27th March 2007

NEWS RELEASE
Economic Viability Must Be Third Consideration

Industry asks Cross Party committee considering the Waste Minimisation (Solids) Bill to remember that the 3rd measure of sustainability is economic viability

At a cross party briefing at Parliament House this evening, representatives from The Packaging Council and the New Zealand Retailers Association told MP’s that waste minimisation decisions need to balance environmental, social and economic factors and not be driven by emotion.

Paul Curtis, Executive Director of the Packaging Council said that the Green Party’s Private Members Bill will impose significant costs on businesses and individuals, but little opportunity has been provided for consultation to assess whether those costs are actually necessary:

“You will not find anyone in this room who is not committed to sustainability and the packaged goods industry was on board the bus early signing a Packaging Accord in 2004 with local and central government and recycling operators with agreed targets for recycling and for sustainable product design. We are delivering on this. Industry can be credited with doing more to advance recovery and recycling in New Zealand than any Government regulation as evidenced by the new generation of material collectors and processors here in New Zealand.”

“But in the absence of any economic data relating to the Bill, we commissioned independent research to fill the vacuum. The net impact of introducing a mandatory beverage container deposit system in New Zealand could cost up to $121 million per annum. Whilst there is no doubt that our memories of the annual Scout’s bottle drive provide a compelling emotional argument for container deposits, all the economic evidence points to the huge, additional costs of such a system.”

“Those countries which have introduced Container Deposit Legislation (CDL) have primarily introduced it as a litter management solution or have introduced it prior to a kerbside system. Common sense should tell you that running two competing systems in parallel is not efficient when 77% of our councils already provide a kerbside collection which is by far the cheapest option targeting a wider range of materials. The additional cost for every tonne recycled would be an average of $1020 per tonne or $65 per household, compared with an average cost of $60 per tonne for a kerbside collection service”

“The study asked how supermarkets would process a potential 2.9 million m3 of containers in their already limited store space incurring lost revenue for them of around $12 million so campaigners for CDL have since suggested that returns could be to stand-alone depots. But their model simply has to be tested before legislation is introduced on the hoof, particularly since it will have a disastrous effect on kerbside recycling. But this is not just about the financial cost - the additional vehicle movements will increase C02 emissions by an estimated 8000 tonnes per year, or the equivalent of a medium sized factory”

“However one of the most compelling reasons driving sustainable behaviour for business and for individuals is cost reduction and this is behind every decision our members make - including the decision to send material to landfill. Introducing a $160 million tax on waste is a blunt instrument which impacts at the point of landfill. We have identified a number of perverse outcomes of such a tax, including increasing the cost of recycling certain materials and an increase in illegal dumping. We urge the Select Committee to recommend a full cost-benefit analysis before the Bill progresses any further.”

The packaged goods industry is strongly supportive of voluntary product stewardship which motivates industry to achieve the best outcomes at the least cost.

Under the Packaging Accord:-
• We are recovering more packaging than goes to landfill;
• All packaging types are significantly lighter than they were 10 years ago;
• Success is evident:-
o We have the highest rate of paper recovery in the world;
o Steel is funding a major public awareness campaign;
o Glass has introduced the first voluntary levy to develop alternative uses;
o Plastics recovery is twice that of consumption;
o Aluminium consumption has reduced by 13% (850 tonnes)
o Retailers have reduced the plastic consumption by 8% (434 tonnes) and are launching a major public awareness campaign; and
o Brand owners have introduced world leading application of bar code data to improve accuracy of consumption information.

The caucus meeting is being organised by Nicky Wagner, MP National Party and Assistant Spokesperson for the Environment.

Industry representatives include senior management from Coca Cola Amatil, Danone, Foodstuffs, Fonterra, Frucor, Lion Nathan and Progressive Enterprises.

ends

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