Chapter 3

Key issues

Overview

3.1 There was broad support amongst submitters for a national approach to product stewardship rather than multiple, and potentially inconsistent, state based arrangements.[1] Australia was also recognised by several submitters as being behind other international jurisdictions in relation to policies, laws and directives concerning product stewardship.[2]

3.2 In a recent media release, Product Stewardship Australia and the Australian Information Industry Association were strongly supportive of the bill claiming that it 'is a significant and positive step towards supporting industry efforts to deliver a national scheme'.[3] They stated that the bill is an important government initiative that 'must be passed in a timely manner so that industry can commence delivering its national television and computer recycling scheme'.[4] The media release is attached at Appendix 4.

3.3 Submitters were also supportive of the intention of the bill to provide first for voluntary and co-regulatory schemes rather than imposing a mandatory scheme.[5] The explanatory memorandum highlights that the purpose of accreditation is 'to provide an avenue for encouraging and recognising product stewardship without the need to regulate'.[6] The Lighting Council of Australia summarised that:

...this gives industry an incentive to work towards a voluntary or co‑regulatory approach. The industry ownership bestowed by this approach should lead to better outcomes among industries prepared to assume such responsibility. To reduce costs on both industry and government, all efforts should be made to encourage voluntary rather than regulatory approaches.[7]

3.4 However the bill did raise a number of concerns for submitters. These concerns were galvanised around six main issues:

the potential coverage of products that may come under a product stewardship scheme;
the absence of a priority list of products to be covered under the framework legislation;
the lack of an advisory panel to recommend a list of priority products;
the overlap of state and territory legislation;
the broadening of the objects of the Act; and
the adequacy of the consultation process.

Coverage

3.5 As the bill is designed to establish a legislative framework for product stewardship schemes, it is silent on the products that may be covered at some point in the future. Different industry sectors will decide which products they seek accreditation for under the voluntary arrangements, while it will be for the environment minister to decide which products to regulate under the co-regulatory or mandatory arrangements. For this reason there were differing views about the coverage of the bill. Some submitters argued that every conceivable product could be covered while others argued that potentially no products would be covered.

3.6 The explanatory memorandum explains that the bill uses product stewardship criteria 'to be basic filter criteria to help determine whether the Bill should apply to a particular class of products'.[8] Before regulations are made for either a co-regulatory or mandatory scheme, the minister must first be satisfied that the regulations will further the objects of the Act and that the product stewardship criteria are met.[9]

3.7 The product stewardship criteria are outlined in clause 5 of the bill. The criteria are satisfied if two or more of the following criterion apply to a class of product:

(a) the products are in a national market;

(b) the products contain hazardous substances;

(d) reusing or recycling of the products involves a significant cost to the Commonwealth, state, territory or local governments;

(e) consumer's willingness to pay; and

(f) taking action will offer business opportunities that would make a contribution to the economy.[10]

3.8 Several submitters raised concerns that these criteria were too broad and could conceivably require all household items sold in Australia to be covered by a product stewardship scheme.[11] According to several industry associations this potential coverage of products creates uncertainty for businesses.

3.9 The Australian Food and Grocery Council, which represents Australia's food, drink and grocery manufacturing industry, highlighted that the wide ranging criteria would leave their industry without a clear indication of which products may be targeted for a product stewardship scheme:

It is our view that the criteria in the bill are too broad and the requirement to adopt only two criteria is an inadequate basis on which to determine appropriate regulatory action. The criteria currently proposed in the bill will pose an unnecessary level of ambiguity around products and potential schemes which could and would lead to a high level of uncertainty for business.[12]

3.10 Of particular concern to several industry groups were criteria (a) and (f). It was believed that most products on Australian shelves were sold in a national market and that any action to recycle or re-use a product would provide a business opportunity to a waste management or recycling company.[13]

3.11 In contrast to the industry associations, the use of broad criteria was supported by environmental and recycling groups as a way to 'capture all the potential products that one might come across that would be appropriate for a product stewardship type arrangement'.[14]

3.12 It was suggested that to address the issue of having broad criteria, a product must satisfy a least three criteria (instead of the current two) in order for it to qualify for a stewardship scheme.[15] The Australian Food and Grocery Council argued that requiring an additional criterion to be met would provide more specific advice to industry and give a 'more robust, equitable and credible process for the development of any product stewardship schemes'.[16]

3.13 At the public hearing the department informed the committee that the criteria were deliberately broad so as to capture any potential products that could be covered under a stewardship scheme.[17]

3.14 The department also advised that there are additional requirements besides the criteria that a product must satisfy for it to be subject to the framework. For a product to be covered by a product stewardship scheme it must:

be recommended for consideration by the Environment Ministerial Council;
be subjected to a Regulation Impact Statement (RIS);
go through a consultation process;
meet the objects of the Act;
meet the criteria; and
have the support of the Australian Parliament.[18]

3.15 These additional requirements are set out in more detail in Appendix 3.

3.16 Several local government peak bodies and environmental groups noted that the requirement for a product to be subjected to a RIS could have the effect of limiting the number of products being placed under stewardship schemes.[19] Both groups had concerns that the RIS process is poorly suited to quantify environmental benefits in monetary terms. They contended that the RIS process 'ends up overstating the costs and understating the [environmental] benefits'.[20]

3.17 Conversely, several industry associations felt that the RIS process would help to evaluate suitable products based on their physical size, materials, supply chains and processing issues.[21]

3.18 The department noted that the RIS process would be cognisant of the objects of the Act and accordingly not every product would qualify for a stewardship scheme.[22] End-of-life tyres was one example given by the department of a class of product that did not pass a regulatory impact assessment.[23]

Committee comment

3.19 The committee has considered the concerns raised by submitters and provides comments and recommendations later in the report at paragraphs 3.47–3.52.

List of priority products

3.20 In response to the broad list of criteria that must be satisfied for a product to be covered by a stewardship scheme, it has been suggested that a priority list of products be drawn up to give industry, environmental groups and the community certainty as to what range of products are to be covered.[24]

3.21 The Australian Food and Grocery Council suggested that a list of priority products could be developed so that:

...we can start with the most intensive or the products that have the most impact and work our way through those rather than having an open policy suggesting product stewardship schemes could be implemented for anything.[25]

3.22 It was suggested by a number of submitters that a priority list of products could target the 'low hanging fruit' and address the products that are most easily able to be converted into an accredited arrangement.[26] Low hanging fruit was indentified to include televisions and computers which are scheduled to be covered under the first regulations issued under the framework legislation.[27]

3.23 It was also felt that the process of developing a priority list would allow direct input by stakeholders into what products are considered. The Australian Local Government Association believed that a priority list would show 'clear leadership from Government and allows industry time to develop product stewardship programs'.[28]

New South Wales Extended Producer Responsibility Priority List

3.24 The New South Wales product stewardship legislation was highlighted as an example that contained a list of priority products.[29]

3.25 In 2001, extended producer responsibility (EPR) legislation was introduced into NSW through the Waste Avoidance and Recourse Recovery Act 2001 (WARR Act). Section 15 of the WARR Act notes that 'EPR schemes' also refer to schemes that may be labelled as 'product stewardship schemes'.[30]

3.26 The aims of the NSW EPR scheme are to:

...engage producers and others involved in the supply chain of a product to take responsibility for the environmental, health and safety footprint of those products. This includes the design and manufacture of a product, as well as how the product is managed at the end of its life (including resource recovery and proper disposal).[31]

3.27 Section 18 of the WARR Act requires the Director General of the former Department of Environment, Climate Change and Water (DECCW)[32] to publish an annual priority statement on EPR schemes that the Director General proposes to recommend for implementation under the WARR Act in the following 12 months.[33]

3.28 Whilst the WARR Act requires a priority statement to be developed, no regulations have yet been made under the Act to establish an EPR scheme.

3.29 The first NSW priority statement was published in March 2004 and identified 16 'wastes of concern'.[34] In 2004 an expert reference group (ERG) was also established to advise the then Minister for the Environment and the Director General on current and proposed EPR schemes and other industry action. The ERG provided its report to the Minister and Director General in September 2005.[35] The report contained analyses and recommendations on each waste of concern listed in the 2004 priority statement. The Minister subsequently wrote to each industry sector seeking specific actions and reporting over the next 12 months.

3.30 Priority statements were revised and released in 2005–06 and 2007.[36] Priority statements progressing state-based regulation were not issued in 2008 and 2009 pending development of the National Waste Policy. The most recent priority statement is from 2010 and covered 17 products.[37] The Director General of DECCW has indicated that the department will not recommend any wastes for EPR regulatory action in NSW in 2011, noting 'new Product Stewardship legislation is due for consultation at the national level in the first quarter of 2011'.[38]

3.31 The NSW list of priority products has received support from various environmental groups. The Total Environment Centre believed that the list has been successful. In particular, 'the public reports were very illuminating and put out in a transparent manner what industry was up to and the stage at which the government negotiations had been reached'.[39]

3.32 However it was pointed out to the committee that the NSW scheme does have its limitations. Mr Russ Martin, President of the Global Product Stewardship Council, argued that the NSW EPR priority statements were not in fact prioritised, but instead consisted of 16 items that were all to be equally addressed.[40] Mr Martin also stated that it then became an issue of which products could be most easily singled out for stewardship with regards to existing infrastructure and the size of the task.[41]

3.33 The Department of Sustainability, Environment, Water, Population and Communities (DSEWPAC or the department) felt that the NSW example helps to illustrate that 'statutory mechanisms to identify "priority products" do not necessarily result in more product stewardship activity.'[42] The department further explained that:

The significant difference appears to be that framework legislation applies a consistent rather than piecemeal approach to regulation of products and hence reduces regulatory red tape.[43]

Commonwealth arrangements for identifying priority products

3.34 In an answer to a question taken on notice, the department outlined the current arrangements for identifying priority products for stewardship schemes:

As part of COAG's agreement to the National Waste Policy, the primary role of establishing priority product stewardship rests collectively with Australia's Environment Ministerial Council. Strategy 1 of the National Waste Policy provides that consultation on additional products that might be regulated in the future will be through the EPHC. This is the long-standing mechanism for identifying priorities and has a history of active and broad consultation with stakeholders on a range of products. The use of the Council makes practical sense as the Council undertakes this role already, it includes all jurisdictions and local government, has well established consultative mechanisms and experience with regulatory impact analysis of products...[44]

3.35 Additionally, the work of the Environment Ministerial Council is supported by a Product Stewardship Working Group which has responsibility for providing advice on strategic and emerging product stewardship issues and priorities.[45]

3.36 In Australia there are six products or materials that are currently subject to assessment for product stewardship or have been previously assessed by the Environment Ministerial Council: packaging; plastic bags; mercury containing lights; computers and televisions; tyres; and packaging and litter (including beverage containers).[46]

3.37 Of these products, the National Waste Implementation Plan has identified that televisions and computers, packaging and litter, mercury containing lamps and tyres are the priority products to be covered under product stewardship schemes in the first two to three years.[47]

Committee comment

3.38 The committee has considered the concerns raised by submitters and provides comments and recommendations later in the report at paragraphs 3.47–3.52.

Advisory panel

3.39 A number of submitters to the inquiry raised the possibility of establishing an expert advisory panel to recommend a priority list of products to be covered by stewardship schemes.[48]

3.40 It was argued by submitters that an independent group consisting of industry, consumer, community, environment and scientific representation would be valuable in providing expert advice on new products that could potentially come under the framework legislation.[49]

3.41 The use of an expert panel was seen as a way of providing forthright advice from outside the bureaucracy and would strengthen the governance arrangements.[50] The Western Australian Local Government Association thought that the panel would ensure that the most important products and those with the biggest potential to create an environmental impact were selected for product stewardship schemes.[51]

3.42 An example of such an advisory committee being established to manage waste and determine priorities is the statutory Waste Advisory Board in New Zealand.[52] The board is tasked with providing advice to the responsible minister on a range of issues including:

declaring priority products (but is not required to develop a priority list);
making guidelines for product stewardship schemes;
specifying criteria for the funding of waste minimisation projects; and
regulations on records, information and reports.

3.43 The Waste Avoidance and Resource Recovery Act 2001 (NSW) also provides for the establishment of a non-statutory committee with expert, business and non-government representatives to assist the Director General of the DECCW to develop a list of wastes of concern.

3.44 The Department of Sustainability, Environment, Water, Population and Communities has raised concerns about the effectiveness of establishing external panels on waste management. The department notes that the National Waste Policy, agreed by all jurisdictions, states that consultation on existing products that might be regulated would be through the Environment Ministers Council which already has a governance structure in place.

3.45 The department also had concerns about the ability of an external panel, even a large panel, to provide expert advice on a wide range of products and the supply chain related to those products.[53] The department also raised concerns that some groups may feel disenfranchised by not being represented on the panel.[54]

3.46 The department therefore recommended that:

Rather than establishing a single standing advisory committee it would be more effective to continue current practice of establishing stakeholder reference groups and/or working groups relevant to products and their supply chain.[55]

Committee comment

3.47 The committee acknowledges the concerns raised by submitters regarding the uncertainty over which products may be covered by a future product stewardship scheme. These concerns were raised right across the spectrum of submissions the committee received.

3.48 The committee notes that established government policy requires a Regulation Impact Statement process to be undertaken prior to the minister authorising regulations under the proposed Product Stewardship Act. The committee also notes that a product must further the objects of the Act and meet a minimum of two legislated criteria before regulations can be made.

3.49 The committee recognises that the Environment Ministerial Council currently has responsibility for examining which products would be suitable for a product stewardship scheme. The committee believes that developing and annually publishing a priority list of products to be covered by product stewardship schemes would create certainty for business and community groups. Without identifying the end-of-life products that could be covered by the framework, the question of whether a product stewardship scheme could be established for every conceivable product or alternatively not a single product would remain unresolved.

3.50 The committee believes that an advisory group consisting of waste management experts, industry representatives, environmental groups, community and government would be valuable in advising the Environment Ministerial Council on developing a priority list of products.

Recommendation 1

3.51 The committee recommends that as part of the framework legislation, a priority list of products to be covered by product stewardship schemes be developed and published annually.

Recommendation 2

3.52 The committee recommends that an advisory group consisting of waste management experts, industry representatives, environmental groups, community representatives and government be established to advise the environment ministerial council on declaring priority products.

Relationship with state and territory laws

3.53 A number of submitters raised concerns that whilst the framework legislation would create a national approach to product stewardship and reduce inconsistent state‑based arrangements, there was the possibility that successful, pre-existing state product stewardship schemes may be made void.[56]

3.54 The Total Environment Centre (TEC) argued that in seeking a national approach, 'there is a clear risk that a regulation under the Act could dumb down the achievement of state law by reducing targets and quality of outcomes'.[57] Accordingly they recommended that:

...there should be protection of state laws that achieve more or a clause inserted that ensures a regulation achieves more than the best applicable state law in relation to targets and quality outcomes.[58]

3.55 Contrary to this view, the South Australian Government believed that the bill would allow for existing state schemes to continue operating. The national approach was seen to be 'consistent with the approach taken by the South Australian Government to support product stewardship through a mix of legislation, collaboration, advocacy and incentives.'[59]

3.56 The framework legislation would complement other South Australian waste management policies and strategies including the Environment Protection (Waste to Resources) Policy 2010, which addresses the issue of rising waste, and the Environment Protection Act 1993 (SA).[60]

3.57 The South Australian Environment Protection Act provides for one of the longest running product stewardship schemes in Australia, the container deposit system. According to the South Australian Government the scheme is well supported by the community and results in significantly higher recovery rates and lower litter rates than in other jurisdictions.[61] The container deposit scheme will still continue to operate following the passage of the bill.[62]

3.58 The TEC's comments that the bill's federal powers may extinguish state schemes appear at odds to statements made in the explanatory memorandum and outlined in the bill.[63]

3.59 The explanatory memorandum acknowledges that 'as the Bill was developed with the support of all Australian governments to establish a nationally-consistent approach to product stewardship, it is unlikely that duplicative schemes for the same class of products will be established'.[64]

3.60 The bill outlines the relationship between the federal framework legislation and state and territory laws. Subclause 9(1) states that the Act 'is not intended to exclude the operation of any law of a State or Territory, to the extent that that law is capable of operating concurrently with this Act'.[65] Subclauses 9(2) and 9(3) do allow for regulations to be made prescribing a state or territory law as an 'excluded law' if a duplicate law is established in another jurisdiction.

3.61 In evidence to the committee, the department also pointed out that in practice all states and territories will be consulted on proposed products to be covered by a stewardship scheme at the ministerial level through the Environment Protection and Heritage Council.[66]

Committee comment

3.62 The committee notes the concerns of some submitters regarding the possibility that the national product stewardship legislation may be counterproductive to successful product stewardship schemes already existing in the states and territories. The committee also notes that the two state governments that submitted to this inquiry were supportive of the bills and did not raise as an issue the potential winding back of established state-based schemes. It is the committee's view that successfully operating state schemes should not be impacted by this legislation so as to reduce targets or outcomes. The committee notes that should a national product stewardship scheme be introduced with higher targets that an existing state scheme, then the national scheme should prevail.

Recommendation 3

3.63 The committee recommends that the legislation preserve or protect product stewardship schemes at the state level that are already underway so as to not reduce their targets or effectiveness.

Objects of the Act

3.64 A number of organisations expressed the view that the objects of the Act should be broadened to ensure that the manufacturing of goods is included as a key part of product stewardship.[67]

3.65 Keep Australia Beautiful NSW highlighted that one of the ongoing trends in the production of modern goods is their reducing lifespan.[68] They believed that modern consumers will simply throw a product 'onto a curb side council cleanup and buy a brand new product because the parts might be too expensive or difficult to find'.[69] Keep Australia Beautiful NSW highlighted in their submission that when producing any type of product, there is a set amount of energy and resources used. The longer this product is used, 'the better the return on the embodied energy and inputted resources'.[70]

3.66 Keep Australia Beautiful NSW therefore recommended that the objects of the Act be amended to ensure that the lifespan of a product be considered for its impact on waste streams and the environment.[71]

3.67 The Total Environment Centre raised a similar point, arguing that the objects of the Act should also contribute to 'reducing the amount of virgin resources used in products by preferencing recyclate'.[72] The TEC argued that in addition to the benefit of limiting the amount of new resources used in creating a product, expanding the objects of the Act would have the effect of encouraging the domestic recycling industry:

You create a market for the recyclate and that leads to very significant economic benefits. The fact is that for every tonne of waste that goes to landfill there is one job, but if you take it right through the whole processing and manufacturing system and include that recyclate in a product you create nine jobs.[73]

Committee comment

3.68 The committee notes the concerns raised by submitters regarding the broadening of the objects of the Act. The committee recognises the environmental and economic benefit of using as much recycled material as possible in manufacturing products.

3.69 The committee however believes that reducing the use of virgin material in the manufacturing of goods and increasing the lifespan of products is sufficiently covered under the current objects of the Act. In particular paragraph 4(2)(e) requires that the objects of the Act be achieved by ensuring that manufacturers take action to ensure that products and waste are reused, recycled, treated and disposed of in an environmentally sound way.[74]

Consultation

3.70 The issue of consultation with key stakeholders over the proposed legislation was raised during the public hearing.[75] There was some concern that industry and key businesses were not given an opportunity to comment on the legislation before it was entered into Parliament.

3.71 For example the Australian Chamber of Commerce and Industry (ACCI), who were a member of the Product Stewardship Framework Legislation Stakeholder Reference Group submitted:

...ACCI would like to make clear its disappointment with one key aspect of the consultation process to date...the Stakeholder Reference Group was not provided with a copy of the legislation before it was introduced into the Parliament.[76]

3.72 The ACCI recommended that a fresh round of consultation is required to 'ensure that any product stewardship scheme has the full co-operation of the group that will have primary responsibility for its success – the business community'.[77]

3.73 Other submitters however felt that the product stewardship legislation has been long known to industry:

We were aware that the government had been looking into this issue for some time. There had been discussions to various other fora, at which it came to our attention that the government was looking at national product stewardship legislation. It was a well known issue probably about six months before that [December 2010] as part of the National Waste Policy.[78]

Government consultation

3.74 In response to the issues of stakeholder engagement, the Department of Sustainability, Environment, Water, Population and Communities outlined the consultation processes it undertook.

National Waste Policy

3.75 Initial consultation over the creation of framework legislation for product stewardship began as part of the broader strategic aims of the National Waste Policy. Consultation on the policy commenced in April 2009 with a consultation paper followed by a discussion paper on a draft policy. Over two hundred written submissions were received in connection with the papers and 11 public meetings were held in capital cities and regional centres with 364 attendees.[79]

3.76 In conjunction with the consultation on the National Waste Policy, the department commissioned publicly available research on overseas product stewardship schemes to inform public debate.[80]

Consultation regulatory impact statement

3.77 Prior to the finalisation of the National Waste Policy in November 2009, the department also commenced a Consultation Regulatory Impact Statement for televisions and computers as part of a wider consultation package. Consultation occurred between July and August 2009, with 130 written submissions received. Four public meetings were held with 163 attendees.[81]

Product stewardship legislation consultation paper

3.78 A consultation paper on the proposed product stewardship legislation was released on the department's website for public comment between 11 November and 10 December 2010. Forty-six submissions were received and five public meetings were held in Adelaide, Brisbane, Melbourne, Perth and Sydney with 140 attendees. The department also provided 14 face-to-face bi-lateral meetings with interested individuals or organisations.[82]

3.79 The department notified the public of the release of the consultation paper and the public meetings through the National Waste Policy E-News, stakeholder reference groups, public notice in The Weekend Australian and emails to state and territory government representatives and the Australian Local Government Association.[83]

National television and computer product stewardship schemes

3.80 The National Television and Computer Product Stewardship Scheme: Consultation Paper on Proposed Regulations was released on the department’s website for public comment from 8 March 2011 to 8 April 2011. Sixty-two submissions were received and 11 public meetings were held around the country with 310 attendees.[84]

State and territory consultation

3.81 The department has also consulted with state and territory governments on the product stewardship legislation through the Environment Protection and Heritage Council. The EPHC has considered the National Waste Policy and product stewardship legislation at five meetings between November 2008 and November 2010. Departmental officers also provided a briefing to state and territory government officials on the draft bill in mid-February 2011 prior to its introduction to the Parliament.[85]

Committee comment

3.82 Whilst acknowledging that the government did not release an exposure draft of this legislation before its introduction, the committee is satisfied that the government has undertaken extensive public consultation on the proposed product stewardship legislation. This consultation has occurred in the context of much broader industry and community consultation as part of the development and implementation of the National Waste Policy. This has involved several consultation papers, the receipt of hundreds of written submissions, and dozens of public meetings. The committee also acknowledges that consultation continues with key stakeholder groups regarding the creation of a national television and computer product stewardship scheme.

Other matters

3.83 The committee received a late submission from the Intellectual Property Committee of the Business Law Section of the Law Council of Australia, concerning the creation of product stewardship logos under the voluntary product stewardship provisions.[86]

3.84 The committee is aware that the Law Council only became aware of the provisions of the bill relatively recently, however due to the recent arrival of the submission the committee has not had an opportunity to consider in detail the issues raised.

Committee comment

3.85 The committee draws the government's attention to the issues raised in the submission by the Law Council of Australia.

Recommendation 4

3.86 The committee recommends that, subject to the recommendations made elsewhere in this report, the Senate pass the Product Stewardship Bill 2011 during the winter Parliamentary sittings.

Senator Doug Cameron
Chair

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