Whose rubbish is it anyway? The battle for control of EPR regulations.
The bins overflow, the landfills bulge, and the tide of discarded packaging, electronics, and textiles continues to rise. In response, Extended Producer Responsibility (EPR) – a system holding producers accountable for the post-consumer fate of their products – is gaining traction globally. But a fundamental question lingers:
Decision Point 2: Should EPR be a top-down affair, orchestrated by government decree, or a bottom-up initiative driven by industry itself?
Recent developments, from the assertive stance of Saudi Arabia to the fragmented landscape in South Africa and Germany, highlight the contrasting approaches and their inherent trade-offs.
During my recent visit to the desert kingdom of Saudi Arabia, the answer is resounding: the state reigns supreme. A sweeping regulation enacted in August 2021 has effectively nationalised waste. As soon as refuse leaves a household or business, it becomes the property of the government. This isn't a gentle nudge towards recycling; it's a firm assertion of control, with scavengers caught sifting through bins now facing prosecution. The Saudi vision is clear: a centralised, government-led system where the state tenders waste collection to a limited number of companies, aiming for an ambitious 90% diversion from landfills by 2030. This top-down approach, akin to the management of sewage, ideally with zero leakage between apartments and the sewerage plant, envisions a streamlined process where the state dictates the terms and oversees the entire value chain.
Contrast this with the situation in a country where, as one environment ministry head lamented, their department is swamped, lacking the staff and resources to effectively implement EPR. The suggested solution? Hand the reins to industry federations, tasking them with devising and executing plans for managing their own packaging waste. This reflects the governments’ surrender to a more laissez-faire approach, where the onus falls on producers to organise and finance the collection and recycling of their discards.
Several nations offer glimpses into this industry-led model. In the Netherlands, a history of consensus-based agreements with industry covenants shaped early packaging recovery efforts. Germany, South Africa, and India have witnessed the emergence of numerous Producer Responsibility Organisations (PROs) – industry-backed associations formed along sectoral lines. These PROs, funded by member contributions, manage the collection and processing of waste generated by their specific industries.
However, this decentralised approach is not without its pitfalls. With multiple PROs it becomes very difficult for governments to monitor how much waste is actually being recovered? Which companies are really contributing to the payments, and which are free-riders? These fragmented PROs need to achieve collection targets expressed in tonnes, therefore it is simplest to focus on commercially viable materials like PET, HDPE, and PP, leaving less profitable and more problematic materials like multi-layer plastics neglected. In the electronics sector, companies might diligently collect old televisions and laptops but overlook less lucrative white goods like refrigerators, freezers and microwaves.
Furthermore, the emergence of competing PROs, particularly evident in Germany, Kenya and South Africa and previously in India, can lead to a race to the bottom. To secure more members, a PRO may offer its members the same service for a lower member contribution. These PROs will thereby offer lower pay for waste collection, squeezing margins for collection companies and, in developing economies, leaving informal waste pickers with meagre earnings. This drive for cost efficiency can compromise environmental standards and social equity.
Recognising the limitations of both extremes, a middle ground is emerging as a potentially more effective solution. This hybrid model envisions a robust regulatory framework set by the government, defining which materials are subject to EPR and establishing ambitious collection and recycling targets. Crucially, however, it advocates for a government-mandated regulator overseeing a single PRO or fund. This centralised financial mechanism simplifies monitoring and ensures that producers contribute equitably to the management of all their waste streams, not just the profitable ones.
This ‘government-led, single PRO’ approach offers several advantages. It provides the necessary regulatory teeth to ensure compliance and achieve ambitious targets. The single PRO streamlines financial flows, making it easier to track producer contributions and allocate funds effectively across the entire waste management system. It avoids the fragmentation and potential for cherry-picking inherent in a multi-PRO system, ensuring that all materials, regardless of their commercial value, are adequately managed. Moreover, it provides a clear point of accountability, simplifying oversight and enforcement for the government. The Ministry of Environment of the government of India learnt the hard way. In 2022 it completely revamped its initially industry-led, multi-PRO approach into a government-led single regulator approach, which it aptly calls the Central Pollution Control Board.
Ultimately, the question of whether EPR should be government or industry-led is not an either-or proposition. While industry expertise and financial resources are crucial, a strong governmental hand is needed to set the rules of the game, ensure a level playing field, and guarantee that environmental and social objectives are not sacrificed in the pursuit of profit. The sweet spot lies in a collaborative approach: government setting the vision and the framework, and a single, well-regulated PRO channelling industry responsibility into tangible and effective waste management solutions. Only then can the rising tide of waste be effectively stemmed, turning a linear discard model into a truly circular economy.