E-Waste: what's really going on, but what to do?

On the outskirts of Ghana's biggest city sits a smoldering wasteland, a slum carved into the banks of the Korle Lagoon, one of the most polluted bodies of water on earth. The locals call it Sodom and Gomorrah.

Correspondent Peter Klein and a group of graduate journalism students from the University of British Columbia have come here as part of a global investigation -- to track a shadowy industry that's causing big problems here and around the world.

Their guide is a 13-year-old boy named Alex. He shows them his home, a small room in a mass of shanty dwellings, and offers to take them across a dead river to a notorious area called Agbogbloshie.

Agbogbloshie has become one of the world's digital dumping grounds, where the West's electronic waste, or e-waste, piles up -- hundreds of millions of tons of it each year.

The team meets with Mike Anane, a local journalist who has been writing about the boys at this e-waste dump.

“Life is really difficult; they eat here, surrounded by e-waste,” Anane tells them. “They basically are here to earn a living. But you can imagine the health implications.”

Some of the boys burn old foam on top of computers to melt away the plastic, leaving behind scraps of copper and iron they can collect to sell. The younger boys use magnets from old speakers to gather up the smaller pieces left behind at the burn site.

Anane says he used to play soccer here as a kid, when it was pristine wetland. Since then, he's become one of the country's leading environmental journalists.

“I'm trying to get some ownership labels,” Anane tells reporters. “I'm collecting them because you need them as evidence. You need to tell the world where these things are coming from. You have to prove it. Now, just look,” he says, pointing to an old computer with the label: “School District of Philadelphia.”

When containers of old computers first began arriving in West Africa a few years ago, Ghanaians welcomed what they thought were donations to help bridge the digital divide. But soon exporters learned to exploit the loopholes by labeling junk computers "donations," leaving men like Godson to sort it out.

Godson, one of the e-waste dealers who have set up shop close to the port, shows the contents of the container he has bought.

“Some are from Germany and the U.K., and also from America,” he says, when asked where the equipment has come from. He sorts through them looking for working electronics that can be sold. He says that maybe 50 percent of the shipment is junk and the rest he will be able to salvage in some way.

After it’s sorted, a lot of the contents of the container will still be dumped at the burn site outside of town.

Hard drives that can be salvaged are displayed at open-air markets. Off camera, Ghanaians admit that organized criminals sometimes comb through these drives for personal information to use in scams.

As part of the investigation, one of the students buys a number of hard drives to see what is on them, secretly filming the transaction to avoid the seller's suspicions.

The drives are purchased for the equivalent of US$35.

The students take the hard drives to Regent University in the Ghanaian capital and ask computer scientist Enoch Kwesi Messiah to help read what is on them.

Within minutes, he is scrolling through intimate details of people's lives, files left behind by the hard drives' original owners.

There is private financial data, too: credit card numbers, account information, records of online transactions the original owners may not have realized were even there.

“ I can get your bank numbers and I retrieve all your money from your accounts,” Messiah says. “If ever somebody gets your hard drive, he can get every information about you from the drive, no matter where it is hidden.”

That's particularly a problem in a place like Ghana, which is listed by the U.S. State Department as one of the top sources of cyber crime in the world. And it's not just individuals who are exposed. One of the drives the team has purchased contains a $22 million government contract.

It turns out the drive came from Northrop Grumman, one of America's largest military contractors. And it contains details about sensitive, multi-million dollar U.S. government contracts. They also find contracts with the defense intelligence agency, NASA, even Homeland Security.

When the drives’ data are shown to James Durie, who works on data security for the FBI, he's particularly concerned about the potential breach at the Transportation Security Administration (TSA).

“The government contracting process is supposed to be confidential. If I know how you're hiring the people for security related job, TSA air marshals, then I can prepare a person to fit that model and get my guy in,” Durie says. “Once I have my guy in, you have no security.”

Northrop Grumman refused to speak to FRONTLINE/World on camera. But they did issue a statement saying the potential security threat was disconcerting, and they pledged to investigate.

Right now there are no tough U.S. laws regulating the disposal of e-waste, leaving companies and consumers to sort out the claims of recyclers on their own.

Following the recycling process as a consumer would, students drop off some e-waste at a facility on America’s West Coast. They are wearing a hidden camera and are assured that what they are bringing in will be disposed of safely and locally.

One worker at the facility tells them: “What they literally do is dump it into a blast furnace and it burns it all up; and all they get out of it is a bunch of ash and some of the precious metal. Everything else gets consumed, burnt. And that's an actual fact.”

The team notes the container numbers leaving the facility and, using public records, traces where they're sent. A few weeks later, their reporting takes them to the port of Hong Kong.

Just a few miles from Hong Kong’s port, hidden behind eight-foot-high corrugated walls, are mountains of computer monitors, printer cartridges from Georgia, relics of old video arcades…

In China, e-waste has become big business.

The southern Chinese city of Guiyu has been completely built around the e-waste trade. Miles and miles of nothing but old electronics.

Jim Puckett is an environmental activist credited with discovering this harmful e-waste route to China. He has accompanied the team to Guiyu, a place he first visited eight years ago, and calls it the dirty little secret of the hi-tech industry.

Video Puckett shot in 2001 was the first anyone had documented showing Western computers being dumped in Guiyu. He found tens of thousands of people working here in the toxic trade. On this return visit, Puckett says things have gotten worse.

“I was there first in 2001 and it was shocking enough then. It had gone from very bad to really horrific. And what is happening there is rather apocalyptic.”

One of the most disturbing things Puckett points out is happening behind closed doors. Women literally cooking circuit boards to salvage the computer chips, which have trace amounts of gold.

“All these old mother boards and other types of circuit boards are being cooked day in and day out, mostly by women, sitting there, breathing the lead tin solders. It’s just quite devastating,” Puckett says.

To find out who is making money off this hazardous work, the team travels to downtown Hong Kong, home to hundreds of companies that import e-waste into China. No one here will speak to the reporters on camera, so they film surreptitiously.

Puckett and one of our reporters arrange to meet an e-waste broker willing to explain the e-waste trade from the inside.

The man explains how hundreds of thousands of tons of American e-waste makes its way into China, despite laws intended to stop it.

“If we were to send you our material, would our recyclers get in trouble with the Chinese government if they find their material coming into mainland?” Puckett asks the broker.

“I can only say that if they get caught it has nothing to do with you. Because I buy from you, and then I sell to him. He is buying from me; he's not buying from you,” the man explains.

He says that since Hong Kong ships millions of containers to the U.S. and most return empty, it's cheap to load them with e-waste, and too expensive to dispose of the waste safely -- no matter what recyclers claim.

When the reporters ask what sort of due environmental due diligence there is, the man responds:

“I can only say one thing, if you want to do it environmentally, you have to pay. They have to invest in machinery, labor, everything. It isn’t worth it to pay so much money.”

On the last trip of the assignment, the team heads to India. No longer just a dumping ground, India is now generating its own e-waste at an alarming rate, thanks to a growing middle class with a taste for high tech.

“Last year, we sold more than seven million PCs in India,” says Indian businessman Rohan Gupta. “We generated 330,000 tons of electronic waste within India. So all these are going to comeback to the waste stream sooner or later. It’s a growing industry.”

Gupta is giving a tour of his state-of-the-art facility outside Bangalore.

He is betting on a new Indian law that could force its high tech industry to recycle responsibly and maybe one day put the digital dumps out of business.

At another recycling plant in Bangalore, they are literally trying to spin the waste into gold, refining the scrap in a safe environment and fashioning it into watches and jewelry they market as eco friendly.

Plants like this could become part of a global network of certified e-waste recyclers that Puckett's group is trying to get off the ground. But even Puckett realizes it's an uphill struggle.

“Even if you have a state-of-the-art facility in a country like India, the free market there will send it to the lowest common denominator, to the worst facilities where people are sitting on the streets just picking through it by hand,” he says. “It’s a myth to think that you can just solve the problem immediately with technology alone.”