Dr Jan Wright, Parliamentary Commissioner for the Environment

Introduction

Thank you for the invitation to assist with your consideration of the Waste Minimisation (Solids) Bill and its Supplementary Order Paper.

This briefing refers collectively to the original member’s bill [the Waste Minimisation (Solids) Bill] and its proposed amendment by the Supplementary Order Paper as ‘the bill’ or ‘the proposed legislation’. This briefing also uses the word ‘legislation’ when referring to the Act that may be passed after Parliament’s consideration of the bill.

My analysis has focused on four key questions:

• How well is the bill aligned with the principles of the waste hierarchy?
• How will we know if the legislation is effective?
• Will implementation of the legislation lead to undesirable environmental outcomes?, and
• What functions should the Waste Advisory Board have to get best value from these experts?
  
  

Accordingly, the presentation is structured in four parts:

1. assesses how New Zealand has implemented the principles of the waste hierarchy to date, and how the bill encourages waste reduction, the most preferred of the waste management methods

2. reviews how the bill proposes to collect data on the quantity and composition of waste disposed of in landfills and other facilities

3. identifies two possible perverse outcomes of the legislation and how these may be addressed

4. reviews and proposes changes to the Waste Advisory Board’s functions.

I. How well is the bill aligned with the principles of the waste hierarchy?

The waste hierarchy

This bill is largely about resources that are in the wrong place at the wrong time. These resources, along with other materials, are often termed ‘waste’. The waste hierarchy (see figure 1) provides a list of waste management methods and prioritises them as follows:

1.  reduce (which is sometimes preceded by ‘avoid’)

2.  re-use

3.  recycle

4.  recover energy/material

5.  treat, and

6.  dispose (which is sometimes preceded by ‘contain’).

In the figure, the most preferred methods - which reflect the most effective policies and processes - are located at the top of the triangle. The least favoured options are at the bottom. The triangle also illustrates that, traditionally, the least favoured method of disposal has been applied to the bulk of waste produced.

The waste hierarchy underpins the 2002 New Zealand Waste Strategy which has been in place for six years.

This hierarchy is also presented in Part 4 of the bill in the context of the Waste Management and Minimisation plans to be prepared by territorial authorities. A significant improvement in the bill over the Local Government Act 1974 is that the list of waste management methods in Part 4 is now explicitly listed in descending order of importance – that is, as a hierarchy.

New Zealand’s implementation of the principles of the waste hierarchy

Treat and dispose

Starting from the bottom of the hierarchy, territorial authorities are largely responsible for waste disposal [1]  . The number of landfill sites has dramatically reduced since 2002, and environmental management of the remaining landfills has significantly improved [2]  . Treatment mostly applies to hazardous, quarantine and medical waste.

Recover

Where the territorial authorities can act reasonably autonomously, some actions have been taken to recover energy or material. For example:

 ·    about 310,000 tonnes of organic waste were diverted from landfill in 2005 [3]   - about 10% of the total waste disposed to landfill

 ·    16% of all territorial authorities’ waste management plans refer to the authority having installed, or considering installing, systems at their landfills to use landfill gas as an energy source [4]  .

Recycle

Recycling relies on a larger number of stakeholders including territorial authorities, industry and consumers. Despite the difficulties this creates, good things have been achieved:

• 97% of New Zealanders now have access to recycling facilities [5]  
• some 57% of total aluminium, glass, paper, plastic and steel packaging was recovered in 2006 [6]  , compared with 29% in 1994 [7]  .

Re-use

A number of organisations, including territorial authorities and community organisations, facilitate product re-use through second hand shops or shops at waste disposal sites. However, in this area, ‘Trade Me’, with over six million used items sold a year, may be New Zealand’s greatest re-use promoter!

Reduce

At the peak of the triangle, reduction is the most favoured waste management method, but it also has the bleakest outlook. With so many different stakeholders and competing interests this perhaps should not come as a surprise. Packaging consumption, in kilograms per capita, has increased by some 50% since 1994 [8]  . Despite improvements in waste recycling, the total quantity of waste disposed to landfill per person slowly but steadily increased between 1994 and 2004 [9]  . In some regions, such as Canterbury, data also shows that the quantity of total waste produced per person has steadily increased since 2001 [10]  .

Despite the intent of the New Zealand Waste Strategy, territorial authorities are still likely to favour waste diversion and waste disposal rather than waste reduction. [11]  

How does the bill encourage waste reduction?

The proposed legislation seeks to reduce waste through:

• product stewardship
• territorial authorities’ Waste Management and Minimisation Plans and associated activities, and
• funding waste reduction projects.

However, it should be noted that the key to reducing waste is to focus on its generation, and this is only partly addressed in the bill.

Commercial and industrial waste

Estimates from operators of 50 disposal facilities indicate that, in 2006/07, about two-thirds of waste was of industrial and commercial origin [12]  . Voluntary initiatives are currently the only way to reduce the volume of commercial and industrial waste produced, as councils cannot require the implementation of waste reduction plans under the Resource Management Act 1991.

Product stewardship schemes may address this gap, provided the priority products are carefully selected (see below). However, it is not clear whether this will be sufficient to address the high quantity of waste generated as part of production processes.

The waste levy

Overseas, where landfill levies have been introduced and regularly increased, the amount of waste deposited to landfill has been shown to decrease. In the Australian state of Victoria, manufacturing waste deposited to landfill decreased by about 37% between 1999 and 2006 [13]  . In the United Kingdom, the amount of waste going into landfill fell from about 96 million tonnes to just under 77 million between 1997 and 2004 [14]  . Figure 2 also shows that, in the United Kingdom, a significant increase in the landfill tax was accompanied by a reduction in household waste generated.

 
Figure 2: Landfill tax and household waste generated in the UK 1996 -2006 [15]  .

Imposing charges to increase the cost of waste disposal does affect the behaviour of individuals, organisations and sectors. One of the bill’s merits is that it enables the levy to be modified, both generally and as applied to specific waste streams, in a responsive manner via regulation.

However, the Regulatory Impact Statement explicitly states that the levy will not initially be used as an economic instrument to produce behaviour change. If the full benefits of the levy are to be realised - and behaviour change is a major benefit - it is important that the bill fully clarifies any current or future purpose of the levy. My view is that the possible use of the levy as an economic instrument is critical to achieving waste reduction.

I therefore recommend the addition of a third purpose in clause 21 related to the use of the levy as an instrument to influence behavioural change among individuals and organisations and to reduce the creation of waste. (Recommendation 1)

I further recommend that the ability to modify the levy rate via regulation be retained. (Recommendation 2)

2. How will we know if the legislation is effective?

Assessment of whether the legislation is meeting its purpose will require good and accurate data collection. Reliable and comprehensive information on the quantity of waste generated and the composition of the waste stream is critical to sound policy decisions, and to accurately assess whether waste reduction targets are being met.

The poor availability and quality of information on New Zealand waste has been highlighted by many reports in the past 10 years [16]  . This applies to landfills, which were estimated to have received about 3.1 million tonnes of waste in 2006, and to a greater extent to cleanfills. They are under limited monitoring and were estimated to have managed between 2.7 and 3.7 million tonnes of cleanfill material in 2005 [17]  .

Clause 76(1)(a)(ii) of the bill allows the operator of waste disposal facilities to be mandated to keep and provide information on the quantity and composition of waste received at the facility. While primarily focusing on household waste, the bill also has a sub-clause which enables the consideration of waste disposed at other facilities, if these become prescribed.  Imposition of the waste levy, a key component of the bill, strongly depends on the implementation of clause 76(1)(a)(ii). This should strengthen the collection of high quality data on the quantity of waste disposed.

As least as important to sound policy making and potential use of the levy as a deterrent to producing certain types of waste, is knowledge about the relative composition of the waste stream. A practical methodology will be needed to assess waste composition and collect waste composition data. However, these activities will not be driven by the need to collect the levy.

The Waste Advisory Board already has the role of advising on regulations for data collection. I recommend that the Board be given the additional role of assisting with the development of a practical methodology for collecting data on waste composition. (Recommendation 3)

3. Will implementation of the legislation lead to undesirable environmental outcomes?

Use of the word ‘minimisation’ versus ‘reduction’

There are questions around the overall use of the words ‘minimisation’ and ‘minimise’ in the title and in many other parts of the bill. The definition of ‘minimise’ in the Oxford English Dictionary implies a reduction to the smallest possible amount. This interpretation may lead to extreme waste reduction while not fully considering the amount of energy needed to achieve such an ambitious outcome.

My recommendation is to use the words ‘reduce’ and ‘reduction’ where ‘minimise’ and ‘minimisation’ are currently used in the bill. (Recommendation 4)

Priority products and stewardship schemes

The product stewardship schemes accredited under the legislation are a key element to meeting the legislation’s purpose. Selection of a priority product must therefore be based on sound evidence that management of it through a stewardship scheme will lead to a reduction of waste generated or waste to landfill.

Sub-clauses 7(2) and 7(3) of the bill propose a set of criteria for the selection of priority products. Those criteria may lead to the selection of a very large number of products with variable environmental benefits when managed via stewardship schemes.

There is a particular concern about sub-clauses 7(2)(b) and 7(2)(c).

Sub-clause 7(2)(b) proposes that public concern be a trigger for the selection of priority products. This raises the risk of a populist product selection, at the expense of products that may be less visible but have higher environmental impacts. I support the suggestion of the Ministry for the Environment’s that the Minister consider public concern, but that it not have the potential to be the sole trigger in declaring a priority product.

Sub-clause 7(2)(c) does not provide an appropriate screening tool, as benefits are likely to arise from the re-use, recycling, recovery or treatment of any products, independently of cost or adverse environmental impacts.

The two key elements in the selection of priority products are

• the environmental harm that the product will or may cause at the end of its life, and
• the ability of a product stewardship scheme to effectively manage the product and generate environmental benefits.

The expertise of the Waste Advisory Board will greatly assist the Minister to determine if a product meets these two criteria. Where many products meet the two criteria, the Board may also assist the Minister to prioritise these products.

I recommend that the criteria for declaring a priority product be amended so the Minister can compare the merits of different proposals. (Recommendation 5)

My detailed suggestions for this amendment are as follows:

• delete sub-clauses 7(2)(b) and 7(2)(c)
• retain 7(2)(a) as the first key selection criteria
• add, as a second selection criteria, “the ability of a product stewardship scheme to effectively manage the product and generate environmental benefits”, and
• ensure that both key selection criteria are met prior to a product being declared a priority product.

4. What functions should the Waste advisory Board have to get best value from these experts?

The bill proposes to establish a Waste Advisory Board which has a responsive advisory function, and limited powers and initiative. Parts two and three of this briefing have already suggested an additional function for the Board, namely assisting with the development of a practical methodology for collecting data on waste composition.

To make full use of the Board’s expertise and optimal use of the legislative framework to reach national objectives, I recommend that the Board’s functions be further extended in two areas.

First, assuming that experts on the Board will collectively have a very good understanding of the operational challenges of waste reduction projects, I recommend that it be given the additional function of allocating the contestable levy revenue. (Recommendation 6)

The second area is the provision of independent and unprompted advice to the Minister for the Environment and to territorial authorities on a wider range of strategic and operation issues. Such issues may include:

• progress towards national waste reduction targets and strategy implementation
• review of product stewardship schemes’ effectiveness
• prescription of additional waste disposal facilities, and
• identification of best practice and opportunities for joint activities by territorial authorities to manage and minimise waste.

I recommend that the role of the Waste Advisory Board be extended to give independent and spontaneous advice on a wider range of strategic and operational issues. (Recommendation 7)

Conclusions

I commend the work to date on the bill. It provides a good basis to consolidate the legislative framework for waste reduction and management. The bill also refocuses waste management towards the top end of the waste hierarchy and addresses a number of key findings of the 2006 PCE report “Changing behaviour: Economic instruments in the management of waste”.

I am particularly satisfied that the bill enables:

• collection of information on waste quantity and composition
• future consideration of disposal facilities, other than those that accept household waste, and
• the levy rate to be modified via regulation for either specific or multiple waste categories.

In considering the waste hierarchy, I recognise the potential of the levy and of product stewardship schemes to generate significant waste reduction. However, I question whether current and proposed legislation is sufficient to address the high quantity of industrial and commercial waste generated.

I have seven recommendations to enable waste reduction, avoid perverse environmental outcomes and ensure good governance.

Recommendation 1

Add, as a third purpose to the levy, the possibility of using the levy as an economic instrument to reduce waste generation. (Clause 21)

Recommendation 2

Retain the ability to set the levy rate via regulation. (Clause 23)

Recommendation 3

Give to the Waste Advisory Board the additional role of assisting to develop a practical methodology for collecting data on waste composition. (New clause)

Recommendation 4

Replace “minimise” with “reduce”, and “minimisation” with “reduction” throughout the bill.

Recommendation 5

Amend the criteria for declaring priority products so the Minister can compare the merits of different proposals. (Clauses 7(2) and 7(3))

Recommendation 6

Give the additional role of allocating the contestable levy revenue to the Waste Advisory Board. (New clause)

Recommendation 7

Allow the Waste Advisory Board to give independent and spontaneous advice on a wider range of strategic and operational issues. (New clause)