Plastics are one of the most used materials in today’s world because of its various properties, ranging from cost saving and light weighting to durability and longevity.
However, as we are using more plastic products, we are also creating more plastic waste. In keeping with international trends and the local legislative framework, the South African plastics industry has committed to the vision ‘Zero plastics to landfill by 2030’. In my opinion a somewhat ambitious target, but surely one that will call the industry to definitive action.
According to data from Plastics|SA, only 20%, or 280,000 tons, of all plastics manufactured in South Africa were recycled in 2013, which shows an increase of 4,1% from 2012. Of the 280,000 tons, 220,400 tons (79%) were plastics packaging products.
One of the reasons Plastics|SA states for the slow increase in the recycling rate, specifically for plastic packaging, is the economic down-turn during 2013 that had a direct impact on the quality and quantity of plastic packaging available for recycling. On the one hand the consumer purchased less, thus less packaging, and on the other hand the exchange rate favoured the export of recyclables.
However, it is not only the target of sending ‘Zero plastics to landfill by 2030’ that is driving change and the way in which we as producers view our responsibility towards an increase in plastics waste. In South Africa we have a progressive environmental regulatory framework. The right to an environment that is not harmful to one’s health or well-being is entrenched as a fundamental right in the Constitution of South Africa.
Understanding and navigating legislation can be somewhat daunting, but with reference to waste management and the impact of various pieces of legislation on our industry, we should understand the basic principles of the following Acts and Strategies:
- National Environmental Management: Waste Act (59/2008)
- National Environmental Management: Waste Amendment Act (26/2014)
- National Waste Management Strategy (NWMS)
- National Pricing Strategy for Waste Management (NPSWM)
The promulgation of the National Environmental Management: Waste Act (59/2008), has placed great emphasis on recycling and the reduction of materials to landfill. It allows for the use of economic instruments applied to specific waste streams to serve as an incentive or disincentive to ultimately increase the diversion of material from landfill.
Six years after the Waste Act was promulgated, we saw the National Environmental Management: Waste Amendment Act (26/2014) from which the National Pricing Strategy for Waste Management (NPSWM) is a direct consequence. The Waste Act, as amended, provides for the determination of waste management charges and its review, as well as for the collection of these charges through the national fiscal system.
It also makes provision for the establishment of a Waste Management Bureau within the structures of the Department of Environmental Affairs (DEA). The main purpose of the Waste Management Bureau will be to process, monitor and evaluate any Industry Waste Management Plan (IndWMP) submitted to the DEA. All of these aspects are prescribed in the NPSWM.
Time to get serious
It is time that we get serious about the impact that the Waste Act could have on our industry. We know that we need to increase recycling rates of our various waste streams – from rigid to flexible. But do we know what will happen if we don’t?
The Waste Act introduces us to additional principles such as the life-cycle approach to waste management, extended producer responsibility (EPR), the precautionary principle and the polluter pays principle.
Within the framework of EPR, we as an industry remain financially or physically responsible for a product to its post-consumer stage. According to the Waste Act, this responsibility could include the implementation of waste minimisation practices, the funding of campaigns to increase the reduction, re-use, recycling and recovery of waste, conducting awareness programmes to inform the public of the impacts of waste emanating from the product on health and the environment.
However, should the Minister of Environmental Affairs believe that a specific waste stream either poses a threat to health or the environment, either due to the quantity or composition of this waste stream, and that current measures are insufficient in dealing with this waste stream, the Minister may declare such a waste a priority waste.
Section 28 of the Waste Act allows for the Minister to require a specific industry to submit an IndWMP or any industry may elect to voluntarily submit an IndWMP to the Minister for approval. Typically an IndWMP will provide the Minister with a detailed status quo analysis of the current waste management system, set realistic targets for waste minimisation within a particular industry, outline milestone indicators with achievable time-frames for different interventions and provide for sound record-keeping systems.
The National Waste Management Strategy (NWMS) is a legislative requirement of the Waste Act set out to achieve the objects of the Act. According to Michael Goldblatt one of the challenges facing waste management in South Africa is a policy or regulatory environment that does not actively promote the waste management hierarchy.
This has limited economic potential of the waste management sector, which has an estimated turn-over of approximately R10bn per annum. Both the private and public sector believes that waste collection and the recycling industry make meaningful contributions to job creation and the GDP, and will continue to do so with the right combination of industry support and legislative drivers.
To this effect government is proposing an approach that will optimally combine regulation and compliance measures with self-regulatory components, voluntary initiatives, economic incentives and fiscal mechanisms. The approach establishes baseline regulations for the waste sector as a foundation for a co-regulatory system that relies on industry initiative and voluntary compliance.
In cases where industry response proves insufficient for dealing with waste challenges or where market failure prevails, more interventionist regulatory tools may be deployed, i.e. a mandatory EPR scheme where IndWMP have been ineffective.
Purpose of NPSWM
The National Pricing Strategy for Waste Management (NPSWM) is a legislative requirement of the Waste Act and gives effect to the NWMS. It contains guiding methodologies for the setting of waste management charges, the implementation of IndWMP and the operations of the Waste Management Bureau.
The selection and use of economic instruments, as outlined in the strategy, is strongly grounded in the polluter pays principle whereby all generators of waste (including businesses and households) are responsible for the costs of managing wastes generated.
The NPSWM is furthermore based on the principles of environmentally related taxation as per Chapter 2 of the National Treasure Framework for considering market-based instruments to support environmental fiscal reform in South Africa.
One of the aspects addressed in the NPSWM is that of EPR schemes. It is suggested that amongst other advantages, these EPR schemes could be used to relieve municipalities of some of the financial burden of management, promote ‘design for recycling’ initiatives and encourage the use of more recycled content in production processes.
In essence, EPR shifts the responsibility for waste management away from government to industry and these schemes are typically funded through the implementation of various economic instruments, levied either directly by the obligated industry (e.g. product charges, advanced recycling fees, deposit refund schemes, EPR fees), or by government (e.g. through material, input or product taxes).
It is the Minister’s prerogative to declare the application of EPR to a product, group of products or waste stream and the evaluation criteria proposed to identify possible candidates for EPR schemes include:
- Risk of harm – Products with toxic constituents that may become a problem at the end of life.
- Large products – that are not easily and conveniently thrown out as waste.
- Complex products – Products with multiple material types that make them difficult to recover in traditional recycling systems.
- Voluntary measures insufficient – where participation rates or waste diversion from landfill remain low for voluntary EPR schemes already in existence.
- Current waste stream recycling/recovery low – where the diversion of specific waste streams from landfill is low, as benchmarked against developing and developed countries (e.g. % recycling).
It is important to note that if a waste stream has not been prioritised by the Minister and a voluntary EPR schemes are already in operation, the suggested course of action would be for that voluntary systems to continue operating to ensure minimal disruption to current waste management activities. These voluntary EPR schemes may however be ‘influenced’ by DEA through the approval and implementation of the relevant IndWMPs (e.g. requiring greater support of EPR schemes to municipalities, setting of recycling targets, monitoring and evaluation by government, etc.).
But as in any industry and with any voluntary programme, there is always the question of dealing with ‘free riders’ or companies that either refuse or fail to participate. In a recent meeting with DEA, this question was posed in relation to the pricing strategy and DEA responded: “There is a proposed additional tax that will be imposed on free riders. DEA will make it compulsory that companies need to be part of an Industry Waste Management Plan and anyone not forming part of the plan will be subjected to higher tax levels. Engagement with SARS in relation to free riders will still take place.”
When we debate sustainability in the business environment we could easily divide companies into three basic categories, namely: those who only recently embarked on the journey towards greater sustainability, those who are happily using the hype around environmental sustainability as an opportunity to ‘green wash’ their products and brands and those who have gone through great lengths (and costs) to implement the principles of sustainability at every level of their businesses.
I am of the opinion that the majority of companies operating within the PVC industry in South Africa, and globally, fall into the latter group. This is certainly true for members of SAVA who voluntarily signed a Product Stewardship Programme (PSP) in 2011 and continue to work towards achieving its robust targets and deadlines!
DEA indicated in an Industry Waste Management Forum held on 13 February 2015 that they working on a Section 28 Notice to invite industries to submit IndWMPs and that they are engaging on an ongoing basis with sectors and industries that have already voluntarily submitted their IndWMPs. It is foreseen that the Section 28 Notice will be published before the end of this financial year, to also allow a 30 day commenting period, after which the process on calling for the submission of IndWMP will be finalised.
Costs of failure
The outlined legislation either holds an opportunity for the local PVC industry to pro-actively submit and bring into effect its IndWMP, or it holds a risk should the industry decide to adopt a wait-and-see approach. When it comes to legislation and regulations, companies tend to underestimate the cost of non-compliance, which, within the framework of the NPSWM, could be dealt with by the implementation of a government managed tax similar to the plastic bag levy of which we are all too familiar with. Product manufacturers need to understand the true costs of failure, assess the business implications, and adopt long-term strategies to avoid these costs.
To this effect, SAVA is in the process of conducting an extensive recycling survey that will ultimately feed into an IndWMP that we as an industry will voluntarily submit to DEA, in response to the Waste Act and EPR and give effect to in the near future.
In summary SAVA believes that the key to succeeding and avoiding costs in our current regulatory environment is to take a proactive approach and for our industry to invest in a long-term approach towards waste management. The long-term costs of being unprepared are simply too high.