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Product stewardship - FAQ sheet

What is product stewardship?

How does product stewardship compare to extended producer responsibility (EPR)?

Why has the Government chosen to use the term “product stewardship”?

Is product stewardship only about taking back product?

What schemes are operating in New Zealand?

Why do we need product stewardship?

What are the other, non-environmental benefits of product stewardship?

Who pays for it?.

What work is the Ministry doing on product stewardship?

What product stewardship policy is the Government proposing?

What is a “free-rider”?

Would the proposed legislation apply to all products?

What products would be regulated by the proposed legislation?

What about existing voluntary product stewardship schemes?

Do product stewardship requirements only apply to domestic producers?

What consultation has been done on product stewardship?

What other countries have product stewardship legislation?

How does the Waste Minimisation (Solids) Bill fit with the Government’s product stewardship policy?

What is the next step in the process?

Where can I get more information on product stewardship?

What is product stewardship?

Product stewardship is a tool that encourages everyone involved in the manufacture, use and disposal of a product – producers, brand owners, importers, retailers, consumers and other parties – to take greater responsibility for the environmental effects of their products throughout the product lifecycle.

Product stewardship is a flexible approach which enables the best means of minimising the environmental risks of a product to be considered at the most appropriate stage of its lifecycle.

How does product stewardship compare with extended producer responsibility (EPR)?

Product stewardship encourages all key parties in a product lifecycle to share responsibility for reducing the impact of a product on the environment throughout its production, consumption and disposal. EPR generally has a narrower focus and centres on the responsibilities of the “producer” for a product once the consumer no longer wants it. EPR is a term used commonly overseas and is a subset of product stewardship.

Why has the Government chosen to use the term “product stewardship”?

The Government has chosen to use the term “product stewardship” for two reasons.

First, Government believes that parties other than producers have a role to play – in some cases they may play a greater role than the producers. Many products consumed in New Zealand are produced overseas, and the producer may have little or no presence in New Zealand. It may be more effective and efficient for the importers, retailers or service providers to take the key role in a product stewardship scheme. A good example of this is how both Telecom and Vodafone operate cell phone take-back schemes, even though they do not manufacture handsets. However, the manufacturers still have a role in ensuring the cell phone design is environmentally friendly and by supporting Telecom and Vodafone in other ways.

Second, Government wishes to reduce the total lifecycle environmental impact of a product, rather than just focus on reducing the impact from disposal. This would ensure that action to reduce the disposal impact doesn’t lead to a larger increase in the impact at another point in the lifecycle of the product. For instance, the environmental impact from energy consumption during the use of refrigerator is a significant part of its overall impact. Over the past decade, the energy efficiency of refrigerators has increased significantly, so it may be environmentally better to replace very old refrigerators with newer, more efficient models.

Is product stewardship only about taking back product?

No. The term “product stewardship” applies to a range of initiatives that can span a product’s entire lifecycle and put varying degrees of responsibility onto different parties. Take-back schemes are only one example of product stewardship. In some cases, taking a product back at the end of its lifespan may not be the most efficient or effective way to reduce environmental impact.

Members of the Packaging Accord, for example, felt it was more efficient for industry participants to reduce environmental impact of packaging by changing the design, encouraging their customers to change their product consumption and disposal behaviours, monitoring waste streams, and supporting education and recycling markets. Local government recycling services continue to provide an effective system for recovering used packaging. Other product stewardship schemes, such as Fisher & Paykel’s take-back service, recycle the returned product themselves.

This flexibility makes product stewardship a particularly useful approach in finding the most efficient and effective means of dealing with the end-of-life impacts of a product.

What schemes are operating in New Zealand?

Some examples of product stewardship schemes which are operating in New Zealand are: the Resene Paintwise paint and packaging take-back, the Packaging Accord, Fisher & Paykel’s whiteware take-back, Vodafone’s and Telecom’s cell phone take-back, refrigerant recovery, TyreTrack for used tyres and the Used Oil collection programme.

Why do we need product stewardship?

The way we handle waste is crucial to our capacity to live sustainably. Waste is a significant risk to human health and the environment, and tangible evidence that we are making inefficient use of resources.

The New Zealand Waste Strategy outlines three core goals – lowering the social costs and risks of waste; reducing the damage to the environmental from waste generation and disposal; and increasing economic benefit by more efficient use of materials.

Product stewardship helps achieve these goals with no, or only minor, changes in the benefits we receive from living in a developed economy. Product stewardship is often used on products which cause particular waste problems and by focussing on these areas we can make a real difference to reducing our footprint on the environment. Here are some facts about products that are, or might be, assisted by product stewardship:

Product stewardship is the ideal tool to address product waste as it achieves waste reduction goals by encouraging producers to develop better options for consumers, rather than by having to go without. Product stewardship can both minimise the amount of waste created in the first place by influencing design and manufacture and influencing decisions to purchase. At the end of the lifecycle, it facilitates the efficient and effective disposal.

What are the other, non-environmental benefits of product stewardship?

  • Product stewardship helps our economy by encouraging resource efficiency and driving innovation. This can be achieved by providing financial incentives for waste reduction and allowing producers flexibility in how they design and dispose of products.
  • Recycled materials replace our need to import key raw materials (such as plastics, oil and metals) or can be a potentially valuable export commodity for our industry.
  • Disposal services can represent an added-value feature and can generate customer loyalty to a brand as customers enjoy the convenience of having a disposal solution for awkward products, such as computers, tyres and chemical containers.
  • Active environmental programmes and maintenance of our clean-green image is a significant marketing benefit for our exporters. A recent study estimated the value of New Zealand’s clean-green image was worth $500 million to the dairy sector alone.

Who pays for it?

The consumer pays for product stewardship in the price of the product they choose to buy. Product stewardship is consistent with the polluter-pays principle.

The great advantage of product stewardship is that the total cost to society, and even sometimes to the customer, is lower than if the problem is handled in other ways. This is due to the efficiencies, flexibility and transparency that product stewardship offers producers and consumers.

Without product stewardship, the costs of the environmental impact from a product are usually borne by society – ratepayers, taxpayers and the environment – rather than the consumer or producer. Even in cases where disposal costs are paid by the consumer this can be an incentive to choose cheaper (to the consumer) disposal methods  that still pass costs on to others.  

With product stewardship, some or all of the environmental costs from a product are included in the price, allowing the producer or consumer to use that price to help design or purchase decisions. Decisions that reduce the environmental impact of a product may also reduce the cost of manufacturing the product, such as using less material or energy.

Product stewardship can also result in more efficient disposal, reducing collection costs and maximising the recovered resource value, meaning that it may be profitable to recycle products that councils would previously have had to pay to recycle.

What work is the Ministry doing on product stewardship?

  • We are supporting existing schemes, such as TyreTrack and the Packaging Accord, and working with industry to develop new schemes to address product waste issues with farm plastics, computers and TVs.
  • We have developed a product stewardship policy that will allow the Government to offer legislative support for product stewardship. This policy is based on experience from working with schemes and on extensive consultation carried out with the public and those involved in schemes.
  • The Local Government and Environment Select Committee is considering the Waste Minimisation (Solids) Bill, which contains legislative provisions for product stewardship provisions. The Ministry, including the product stewardship team, has been appointed as advisors to the Committee on this Bill.

What product stewardship policy is the Government proposing?

Government seeks to have industry designed and led schemes. Regulation will only be considered as a backstop.  This means the Government would continue to encourage and support voluntary schemes set up by industry. However, in cases where voluntary action wasn’t working, for example because of “free-riders” (see below for a definition of this term), and the product was a priority, regulatory support for the scheme could be applied.

This approach is outlined in more detail in the 2005 Product Stewardship and Water Efficiency Labelling discussion document.

What is a “free-rider”?

Free-riders are those who don’t contribute or comply with a product stewardship scheme, but benefit from it.

In some situations even a small amount of free-riding can compromise the entire system. In others, free-riding may not threaten the viability of a product stewardship scheme and may be accepted and dealt with by those involved.

Free-riding has contributed to a shift internationally from relying solely on voluntary initiatives of producers to the introduction of mandatory programmes for some products by governments.

Free-riders are discussed in more detail in the 2005 Product Stewardship and Water Efficiency Labelling discussion document.

Would the proposed legislation apply to all products?

No. The discussion document outlines an approach whereby Government would apply regulatory support only to products that satisfy three stringent conditions:

  1. They are assessed to be a priority (based on the criteria set out in the discussion document - volume, harm, need for national action, public concern and cost effectiveness).
  2. Product stewardship is the most suitable approach to resolving the issue.
  3. Attempts for voluntary product stewardship have failed.

A clear framework for regulatory support should also assist the formation and effectiveness of a lot of voluntary schemes, requiring less regulatory intervention than product-by-product legislation would.

What products would be regulated by the proposed legislation?

No products or wastes would be specified in the proposed legislation. Instead, the legislation would provide a framework for regulation of products on a case-by-case basis when needed.

What about existing, voluntary product stewardship schemes?

Government’s continuing priority is to encourage effective, industry-led, voluntary schemes. The proposed approach will support this.

Work by the Ministry on assisting voluntary schemes will continue, and the proposed approach specifically outlines that regulation is intended for priority products, and efforts would first concentrate on resolving the issue with voluntary action.

Even for products where a voluntary scheme covers only a single or few of the producers, this scheme could form the basis for an approved scheme under the regulation.

Do product stewardship requirements apply only to domestic producers?

No. Regulatory support is being proposed to level the playing field to make the situation for all businesses fairer. The Ministry has proposed a requirement for the regulation that the same obligations will be expected of all producers, regardless of their circumstances.

This equity is not just in relation to whether the item is produced in New Zealand or overseas, but also in relation to other factors, such as whether the item is sold by the manufacturer or parallel imported (when a product is imported by someone without the consent of the manufacturer), whether the producer sells directly to the customer or only wholesale or whether the producer is a major player or a minor player. The flexibility offered by this policy means producers can meet their responsibilities in whatever way is most efficient for them.

Product stewardship is not a barrier to trade if it imposes the same obligations on domestic and imported goods. The trade agreements overseen by the World Trade Organisation (WTO) do not stop countries from putting requirements on imported product as long as those requirements the same as the requirements on the country’s own product. In fact, product stewardship legislation that conforms to WTO rules is already in place in many countries.

The Organisation for Economic Co-operation and Development (OECD) has released a guide about EPR which discusses this issue in more detail – “Extended Producer Responsibility: A Guidance Manual for Governments”, OECD, 2001.

What consultation has been done on product stewardship?

The Ministry has engaged in extensive consultation.

In July 2005 a discussion document was released for formal consultation, proposing a backstop regulation approach and comparing it with options. We received 117 submissions, with the greatest support for the backstop approach (outlined above). Since then the Ministry has had more in-depth discussions with interested parties, investigated approaches overseas and completed case studies on product stewardship schemes operating in New Zealand.

Select Committee hearings in early 2007 on the Waste Minimisation (Solids) Bill will give an opportunity for further consultation on product stewardship.

What other countries have product stewardship legislation?

New Zealand is one of the few developed countries that does not have any form of product stewardship legislation.

Many countries have imposed regulations for specific products, such as packaging, paint, tyres or electrical waste. For instance, New Zealand aater nd Turkey are the only two countries in the OECD without any legislation for the take-back of electrical equipment.

A broader framework legislation, such as the Ministry is proposing, has been successfully enacted by British Columbia in Canada. Australia is also working on similar legislation.

How does the Waste Minimisation (Solids) Bill fit with the Government’s product stewardship policy?

In 2006, Green Party member Nandor Tanczos’ Waste Minimisation (Solids) Bill was referred to the Local Government and Environment Select Committee.  This Bill contains provisions on product stewardship. Government parties chose to support it being heard by Select Committee to allow more debate on the matter.

The Minister for the Environment said in response to a Parliamentary question:

“that the key principles of the Waste Minimisation (Solids) Bill do align with Government policy. In particular, the Government is supportive of the introduction of a legislative framework to back up or support industry-led product stewardship schemes, where that might be necessary or appropriate... [Nandor Tanczos] has conceded previously that some parts of his bill are overly prescriptive, and I agree with that view, but I look forward to seeing how the bill develops and progresses in the select committee process.”

More information about the Bill

What is the next step in the process?

The Bill is currently before the Local Government and Environment Select Committee.

Written submissions on this Bill closed in September 2006, and the Committee will be considering these submissions and hearing those who have asked to present an oral submission in 2007.

The Select Committee is currently scheduled to report their findings back to Parliament on 29 June 2007, after which the issue will be further debated by Parliament.

More information on the legislative process

Where can I get more information on product stewardship?

  • The Product stewardship page has links to a discussion document on product stewardship that was released last year, the submissions received from the public on this, and case studies on five New Zealand product stewardship schemes
  • Contact Chris Ballantyne at the Ministry on 04 4397727.

Last updated: 21 February 2007