In December 2017, the government issued a gazette requiring the paper and packaging, electric and electronic, and lighting industries to prepare and submit Industry Waste Management Plans within nine months of the publication of the gazette. The three industries must submit their plans by 6 September 2018.
In addition, all producers in these industries must register with the department of energy within two months of the publication of the gazette.
All this is happening against a backdrop of the dismal history of failures in the plastic bag and tyre waste sector systems. The plastic bag initiative was government driven, while the tyre initiative was industry driven. One hopes that lessons have been learnt and future plans will mitigate against another unsuccessful implementation of a sector plan.
Levies and job creation
The latest call for industry waste management plans is a step in the right direction to achieve government’s goal of zero waste to landfill. The government must be lauded for enforcing responsibility for the full product lifecycle with manufactures and importers. This is a worldwide practice, and South Africa should be no exception. It is a huge opportunity to create job opportunities in the collection, transportation, storage and processing of waste.
Industry waste management plans reduce the opportunity for fence-sitting. They eliminate free riders and convoluted conspiracy theories, which are the Achilles heel of voluntary schemes. Hopefully, they will also kill off the unfortunate notion that industry should pay to have waste collected in voluntary schemes. Both public and private sector role-players regrettably subscribe to this view that is not supported by evidence, but continues to influence behaviour and practice.
On the other hand, the call for industry waste management plans could have a negative impact on those who will ultimately bear the brunt of regulated levies for waste collection and disposal. The negative comes only if it is not foreseen that the cost of recycling will be borne by the ultimate consumers of the products.
Whenever the government or industry imposes a levy on a product, the producers merely add the levy to the cost of production. To illustrate this point, consider the price of a litre of petrol. All the levies are tabulated separately and form part of the cost structure for the litre the consumer buys at a service station. The more the levies increase, the more expensive fuel becomes. Customers have to pay for whatever levy is agreed upon and implemented.
Waste collection EPR models
The government envisages two models or schemes for the management of producer responsibility organisations and the related collection of levies, namely, government versus industry managed schemes. In the industry managed scheme, an industry association effectively coordinates and facilitates all the recycling activities of that industry’s waste stream, and also collects their own levies directly from producers (indirectly from consumers). Naturally, but not always obviously, the customer is still the ultimate payer of the levy.
Alternatively, there would be a government managed scheme run directly by government or more likely by an organisation directly under government supervision. Under the government managed scheme, the government collects the levies, via Treasury.
There are three very significant downsides to a levy collected via central government. The first is that the government will impose an administrative fee of up to a quarter of the collected levies. So from the get-go, the recycling kitty reduces by 25% as a function of who collects the funds. Second, and most worrisome, there is no guarantee that the funds for recycling will be ring-fenced towards the purpose for which they were collected. Lastly, the consumer will ultimately pay more per kilogram for the recycling of waste. To achieve the same goals as the industry managed schemes, the customer must have the burden of an administered price from which there is no escape. No matter how much we could try, incorrect strategies implemented correctly could never achieve the best results.
If it is true that all solutions somehow have winners and losers, then it is fair to say that in the government managed scheme, the customer is the loser and the national fiscus is the winner. In the industry managed scheme, the opposite is true, if the scheme is efficiently managed.
It is not difficult to understand why industry managed or government managed schemes should work in collaboration with the Waste Bureau from the Department of Environmental Affairs. The government needs to have sight of what is happening within each waste stream, and that could be done easily and without much fanfare.
Producer responsibility and planning
The development and implementation of industry waste management plans have to be the responsibility of producer industry associations. Industry has to be responsible for the collection and disbursement of levies under tight governance controls. Generally, industry associations have a long history of robust corporate government without any one player allowed to exercise dominance.
The place for creativity, craftsmanship, and business skills should be exercised somewhere else down the value chain. The collection, transportation, storage, and processing of waste is a large enough space to allow for entrepreneurs to apply their skills and experience to earn a living and to create employment.
The anomaly in the tyre industry should be considered a misstep that should not be repeated. Placing producer responsibility organisations in self-interested companies or private hands, however disguised, is a recipe for disaster.
Similarly, independent non-profit organisations that are removed from the producers is an opportunity to manufacture malfeasance and news grabbing practices that are not related to reducing waste to the landfills and protecting the environment. The interface with the Waste Bureau is a good step so that the government is always in the loop regarding the activities of each waste stream. Otherwise the government will have a complete outsider view of what is happening and base its decisions on assumptions rather than what is the real situation.
We have to view these latest developments as an opportunity to create the right systems and architecture for the waste industry. We have an opportunity to do it right and minimise any unintended consequences of our actions. We have the hindsight of having implemented two incorrect approaches incorrectly, and not surprisingly, both haven’t been a resounding success. Now is a perfect opportunity to implement the correct processes correctly. We owe it to the future of our environment and future generations.
For more information contact the ROSE Foundation, www.rosefoundation.org.za