Having worked for various suppliers for Honda, Nissan, Ford, and Toyota (to name solely the automakers), I can tell you how this works. There’s several tiers of subcontractors. Going up the supply chain, the Third Tier suppiler is often (though not always) the company which processes the raw materials, the Second Tier will do some of the subassembly work, then ship it to the First Tier subcontactor, who’ll combine that subassembly with others and ship that to the manufacturer. The inspectors from manufacturer will routinely check the facility of the First Tier supplier, and, occassionally, check those of the Second Tier manufacturer, and only inspect the Third Tier when they’re first brought onboard, or there’s a problem which can be traced back to the Third Tier subcontractor (if there’s a Fourth Tier, they’ll only see inspectors from the manufacturer if the problem can be traced to them).
On the outbound side (when it comes to waste and not product shipped), they’ll generally go as far as the First Tier, and that’s it, as their legal responsibility ends there. When I was working with one of the environmental engineers at Nissan, she began describing (among other things) how Nissan would turn the damaged wooden pallets they got into mulch and use that for landscaping on the Nissan factory grounds in Smyrna, TN. My first question to her was, “Do you guys do soil sample tests?” When she replied that they didn’t, I proceeded to explain to her that it was a really bad idea because over the years I’d found that you never really know what’s been spilled on those pallets and that I’d seen any number of them which had been stamped “Single Use Only” and had obviously been used more than once. (These pallets tended to have originated with pesticide companies and wound up getting mixed in with others that the trucking companies used.)
Odds are, the returned battery packs go to a First Tier subcontractor, who tests and sorts through them. The ones that can easily and inexpensively be reprocessed are handled by the First Tier subcontractor, the rest are shipped to the Second Tier, who selects the ones they can handle, and then hands the rest off to a Third Tier subcontractor. It is here that they’re most likely shipped off to some Third World nation for processing.
Even if Toyota checks the Second and Third Tier recyclers to make sure the stuff’s not being sent overseas, that doesn’t mean it won’t happen. Corporations are always getting surprised that one of their subcontractors is doing something different than what they were supposed to do. Often times, the subcontractor will be less than dilligent in selecting a subcontractor, and this subcontractor will do the illegal/unethical thing. Generally, this is only caught when some independant group makes a stink about what happens.
Oh, and forget about surprise inspections. Those only happen when there’s a consistent problem. Otherwise, the subcontractor knows well in advance that inspectors are coming. The only exceptions to any of this that I’ve found, are in the aviation industry. There, every one of the subcontractors can expect to have an inspector from the manufacturer on site (and depending upon the component, said inspectors might be there 24/7).
I can tell you that my current employer is a First Tier supplier for both Honda and Toyota. In the time I’ve been there (6 months), we’ve never had a Toyota inspector in the facility, while Honda’s there about every other month. Make of that what you will.