To:	Local Government and Environment Committee Bowen House, Parliament Buildings, WELLINGTON
From:	Susa Kupa, Coordinator CRN [email protected]
Date:	8th June 2006
Submission:	Draft submission to Ministry for the Environment re current status of the National Waste Levy Proposal

Waste Levies - some history
CRN Support
What is the purpose of a waste levy?
Who would pay the levy?
On what basis would a levy be charged?
What would happen to the levy revenue?
 

New Zealand's Community Recycling Network (CRN) has been established to further strengthen existing and emerging community based groups involved in recycling, reuse, composting, waste reduction and waste education activities.

CRN does this by:

• providing support to communities dedicated to improving their environment and their local economy by treating waste as a valuable resource
• acting as the main point of representation and contact for community enterprises actively involved in the waste management and mimimisation sector
• enabling the community sector to have a stronger voice and role in the future of waste minimisation and recycling in New Zealand
• fostering working partnerships between its members and local authorities and businesses working towards Zero Waste
• by providing development support and advice to member organisations, particularly in terms of business advice, training, mentoring and market development

Currently, CRN represents 25 community waste enterprises and has 'commonalities' with a further 15 or so community groups associated with waste reduction and waste education activities.

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Waste levies have been used in New Zealand since 1998 when Christchurch City Council introduced one. In 2005, three Auckland Territorial Local Authorities (Waitakere City, Rodney District and North Shore City) introduced a similarly worded by-law to require all waste collectors operating in their areas to be licensed and be charged a local waste levy.

As a result, two major waste companies initiated a judicial review to question the power of Territorial Local Authorities to set by-laws for this purpose. The High Court found that provisions for local levies don't exist in the Local Government Act and since March 2006 Christchurch City Council has been unable to charge the levy and is facing a funding shortfall.

Ministry for the Environment has been asked to provide advice to the Minister by the end of June regarding potential models for a waste levy.

The Ministry is also seeking feedback, contributions and comment from the wider community with regards to a proposal drafted in May 2006 prepared largely by the waste management companies, Waste Management Ltd and Envirowaste.

By July 2006, the Minister will decide if there is a case to develop a national waste levy and any necessary legislation and regulations. This is a particularly tight timeframe.

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In principle, CRN supports the concept of a national waste levy but has a number of key apprehensions as outlined below with the National Waste Levy Proposal (NWLP) currently drafted for the Ministry for the Environment.

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1. The NWLP proposes "a levy on all solid waste going to "final" disposal facilities (in landfills and waste incinerators, etc.) in New Zealand". CRN questions the definition of 'final disposal'. Given that waste is never actually 'disposed' of but is merely transported and discarded to another place ie: landfill where its value is diminished (mostly due to the way in which it is discarded as mixed materials), CRN questions what does "final disposal" actually mean as stated in the NWLP?
2. Waste incineration, meaning the incineration of mixed, unsorted waste, is also described as 'final disposal'. If plastics used in the future for energy recovery and fuel are considered 'final disposal', will this create a perverse situation whereby sending waste to landfill is an easier option?
3. "Waste for final disposal excludes waste that is recovered, reused, or recycled for some beneficial purpose such as making paper, compost, glass and plastic products, whether in New Zealand or overseas". CRN is concerned that this can be interpreted as automatically removing any Extended Producer or Product Stewardship responsibility from manufactures and industry generating waste through the sales of their products.
4. This raises the question: Where will a waste levy be applied? Only to those parties managing the final disposal of waste (ie: landfills and waste incinerators) or also imposed upon those parties generating waste ie: producers of packaging waste?
5. CRN asks how the application of a waste levy will affect those parties signed up to Product Stewardship schemes like the voluntary Packaging Accord which has 200 participants.

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6. If the purpose of a waste levy is to source funds to "support sustainable waste minimisation initiatives including public and business education, the collection of recyclable material and 'start-up' support for alternatives to disposal including community and business resource recovery projects", then CRN supports the concept of a national levy. CRN also considers that all 100% of the funds collected be made available for waste minimisation activities.
7. In New Zealand most of the major primary production industries have benefited from decades of government support in the form of grant programmes, funding support for research and development corporations, university research programmes and cooperative research centres. Compared to this, apart from the National Waste Strategy 2002, the level of industry development support for waste minimisation and resource recovery has been negligible. CRN recommends that the fund generated through levies be reinvested into waste minimisation, resource recovery, education, including at all school and tertiary levels as well as public and business education campaigns, and the design and implementation of strategies that tackle resource depletion, environmental degradation, and climate change.

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8. How will it be determined who sits on the "Board" or central funding agency that allocates the funds 75:25 and 50:50 in the first two and three years respectively? Will the "Board" be evenly represented by the differing waste sectors? Will it be made up exclusively of waste industry representatives or will individuals whose profession is not related to waste, manufacturing or industry also sit on the "Board" so as to offer an 'unbiased' or objective view on all decisions made? Will Community be given the opportunity to sit on the "Board" or will it be unevenly weighted by government officials and people representing Waste Management Ltd and Envirowaste? CRN argues that those parties with interests in landfills should not be involved in the administration of levy revenue.
9. CRN is concerned that the cost of a levy as proposed in the NWLP would flow disproportionably back to householders. That large waste management companies who, in many cities, towns and districts hold the monopoly on waste collection and 'disposal' services, will pass the cost of the levy on to the householder rather than make efforts themselves to minimise waste.
10. CRN is uneasy about the suggestion in the NWLP that in 'many circumstances payment of the levy could be avoided by ensuring cleaner production'. Larger businesses that have the economic impetus to implement cleaner production may do so but smaller business often don't have the staff or budget to implement the necessary systems and technology required to 'upgrade overnight'. The mere suggestion that 'payment of the levy could be avoided' raises alarm for CRN. Is this another example of big industry getting bigger through 'tax avoidance' whilst small to medium sized businesses continue to abide responsibly 'by the rules'?

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11. CRN questions also the basis on which the proposed levy is charged. It is common knowledge that in volume, one tonne of PET plastic diverted from landfill is far greater than in volume one tonne of concrete. CRN calls for further discussion regarding a charge on the basis of the weight of waste. CRN proposes that the waste levy be charged on volume rather than mass or that an acceptable 'formula' be derived that equates a combination of both.
12. The NWLP does not differentiate between wastes on the basis of environmental impact but suggests only that the levy be charged on the basis of the weight of waste. CRNs concern with this is that toxicity and biodegradability are environmental issues that must be considered when proposing to implement a waste levy. The same levy should not be applied to one tonne of concrete as to one tonne of electronic scrap because the environmental impact is markedly different. Does the NWLP suggest the same levy be applied to industrial hazardous waste as to household waste?

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13. The suggestion by the NWLP of exemptions or 'circumstances where it would be unreasonable, unfair or even environmentally inappropriate for a levy to be charged', leads CRN to question who, at the end of the day, will be colouring in the different shades of grey with regards to exemptions? How exemptions may be determined, under which circumstances and by whom? CRN questions in advance the 'discretion' of the "Board" to offer its approval to claimed rebates, clearly specified or otherwise.

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14. It is important to CRN that revenue gathered from a national waste levy not go into the central government coffers but was specifically targeted towards waste minimisation and resource recovery projects. However, CRN is apprehensive that if the money is collected by a central agency like the , then distributed, it maybe administered only to the 'squeakiest wheels' ie: urban areas and large waste companies. CRN considers that, if designed properly, a regional approach to waste levies could work. Relationships between CRN members and their LTA have been fostered over the years and many community waste enterprises now have contracts and solid, sound, constructive working partnerships with their LTA. In many cases, the administration of funds to groups and businesses would best be delivered by an authority that was 'intimate' with the group, business or industry regionally located.
15. Many CRN members operate in the South Island where all but one council has made the commitment to zero waste. Groups operating in the South face many challenges including in particular the shear geographical distance between centres, and population (in decline in many parts). The socio economic distribution also reflects recent changes in land and real estate prices. As demographics change, so too does the waste and some CRN members face huge hurdles managing increasing volumes of waste generated as a result of the traditional 'Crib' being sold to wealthy residents who only holiday and generate waste rather than live in the community and assist to reduce it. Regional authorities are more aware and 'in tune' with their constituency than a central body administering a contestable fund.