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Brief Counsel

Have your say on design of waste minimisation regime

02 April 2009

The Waste Minimisation Act, passed last year, sets the broad framework for waste minimisation in New Zealand. Its aim is to encourage the efficient use of resources, less waste and more environmentally friendly waste disposal. 

While the Act has been in force since September 2008 much of the detailed policy has yet to be filled in and, as we all know, the devil is often in the detail. The Ministry for the Environment (the Ministry) has issued a Discussion Document for consultation, setting out five topic areas on which it wants feedback (the Document). 

The response the Ministry gets from this exercise will inform decisions which will affect all sectors of the economy to some extent and some businesses significantly. Although the Ministry’s mind remains open on many issues, the Ministry has given clear indications that it prefers "voluntary" and "industry-led" solutions. That is likely to suit some but not all so may become an issue for rigorous debate.

This Brief Counsel canvasses the topics covered in the Document and explores some of the potential implications.

Scope of consultation and timetable

The Waste Minimisation Act 2008 (the Act) began life as a Green initiative but was adopted by the Labour Government and was eventually passed, after significant amendment, with broad cross party support. Several key aspects of the Act, however, require detailed regulation before they can be implemented.

The Document covers:

  • priorities for product stewardship
  • criteria for funding projects through the Waste Minimisation Fund
  • the design of regulations for waste monitoring and data collection, and
  • the exemption regime for cover material from the new waste levy.

The Ministry is also taking the opportunity to seek input on a planned revision of the targets in the New Zealand Waste Strategy 2002. This Brief Counsel will follow the structure of the Ministry’s Document.

Each section contains a list of questions to guide feedback on the Document. Submissions close at 5 pm Friday, 15 May.

Waste Strategy targets

The Waste Strategy 2002 identifies 30 targets, some of which have been achieved and others of which were incapable of achievement due to lack of baseline information or lack of an implementation mechanism. The proposal is to replace these with 14 specific high-level targets geared toward ensuring the successful implementation of the Act. 

Some targets are for the Ministry to fulfil but others signal a clear intention for action from the private sector and therefore will need to be considered carefully by players in the waste industry. Those targets relating to hazardous waste would seem to deserve particular thought and attention. There may also be an issue concerning the appropriateness of a 2010 baseline for Target 1, given that the current economic climate may distort typical annual waste trends. 

Target 1: By 2015, reduce the quantity of waste disposed to landfill per person per year by 20% relative to an established 2010 baseline.

Target 2: By 2010, have a system in place for the ongoing monitoring of the composition of waste to landfill.

Target 3: By 2012, have a system in place for the ongoing monitoring of the composition of organic waste, the amount disposed of at landfills and diverted from the waste stream.

Target 4: By 2012, have a system in place for the ongoing monitoring of the generation and composition of construction and demolition waste, the amount diverted from the waste stream and the amount disposed of. 

Target 5: By 2012, the Ministry will have established a national tracking system for all hazardous waste.

Target 6: By 2011, the Ministry will have investigated the need for, and propose if warranted, regulatory standards for storage, transport, recycling, recovery, treatment and disposal of hazardous wastes.

Target 7: By 2012, specific industries will develop at least three accredited product stewardship schemes that increase the recovery or recycling of the hazardous components of waste.

Target 8: By 2014, specific industries will develop at least two other accredited product stewardship schemes that result in a reduction in hazardous substance production at source.

Target 9: By 2015, regional councils will have established satisfactory systems to record information on contaminated sites and will have assessed which sites pose a high environmental risk.

Target 10: By 2020, regional councils will have investigated all contaminated sites identified by 2015 as high risk, and will be implementing an action plan for their management and/or remediation.

Target 11: By 2015, all waste disposal facilities (including wastewater treatment plants, landfills, cleanfills and onsite wastewater systems) will be meeting existing regulatory standards and will be consented if this is a requirement.

Target 12: By 2010, the Ministry will assess the need for a national environmental standard addressing environmental management of solid waste disposal facilities.

Target 13: By 2012, the Ministry will have implemented a waste monitoring and reporting programme to generate consistent data on national waste streams including waste to cleanfills and other disposal sites (e.g., industrial landfills).

Target 14: By 2012, the Ministry will work with local authorities to develop a national reporting template that councils will use to report to the Ministry on progress against their waste management and minimisation plans and other waste-related activities.

The Ministry is seeking input on the choice of targets, whether the timeframes proposed are realistic and whether any further targets should be proposed. The new targets will be submitted to the Government for approval mid-year. Once they are approved, the 2002 Waste Strategy will be reprinted to incorporate them. 

Product stewardship

"Product stewardship" is when producers, brand owners, importers, retailers, consumers and other parties take responsibility for the environmental effects products may have, including recycling and disposal at the end of the product’s useful life. 

The idea is to internalise the costs of waste, providing an incentive for more efficient resource use and sending a price signal to consumers. The term "product" can include classes of products (eg, all refrigerators and freezers) and includes packaging.

The concept follows world-wide trends in waste regulation.  Environmental regimes in the United States and Europe also promote systems of “product stewardship” although Europe prefers the term “producer responsibility”. 

Europe in particular takes a highly regulated approach, imposing significant financial burdens on producers of waste streams arising from the likes of waste electrical and electronic equipment ("WEEE"), packaging and batteries. 

The New Zealand Government by comparison seems to prefer the "carrot" rather than the "stick", at least at this stage. The legislation provides for the accreditation of both voluntary and compulsory product stewardship schemes resorting to compulsion only where voluntarism fails and only where the environmental impacts are serious. 

Voluntary schemes

The Ministry has identified a number of products which it wants to be covered by voluntary schemes so that it can monitor the success of these over the next two to three years to determine whether further action is required. 

The products in this category are: computers, computer accessories and televisions; packaging; lead acid batteries; mobile phones; paint and plasterboard. 

Also included in this list are tyres and mercury-containing lamps although in both cases the Ministry states that it does not consider that any immediate action is warranted as the potential harm from these products is less than from the other products which have been selected.

Those running voluntary schemes can apply to the Minister to have them accredited, provided they meet the requirements of the Act. The Act also allows for regulations to be developed in support of voluntary schemes but there is no present intention to do this.

The Document flags the issue of "free-riders" - i.e. those within an industry who, by choosing not to participate in a voluntary scheme, gain a commercial advantage over their complying competitors. Concern among some industry players around free-riding may be the catalyst for the slightly oxymoronic concept of "mandatory voluntary" schemes (voluntary schemes supported and enforced by regulations) in some cases. 

An interesting issue arises as to how voluntary schemes could be considered under the Commerce Act 1986. This issue has not been dealt with in the Document but may require addressing , particularly in light of the Government’s clear preference for those schemes.

Mandatory product status

The trigger for mandatory product stewardship under the Act is when the Minister for the Environment declares a product to be a “priority product”. To make such a declaration, the Minister must be satisfied that:

  • the product’s waste will or may cause significant environmental harm or that significant benefits will accrue from the waste minimisation of the product, and that
  • the product can be effectively managed under a product stewardship scheme. 

Any such scheme must be accredited. If no scheme is developed, the Minister can make regulations to require a scheme.

While the selection process has not been explained nor its technical basis, products the Ministry intends to investigate for "priority product" status in the short term are:

  • Agricultural chemicals (pesticides, herbicides, veterinary medicines, farm cleaning products, plant growth regulators and other chemicals) The Ministry is supporting the development of a voluntary scheme in partnership with industry and regional councils which is due to be launched mid-year. Key to its success will be that all of the industry participates. If full participation does not happen, a mandatory scheme may be resorted to.
  • Used oil  Estimates are that around 33 to 40 million litres of used lubricating oil are generated each year. Much of this is being collected and either refined for reuse or used in high temperature industrial processes but some 7 million litres are unaccounted for. A product stewardship scheme would ensure all used oil is managed and directed to high-value uses with minimum harm to the environment. If the current voluntary schemes cannot achieve this, used oil may be declared a priority product.
  • Refrigerant gases The Ozone Protection Company collects refrigerants and exports them to Australia for destruction. This is funded through a voluntary $1 per kilo levy on imports of ozone-depleting substances. These regulatory controls do not exist for other refrigerant gases of concern.

The Document states that it is unlikely that all three of these products will be put under mandatory stewardship as industry may develop effective voluntary schemes or the product may fail to meet the criteria; once again an indication that the Government would prefer not to regulate.

The Ministry is seeking feedback on which products (to a maximum of five) to declare as priority products, who would be affected, who should be involved in the design and running of such a scheme and what the potential costs and benefits would be.

Criteria for the Waste Minimisation Fund

The Waste Minimisation Fund (the Fund) is to be funded by a levy of $10 per tonne, payable from 1 July 2009, on waste sent to landfill. Half of this funding stream will go to those territorial authorities which have adopted a Waste Management and Minimisation Plan; a commitment already provided for in the Act. The remaining half (less administration costs) will be allocated on a contestable basis to projects which promote or achieve waste minimisation, although who will gain access to this fund and how, is still up in the air.

The Ministry wants input on how funding applications should be evaluated. 

The Ministry’s proposed criteria

  • Funding is for waste minimisation projects (the reduction of waste and the reuse, recycling and recovery of waste and diverted material).
  • Funding is for specific projects rather than for existing activities or ongoing running costs.
  • Funding will not be provided from the Fund where alternative sources are available (e.g., Sustainable Management Fund, Contaminated Sites Remediation Fund, or research funding through the Foundation for Research, Science and Technology).
  • Projects must implement new initiatives or expand on existing activities.
  • There must be a degree of confidence that the applicant can deliver the project.
  • There must be a degree of confidence that the project can deliver its goals.
  • Funding can be for operational or capital costs.
  • Projects will be assessed for their strategic value, from which other waste minimisation projects may benefit or be developed.
  • Preference will be given to projects that collectively give the largest sustained net benefit in environmental quality.

But the Ministry has also identified a range of additional issues that could be considered. These are:

  • Scale (should the Fund give preference to larger projects?)
  • Innovation (should the Fund encourage new and innovative solutions?)
  • Research and Development
  • Legacy waste (should the Fund prefer projects that deal with legacy waste where there is no identified owner?)
  • Focus (should the Fund target particular waste or waste streams, in which case priorities would need to be developed?)
  • Repayment conditions (these could be used in future for projects that have commercial potential to provide ongoing revenue).

The first round of funding proposals will be invited in the second half of this year. 

From our perspective, the criteria appear to lack the clarity and objectivity required to give industry members seeking to benefit from the fund sufficient certainty. Much is presently left in the hands of the decision maker. Those already engaged in the waste industry may also be concerned about the apparent inconsistency over support (or lack of) for existing initiatives and whether this creates potential for a less than level playing field.

The criteria also raise the question of how to deal with "legacy waste" - that is, waste arising from activities existing before the Act came into force. It seems the Government is yet to develop a position but we anticipate it becoming one of the more significant and difficult issues as the Document and indeed the life of the Act progresses. There is obviously a lot of work still required to refine the fund allocation process. 

Monitoring waste

The proposed new targets require the collection of detailed information on New Zealand’s waste profile in order that the Government can assess whether it is on track to meet its proposed reduction target of 20% by 2015. 

The Act will require landfill operators from 1 July to provide monthly returns of the tonnes of waste received based on measured weight or volume. But the Ministry is proposing to add to this a requirement to also provide data on waste composition – and this can be more expensive and difficult to obtain.

To limit the costs, the Ministry is proposing to use compositional categories which fit with those already used by landfills. These are still being refined but are provisionally: cover (with type specified), kerbside collection, transfer station, special (with type of special waste specified), construction and demolition, landscape waste, commercial and industrial, residential.

Some of New Zealand’s 52 landfill operators may be able to supply this information from their existing records. Others have indicated that they will be able to provide it easily and at low cost. Others will need to collect or process records differently and estimate costs ranging from $500 to $2000 a month. Some landfills do not have weigh bridges and will need to buy one at a one-off cost of $80,000. It is also possible that the requirements will be effectively passed down the chain by landfill operators to the actual producers, which may mean additional management and administrative burdens at pick up point. Having said that, in some cases this practice may already be in place.

Before proceeding with regulations to require high-level data collection, the Ministry will consult further with landfill operators, assess the costs and benefits of the proposal, seek Cabinet approval and produce guidance material on the new requirements.

Improving the operation of the waste levy

Landfill operators use soil and rock known as "cover material" as part of routine environmental management of their sites. If the proposed $10 levy was applied across the board, it would catch any of this cover material which was sourced off-site. As this accounts for up to 10% of all material deposited at landfills, this could have serious perverse effects which would compromise what the Act sets out to achieve, for example:

  • it would make it difficult for landfill operators to access cover material as people wanting to dispose of it would be likely to take it to sites that do not charge the levy (cleanfills and other landfills that do not accept municipal waste), and
  • it would be inequitable in its application as some landfills will be able to source more cover material on site than others.

To address these problems, the Ministry is proposing that cover material required for environmental purposes (up to 10% of the weight of waste deposited in the landfill) should be exempt from the levy.  We think the proposals are sensible, although what should be defined as "cover material" and how that would need to be evidenced may benefit from further clarification.

Conclusion

Some may ask whether waste minimisation initiatives should be seen as a priority given other major issues facing the New Zealand economy at this time but, the Government clearly wants to be seen to be maintaining momentum in this area while avoiding regulation where possible. This will suit some, but not all, including those firms and sectors who are already implementing, or well on the way to implementing, waste minimisation programmes, but are concerned about “free-riders” and potential consequential implications on competitiveness. 

The proposed new waste targets are somewhat of a mixed bag. Some of the targets lack, in our view, a robust technical basis. In part, that is likely to reflect the paucity of reliable data on waste production and disposal in New Zealand – an issue that itself is intended to be addressed by a number of the targets. 

The Government has signalled an intention to engage in a series of further consultation exercises addressing additional detail, for example, what "systems" will be put in place for monitoring and recording waste-related information. Whether consultation on the Document itself will lead to more regulation, new national environmental standards, further proposals for industry self regulation or more priority products remains to be seen, but it is likely that the outcomes will largely be influenced by the responses received.

Footnote

  1. Document located at http://www.mfe.govt.nz/publications/waste/waste-minimisation-discussion-document/index.html