Part Two: Initial thoughts on the 2020 July Draft Extended Producer Responsibility Regulations

On the 26^th of June 2020, the Department of Environment, Forestry and Fisheries (DEFF) invited comments on the Extended Producer Responsibility Regulations. These regulations came after a policy shift away from Industry Waste Management Plans towards the principle of Extended Producer Responsibility (EPR). Read alongside section 18 of the National Environmental Management Waste Act, EPR is a waste management measure furthering the aim of reduction, reuse, recycling and recovery of waste. The purpose of EPR is to ensure financial and physical responsibility attaches to the producer of the product in the post-consumer life stages of the product.[1]

The call for comment was made on a general EPR regulation document alongside regulations for EPR in the lighting, electronic and electrical equipment, and the paper, packaging and other single-use industries. The Circular Economy (CE) has become one of the objectives of sustainable development policy in South Africa, and EPR is considered by DEFF as one of the ways to manage waste streams and further CE policy initiatives.

The regulations are aimed at encouraging the implementation, monitoring and evaluation of Extended Producer Responsibility Schemes (EPR Schemes) by producers, importers and brand owners. The three main characters within the regulations are the producers, the Producer Responsibility Organisations and the EPR Schemes. Producers are registered persons, a category of persons and/or a brand manager which engages in commercial manufacture, conversion, refurbishment and import of new or used products (as identified by the Minister of DEFF). PROs are non-profit companies established by producers (or any other person in the industrial sector concerned) to implement EPR Schemes. EPR Schemes are systems that affects the obligations placed on producers.

Producers have full responsibility for the establishment, implementation, financing, maintaining fees, auditing and managing the data of the EPR Scheme. The producers are responsible for the life cycle assessments of the product; the collection, recycling, recovery, documentation and control over all services related to the product waste stream; and the establishment of needed infrastructure or the use of existing infrastructure through collaborations.

The producers are also responsible for promoting small businesses, implementing BBBEE policy and the establishment and development of a secondary material market to ensure the recycled material has an end-use market to go to. This is incredibly overwhelming for smaller producers, especially considering the onerous penalties they may face if they do not comply. This may result in larger industry players stepping forward with PROs that serve their own interests, making an uneven playing field.

It is now important to note that the EPR principle is innovative and an incredibly exciting policy avenue to explore and we commend DEFF for the publication of EPR regulations. They provide an incredible platform to hold those who profit from products responsibility for the environmental and social costs of their products. We are adding our initial thoughts to join the conversation – these are our concerns but do to seek to detract for the policy direction, a path we endorse.

Within the general EPR regulations, the definition of a ‘producer’ has been cast so wide that responsibility has been stretched over the entire lifecycle of the production and distribution of any product. The manufacturers of the goods, the importers, retailers and any the waste management providers have become part of a mandatory responsibility model. Although there is strength in shared responsibility, and this is preferred within a developing country context, if spread too thin the amount of responsibility attributable to a specific stakeholder becomes difficult to discern.

If a producer becomes the provider of public services like waste management, then holding that producer responsible requires effective accountability structures. Administrative action (waste collection for example) taken by a private party (waste management company considered a ‘producer’) passes what is in the governments interest to provide adequately, to a 3^rd party. This transferral ‘privatises’ a public service. The pros and cons of privatisation can be endlessly debated, but the focus here is on responsibility and who will be held accountable if something is not provided effectively and how do we ensure accessible accountability structures exist.

Currently, the regulations provide a definition of a ‘producer’ that is far too vague and will result in multiple confusing relationships between the public structures which are supposed to be accountable (like local municipalities) and the private parties that are now ‘responsible’. Another element to consider is the compliance and enforcement of the EPR systems – what is the true cost of the product? how do we attribute a causal link? and how much does the cost connect to the final disposal?

PROs appear to be the main structure to ensure accountability when it comes to EPR, how can we ensure that the PROs are governed in an independent manner when almost every aspect of the value chain will both need to be represented and be accountable to said PROs? At this stage there seems to be a conflict of interest where those representing the PRO will also be representing a producer, resulting self-evaluation. An independent audit is required, but this might not be enough.

I suppose the question is – where is the state? What role do municipalities play when they are the ones legally mandated to manage waste? We cannot hand over all responsibility. It needs to be shared alongside state structures in a mutually beneficial manner otherwise the cost of these changes will inevitably fall on the consumer of the product, and not the producer. Producers will externalise the cost of these EPR schemes if not carefully monitored – consumer protection is a vital issue to consider in the implementation of these schemes and unfortunately the regulations appear silent on how these fees will be calculated.

Having a general EPR regulation might also need to confront some of the existing regulatory hurdles faced by individual sectors. For example incredibly onerous authorizations, licences and assessments are required in the context of the electronic and electrical equipment (EEE) recycling when the activities do not result in hazardous activities (collection and transportation for example of most waste EEE (WEEE)). Managing WEEE, and incentivising small transportation and collection businesses, needs to be considered when looking into EPR. Regulatory restructuring may need to be considered first before adding additional principles.

Other points of concern regarding the general EPR regulations that came up from industry when in conversation with DEFF:

• Currently, the South African Waste Information System needs substantial improvements before accurate reporting on the targets and successes of any EPR Schemes can be expected. What is most probably needed is an independent forum where data can be professionally stored and analysed.
• Regulation 5 applies to producers, but upon further analysis the objectives often seem more relate to PROs. Thus clarity is needed on what producers are directly accountable for and what PRO’s are accountable for.
• Producers and PRO’s seem to be one and the same – how would one be held accountable whilst the other not when their responsibilities according to the regulation 5 and regulation 11 appear largely mirror one another.
• If the administration fee of the PRO is limited to 6% whilst being expected to undertake all the obligations set out in the regulations, the PROs will be substantially under-funded.
• Bi-annual audits are considered an unnecessary financial and administrative burden placed on the PRO and an unnecessary administrative burden on the DEFF. Annual audits should prove adequate monitoring.
• Unclear how consultation processes will be facilitated with impacted Ministers in other governmental departments, how will producers/PROs establish effective communication on matters regarding EPR.
• How do we ensure fair calculation and handling of fees across the various PROs?

A lot of debate and answers are necessary to ensure the effective management of various waste streams, and the draft EPR regulations thus far provide a useful foundation to navigate this innovative approach by government to further CE initiatives. Make your voice heard if you have any comments – due date for comments is the 27^th of July, email them through to apillay@environment.gov.za.