PAPER & PACKAGING UPDATE ON LEGISLATION & THE INDUSTRY WASTE MANAGEMENT PLAN
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1 PAPER & PACKAGING UPDATE ON LEGISLATION & THE INDUSTRY WASTE MANAGEMENT PLAN CHARLES MULLER EXECUTIVE DIRECTOR PACKAGING SA 4 NOVEMBER 2015
2 PACKAGING IN PERSPECTIVE
3 PACKAGING IN PERSPECTIVE! Biggest pollution issue is Greenhouse emissions! How much do we create?! Statistics vary but estimates range between 35 & 40 billion tonnes annually! How much is a billion?! About 1m tonnes in next 15 minutes! Heading for a climate catastrophe which will threaten the very existence of mankind!
4 PACKAGING IN PERSPECTIVE! The 2011 CSIR baseline report suggested that SA creates around 108m tonnes of solid waste annually this excludes mining waste! Around 90% of this is landfilled! Municipalities collect between 20 & 25m tonnes.
5 PACKAGING IN PERSPECTIVE! Approximately 53% of all packaging placed on the market is collected for recycling with <2m tonnes ending up as unrecovered waste! Compare this to food where an estimated 10m tonnes is wasted annually at a cost of >R61 billion!!!! Globally around 35% of food ends up in landfills bigger problem than packaging! Packaging plays a significant role in preventing this waste Source - CSIR
6 PACKAGING IN PERSPECTIVE! In addition to Greenhouse emissions & organic waste there are also very significant challenges with.! Mining waste! Residual ash from power stations! Building rubble! Whilst the volumes are relatively small packaging waste is unfortunately very visible!
7 PACKAGING IN PERSPECTIVE 2011 Solid waste generated 108 Solid waste landfilled 98 General waste 58 Municipal waste 20 Net paper & packaging 2 ( million tonnes )
8 SOUTH AFRICA S PERFORMANCE BY SUBSTRATE
9 OUR PERFORMANCE 2014 PAPER & PACKAGING COLLECTED FOR RECYCLING & OTHER PROCESSES ( 1000 tonnes ) Source - BMI
10 Whilst our numbers compare favourably with many developed countries around the world we accept that it is still NOT good enough!
11 WHAT DOES THE PAPER & PACKAGING SECTOR PLAN TO DO?
12 INDUSTRY PLAN! Original Plan was presented to the DEA in August 2011! Document was updated & submitted as a Draft Proposal for Discussion in September 2014! Various International experts were consulted! Compiled with extensive input from Aerosol Manufacturers Association of SA Collect-a-Can The Glass Recycling Company Multilayer Packaging Forum Paper Manufacturers Association of SA Paper Recycling Association of SA PETCO Plastics SA POLYCO Polystyrene Packaging Council Printing SA S A Plastics Recycling Organisation Southern African Vinyls Association
13 Cornerstone of our Plan INDUSTRY PLAN! Must be an Industry managed system! Primary objectives.! Maximise diversion away from landfill! Provide industry with a steady stream of good quality recyclables! Reduce resource consumption! Create employment, develop the 2 nd resources economy & ensure better working conditions! Clean up the environment
14 ! Household Separation-at-Source has to be mandatory! Non-profit & as cost-effective as possible! Develop new collection systems! Support Municipalities INDUSTRY PLAN! Develop labour intensive models to handle & sort recyclable materials specifically through MRF s! Develop markets to absorb increased volumes of recyclables collected! Create awareness campaign / education.
15 INDUSTRY PLAN! Ensure that there are NO free riders - obligatory membership of a Producer Responsibility Organisation! Costs to implement will be collected from obliged industries! Encourage entrepreneurship
16 PRICING STRATEGY
17 PRICING STRATEGY The Pricing Strategy discussion document Gazetted for comment earlier this year suggested.! That the EPR Scheme becomes Government Managed! Existing EPR schemes will have 2 years to align their funding models to the Pricing Strategy & the ACT! Implies there will be a SARS collected waste management charge or tax! The Sector responded to the Gazette & has requested formal feedback from the DEA.
18 INDUSTRY CONCERNS Industry have some concerns that with increased Government intervention & regulation including the imposition of SARS collected waste management charges or taxes the following will inevitably occur.
19 INDUSTRY CONCERNS The paper & packaging industry may abdicate responsibility.! Unlikely to pay twice ie. both a voluntary levy & a mandatory waste management charge or tax! With some exceptions the packaging manufacturers in South Africa are not in good economic shape careful that undue taxation & interference does not negatively impact the sector! Industry may seek to recover costs through increased automation and job reduction.
20 INDUSTRY CONCERNS The many successful voluntary initiatives, particularly those of the 7 main stream Material Organisations, may collapse.! Our collection rates compare favourably to many developed countries! They are currently funded through voluntary contributions which are generally collect upfront delays in funding will see the disintegration of projects etc!! Collective budgets are >R300 million! Responsible for tens of thousands of jobs! Destroy the passion!
21 INDUSTRY CONCERNS There will be a regression of recycling rates.! There is ample international evidence to suggest that recycling rates will regress such as what occurred in Hungary & Croatia where the State assumed control from privately run PRO s! In Hungary the recycling rates there fell from 59% to 49% within a year!
22 INDUSTRY CONCERNS The cost of packaging effects all LSM s.! Packaging is an integral part of protecting, preserving & containing food! Poor cannot afford further on-costs such as taxes! Careful of inflationary affect.
23 INDUSTRY CONCERNS Revenue collected will be swallowed up in the Fiscus.! Government have advised that there will be NO soft or hard earmarking (ring-fencing) of any revenue generated & collected! Other State expenditure such as housing, education, unemployment etc. may take preference! There could be another.& the money required to achieve our targets & objectives may not be forthcoming!
24 NOTICE OF INTENTION TO CALL FOR PLANS
25 NOTICE OF INTENTION TO CALL FOR PLANS The Minister recently gazetted the Notice of Intention to require our sector to prepare & submit an Industry Plan for approval.! This is de facto the rules of the game & specifies what must be included in the Plan! Packaging SA, BUSA & Others submitted extensive comments! In particular Penalties were too severe! There were so many changes that we have requested that this Notice gets republished for another round of comments.
26 QUO VADIS?
27 THE ROAD FORWARD? Many issues will need to be addressed including.! Single or multiple EPR schemes?! Who in the value chain (obliged industry) will pay?! Raw Material Producers! Converters! Brand owners! Retailers! Combination of above! How will the tax or levy be calculated?! Free Riders imports - Compliance & enforcement?! How do we deal with imports?
28 THE ROAD FORWARD?! Application of the levy or tax to drive kerbside collection, help recyclers, support under-valued recyclables etc?! Full cost or partial cost?! What financial & operational support will be provided to Municipalities?! Marketing & awareness campaign?! Education?
29 THE ROAD FORWARD?! Packaging SA awaits formal feedback on the 2 Gazettes! Continue to engage with the DEA, dti & other stakeholders! Industry recognizes that Government must be an integral part of the solution but cannot be THE solution! Must preserve the successes & good work done at all costs! REDISA! In the event that the scheme - particularly the funding - becomes Government managed then whatever gets introduced is as palatable as possible..
30 INDUSTRY PLAN - ROAD FORWARD? We cannot fail - there is no option but to ensure that South Africa becomes a better place for current & future generations.
31 Charles Muller Tel : Mobile : Thank you
THE ROADMAP PAPER & PACKAGING INDUSTRY WASTE MANAGEMENT PLAN 4 JUNE 2015 CHARLES MULLER EXECUTIVE DIRECTOR PACKAGING SA
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