.A. ! Miguel Solera, WPP S.A. ! Francisco Benavides, Intel CR ! Anibal Alterno, Intel CR ! Juan Rafael Vargas, APFLB (NGO) ! Rafael Gonzalez Ballar, Justicia para la Naturaleza (NGO) ! Nazira Gonzalez, UNA ! Andres Incer, MINSAL

http://www.igc.apc.org/svtc/dark.htm

http://www.procomer.com/

http://www.cinde.or.cr/

http://www.bizsites.com/clusters/clusterintro.htm

http://148.228.111.91/economia/t1_german.html

http://www.uacj.mx/cema/num3/ecofront.html

http://developer.intel.com/design/mobile/packdata/packbook.htm

http://www.eiaj.org/fact_fig/semi_up.html

Section V-108

! Alberto Pinto, Consejo de Salud Ocupacional (CSO) ! Denia Vargas Azofeifa, INTECO ! Cesar Castro, Unidad de Desechos Solidos, CNE

⇒ Abroad:

! Prof. Allan Johansson, VTT, Finland ! Ake Tidell, IIIEE, Sweden ! Claudia Grossi, AMCHAM, Guadalajara, Mexico ! Olegario Hernandez Lopez, COESE, Guadalajara, Mexico ! Walter Ramirez Meda, University of Guadalajara, Mexico ! Oswaldo Nuno, University of Guadalajara, Mexico ! Alfredo Figarola, ITESM, Guadalajara, Mexico ! Juan Carlos Arredond, ITESM, Guadalajara, Mexico ! Dr. Jesus Federico Rivera Garcia, IMSS, Mexico ! Eduardo Sanchez, SEMARNAP, Jalisco, Mexico ! Miguel Cordero, AMCRESPAC, Guadalajara, Mexico ! Jorge Sanchez Gomez, AMCRESPAC, Mexico D.F. ! Abel Arguelles Almontes, Chamber of Electronics Industries, CANIETI, Mexico.

D.F ! Luis Carlos Contreras, Hewlett-Packard, Guadalajara, Mexico ! Alejandro Kikpatrick, UNEP, Mexico D.F. ! Arturo Rodriguez, Commission for Environmental Cooperation (CEC), Mexico

D.F. ! Jose Castro, National Institute of Ecology (INE), Mexico D.F. ! Mai Te Cortez, Colectiva Ecologista de Jalisco, Guadalajara, Mexico

Section V-109

APPENDIXES LIST

Section V-110

APPENDIX I

SELECTED PROCESS FLOW DIAGRAMS

TAKE IT FROM THE WRITTEN DRAFT THAT DON HAS

Section V-111

APPENDIX II

COMPOSITION OF SELECTED ELECTRONIC COMPONENTS

Component Composition

Printed Circuit Boards (PCBs) Assemblies

Average composition of PCBs Assemblies is as follows • 33% ceramics and glass in ceramic components, shell and reinforcements of printing

wiring boards (PWBs) • 33% plastics in PWBs, plastic components, shells and connectors • 33% metals in component conductors, printed board assembly fronts and PWB tracks • < 1% paper and liquids in capacitors The metals contained in a printed circuit board assembly are distributed as follows: • Cu = 12% component conductors, PWB tracks, connectors • Fe = 7% component conductors, mechanical details, inductors • Ni = 2% components and component conductors • Zn = < 1% surface treatments • Sn = < 1% soldering • Pb = < 1% soldering • Mn = < 1% dry electrolytic capacitors • S = < 1% moulding compounds for packages • Others: <8% Cr, Ti, W, Ag, Au, Pd, Al, Ba, B, Be, Co, etc

Integrated circuits ICs consist of a matrix of semi-conducting material (generally silicon) encapsulated in a ceramic or plastic shell and metallic conductors for connection with other components. The plastic shell generally has the following composition: • Inert filler *usually silicate, SiO2) $ 65 - 75% • Epoxy resin (tBBA incorporated as a flame retardant, approx 1% bromide in epoxy) $ 20-30% • Flame retardant (antimony oxide Sb2O3) $ 2 - 6% • Hardening agent (generally an amino hardener) (5-30% o total weight of the resin) $

1-10% • Accelerator consisting of a Lewis acid (i.e. boron trifluoride in the form of its mono-

ethylamine complex) $ 0.6 - 1 % • Coloring (generally lampblack) and mold release agents (generally natural wax or

carnauba) The ceramic shell generally consist of aluminum alloyed with magnesium, calcium, silicon and titatnium oxides. The lead frame consists of copper or Alloy-42 which contains 42% nickel and 58% Fe. The lead frame is coated with a thin layer of silver or palladium-silver at the points where the gold conductors are to be placed. Chips are made of silicon coped with small concentrations of bromine, phosphorus, arsenic and antimony. They are coated with an extremely thin film of aluminum and sometimes also with a plastic or ceramic material.

Relays The materials used most often are iron, copper and epoxy resins. Beryllium is generally used to improve the properties of the copper contact clips. Magnetic parts generally contain Fe, Ni, Mn, Zn, Co, Cr, Si, Mo, Ti, Al, C, V, Ba, Sm, Sr, Se, Pr and/or Nd. A high-performance core usually contains Fe combined with Sm, Nd or Co.

Section V-112

Light indicators Lighted indicators are generally light-emitting diodes (LED) or semiconducting materials such as indium phosphide or gallium phosphide.

Cathode ray tubes (CRTs)

Basically four parts constitute a CRT: the cone, the screen, the connection between them and the electronics. CRTs are made of two or even three types of glass containing ray-absorbing metal oxides (PbO, BaO, SrO). The inside of the screen and the inside and outside of the cone are coated with a film of fluorescent materials (Zn, Y, Eu, S, Cd). The fluorescent substances contained in the screen are generally phosphides or sulphides of zinc, europium, yttrium and cadmium (5-10 gr per screen). In older model tubes, the fluorescent coating contains mainly cadmium and zinc sulphide while the newer models are 94% zinc sulphide and rare-earth metals.

Liquid Crystal Displays (LCDs)

Over 2000 different kinds of liquids are used in LCDs, however, the most common are trans-4-Propyl-(4-cyanophenyl)-cyclohexane and azoxylbenzene. The quantity of liquid generally does not exceed 1 dl in a 20x30 cm2 display. The backlighting lamp uusually contains mercury or rare-earth metals. For plasma displays with red light emission, mercury or radiactive isotopes such as Ni63, Kr85 or H3 are generally used, while luminescent displays with yellow or green light emission use ZnS-based compounds doped with heavy rare-earth metals.

Sensors Temperature sensors consist of a heat-sensitive resistor. Negative temperature coefficient sensors are made of a polycrystalline material Cr Mg Fe Co Ni. Positive temperature coefficient resistors are made of BiTiO3. Electronic pressure sensors generally consist of e piezoelectric PXT-crystal containing lead, zirconium and tantalum. Electronic light sensors are generally made of CdS or CdSe.

Cables A cable is a metal conductor in copper or aluminum (or their alloys) protected by thermoplastic (PVC or PE), elastomeric or paper sheathing, which in some cases is impregnated with mineral and synthetic oils. Cables may also be protected by a second metal, fabric, thermoplastic or elastomeric sheath. The surface of the conductors are often treated with Sn/Pb alloy (60% Sn, 40% Pb). Polyethylene, a material with good dielectric properties, is often used as an insulating material between the copper conductor and the aluminum or Fe-Ni sheaths. Due to its good chemical resistance, PVC is used for outer protection. Plastics generally contain chloroparaffin and PBDE as flame retardants, stabilizers based on the organic compounds of As, PB and Sn, and pigments based on Pb, Cd, Ti, Fe and Cr.

Source: Priority Waste Streams: Waste from Electrical and Electronic Equipment, ENEA 1995.

Section V-113

APPENDIX III

MOST COMMON CHEMICALS USED BY ELECTRONIC INDUSTRIES

Chemical Status in Costa

Rica?15

Sulfuric Acid Controlled Hydrochloric acid Controlled Boric acid Hydrofluoric acid Nitric acid Fluoroboric acid Acetic acid Controlled Methanol Controlled Acetone Controlled 1,1,1-trichloroethane (TCA) Methylene chloride Controlled Isopropyl alcohol (IPA) Controlled Trichloroethylene (TCE) Glycol ethers N-butyl acetate Controlled Toluene Controlled Xylene Controlled CFC-113 Dichloromethane (METH) Dichloroethylene (DCE) Ehylene glycol Controlled Ethyl Acetate Propylene Glycol Controlled Methyl Ethyl Ketone (MEK) Controlled Methyl Isobutyl ketone (MIBK) Controlled Potassium permanganate Controlled Oxygen Nitrogen Fluorocarbon gas Silica *and other abrasives) Mylar (resists) Vinyl (resists) Photoresists

15 Controlled substances in Costa Rica means that the quantities imported and the use must be reported to the Department of Register and Controls of the Ministry of Health. The periodical reporting is done by the importers, whether they are direct users of the chemical or distributors who must report where the substance goes. Thus the Ministry of Health has consumption statistics for the entire country.

Section V-114

Potassium bicarbonate Sodium bicarbonate Amines Ammonia Controlled Ammonium chloride Ammonium persulfate Ammonium bifluoride Ammonium hydroxide Benzene Controlled Carbon tetrafluoride Chlorine Cupric chloride Stannous chloride Palladium chloride Tin chloride Hydrogen peroxide Nickel chloride Nickel sulfamate Peptone Sodium citrate Sodium hydroxide Sodium citrate Sodium hypophosphite Copper pyrophospate Orthophosphate Pyrophosphate Nitrates Acid copper Copper sulfate Formaldehyde Metallic tin pellets Silane

OTHER IMPORTANT CHEMICAL USED ARE:

Epoxy Resins According to LaDou and Rohm (1998), Epoxy Novolak resin formulations are used to encapsulate approximately 90% of all integrated circuits that are produced. These formulations are nearly physically inert and practically fully polymerized materials. The potential hazards associated with their use arise from the presence of unreacted starting materials (monomers), solvents, curing agents and additives. Normally prior to curing, diluents and flame retardants (see below) are added to the resin. Fused silica, alumina and quarts are materials usually added as fillers. Other encapsulant materials are described in Appendix II in the description of ICs' composition.

Section V-115

Fluxes The main type of fluxes used in electronics industries are as follows:

Flux Common Reference

Composition Solubility

Rosin R Abietic acid and other isomeric acids

S, WS

Mildly activated rosin

RMA Abietic acid and other isomeric acids; amine hydrochloride activators

S, WS

Activated rosin RA Abietic acid and other isomeric acids; amine hydrochloride activators

S, WS

Superactivated rosin

RSA Abietic acid and other isomeric acids; amine hydrochloride activators

S, WS

Organic Acid OA Abietic acid and other isomeric acids; halide or non halide activators

W

Synthetically activated

SA Alkyl acid phosphates; halide activators

S

Low solids Low solids 2 to 5% solids No cleaning required

Notes: S = chlorinated solvent soluble W = water soluble WS = water soluble with saponifier

Source: Freeman (1995). Industrial Pollution Prevention Handbook The organic soldering fluxes contain ethanol, propanol or isopropanol as some of the major ingredients. These fluxes also contain resins, organic acids, organic phosphates, surfactants and formic acid. Inorganic fluxes often sued are dilute aqueous solutions of hydrochloric or phosphoric acid with an organic acid such as glutamic acid (LaDou and Rohm 1998). The rosin type of fluxes are have a stable chemistry and good properties but may require CFC type of solvent or a saponifier (detergent) for cleaning. The water soluble type of fluxes can be cleaned using pure water and are good if used within the shelf life. However, they are humidity sensitive and have short shelf and working life. The newer "No-Clean" type of fluxes do not require cleaning processes, equipment or chemicals. This eliminates the effluent issues that concern the other type of fluxes. Nevertheless, these fluxes have lower activity, they may leave some visible residues behind and the processes are more difficult to control (Intel Corp. 1998)

Section V-116

Flame retardants A flame retardant is a compound or a mixture of compounds that, if added or chemically incorporated in a polymer, prevents ignition or flame-maintenance. Common flame retardants are the halogenated derivatives of bisphenol A -tetrachlorobisphenol A and tetrabromobiisphenol A, antimony trioxide and alumina trihydrate (LaDou and Rohm 1998). Polychlorinated paraffins have also been used by the electronics industry contributing with the chlorine content of the waste streams. According to ENEA (1995), the ideal flame-retardant is colorless, easily mixable, compatible, stable to light and heat and with no influence on the basic polymer. Solders and Adhesives The alloys used in solders are generally 63% Sn and 37% Pb or sometimes for SMT 2%Ag, 36% Pb and 62%Sn. Other solder alloys are Sb-Sn, Bi-Sn and In-Sn. The adhesives employed generally consist of epoxy and acrylic compounds. Even though there are alternatives for lead-based solders, the tradition and the higher costs of substitutes are a strong barrier to phasing out lead in solder. Unfortunately, all alternatives contain metals that may have toxic health effects and environmental impacts. These effects may be less dangerous than lead.(ENEA 1995)

Section V-117

APPENDIX IV

ENVIRONMENTAL RELEASES AND TRANSFERS FROM SEMICONDUCTORS, PCBS AND CRTS MANUFACTURERS

Source: Electronics and Computer Industry, Sector Notebook Project (1995), TRI Database, 1993

Releases: are and on-site discharge of a toxic chemical to the environment. This includes emissions to the air, discharges to bodies of water, releases at the facility to land, as well as contained disposal into underground injection wells. Releases to air (point and fugitive air emissions): include all air emissions from industry activity. Point emissions occur through confined air streams as found in stacks, ducts, or pipes. Fugitive emissions include losses from equipment leaks, or evaporative losses from impoundments, spills, or leaks. Releases to water (surface water discharges): encompass any releases going directly to streams, rivers, lakes, oceans, or other bodies of water. Any estimates for storm water runoff and non-point losses are also included. Releases to land: includes disposal of waste to on-site landfills, waste that is land treated or incorporated into soil surface impoundments, spills, leaks or waste piles. These activities must occur witin the facility's boundaries for inclusion in this category. Underground injection: is a contained release of a fluid into a subsurface well for the purpose of waste disposal. Transfers: is a transfer of toxic chemicals in wastes to a facility that is geographically or physically separate from the facility reporting under TRI. The quantities reported represent a movement of the chemical away from the reporting facility. Except for off-site transfers for disposal, these quantities do not necessarily represent entry of the chemical into the environment. Transfers to POTWs: is wastewater transferred through pipes or sewers to a publicly owned treatments works (POTW). Treatment and chemical removal depend on the chemical's nature and treatment methods used. Chemicals not treated or destroyed by the POTW are generally released to surface waters or landfilled within the sludge. Transfers to recycling: are sent off-site for the purposes of regenerating or recovering still valuable materials. Once these chemicals have been recylced, they may be returned to the originating facility or sold commercially. Transfers to energy recovery: are wastes combusted off-site in industrial furnaces for energy recovery. Treatment of a chemical by incineration is not considered to be energy recovery.

Section V-118

Transfers to treatment: are wastes moved off-site for either neutralization, incineration, biological destruction or physical separation. In some cases, the chemicals are not destroyed but prepared for further waste management. Transfers to disposal: are wastes taken to another facility for disposal generally as a release to land or as an injection underground.

Section V-119

APPENDIX V

SUSPECTED CARCINOGENIC CHEMICALS AND OTHER POTENTIAL HAZARDS…..

Take this from written draft or could be printed out from Excell files if desired.

Section V-121

APPENDIX VI

SUMMARY OF CURRENT SCIENTIFIC TOXICITY AND FATE INFORMATION FOR THE TOP CHEMICALS (BY WEIGHT) THAT ELECTRONIC INDUSTRIES SELF-REPORTED AS RELEASED TO THE

ENVIRONMENT (TRI 1993)

Chemical Toxicity and Fate Information Acetone Toxicity: Acetone is irritating to the eyes, nose and throat. Symptoms of exposure to large quantities may include

headache, unsteadiness, confusion, lassitude, drowsiness, vomiting and respiratory depression. Reactions of acetone in the lower atmosphere contribute to the formation of ground-level ozone which can affect the respiratory system, especially in sensitive individuals such as asthmatics or allergy sufferers. Carcinogenicity: there is currently no evidence to suggest that this chemical is carcinogenic. Environmental Fate: if released into water, acetone will be degraded by microorganisms or will evaporate into the atmosphere. Degradation by mocroorganisms will be the primary removal mechanism. Acetone is highly volatile and once it reaches the troposphere it will react with other gases, contributing to the formation of ground level ozone as mentioned above. Physical Properties: acetone is a volatile and flammable organic chemical.

Methylene Chloride (Dichloromethane, DCM)

Toxicity: short-term exposure to DCM is associated with central nervous system effects, including headache, giddiness, stupor, irritability and numbness and tingling in the limbs. More severe neurological effects are reported from longer term exposure, apparently due to increased carbon monoxide in the blood from the break down of DCM. Contact with DCM causes irritation of the eyes, skin and respiratory tract. Occupational exposure to DCM has also been linked to increased incidence of spontaneous abortions in women. Acute damage to the eyes and upper respiratory tract, unconsciousness and death were reported in workers exposed to high concentrations of DCM. Phosgene (a degradation product of DCM) poisoning has been reported to occur in several cases where DCM was used in the presence of an open fire. Populations at special risk from exposure of DCM include obese people *due to accumulation in fatty tissues) and people with impaired cardiovascular systems. Carcinogenicity: DCM is a probable human carcinogen via both oral and inhalation exposures, based on inadequate human data and sufficient evidence in animals.

Section V-122

Environmental Fate: when spilled on land, DCM is rapidly lost from the soil surface through volatilization. The remainder leaches through the subsoil into the groundwater. Biodegradation is possible in natural waters but will probably be very slow compared with evaporation. Little is known about bioconcentration in aquatic organisms or adsorption to sediments but these are not likely to be significant processes. Hydrolysis is not an important process under normal environmental conditions. DCM released into the atmosphere degrades via contact with other gases with a half-life of several months. A small fraction of the chemical diffuses to the stratosphere where it rapidly degrades through exposure to ultraviolet radiation and contact with chlorine ions. Being a moderately soluble chemical, DCM is expected to partially return to earth in rain.

Freon 113 (Trichlorotrifluoroethane)

Toxicity: No adverse human health effects are expected from ambient exposure to Freon 113. Inhalation of high concentrations of Freon 113 causes some deterioration of psychomotor performance and irregular heartbeat. Chronic exposure causes reversible weakness, pain and tingling in the legs of one occupationally-exposed woman. There is some evidence of a higher incidence of coronary heart disease among hospital personnel and refrigerant mechanics exposed to fluorocarbons. Exposure to high concentrations may cause eye and throat irritation. Fluorocarbons are considerably less toxic than the process materials used in their manufacture (i.e. chlorine). In addition, under certain conditions, fluorocarbon vapors may decompose on contact with flames or hot surfaces, creating the potential hazard of inhalation of toxic decomposition products. The most significant toxic effect associated with Freon 113 is its role as a potent ozone-depleter. Stratospheric ozone depletion causes an increase in the levels of ultraviolet solar radiation reaching the earth's surface, which in turn is linked to increased incidence of skin cancers, immune system suppression, cataracts and disruptions in terrestrial and aquatic ecosystems. Increased UV-B radiation is expected to increase photochemical smog, aggravating related health problems in urban and industrialized areas. Carcinogenicity: there is no evidence to suggest that this chemical is carcinogenic. Environmental Fate: all of the Freon 113 produced is eventually lost as air emissions and builds up in the atmosphere. If released on land, it will leach into the ground and volatilize from the soil surface. No degradation processes are known to occur in the soil. Freon is not very water soluble and its removed rapidly from water via volatilization. Chemical hydrolysis bio-accumulation and adsorption to sediments are not significant fate processes in water. Freon 113 is extremely stable in the lower atmosphere and will disperse over the globe and diffuse slowly into the stratosphere where it will be lost by photolysis. In this process, chlorine atoms are released and are able to attach the ozone molecules.

Section V-123

Glycol Ethers Given the existing data limitations on the effects of Glycol Ethers, data on diethylene glycol is used to represent all

glycol ethers: Toxicity: diethylene glycol is only a hazard to human health if concentrated vapors are generated though heating or vigorous agitation or if appreciable skin contact or ingestion occurs over an extended period of time. Under normal occupational and ambient exposures, diethylene glycol is low in oral toxicity, is not irritating to the eyes or skin, is not readily absorbed through the skin and has a low vapor pressure so that toxic concentrations of the vapor can not occur in the air at room temperatures. At high levels of exposure, diethylene glycol causes central nervous depression and liver and kidney damage. Symptoms of moderate diethylene glycol poisoning include nausea, vomiting, headache, diarrhea, abdominal pain, and damage to the pulmonary and cardiovascular systems. Sulfanilamide in diethylene glycol was once used therapeutically against bacterial infection; it was withdrawn from the market after causing over 100 deaths from acute kidney failure. Carcinogenicity: there is currently no evidence to suggest that this chemical is carcinogenic. Environmental Fate: Diethylene glycol is a water-soluble, volatile organic chemical. Ti may enter the environment in liquid form via petrochemical plant effluents or as an unburned gas from combustion sources. Diethylene glycol typically does not occur in sufficient concentrations to pose a hazard to human health.

Methanol Toxicity: methanol is readily absorbed from the gastrointestinal tract and the respiratory tract, and is toxic to humans in moderate to high doses. In the body, methanol is converted into formaldehyde and formic acid. Methanol is excreted as formic acid. Toxic effects at high doses normally include central nervous system damage and blindness. Long-term exposure to high levels of methanol via inhalation cause liver and blood damage in animals. Ecologically, methanol is expected to have low toxicity to aquatic organisms. Concentrations lethal to half of the organisms of a test population are expect to exceed 1mg methanol per liter of water. Methanol is not likely to persist in water or to bioaccumulate in aquatic organisms. Carcinogenicity: there is no evidence to suggest that this chemical is carcinogenic. Environmental Fate: Liquid methanol is likely to evaporate when left exposed. Methanol reacts in air to produce formaldehyde, which contributes to the formation of air pollutants. In the atmosphere it can react with other atmospheric chemicals or be washed out by rain. Methanol is readily degraded by microorganisms in soils ad surface waters. Physical Properties: highly flammable.

Section V-124

Methyl Ethyl Ketone (MEK) Toxicity; breathing moderate amounts of MEK for short periods of time can cause adverse effects on the nervous system ranging from headaches, dizziness, nausea and numbness in the fingers and toes to unconsciousness. Its vapors are irritating to the skin, eyes, nose and throat and can damage the eyes. Repeated exposure to moderate to high amounts may cause liver and kidney effects. Carcinogenicity: no agreement exists over the carcinogenicity of MEK. One source believes MEK is a possible carcinogen in humans based on limited animal evidence. Other sources believe that there is insufficient evidence to make any statements about possible carcinogenicity. Environmental Fate: most of the MEK released to the environment will end up in the atmosphere. MEK can contribute to the formation or air pollutants in the lower atmosphere. It can be degraded by microorganisms living in water and soil. Physical Properties: flammable liquid.

Sulfuric Acid Toxicity: concentrated sulfuric acid is corrosive. In its aerosol form, sulfuric acid has been implicated in causing and exacerbating a variety of respiratory ailments. Ecologically, accidental releases of solution forms of sulfuric acid may adversely affect aquatic life by inducing a transient lowering of the pH of surface waters. In addition, sulfuric acid in its aerosol form is also a component of acid rain. Acid rain can cause serious damage to crops and forests. Carcinogenicity: there is no evidence to suggest that this chemical is carcinogenic. Environmental Fate: releases of sulfuric acid to surface waters and soils will be neutralized to an extent due to the buffering capacities of both systems. The extent of the reactions will depend on the characteristics of the specific environment. In the atmosphere, aerosol forms contribute to acid rain. These aerosol forms cant ravel large distances from the point of release before the acid is deposited on land and surface waters in the form of rain.

Xylene (mixed isomers) Toxicity: Xylenes are rapidly absorbed into the body after inhalation, ingestion, or skin contact. Short-term exposure of humans to high levels of xylenes can cause irritation of the skin, eyes, nose, and throat, difficulty in breathing, impaired lung function, impaired memory, and possible changes in the liver and kidneys. Both short- and long-term exposure to high concentrations can cause effects such as headaches, dizziness, confusion, and lack of muscle coordination. Reactions of xylenes (see environmental fate) in the atmosphere contribute to the formation of ozone in the lower atmosphere. Ozone can affect the respiratory system, especially in sensitive individuals such as asthma or allergy sufferers. Carcinogenicity: There is currently no evidence to suggest that this chemical is carcinogenic.

Section V-125

Environmental Fate: The majority of releases to land and water will quickly evaporate, although some degradation by microorganisms will occur. Xylenes are moderately mobile in soils and may leach into groundwater, where they may persist for several years. Xylenes are volatile organic chemicals. As such, xylenes in the lower atmosphere will react with other atmospheric components, contributing to the formation of ground-level ozone and other air pollutants.

Toluene Toxicity: Inhalation or ingestion of toluene can cause headaches, confusion, weakness, and memory loss. Toluene may also affect the way the kidneys and liver function. Reactions of toluene (see environmental fate) in the atmosphere contribute to the formation of ozone in the lower atmosphere. Ozone can affect the respiratory system, especially in sensitive individuals such as asthma or allergy sufferers. Some studies have shown that unborn animals were harmed when high levels of toluene were inhaled by their mothers, although the same effects were not seen when the mothers were fed large quantities of toluene. Note that these results may reflect similar difficulties in humans. Carcinogenicity: There is currently no evidence to suggest that this chemical is carcinogenic. Environmental Fate: The majority of releases of toluene to land and water will evaporate. Toluene may also be degraded by microorganisms. Once volatilized, toluene in the lower atmosphere will react with other atmospheric components contributing to the formation of ground-level ozone and other air pollutants. Physical Properties: toluene is a volatile organic chemical

Trichloroethylene (TCE) Toxicity: Trichloroethylene was once used as an anaesthetic, though its use caused several fatalities due to liver failure. Short term inhalation exposure to high levels of trichloroethylene may cause rapid coma followed by eventual death from liver, kidney, or heart failure. Short-term exposure to lower concentrations of trichloroethylene causes eye, skin, and respiratory tract irritation. Ingestion causes a burning sensation in the mouth, nausea, vomiting and abdominal pain. Delayed effects from short-term trichloroethylene poisoning include liver and kidney lesions, reversible nerve degeneration, and psychic disturbances. Long-term exposure can produce headache, dizziness, weight loss, nerve damage, heart damage, nausea, fatigue, insomnia, visual impairment, mood perturbation, sexual problems, dermatitis, and rarely jaundice. Degradation products of trichloroethylene (particularly phosgene) may

Section V-126

cause rapid death due to respiratory collapse. Carcinogenicity: Trichloroethylene is a probable human carcinogen via both oral and inhalation exposure, based on limited human evidence and sufficient animal evidence. Environmental Fate: Trichloroethylene breaks down slowly in water in the presence of sunlight and bioconcentrates moderately in aquatic organisms. The main removal of trichloroethylene from water is via rapid evaporation. Trichloroethylene does not photodegrade in the atmosphere, though it breaks down quickly under smog conditions, forming other pollutants such as phosgene, dichloroacetyl chloride, and formyl chloride. In addition, trichloroethylene vapors may be decomposed to toxic levels of phosgene in the presence of an intense heat source such as an open arc welder. When spilled on the land, trichloroethylene rapidly volatilizes from surface soils. The remaining chemical leaches through the soil to groundwater.

Source: Electronics and Computer Industry, USA EPA Sector notebook Project (1995)

Section V-127

HEALTH HAZARDS INFORMATION OF OTHER CHEMICALS

Chemical Health Effects Ethylene Glycol Ethers Four ethylene glycol ethers have been the subject various studies (2-Ethyoxyethanol, 2-Ethoxyethanol Acetate, 2-

Methoxyethanol and 2- Methoxyethanol Acetate). These chemicals are commonly used in photoresist formulations used by semiconductors manufacturing. Short term exposures to ethylene glycol ethers can cause: eye and upper respiratory tract irritation and mild skin irritation. Ingestion of large doses may cause vomiting. Systematic effects of short-term high-exposure may include lung, kidney and brain damage. Long-term exposure may cause lung, kidney and brain damage and also affects the central nervous system resulting in depression and anemia.

Alchols (Isopropanol, ethanol, isopropyl alcohol)

Short term exposures can cause skin, eyes and respiratory tract irritation. Also affect the central nervous system and may damage the liver.

Ammonia Ammonia is a pungent, colorless, gaseous alkaline compound of nitrogen and hydrogen most commonly found in the form of a water solution. Contact with ammonia may result in irritation of the respiratory and mucous membranes, burning and blistering of the skin, headaches, nausea and vomiting

Argon This gas causes difficulties in breathing. It can also affect the central nervous system resulting in confusion, convulsions, coma, nausea, vomits.

Nitric Acid, Phosphoric Acid Skin irritation and respiratory tracts Epoxy Resins and Ceramic materials used for encapsulation

Some substances contained in this kind of epoxy resins are known to be carcinogenic. Beryllium Oxide is often used for ceramic encapsulation of semiconductor devices. There is little health hazard associated with the finished product under normal conditions but the process of device encapsulation (packaging) and operations involving crushing or grinding the finished product could possibly expose workers to the toxicant by inhalation.

Hydrofluoric Acid (HF) HF main concern are the potential delayed and continuing burns of employees' skin due to wrong handling practices. Photoresists Photoresists are chemical mixtures that can be altered by exposure to electromagnetic energy such as ultraviolet

radiation, electron beams or x-rays. The greatest concern about photoresist has been the potential for reproductive and developmental toxicity because of the high content of glycol ether solvents.

Section V-128

Gallium Arsenide Problems due to exposures to gallium arsenide are entirely based on the known health effects of exposure to

inorganic arsenic. Chronic effects such as cancer and to a lesser degree about possible effect upon the fetus are the main concerns (i.e. lung cancer, laryngitis pharyngitis, bronchitis, encephalopathy, etc). The possibility of fetal toxicity in humans is not widely discussed, but some animal studies suggest a teratogenic effect.

Arsine Arsine gas (AsH3) is instantly lethal to humans. The mechanism of this sudden death is probably a respiratory arrest caused by central nervous system interruption. At lower concentrations of exposure, the pathologic lesion is hemolysis leading to a sever anemia and hypoxemia. Renal failure also occurs either from direct nephrotoxicity of arsine or from the obstruction of tubules with hemoglobin.

Silane Silane gas is used for the deposition of thin dielectric films in semiconductors manufacturing. It presents a significant health hazard because of its potential to detonate. As an explosive, 0.45 kg of silane is equivalent to 2.7 kg of TNT.

Source: Harrison (1994); Compilation of various international studies, by Dr. Julio C. Rojas,

UNA; UNEP-UNIDO (1993), CRT-Southwest Network for Environmental and Economic Justice, and LaDou and Rohm (1998)

Section V-129

APPENDIX VII

HEALTH EFFECTS FROM SOME HAZARDOUS MATERIALS

The concern about hazardous substances has increased since the people have become more aware of the damage they cause to health and the environment. Besides the substances described in previous appendixes which are used during the manufacturing of electronic components and products, the following substances (see table below) are contained in the electronic products which are eventually disposed by the users after their useful life. According to ENEA (1995), hazardous substances represent a small portion of the total weight of electronic products with the exception of copper, which has a relatively low degree of harmfulness. ENEA adds that the quantity of some harmful materials like cadmium has almost disappeared from CRTs and the use of flame-retardants and antimony (in TV sets) has also diminished. Nevertheless, alternatives for other harmful substances like mercury used in fluorescent lamps haven't been found yet. Although the proportion of hazardous materials in electronic products has been decreasing is offset by the fact that the tolerability threshold can be very low for most of these substances.

Substane Description

Mercury (Hg) Is one of the least common elements in the earth's crust. It is extracted exclusively from cinnabar, as it is present only in traces in other minerals. Mercury is the only metal that is liquid at room temperature. The metal and its compounds are often used as fungicides in agriculture and in the paint and paper industries. Elemental mercury is also used as a catalyst in the production of plastic materials. In the case of the electronics industry, Hg is used in thermostats, sensors, batteries, relays and switches (i.e. on printed circuit boards, in measuring equipment and in discharge lamps). Because from its low boiling point, Hg can easily be emitted from landfill sites. However, it is one of the most easily recoverable metals. It is more volatile than other metals because its boiling point is 357 C. Thus, Hg and its compounds can be separated by roasting and distillation which are well established techniques. Mercury and its organic and inorganic compounds (methylmercury, phenylmercury, etc) can produce biological transformations in the environment and in living organisms. These compounds are toxic for the human body but their toxicity, distribution, accumulation and retention time differ. Methylmercury and its inorganic compounds are priority toxic pollutants. The alkyl compounds can case teratogenesis. These are transported by blood and settle mainly in the blood cells and to small degree in plasma. Inorganic mercury can be also methylated by the environment, producing highly toxic soluble species.

Lead (Pb) Lead is the 36th most abundant element in the earth's crust. Lead's main applications are in batteries and accumulators, cable sheathing and roofing. Other important applications are solder, ammunition, protective coatings and paints, fuel additives and stabilizers for plastics. In electronics products, Pb is mainly used for cable sheathing and stabilizers of plastics, solder pastes manufacturing and in the glass of CRTs and lighting sources. Lead is used in many products due to its unique combination of properties and low price. It is also the most corrosion-resistant metal, it is soft, malleable, heavy, dense and wear resistant.

Section V-130

The awareness of the effects of lead exposure to humans originated many studies for replacing lead-based products. Some used of lead declined (i.e. as pigment or fuel additive) while others uses (i.e. soldering and storage batteries) increased. Lead can have negative effects on several systems in the human body, especially the nervous system, blood system and kidneys. Lead can be inhaled from the air, food, or water and dust trapped in the upper respiratory tract. Organic lead compounds enter the body through the skin. Lead at low pH is more easily dissolved, thus chemical water-softening treatment increases the solubility of lead. Airborne lead is easily absorbed from the respiratory tract and symptoms tend to develop quickly. When lead is ingested much of it passes through the body unabsorbed but the absorbed lead is trapped by the liver and excreted, in part, in the bile.

Cadmium (Cd) The manufacture of Ni-Cd batteries was the main application of Cadmium. Other uses of Cd are steel coating, pigments and plastic stabilizers. In the case of electronics products Cd is mainly contained in plastics, CRTs and printed circuit boards. When Cd-containing plastics from electronics products are landfilled, Cd may leach (slowly) to the soil and groundwater. Cd accumulates in the liver and can damage the organ if the amount exceeds 50 mg/kg. The process of Cd secretion is very slow. The intake of Zn can inhibit the adverse effects of Cd.

Arsenic (As) Arsenic can be found in microelectronics, in various alloys and as an additive in plastics. Inorganic arsenic is more damaging to human health than the organic form. The natural intake of inorganic arsenic by humans (through drinking water, food or respiration) amounts to 4-5 mg/day. If intake exceeds 20 mg/day, inorganic arsenic may cause cancer and /or damage to genetic material. Organic arsenic can cause dermatitis, increases cancer risk and may damage genetic material as well. Flora and fauna is adversely affected in the presence of high concentrations of arsenic in the environment.

Copper (Cu) Copper blends very well with other metals and over a thousand alloys are known. The electronics industry's use of specialty copper alloys such as phosphor-bronze, nickel-silver and beryllium-copper is expected to grow. Fiber optics have begun to replace copper in telecommunications and will continue to do so in the future. Aluminum competes with copper in many electrical and industrial control appliances. In most applications, copper could be replaced by other materials such as zinc, titanium or plastic. Even though there is no pressing health problem involving copper, environmental and economic factors suggest recovering copper as much as possible. Despite the fact that oversupply and lower prices have discouraged its recovery from waste, copper is one of the most extensively recycled of the common metals. Copper is essential to many enzymatic reactions in mammals, but it is toxic in large quantities. It is especially toxic to lower organisms. Copper does not appear to be very toxic to humans, probably because the body readily excretes most of the intake. Food is the primary source (75% of the intake) and water consumption is the second due to the increasing use of copper piping. Inhalation of airborne copper and absorption through intact skin are generally negligible, even in occupational settings.

Aluminum (Al) Aluminum is the second most widely used metal, after iron, and the second most abundant element in the earth's crust. In electronic equipment, aluminum is used mainly in casings for consumer electronics and household appliances and to a lesser extent in printed circuit boards. The hazardousness of Al is mainly due to the effects of soluble Al ions. Over-exposure of human beings to Al (through water, food and air) can damage the central nervous system and eventually cause Altzheimer's disease, amnesia, apathy and tremor. Soluble Al ions also increases soil acidity as it frees H+.

Zinc (Zn) Zinc is classified as a borderline metal which means that it forms bonds with oxygen as well

Section V-131

as nitrogen and sulphur donor atoms. Under aerobic conditions, Zn2+ is the predominant species at acidic pH, but it is replaced by Zn(OH)2 at pH 8-11. Anaerobic conditions lead to the formation of ZnS regardless of pH within 1-14 range. Zinc binds readily with many organic binders, particularly in the presence of nitrogen or sulphur donor atoms. All this means that the fate of zinc will vary from one waterway to another, depending on the type of humic material present in the system. Within the industrial sector, zinc is the fourth most common metal after iron, copper and aluminum. In electronics equipment, zinc is used as zinc-coated messing and steel (galvanization) and as brass, a zinc-copper alloy. It appears on printed circuit boards and also in cable sheathing and CRTs. Zinc is considered less toxic than most other metals. Zn is a required element in animal an human nutrition as well as an additive in plant fertilizers. Ingestion of 2 g of Zn produces toxic symptoms (i.e. fever, diarrhea, vomiting and other irritations of the gastrointestinal tract) in humans. These effects are largely self-limiting and re generally reversible. The most common episodes of poisoning come from the ingestion of acidic beverages produced in galvanized containers. Zinc and its compounds are not considered carcinogenic in humans or experimental animals.

Chromium (Cr) Chromium and its compounds are in great demand for chromium plating, for the production of refractory bricks, pottery and the production of ferrochromium alloys, which are used as additives in stainless steel and other specialized products. Sodium dichromate is used in the manufacture of chromic acid, pigments and leather-tanning agents. Anthropogenic discharge of Cr to surface waters come from households wastewater, manufacturing processes involving metals and sewage sludge. Electronics production does not account for a significant share of Cr use, but the metal does appear in printed circuit boards and plastic casings. Cr is present in electronic equipment as metallic chromium, which is very stable. Volatilization, photolysis and biotransformation do not appear to be important processes in the environmental fate of Cr. Cr in ore residues and exhausted galvanization baths may cause harm to the environment and health of humans because it is disposed of in water-soluble forms: Cr (III) and Cr (VI) known as trivalent and hexavalent chromium respectively. Organic and inorganic compounds in soil may oxidize Cr (III) to the more harmful Cr (VI). Chromium reduction from hexavalent to trivalent is a well known practice and there is a well developed technology. Trivalent Cr is usually precipitated with sodium hydroxide after the solution pH is adjusted to the alkaline side. Some organic and inorganic compounds that exist in soils such as manganese oxide and citric acid will oxidize trivalent chromium to hexavalent chromium. Cr wastes can be toxic and harmful if they are not properly disposed of. Cr (VI) is highly mobile and can migrate a considerable distance from its source. Moreover, it is highly toxic to animals and plants, and under certain conditions even to human beings. Trivalent chromium is thought to be less toxic than hexavalent Cr. Cr is an essential trace element, forming part of the antidiabetogenic factor, which is essential in insulin metabolism. The recommended daily intake of Cr (III) for an adult is 5-100 mg/day. A lack of Cr (III) may lead to disordered sugar metabolism and may increase the risk of cardiovascular disease. Acute exposure to Cr (VI) produces nausea, liver and kidney damage, dermatitis and respiratory problems. There is sufficient evidence for respiratory carcinogenicity in men occupationally exposed during chromate production. Water soluble Cr (VI) compounds are often mutagenic and can alter human genetic material. In general, recovery of Cr may be the only acceptable solution to these problems.

Nickel (Ni) The main uses of Ni are in transport, batteries, pigments, coins and chemicals. Manufacturing of electronic equipment and electrical appliances accounts for 8% of the world's nickel consumption.

Section V-132

Intense respiratory exposure to Ni and Ni compounds can cause lung and nasal cancer and increases the risk of larynx and prostate cancer. Dermatitis is another type of problem caused by Ni. Moreover, a small increase in blood Ni may lead to cardiovascular diseases. The risks are higher among metallurgical workers. Recovering Ni in a closed system with good air conditioning can minimize the risks of Ni exposure.

Antimony (Sn) The main applications of Sb are in flame retardants (34%), lead alloys (39%) and pigments (7%). Electronic equipment does not account for a significant amount of use of this metal. In electronic products, Sb appears as a flame retardant added to plastics. The use of Sb in TV sets has been reduced dramatically. Other products that use Sb include condensers, transistors, ICs and fluorescent tubes. Toxic effects on human beings are mainly due to bad working conditions. Overexposure can result in skin infections, digestion disorders, shock, respiration problems and blood-related diseases. The exact relationship between Sb doses and the consequent effects is not known.

PCBs Polychlorobiphenyls (PCBs) refers to aromatic chlorinated hydrocarbon compounds with the structural formula CzHxCly where the x varies from 0 to 9 and y = 10 - x. PCBs are resistant to corrosion by acids and bases. They have an extremely low flash point, low dielectric constant, low vapor pressure, low water solubility, etc. They also resist the natural enzymatic degradation processes. PCBs have been used widely in the past. The have been used as dielectric fluids, heat exchanger fluids, flame retardant agents, organic thinners, plastifiers, resin and ink fluidizers. The electronics components that incorporate PCBs are mainly the following: - small PCB capacitors which are used in fluorescent tubes (for the compensation

phases), in electric motors for household appliances, etc - high power capacitors and transformers employed in industry and power distribution

networks, especially in enclosed components which require the use of flame retardants.

The toxicity of a given kind of PCB depends on the amount chlorine. In general, the more chlorine, the higher the toxicity. PCB have low acute toxicity but heir effects are cumulative. In mammals, hypertrohpy of the liver has been observed and can develop into liver damage. PCBs are very persistent and accumulate in human fat. Other effects on humans include hypersecretion of the eyes, pigmentation and acneform eruptions of the skin as well as irritation of the respiratory system.

Brominated flame retardants

Many kinds of additives are used to enhance the performance of plastics. They include stabilizers, dyes and flame retardants. Over 95% of the plastic containing flame retardants is found in the consumer electronics, data processing equipment and industrial equipment. Brominated flame retardants such as deca-, octa- and penta- polybromo-biphenyls (or PBBs) are organobromine derivatives that appear to be quite similar to PCBs. Both are very persistent and tend to accumulate in animal and human fats. PBB contamination can lead to various serious diseases, including liver damage, loss of sight and effects on the nervous system, causing headache, fatigue and arthritis. Even at low doses, PBBs may also damage the unborn child, hence a safe dose is not known.

Furans and Dioxins These substances can result from the incineration of materials containing brominated and halogenated flame retardants. Dioxins are thought by most scientists to be the deadliest of all man made poisons. Dioxin can cause severe skin diseases, damage the liver, pancreas, kidneys, heart, immune system and aversely affect hormone regulation, producing impotence, sterility and damage to the fetus. Other effects of dioxin are neurological and physicological disorders, gene mutation and cancer.

Source: Priority Waste Streams: Waste from Electrical and Electronic Equipment, ENEA 1995.

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