Chapter 2
Background
Introduction
2.1
Container deposit schemes are generally seen as a policy response to
reducing landfill and litter, and as a way of encouraging recycling especially
in geographic locations that do not have kerbside recycling. They also offer a
way of reducing waste from out-of-home consumption of beverages that might not
be so easily captured by existing kerbside recycling facilities.
2.2
This inquiry follows the rejection by the Senate on 13 September 2012 of
the Environment Protection (Beverage Container Deposit and Recovery
Scheme) Bill 2010. This bill was introduced by Senator Ludlam on
30 September 2010 and sought to impose a levy on defined beverage
containers produced or imported into Australia. The bill set the levy at 10
cents per container with a regulation making power to amend that amount, and
provided for payment to be made for the return of relevant beverage containers
at authorised collection depots. The 2010 bill followed several unsuccessful
attempts to have similar bills passed by the Senate.
Previous inquiries
2.3
Senate committees have considered the issue of beverage container
deposit and recovery schemes (CDS) on several previous occasions during
reference and bills inquiries, and considered a range of related issues.
2.4
In 2008 the former Senate Standing Committee on the Environment,
Communications and the Arts reported on the Management of Australia’s waste streams
(including consideration of the Drink Container Recycling Bill 2008), and recommended
that the Environment Protection and Heritage Council[1]
(EPHC) consider initiatives, including container deposit schemes, to improve away-from-home
recycling.
2.5
In September 2009 the former Senate Committee on Environment,
Communications and the Arts tabled its report on the Environment Protection
(Beverage Container Deposit and Recovery Scheme) Bill 2009.
2.6
Like the 2010 bill, the 2009 bill sought to apply a 10 cent deposit to
the sale of each eligible beverage container, with the deposit paid to the
administering department. Labelled beverages would be eligible for a refund at
authorised collection depots and transfer stations. The authorised collection
depots and transfer stations would provide the refund upon receipt of eligible
beverage containers. The relevant government department would then refund the
deposit amount to the authorised collection depots and transfer station
operators. Unclaimed deposits or levy funds would be retained by the
department.[2]
2.7
While the committee in its 2009 report recommended that the bill not be
passed, the committee did provide detail of the status of possible container
deposit schemes under consideration in the states and territories, as well as
work the Commonwealth had done to investigate such schemes.
2.8
The committee noted that, at that time, no other state or territory had
an operational scheme for beverage container deposits except South Australia;
however the Northern Territory government had committed to implement a scheme
by 2011.
2.9
In February 2010 the Commonwealth government responded to the committee's
2009 bill report. In this response the Commonwealth government noted that day-to-day
management of waste is primarily the responsibility of state, territory and
local governments, and that at that time, 'harmonised action on waste issues of
national significance'[3]
were the responsibility of the EPHC and the National Environment Protection
Council. It was through these mechanisms that Australian environment ministers were
working across governments, with industry and communities, 'to achieve
effective, efficient and nationally consistent policies on waste in order to
enhance social, human health, economic and environmental outcomes.'[4]
2.10
The former EPHC investigated alternative mechanisms for increasing
recycling and decreasing litter, including container deposit legislation, from
April 2008. In May 2009, the EPHC considered the results of an investigation
into these options (the Beverage container investigation final report)
and agreed to conduct a survey of the community’s willingness to pay for
improved packaging. recycling and reduced litter.[5]
At their meeting on 5 November 2009, the EPHC considered preliminary findings
from the modelling study on the community’s willingness to pay and which
indicated a high level of community interest in recycling, packaging and
reduced litter.[6]
However, there was no agreement to develop national container deposit
legislation.
National Waste Policy
2.11
The National Waste Policy was agreed by all Australian environment
ministers in 2009, and sets direction for Australia's waste management to 2020.[7]
The National Waste Policy sets out sixteen priority strategies for reducing the
generation of waste in Australia, and attributes responsibility for the
implementation of these strategies in the following way:
1. Product
stewardship framework legislation to allow the impacts of a product to be
responsibly managed during and at end-of-life (Australian government).
2. Sustainable
procurement principles and practices across and within government operations (individual
jurisdictions).
3. Better
packaging management (collaboration).
4. National
definition and classification system for wastes (including hazardous and
clinical wastes) that aligns with international conventions and has provision
for items that have ceased to be classed as waste (collaboration).
5. National
principles, specifications, best practice guidelines and standards to remove
impediments to effective markets for potential wastes (collaboration).
6. Access
to knowledge and expertise in sustainable procurement and business practices
(collaboration).
7. Continued
government focus to reduce the amount of biodegradable material sent to
landfill (states and territories individually).
8. Management
of safety and health risks arising from landfill gas emissions (states and
territories individually).
9. Strategy
for emissions from landfills and other waste activities not covered by the operation
of a future Carbon Pollution Reduction Scheme (Australian government led
collaboration).
10. Improvements in waste avoidance
and re-use of materials in the commercial and industrial waste stream (state
and territory led collaboration).
11. Continued government encouragement
of best practice waste management and resource recovery for construction and
demolition projects (individual jurisdictions).
12. Responsibility to meet
international obligations; reduce hazardous materials entering the waste
stream; dispose of and move trans-boundary waste in an environmentally sound manner
in appropriate facilities (Australian government led collaboration).
13. Adoption of a system that aligns
with international approaches to reduce hazardous substances in products and
articles sold in Australia (Australian government led collaboration).
14. Identify actions to build capacity
and ensure an appropriate suite of services is available to regional and remote
communities (states and territories individually).
15. Audit of existing waste infrastructure
and local capability in selected remote Indigenous communities as part of
essential services audit under the COAG National Indigenous Housing Partnership
(Australian government).
16. Publish a three yearly waste and
resource recovery report, underpinned by a system that provides access to
integrated national core data on waste and resource recovery (Australian government
led collaboration).[8]
2.12
The policy places heavy reliance on product stewardship to reduce the
environmental, health and safety footprint of manufactured goods.
Product Stewardship legislation
2.13
In 2011 the Environment and Communications Legislation Committee
inquired into the Product Stewardship Bill 2011, which was passed by the Senate
in 2011. The Product Stewardship Act 2011 provides flexibility for
different products, materials and industries to be treated differently.
Products currently on the National Waste Policy implementation plan for product
stewardship action include televisions and computers, packaging, tyres and mercury
containing lights.[9]
2.14
The legislation provides for voluntary, co-regulated and mandatory
approaches. Co‐regulatory
product stewardship schemes are delivered by industry and regulated by the Commonwealth
government, with these arrangements to be established by regulation. Mandatory
product stewardship places a legal obligation on parties to take certain
actions in relation to a product.[10]
2.15
The national scheme for televisions and computers is a co-regulatory
scheme and is the first scheme regulated under the Product Stewardship Act.
2.16
The committee was advised by the Commonwealth government that the
Standing Council on Environment and Water (SCEW) has been considering a range
of options for better managing packaging in Australia, including consideration
of a national container deposit scheme.[11]
In December 2011 a Consultation Regulation Impact Statement (RIS) was released
for public comment, and following this process the SCEW agreed to proceed to a
Decision RIS.[12]
The Decision RIS will provide the SCEW with further information to assist them
to make a decision on these options.
2.17
Options investigated in the Consultation RIS were container deposit
schemes, an advance disposal fee, industry-run schemes that may be co-regulated
under the Product Stewardship Act 2011, and a nationally consistent
government initiative.[13]
Committee comment
2.18
The committee notes that it and its predecessors have undertaken a
number of inquiries over recent years into container deposit schemes.
2.19
The committee is also aware that the Council of Australian Governments
(COAG), through SCEW, is undertaking an assessment of policy options for better
managing packaging in Australia, including national container deposit schemes.
The committee expresses its hope that through the COAG processes, all
Australian governments can reach a consensus on the best way to manage
container waste. Further, noting the lengthy periods of consideration these
matters have attracted, the committee hopes such matters are resolved as soon
as possible.
South Australia's container deposit scheme
2.20
South Australia's container deposit scheme commenced in 1977 as a method
of reducing litter and promoting resource recovery. The scheme was introduced
via the Beverage Container Act 1975 (SA). Legislative provisions for the
operation of the scheme are now contained in Part 8 of the Environmental
Protection Act 1993 (SA).
2.21
The scheme allows South Australians to collect a 10 cent deposit for
each beverage container they return to a retailer or collection depot.
How the scheme operates
Approval for beverage containers
2.22
Prior to certain beverage containers being sold in South Australia,
approval must first be received from the Environmental Protection Agency (EPA).
Beverage containers included in the scheme are listed in Table 2.1 below. Under
current regulations certain health tonic, milk (other than flavoured milk) and
wine products are exempt from the container deposit schemes.[14]
Table 2.1 List of beverages covered
by the South Australian and Northern Territory container deposit schemes[15]
Beverage
|
Container type
|
Container capacity
|
|
|
Included
|
Exempted
|
Carbonated soft drinks
|
All
|
3 litres or less
|
Greater than 3 litres
|
Non-carbonated soft drinks (such as sport drinks, vitamin drinks,
energy drinks and ready-to-drink cordials)
|
All
|
3 litres or less
|
Greater than 3 litres
|
Pure fruit juice
|
All
|
Less than 1 litre
|
1 litre or more
|
Flavoured milk
|
All
|
Less than 1 litre
|
1 litre or more
|
Unflavoured milk
|
All
|
Nil
|
All
|
Water
|
All
|
3 litres or less
|
Greater than 3 litres
|
Beers/ales/stouts
|
All
|
3 litres or less
|
Greater than 3 litres
|
Wine
|
Glass
|
Nil
|
All
|
|
Plastic and aluminium
|
3 litres or less
|
Greater than 3 litres
|
|
Aseptic packs/casks
|
Less than 1 litre
|
1 litre or more
|
|
Sachets
|
Less than 250ml
|
250ml or more
|
Spirits
|
Glass
|
Nil
|
All
|
|
Other materials
|
3 litres or less
|
Greater than 3 litres
|
Wine- and spirit-based beverages
|
All
|
3 litres or less
|
Greater than 3 litres
|
Alcoholic beverages (such as cider, alcoholic lemonade)
|
All
|
3 litres or less
|
Greater than 3 litres
|
2.23
In granting approval, the EPA is to divide beverage containers into two
categories:
- Category A containers which can be presented for refund at the
point of sale; and
- Category B containers which can be presented for refund at
collection depots.
2.24
Both Category A and Category B containers must have product labels
displaying the approved refund statement.[16]
2.25
Manufacturers of Category A containers must ensure that retailers
selling their beverages are aware of the obligations to refund the deposit and
store containers—irrespective of the place of purchase.[17]
It is also a condition of approval that there is a waste management agreement
in place for the empty containers to be retrieved from retail outlets and
aggregated for reuse or recycling.[18]
2.26
Category B containers must also have a waste management agreement in
place prior to approval. The agreement is to specify details between the
beverage manufacturer and a super collector for the collection, sorting and
aggregation of containers and their reuse and recycling.[19]
The beverage manufacturer must also ensure that all sales into South Australia,
whether directly or via an interstate distribution centre, are declared to the
super collector and accompanied by funds in accordance with requirements
specified in the waste management agreement.[20]
Deposits
2.27
Theoretically beverage manufacturers in South Australia include the 10
cent refund deposit and a handling fee in the wholesale price of their
products. Price strategies vary between companies and are not necessarily based
entirely on cost structures.[21]
If the refund and handling fee are not included in the wholesale price, they
may be partially or fully absorbed by the beverage manufacturer or distributor.[22]
2.28
When a beverage is bought in South Australia, the 10 cent deposit is
refunded when the consumer returns the container to either a collection depot
or a retailer. Consumers discarding the container lose the value of the
deposit, which then becomes available to anyone who wants to collect the
containers and collect the refund amount, including companies undertaking
kerbside rubbish collection.
Collection depots and super
collectors
2.29
The collection depot or point of sale retailer reimburses the consumer
and sorts the containers. A super collector collects the containers from
various collection depots for auditing and recycling and pays the collection
depots the refund and agreed handling fee. The super collectors are paid the
refund and handling fee by the beverage manufacturers on the basis of
documented container returns.
2.30
Non-refillable glass containers are sold to a glassmaker for the
manufacture of new bottles. Aluminium, steel, liquid paperboard and plastic
(PET, PVC and HDPE) containers are recycled through markets sourced by the
super collection agency.
Northern Territory container deposit scheme
2.31
On 3 January 2012 the Northern Territory government commenced a 'Cash
for Containers' deposit scheme that provides a 10 cent refund on beverage
containers when returned to a collection depot. The legislative provisions for
the scheme are contained in the Environment Protection (Beverage Containers
and Plastic Bags) Act 2011 (NT).
2.32
The Northern Territory container deposit scheme is based on the South
Australian scheme and allows for the same containers to be refunded (see Table 2.1).[23]
The scheme also requires beverage containers to be approved by the Chief
Executive Officer of the Department of Natural Resources, Environment, the Arts
and Sport before being sold in the territory. Approval for containers is
dependent upon them having approved labels and beverage manufacturers having a waste
management agreement in place with a super collector.[24]
2.33
When an empty and clean container is returned to a collection depot a 10
cent deposit is returned to the consumer. Containers are not able to be
returned via the point of sale.
2.34
Containers purchased in South Australia and the Northern Territory are
only able to be refunded in the jurisdiction in which they were bought—that is,
containers purchased in South Australia can only be refunded in South Australia
and containers purchased in the Northern Territory can only be refunded in the Northern
Territory.
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