THE NATIONAL THE NATIONAL PACKAGING COVENANTPACKAGING COVENANT

MOVING FROM REGULATION

TO CO-OPERATION

THE NATIONAL THE NATIONAL PACKAGING COVENANTPACKAGING COVENANT

A new approach to the life cycle environmental management of packaging

How will your Company maximise its benefits?

INTRODUCTIONINTRODUCTION

Regulatory approaches to management of packaging waste are being replaced and augmented by voluntary mechanisms

Benefits come from a more co-operative approach which, although outcome oriented, can be more flexible and reduce overall cost

The future is for a more comprehensive ‘total system’ approach based on better understanding of waste realities and the nature of consumption

OVERSEAS TRENDSOVERSEAS TRENDS

Germany – Packaging Ordinance (DSD) (1990) European Packaging and Packaging Waste

Directive (1994) OECD ‘Guidance Manual’ for EPR (2001) Canadian “Shared Responsibility” American ‘market based’ approach including ‘Pay

as You Throw’ Packaging Covenants in NZ and The Netherlands

EUROPEEUROPE

Fees for the German DSD now exceed DM 4 billion p.a. Total system costs exceed twice that figure Total fee costs in Europe exceed US$10 billion

p.a. Costs passed on through higher prices which erode

consumer purchasing power and reduce employment

Environmental outcomes less than optimal

GERMANYGERMANY

- Weight based fees ranging from

DM 0.15 – DM 2.95/Kg

(paper) (plastic)

- Volume based fee from 0.1 pF to 1.2 pF per unit

DANISH PACKAGING TAXDANISH PACKAGING TAX

Aluminium 35c/Kg

PVC/EPS 32c/Kg

Steel 26c/Kg

Glass 26c/Kg

HDPE/PET 19c/Kg

Flexibles 5c/Kg

Paper 0.5c/Kg

CANADACANADA“Shared Responsibility”“Shared Responsibility”

- Industry Funding schemes being developed at provincial level

- CDL in all provinces for beer and soft drinks

EARLY APPROACHES EARLY APPROACHES - Australia -- Australia -

Regulatory - Vic Resource Recovery Act Voluntary ANZECC agreements Based on concept of ‘a waste hierarchy’ and

focused on post consumer packaging Performance ‘targets’ and industry funding a

common feature Lacked flexibility/equity Gave businesses responsibilities for outcomes

beyond their control

INDUSTRY PLANSINDUSTRY PLANS

Tended to make industry take the role of driver of change in a product area or segment when the system as a whole needed improvement

Contribution focused e.g. NSW Industry Waste Reduction Plan

No matching mechanism for other actors in the overall chain

State based rather than National

NATIONAL PACKAGING NATIONAL PACKAGING COVENANTCOVENANT

Holistic approach Voluntary in nature National in scope Focuses on fixing the system not the symptoms Based on ‘Shared Responsibility’ – do what you

can in your own sector or stage and the system benefits from the sum total of action at each stage

SHARED RESPONSIBILITYSHARED RESPONSIBILITY

R aw M ateria lP rod u cer

P ackag in gM an u fac tu rer

F ille r/M arke ter

R eta ile r/D is trib u to r

C on su m er C o llec tor S orte r R ep rocessor

Tota l S ys tem

NPC – WHAT IS IT?NPC – WHAT IS IT?

In August 1999, after 3 years of discussion and negotiation Australia’s governments (federal, state, local) and representatives of the packaged goods industry signed the National Packaging Covenant.

The Covenant is a voluntary, self regulatory scheme which takes a nationally consistent approach to the life cycle management of packaging.

It covers the three tiers of government and all companies in the “packaging chain” from raw material production through to retail.

WHAT AND WHO DOES IT WHAT AND WHO DOES IT COVERCOVER??

What All consumer product packaging and paper In store packaging and multipacksWho Raw material producers Packaging Manufacturers Packaging Users (fillers/markets/brand owners) Wholesalers & Retailers Paper Manufacturers/Suppliers

WHY SHOULD I SIGN?WHY SHOULD I SIGN?

It supports a voluntary approach to the regulation of packaging

It puts the company in control of what it can contribute to environmental improvement

It allows the company to focus on its OWN business rather than post consumer recycling

It is a low cost approach to regulatory compliance It avoids being caught up in the compulsory regulatory

mechanism (NEPM) – which is a costly alternative IT PROVIDES A POSITIVE BOOST TO COMPANY

ENVIRONMENTAL IMAGE

WHAT ARE THE BENEFITS?WHAT ARE THE BENEFITS?

The Covenant process has resulted in identification of clear roles and responsibilities for government and industry

This includes the recognition that local government is responsible for recycling collection and its cost

It recognises the need to make recycling “market based” i.e. NO INDUSTRY subsidies or contributions to collection and sorting costs required

It allows companies to focus on the things they can improve within their own business

WHAT HAPPENS IF WE WHAT HAPPENS IF WE DON’T SIGN?DON’T SIGN?

Brand owners who don’t sign (or fall out of the Covenant process) must comply with their state’s version of the NEPM for Used Packaging

This is a regulation that will require the company to recover product packaging from consumers (or pay for it) to the level achieved by the rest of the system

It also has extensive data provision requirements Failure to comply attracts heavy financial penalties COVENANT SIGNATORIES ARE EXEMPT FROM

THE NEPM

WHAT HAPPENS IF WE WHAT HAPPENS IF WE SIGN?SIGN?

The company must, within 6 months submit a Covenant Action Plan

This outlines the company’s voluntary commitments to the Covenant – from a menu of options

Report progress annually Commit to the Covenant’s principles and the Packaging

Environmental Code of Practice Contribute to the National Packaging Covenant

Transitional Arrangements

COVENANT ACTION PLANSCOVENANT ACTION PLANSTypical First CommitmentsTypical First Commitments

Plant/facility waste audit Minimise production waste Labeling for recyclability On-pack litter warnings (where appropriate) On-pack community education of packaging

benefits

COVENANT TRANSITIONAL COVENANT TRANSITIONAL ARRANGEMENTSARRANGEMENTS

A program jointly funded by government and industry aimed at improving the cost effectiveness and sustainability of council recycling collections and the development of markets for collected materials

This will facilitate the withdrawal of subsidies $34.9 million over 4 years Contribution according to turnover and place in

marketing chain

TYPICAL CONTRIBUTION LEVELSTYPICAL CONTRIBUTION LEVELS(Packaging Users)(Packaging Users)

Company ContributionTurnover Year 1 Years 2,3 & 4__1-3 Billion $20,000 $30,000750m – 1 billion $10,000 $15,000500-750 million $7,000 $10,500250-500 million $4,000 $6,000100-250 million $2,000 $3,00075-100 million $1,000 $1,50050-75 million $600 $90025-50 million $500 $750Less than 25 million $500 $500

NEXT STEPSNEXT STEPS

Industry -vs- individual action plansPromote broader participationPromote real change within your company