With new legislation for packaging coming down the track, Robbie Staniforth, Head of Policy at Ecosurety and a chartered resource and waste manager, discusses what changes are needed and whether they are best delivered through competition or central co-ordination.
For many decades, the waste sector has wrangled with the benefits of private sector competition to drive performance versus the public service of managing waste from households. From my experience of speaking to professionals in the sector, it is possible that your opinion on the subject is derived from personal experience or vested interest, rather than any analysis on the subject, such as the report published earlier this year.
While macro-analysis may be intellectually stimulating, it is often nuanced individual circumstances that become the most important factor in the decision-making process for local authorities.
As has been highlighted over recent years, the current system for financing packaging recycling is, at best, opaque
While I do not wish to wade into that specific debate, given my expertise does not extend to local authority procurement strategies, the true benefit of competition has caused much head-scratching in the context of what it means for changes to Extended Producer Responsibility (EPR) for packaging.
As has been highlighted over recent years, the current system for financing packaging recycling is, at best, opaque. It is in urgent need of strategic oversight that cannot be delivered by competing organisations.
When the Government comes forward with proposals, the devil will be in the detail of how strategic oversight can be provided without risking totalitarianism. Over the last decade, prominent European economies, such as Germany, have moved towards a more liberalised market for financing packaging recycling.
Even the monopolistic system operating in France, continues to be questioned by Léko, an organisation setup to challenge dictatorial status quo. However, there is no such thing as the “perfect EPR governance model” that can be universally adopted by any country.
From the ground up
Local culture and existing infrastructure – or lack thereof – are just two of those, aforementioned, nuanced individual circumstances that means a governance structure must be designed from the ground up.
The UK’s starting position for such changes is at the opposite end of the spectrum to Germany and France. The tradeable credit PRN (Packaging waste Recovery Note) system has driven volatility but ultimately proved to be lower cost for producers when compared to other countries.
The absolute devotion to meeting recycling targets has come at the expense of building domestic infrastructure. Something that a new governance system must actively address. Creating favourable economic conditions for domestic reprocessing is nothing new but the next round of Government consultations will start to crystallise exactly how such conditions will be created.
The absolute devotion to meeting recycling targets has come at the expense of building domestic infrastructure
The fear of competition driving unintended consequences is perhaps somewhat overstated in this context. Given the entire producer compliance “market” is derived from legislation, it should be highly regulated with those inside the system providing the necessary funds for adequate enforcement. Having a high barrier to entry may, in this instance, come to represent more of a safety net than a barrier to a free market.
When it comes to the reality of who picks up the tab, namely the packaging producers, they will clearly want to be presented with choices for how they meet their obligations. Such choices could be made on several metrics, including, on a basic level: technical support, digital systems, and general customer service.
However, an obvious area where compliance organisations should add value in a new system is by linking reprocessor’s material back to producers. There could well be a role to play in bridging the gap between two culturally different actors in the value chain. Greater focus on how to bring material back around the loop is required, particularly for plastic, if an often-convoluted supply chain is to be simplified, especially given the emergence of chemical recycling technologies.
Balance
However, there is a balance to be struck if we want to maximise the benefits of system change. The criteria for modulating producers’ fees, based on what they create, should certainly be centralised, along with adequate recycling labelling. Producers require one version of the truth and should not be afforded the opportunity to swap compliance organisation in pursuit of lower fees, based on their packaging profile.
This will require some tough decisions, particularly relating to multi-material packaging, but better to take such decisions centrally than have two competing organisations arguing over the truth.
Success in Wales can also be used to demonstrate the potential benefits of centralising the process for the fair funding of Local Authorities’ collection activities.
Indeed, there is no need for competition between compliance organisations on communications and messaging. The industry needs one clear and trusted voice giving recycling information to citizens. The successful messaging that sits behind Wales’ collection blueprint is a clear example of what could be possible when strategic oversight is applied.
Success in Wales can also be used to demonstrate the potential benefits of centralising the process for the fair funding of Local Authorities’ collection activities.
I concede that working for an organisation that has always balanced purpose and profit may well give me a somewhat slanted view on the benefit of good business. While Ecosurety’s recent B Corp certification is outward validation of what has been internally visible for some time, it has made me ponder what triggers competitors to truly step up their offering.
In future, good competition will not simply be about service versus price, it will balance profit with purpose and public good.
