Sales & Marketing

30 May 2008

Waste, Reduce, Recycle: Waste Minimisation Bill

Most products will create waste, either from the packaging or the product itself. The Waste Minimisation (Solids) Bill was a private members Bill, introduced by Nandor Tanczos of the Green Party. This Bill tried to put in place provisions which enabled and required New Zealand businesses, public organisations and households to decrease their disposal of waste.

In September 2007, the Government released details of its preferred waste minimisation policy and provided the Local Government and Environment Select Committee with a Supplementary Order Paper (SOP) containing amendments to this Bill. These amendments reflected the Government's preferred policy.

The original Bill was revoked and renamed the Waste Minimisation and Resource Recovery Bill to reflect the dual purpose of reducing waste and recycling resources. The Select Committee considered the SOP and they reported back to the House on 7 April 2008.

The Select Committee has recommended that the Bill be passed, as the Waste Minimisation Bill (Bill) but with significant amendment. The Bill aims to encourage waste minimisation and reduce waste disposal. This will help to protect the environment from harm and provide environmental, social, cultural, and economic benefits. The Bill aims to reduce the amount of waste sent to landfills, introduce a levy on waste and foster the development of product stewardship schemes.

This article will briefly outline relevant provisions and discuss how they may affect industry, in particular businesses that sell disposable products or provide packaged goods to New Zealand.

Part 2: Product Stewardship

The Bill introduces a new Part 2 on Product Stewardship. This provision encourages and in certain situations requires, the development of product stewardship schemes. A product stewardship scheme is one that will outline the responsibility for managing the end of the life of a product. It will also ensure the environmental impacts of the product are shared by those involved in the product's life.

Priority Products

The Minister for the Environment can declare a product as a "priority product" if they are satisfied the product:

• will or may cause significant environmental harm when it becomes waste; or
• there are significant benefits from reduction, re-use, recycling, recovery, or treatment of the product; and
• the product can be effectively managed under a product stewardship scheme.

This broad definition means that virtually any product may potentially qualify as a "priority product". The Minister for the Environment in a Regulatory Impact Statement has indicated that "priority products" might include products such as computer equipment, aluminium packaging, glass packaging, some construction and demolition materials, agri-chemical containers, televisions, silage plastic, used oil or tyres. These products, if reused or recycled, would create significant benefit.

Product Stewardship Scheme

Where a product is declared to be a "priority product", a product stewardship scheme for the product must be developed and accredited as soon as practicable (clause 8). The Minister can publish guidelines about the contents and expected effects of the schemes. However, it seems the intention of the Bill is to provide for businesses to set up schemes independently and then get them accredited by the Minister. This may require additional work and increased costs for companies.

The Bill provides for official accreditation of product stewardship schemes, including voluntary schemes. To qualify for accreditation the scheme will need to include information such as:

• measurable waste minimisation, treatment or disposal objectives for the product;
• a time frame for achieving the objectives;
• a list of the classes of person involved in the life cycle of the product and those that have agreed to participate in the scheme, assigning responsibility;
• provide for assessing the scheme's performance;
• set out how the information will be provided to purchasers and users.

The form of the accredited scheme will be based on the product and will be developed with the input of the key stakeholders and the industry. Relevant stakeholders, including those involved in designing, producing, selling, using and disposing of a priority product will share responsibility in managing the waste generated throughout the lifecycle of their product. End of life collection, recycling, disposal of the product and waste associated with production, including manufacture and packaging may be addressed in the scheme.

If businesses do not act in accordance with an accredited scheme for a priority product,  the Governor-General may make a regulation (clause 20) prohibiting the sale of a priority product except in accordance with the scheme. All businesses will have to become responsible for sustainable management of their operation and comply with relevant schemes otherwise they run the risk of being prohibited from selling the relevant products.

Regulations

The SOP proposes (clause 21) that the Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations in relation to products and materials, whether or not they are priority products.

Before recommending the making of a regulation, the Minister must obtain and consider the advice of the Waste Advisory Board and must consult with persons or organisations who may be substantially affected by the regulations. The Minister must also be satisfied that the benefits from implementing the regulation exceed the costs expected from doing so.

A regulation can be made, among other things, for the purpose of controlling or prohibiting:

• the disposal of products or waste;
• the manufacture or sale of products that contain specified materials

If a regulation is made under this clause, this could have possible implications for businesses that import products into New Zealand. For example, if a regulation is introduced that prohibits the use of specified materials in packaging, then it may be that these products will be unable to be sold in New Zealand without being repackaged. This will either increase the price payable by the consumer or more likely result in the product being withdrawn. (It is unlikely that an overseas manufacturer/supplier will accommodate unique NZ packaging requirements, given that we are a small market.)

There is provision for a regulation to be made requiring a specified class of person to provide a take-back service for specified products. This may mean that, for example, computer manufacturers may have to take back old computers and then reuse, recycle or dispose of the products themselves. Retailers may also be required to take back packaging. This will create an increased cost in disposing of or recycling the waste, including lost floor space in storing the product/packaging.

Regulations may also be made prescribing requirements of the labelling of specified products or prescribing the standard to be met when reusing, recycling or recovering the product. The broad discretion given to the Governor-General to make regulations means that businesses may be faced with increasing costs.

Part 3: Waste Levy

One key component that has remained in the Bill is a levy on waste that is sent for disposal. The purpose of the levy is to raise revenue to fund waste management projects and administration costs. This levy will also effectively increase the cost of disposal and hopefully encourage waste minimisation. It has been recommended that the levy be initially set at $10 per tonne, but it is intended that this figure will increase over time.

Part 7: The Waste Advisory Board

It is proposed under Part 7 to establish a Waste Advisory Board. The function of the Board is to provide advice relating to waste minimisation. Specifically the Board will provide advice about:

• declaring a product to be a "priority product";
• making guidelines about the content of product stewardship schemes;
• recommending the making of regulations.

Conclusion

Many businesses will be closely following the Waste Minimisation Bill's continuing progress through Parliament. In its current form, this Bill will have a significant impact on businesses and their waste management in New Zealand. The Bill gives wide discretionary power to the Governor-General to impose regulations to ensure sustainable management of operations. All businesses involved in the lifecycle of a product have a responsibility to manage the waste. They need to begin planning now to ensure they reuse and recycle products, otherwise they will be faced with increasing disposal costs.

Authors

Peter Stubbs

Partner - Corporate & Commercial

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Craig Nelson

Senior Associate - Corporate & Commercial

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