Critiques of Different Approaches to Extended Producer Responsibility in Canada

Date: 9 Dec 2020 | posted in: waste - zero waste | 0 Facebooktwitterredditmail

ILSR has reviewed three recent documents that clarify the profound differences between contending approaches to the theory, practice and evaluation of the Extended Producer Responsibility (EPR). These are:

  • British Columbia Bottle and Depot Association (BCBDA), “Re Encorp Pacific Canada Container Stewardship Plan – Draft 2020-2024”
  • Zero Waste Canada, “Comment: EPR for Packaging and Paper Products Practices, Policies and Performance”, 14 September 2020, commissioned by the Institute for Local Self-Reliance
  • The Product Stewardship Institute, ”Extended Producer Responsibility (EPR) for Packaging and Paper Products (PPP): Policies, Practices and Performance, March 2020 (amended September 2020).

British Columbia Bottle Deposit and Recycling Association (BCBDRA) to the BC Ministry of Environment, September 15, 2020

At the same time as the Zero Waste Canada assessment was completed, the BCBDRA published its letter to the Ministry of Environment expressing their concerns about EPR practices and future plans of Encorp, the steward of the BC EPR system.

The letter is respectful of government intentions but questions the thoroughness with which the government has considered the environmental, and ecological impacts of the EPR Encorp system. Among the these impacts are a stagnant recovery rate for beverage containers, no added encouragement for producers to redesign, lack of transparency about the use of consumer funds — such as using those funds to outcompete and replace small businesses — and achieving little or no additional environmental benefits.

Effectiveness of British Columbia Bottle Returns as Compared to other Jurisdictions

Extended Producer Responsibility in Europe starts with beverage container legislation and requires ever-increasing quotas of refillable containers to be available in the marketplace and provides incentives to businesses to attain goals. In British Columbia Extended Producer Responsibility undermines container deposits.

Oregon  91%

Norway  90%

Saskatchewan  88%

Alberta  85%

Nova Scotia  81%

British Columbia 78%

Further, the Encorp system has the power to put small entrepreneurs out of business with six months notice (without consultation or negotiation), which devalues 50 years of small businesses’ investments and eliminates green jobs and community services.

The letter goes on to explain a number of problems with the 2020-24 plan by Encorp, including that it:

•Emphasizes producers’ license to achieve the lowest cost-recovery system possible and, in doing so, dismantles 50 years of Depots’ small business capital, infrastructure, and community investments, green jobs, services to the marginalized, and frontline community services and education by threatening to replace us (without fair compensation) with Encorp-owned facilities.

•Downloads costs to consumers and small businesses

•Evades its primary responsibility of increasing collection and recycling rates across all its beverage container streams (even when other jurisdictions have long since surpassed Encorp’s proposed 5-year results)

•Sets an objective for a positive customer experience, while at the same time, setting up BC’s frontline service providers to fail to achieve this objective. It also devalues 50 years of Depots’ business and community relationships

BCBDRA enumerates unfair business practices characteristic of Encorp operations as follows:

  • Use of fear tactics to dictate contracts with no consultation or negotiation.
  • Monopoly price setting with no negotiation or consultation.
  • No transparency.
  • No fair dealing.
  • Use of pressure and fear tactics.
  • No fair dispute resolution process
  • No consultation, negotiation, or compensation.
  • Competing with businesses and anti-competitive behavior (e.g., pursuing Depots’ clients).
  • Creating an unlevel playing field amongst depots.

The Encorp-operated depot system can be likened to a David and Goliath model, where a monopoly is the gatekeeper to the marketplace. Individual depot licenses can be cancelled with 6-months’ notice regardless of performance.

The BCBDRA concludes with a request for new commitments from Encorp to commit to taking specific actions to build a stable business climate for Depots that will enable them to confidently invest in the future of their businesses. To achieve this, BCBDRA makes specific recommendations for how Encorp could amend its stewardship plan to reestablish confidence in the container return sector that will protect 168 Depot enterprises and encourage further investment in the container return system. As it stands, the 2020-2024 stewardship plan assures that Encorp will retain the power to existing Depots with Encorp-operated facilities. Encorp has already served at least one Depot with a notice of license cancellation and soon after placed a sea can near that Depot’s location.

Zero Waste Canada Report

Zero Waste Canada feels that the existing recycling infrastructure can be expanded without EPR for PPP and has a different goal and a different cost-benefit formula for evaluating progress; these include higher recycling rates, incentives for business investment, improved container deposit systems, more transparency, less reliance on incineration and less authoritarian control over independent businesses.

ILSR asked Zero Waste Canada, based in British Columbia (BC), to review the details and conclusions of the PSI report.

Under BC EPR the industry assumes full control over recycling and container deposit systems, resulting in municipalities having little stake in the outcomes. This is compounded by the fact that the provincial government has limited budget and staff to provide any meaningful oversight. There is no transparency as to where materials go in the system as it prepares investment in garbage incineration in smelters, cement kilns and the existing aged waste to energy incinerator.

Steward organizations can withhold contracts, and choose which companies thrive and which cannot survive. There is no investment in source reduction, refillables or reuse programs or enterprises.

Zero Waste Canada emphasizes as their primary concern the complete lack of transparency in EPR operations, despite the fact that they have accumulated millions of dollars in reserves that go unaccounted for. The amount of materials sent to incineration goes unrecorded. Data presented to the public is not vetted. The percentage of materials like plastic recovered as compared to total generation is not reported. There is no checking their advertising claims. The Zero Waste Canada report includes specific examples of false contextualizing and misleading advertisements, prepared to uphold the myth that EPR has solved British Columbia’s discard management problems.

Zero Waste Canada Primary Concerns 

  1. Lack of transparency in how funds are being allocated

Fact Checking: BC EPR is not comprehensive as the program advertises itself. Only 60% of materials sold are being collected throughout the system; and only 70% is actually recycled. This would mean that only 50% of the funds collected either did not go to any parts of the program, or did not go towards the recycling as intended.This amounts to tens of millions of dollars.

  1. Contextualization

BC EPR claims in its advertising that its flexible plastics packaging program currently collected as part of a research development project to determine how best to manage. BUT until recycling opportunities are available the materials is being converted into engineered fuel along with contaminated rigid plastics.

The Zero Waste Canada report concludes by stating that the BC EPR program is the antithesis of the goals and methods set up by the Ellen MacArthur Foundation’s circular economy guidelines: Design out waste and pollution; keep products and materials in use; and regenerate natural systems. Zero Waste Canada stated that:

“There is no demonstration of this in the stewardship programs, across any format. We are not seeing these programs resulting in any design changes on the production side. We are not seeing products and materials being kept in use via closed loop systems where materials don’t lose value following collection and reprocessing. We are not seeing these programs generate the system changes which are required to meet our environmental challenges as well as the short and long term needs of our wider social and economic systems.”

Product Stewardship Institute Report

While EPR for Paper, Packaging and Products (PPP) raises funding, it also takes control and oversight out of the hands of local city leaders, which has proven to be a problem.

The Product Stewardship Organization prepared its report for Metro Government in Oregon. Extended Producer Responsibility (EPR) for Packaging and Paper Products (PPP): Policies, Practices, and Performance: A report on proven strategies for struggling US recycling programs,”  discusses the ‘key elements’ ‘of EPR for PPP and its ‘success’ in several Canadian jurisdictions including British Columbia, Manitoba, Ontario and Quebec. The report asserts that it is “perhaps the first to provide such in-depth research about the success of packaging EPR programs and how they continue to improve. It shows that EPR not only provides sustainable financing for recycling by placing financial responsibility for the system on producers, it also can reduce the burden of day-to-day recycling management away from the public sector, allowing limited public resources to be redirected toward other priorities.”

By centralizing recycling operations under the control of one entity, communities gain ‘efficiency’ through large-scale operations, regular investment in recycling and engineered fuels for local incinerators, smelters and cement kilns, infrastructure, and market stability. Costs are shifted from local government to producers under a proper balance between government and producer interests. The PSI report concludes with a wholehearted recommendation for application of EPR for PPP for the US..

Coming Up: 

The Breaking Free From Plastic Bill

Mary Lou Van Deventer, principal of Urban Ore, Berkeley and a board member of BCBDRA points to additional concerns about the British Columbia Extended Producer Responsibility: the power to lobby government and inundate the public with false public information; the power of monopolies to lobby government to act against the public good while there are better alternatives to breaking the stagnation of US recycling. The history of the Breaking Free from Plastic legislation in the US Congress typifies the threat to effective recycling and Zero Waste.

The Breaking Free from Plastic Bill, its shortcomings and how to improve the legislation will be the subject of the next article from ILSR on Extended Producer Responsibility.

 

Photo credit: Hermes Rivera via Unsplash

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Neil Seldman

Neil Seldman, Ph.D, directs the Waste to Wealth Initiative. He specializes in helping cities and businesses recover increasing amounts of materials from the waste stream and add value to the local economy through new processing and manufacturing facilities. He is a co-founder of the Institute for Local Self-Reliance.