Product Stewardship

SUMMARY

The Waste Reduction and Recycling Act 2011 (Qld) (31 of 2011)("Act") provides an opportunity to drive significant improvements in waste and resource management in Queensland. The Act provides a combination of mechanisms within a framework that seeks to encourage waste reduction and investment in resource recovery and thereby reduce the environmental impact of waste while promoting sustainability.

Amongst other things, the Act proposes to introduce a levy on waste disposal in an effort to reduce landfill in Queensland, thereby minimising potential impacts resulting from landfill. The Act seeks to implement contemporary waste management technologies and knowledge, including product stewardship schemes, to improve industry practices for waste management and resource recovery.

NEED FOR WASTE MANAGEMENT REFORM

Waste management reform has been one of the top agenda items for the Queensland Government since the release of a significant reform package for waste management and resource efficiency in May 2010. The reform package sought to address landfill issues and promote recycling industries and technologies in the knowledge that one of the most serious effects of waste on the environment is ever-increasing greenhouse gas emissions from landfill.

As Queensland faces a growing population, largely due to the resources boom, waste management and resource efficiency management strategies are crucial in ensuring environmental sustainability.

Queensland has been playing catch up for some time now. It is purportedly one of the worst recyclers in Australia. Much of the rest of Australia has already been implementing measures for waste reduction and resource recovery for some time.

WASTE REDUCTION AND RECYCLING ACT 2011

On 12 October 2011, the Act was passed by the Queensland State Parliament and received assent on 28 October 2011.

The Act provides a tailored approach to waste management and resource recovery through a mix of regulatory mechanisms and enforcement powers, the purpose of which is to promote waste avoidance and reduction and to encourage resource recovery and efficiency.

The Act seeks to provide greater certainty to the community about rights and obligations in terms of waste management. It promises to encourage industry investment in the resource recovery/recycling industry and develop a consumer market for recovered materials and goods.

Department of Environment and Resource Management Minister, Vicky Darling claims that the Act will "halve the amount of rubbish directed to landfill within a decade, create thousands of greens jobs and see millions of dollars invested into recycling and resource recovery programs".

OBJECTIVES OF THE ACT

The main objectives of the Act are to:

reduce waste;
reduce the environmental impact of waste;
increase recycling of resources for re-use; and
ensure a shared responsibility between government, business and industry and the community.

The objectives of the Act are to be achieved through various approaches, including:
preparation of a waste management strategy;
price signalling, including the introduction of a levy on waste disposal; ¹
providing for reporting requirements for the state and local governments and business and industry; and
providing product stewardship arrangements.

One way in which the Act proposes to reduce harmful environmental effects through waste management strategies is by applying the underlying principle that the wider community plays a key role in the management of a product's entire lifespan, from the production stage to disposal. This principle is known as product stewardship.²

Typically under a product stewardship scheme, those involved in the life cycle of a product share responsibility for the management and impact of the product throughout the product's life cycle. The responsibility extends to end-of-use management and so essentially, product stewardship seeks to redress the adverse impacts of a product.

The Queensland initiative falls in line with a similar initiative by the Federal Government, which has turned its attention to waste management through the introduction of the Product Stewardship Act 2011 ("PSA"). The PSA focuses on promoting the management of consumer goods and products. Similarly, the Act promotes product stewardship schemes as a means to achieve its objectives, in that it requires consideration be given to the design, production and use of products to minimise any environmental harm that may be caused by waste generated from the production, use or disposal of the product.

When considering the advances in production technology and the hazardous material contained in products, product stewardship becomes particularly relevant. Product stewardship seeks to contend with concerns about the potential environmental harm from disposal of products, particularly those that contain potentially hazardous chemicals, such as mercury, lead or cadmium.

Both the Federal and Queensland product stewardship initiatives provide voluntary and regulated schemes. The products that will be captured under the Federal regime through the Act and the applicable thresholds for compliance, will be specified in regulations that are expected to commence later this year.

The first products to be regulated under the Federal regime will be televisions and computers. The National Television and Computer Product Stewardship Scheme is an example of an approved program (or "co-regulatory" product stewardship scheme). The scheme is planned to commence at the end of 2011. Under the scheme there will be thresholds for compliance where importers and manufacturers who import and manufacture more than a specified number of units per annum will incur obligations under the scheme. The scheme is expected to increase the recycling rate of televisions and computers by as much as 80 per cent by 2021.

WHICH PRODUCTS ATTRACT PRODUCT STEWARDSHIP OBLIGATIONS?

Under the Queensland regime, product stewardship obligations will be imposed upon those products that are defined as "priority products". A product becomes a priority product if it satisfies at least two of the following criteria:

The product contains hazardous or toxic substances.
There is potential to reduce the consumption of resources through improved management of the product.
There is potential to reduce the environmental or social impacts of the product's disposal through improved management of the product.

In this respect, the Queensland regime is identical to the Federal regime. They both impose measures directed at products that generally contain hazardous substances and products in respect to which there is potential to significantly reduce the environmental impact of those products.

PRODUCT STEWARDSHIP FRAMEWORK UNDER THE ACT

The Act provides the following product stewardship schemes:

voluntary product stewardship scheme: where the participants in the scheme voluntarily share responsibility for the management of the product;
regulated product stewardship scheme: where a scheme is prescribed under a regulation for a priority product; and
approved program: where the state has been involved in some part of the process either as a signatory or a party to its development.

In time, like the Federal Government, Queensland will roll out its own schemes. The schemes will be prescribed in regulations. After the regulations have been introduced, it will be apparent which products and industries will be affected and possible to consider the effectiveness of the product stewardship scheme as a mechanism to reduce environmental impacts.

WASTE LEVY

Another important implication of the Act is that it introduces a landfill levy (Industry Waste Levy) on non-recycled commercial waste, which will commence on 1 December 2011. The purpose of the levy is to discourage unnecessary disposal to landfill. As the levy is an industry levy, it is claimed that it will not target consumers. Nevertheless, it is likely that the levy will be incorporated into the purchase price of the products affected.

Waste will attract a different levy rate depending on the type of waste it is. The rate of the waste levy for each type of waste will be prescribed by regulation. The levy will fund support programs for businesses and other entities in addressing the cost of waste to their business. Businesses should be conscious of the additional costs associated with disposing commercial and industrial waste.

WHO IS AFFECTED BY THE ACT?

In general, companies and enterprises, particularly those that produce or deal in priority products or businesses operating in industries where waste disposal is a significant component, will be primarily affected.

For example, mining companies, and any enterprise dealing in the business of waste disposal or production of goods that contain hazardous material will be affected. However, the Queensland Government has advised that the industry waste levy will be used to help businesses of all sizes, local governments and the community to address the cost of dealing with waste under the Act.

Municipal solid waste (which includes domestic kerbsidecollected waste) will not attract a levy under the Act, nor will some other particular waste products or particular types of waste that are declared to be exempt waste under a regulation. In addition, a deduction against the levy can be applied against waste that is subsequently recycled or reused, so essentially there will be no (or at least a reduced) levy on products that are recycled and reused.

WHO REGULATES THE PRODUCT STEWARDSHIP SCHEMES

The Department of Environment and Resource Management will regulate the Act and will therefore regulate the product stewardship schemes and programs.

HOW EFFECTIVE WILL PRODUCT STEWARDSHIP SCHEMES BE?

There is obviously a growing public awareness about environmental protection and sustainability and there is a growing understanding of policy measures that are required to address concerns raised as a consequence of that awareness. Companies in affected industries, and individuals themselves, are alert to the new consumerism that seeks out environmentally safe products. It is expected that, subject to cost effects, schemes promoting product stewardship and resource recovery would help facilitate and incentivise industry and consumers to become even more environmentally responsible and would guide key industry players to invest in resource recovery infrastructure, knowledge and technology.

Product stewardship schemes in the international landscape include products such as electrical equipment, tyres, mercury lamps, batteries, packaging, chemical products and even cars. It is likely that over time, both the national and state frameworks will allow for more products to be covered under tailored arrangements to suit different circumstances in a changing international, social, environmental and economic context.

Clearly the State and Federal Governments will also be eager to reduce waste management costs. Therefore it is likely that in time, product stewardship schemes will increase product coverage, which will in turn have flow-on effects for importers, consumers, domestic manufacturers and distributors in terms of R&D costs, marketing and packaging costs.

WHO WILL BEAR THE COSTS IN PRODUCT STEWARDSHIP SCHEMES?

Some may argue that as product stewardship schemes encompass the "whole of life" of a product from production to end-user, the environmental responsibilities should be shared by the producer/manufacturer/supplier and the consumer. Nevertheless, the State Government claims the Act will not impose additional costs on consumers (who generally become involved only at the end of a product's life), but that industry will carry the costs of implementing the schemes. However, it is likely that any costs will be built into the purchase price of the product, which will then be absorbed by the consumer and community as a whole.

HOW CAN DLA PIPER HELP YOU?

The environmental and planning specialists in our Brisbane Real Estate team can advise you or your clients on the effect of the new legislative regime and can discuss obligations and opportunities. Our national team can also advise on the effects throughout Australia.

Through our international offices, we have access to experts world-wide, experienced in waste reduction and resource recovery. For example, we can draw on European experience, which has dealt with product stewardship regulation for almost 10 years. By drawing on our expertise at both a national and international level, DLA Piper can help you prepare for Queensland's (and Australia's) waste reforms and initiatives to ensure your business complies with its environmental obligations, meets its commercial objectives and takes advantage of both national and international opportunities.

Footnotes

¹ The waste levy is an industry levy and does not apply to household waste, which is classified as "exempt waste" under the Act.
² While there are a number of important measure introduced under the Act, such as the National Water Initiative, the Carbon Farming Initiative and recycling of CSG water, this article deals particularly with the proposal for product stewardship

This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.

DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to www.dlapiper.com

Australia: Product Stewardship - Waste management and resource recovery Environment & Climate Change Update