Setting up a product stewardship scheme for accreditation
The Waste Minimisation Act 2008 allows for the Minister for the Environment to formally endorse a product stewardship scheme through accreditation.
Any scheme that is seeking accreditation under the Act must meet certain minimum standards. However, a business may operate a product stewardship scheme without having it accredited under the Act. The Act specifically focuses on schemes minimising waste.
This part of the guide provides general information on how to set up a product stewardship scheme before applying for accreditation under the Act. Firstly there are references to the Act and what they mean for product stewardship schemes, then you will find some general information should you wish to consider implementing a product stewardship scheme and applying for accreditation.
Establishing a product stewardship scheme can be a complex process. There may be some aspects of establishing a scheme that require specialist input, such as marketing strategies, business strategies, project management, and environmental, legal and financial advice.
The requirements of an accredited scheme under the Act are covered in a separate guidance document entitled Guidance to Completing the Application Form for Accreditation of a Product Stewardship Scheme. See http://www.mfe.govt.nz/issues/waste/product-stewardship/accredited-schemes.html for a copy of this guide. It provides question-by-question help for completing the application for accreditation form.
See the Ministry for the Environment website http://www.mfe.govt.nz/issues/waste/product-stewardship/accredited-schemes-in-nz.html for a list of currently accredited schemes.
Figure 1 outlines the steps for a product stewardship scheme in the Act.
Figure 1: Product stewardship accreditation steps
Read a description of figure 1
Product stewardship accreditation steps. A flow chart that takes the reader through the process steps as it relates to the sections of the Waste Minimisation Act for a priority product and a non-priority product.
Figure 2: Product stewardship – a concept
This figure describes product stewardship as an overall concept. The following section describes the sections of the Act and how they apply to the product stewardship concept.
Read a description of figure 2
Product stewardship – a concept. A product stewardship scheme has the following inputs: funding, objectives and scope. The Scheme Manager, Responsible Participants and People Affected are the people that make up a scheme. The outputs are reporting, publicising and achievements. Surrounding a product stewardship scheme is compliance and good governance. The two goals from a product stewardship scheme are a reduction in environmental harm and waste minimisation.
What is a ‘scheme manager’?
The Act
An accredited product stewardship scheme must identify a scheme manager (section 14(a)).
What does this mean?
A scheme must have a nominated scheme manager, who is the proposed contact person for the scheme, to qualify for accreditation.
The scheme manager:
- may apply for scheme accreditation
- will be the representative of the scheme
- will be nominated by, and accountable to, the participants in an accredited scheme
- may be the organisation whose product is covered by the scheme or an employee of that organisation
- may be involved in the development of the scheme, but not necessarily
- may provide that service for more than one scheme or for schemes that cover more than one product type
- may not necessarily have to fulfil any other role for the scheme (for example, the executive officer), but often will.
In addition to applying for accreditation, once the scheme is accredited the scheme manager has a responsibility in:
- operating the scheme
- reporting on the performance of the scheme
- managing variations of the scheme.
A scheme manager does not have to be an independent job. The scheme manager could already work for the organisation implementing the scheme. The role of scheme manager could be full-time or it could be part of another role.
Example
In the case of a scheme operated by a single business, the scheme manager may be an employee for that business.
What is the scope of the scheme?
The Act
An accredited product stewardship scheme must provide a description of the scope of the scheme, including the product or brand of product to which it applies (section 14(b)).
What does this mean?
A scheme must have clear boundaries that define the scope of the proposed scheme. This includes a description of the product or products that it covers and/or the brand of product to which it applies. The scope of the scheme must not include stages in the life cycle of a product for which the scheme does not directly control, finance or influence. It may help to define what is out of scope of the scheme too.
Example
Company A sells widgets imported from overseas in all its own-brand stores. The scheme scope covers all widgets sold by the company. The widgets are recovered from the consumer at end-of-life in all of Company A’s outlets. The outlets provide national coverage except for Milford Sound. The scheme has contracts with service providers for the recovery process which recovers the reusable components and sends them back to the manufacturing company overseas. The scheme does not have any influence over the widget design by the original manufacturing company or the components the manufacturer uses.
How do I set objectives for my scheme?
The Act
An accredited product stewardship scheme must set measurable waste minimisation, treatment, or disposal objectives for the product; and time frames for meeting the objectives (section 14(c)).
What does this mean?
A scheme must have reduction, reuse, recycling, recovery, treatment and/or disposal objectives that are measureable and time dependent. To be accredited a scheme doesn’t need to have objectives for all of these categories. The choice of objectives should reflect the environmental impacts being addressed and the benefits it is attempting to capture.
An objective always relates to a product.
To meet the requirements of the Act the objectives need to be measurable so specific measurable targets will need to be set.
Example
If there is an industry-wide scheme, then an objective may be reducing the amount of product sent to landfill over five years. If the scheme only applies to products sold from a particular shop, the objective may be that “an amount equivalent to 25 per cent of the product sold from shop X is reused” within 12 months.
Objectives don’t all have to be quantitative. Clear qualitative objectives are also acceptable as many waste minimisation objectives are less quantifiable. However, the advantages of quantitative objectives or targets are that they are unambiguous.
Example
“Customers’ knowledge of recycling the product has increased within 12 months”. This can be confirmed through consumer surveys or itemising the improvements made that would intuitively lead to a more recyclable product.
Objectives should be time bound. Some will relate to the situation at the expiry of the scheme, but it is important that there are also intermediate objectives to help assess whether the scheme is on track and to maintain an ongoing sense of accomplishment.
We expect a good practice scheme to set ambitious, challenging objectives that will demonstrate a commitment to minimising waste beyond ‘business as usual’ and be prepared to explore innovative ways of meeting those objectives. In this case, it is reasonable to assume that in some instances objectives are not met.
To encourage innovative, ambitious schemes, section 18 of the Act allows revocation of a scheme’s accreditation on the basis of not meeting objectives if the Minister is satisfied that reasonable steps are not being taken to implement the scheme and the scheme’s objectives are not being met or are not likely to be met within the time frames set out in the scheme (section 18(1)(a)). It may be a challenge to meet the objectives but as long as clear effort is being made to meet the objectives and implement the scheme, accreditation is unlikely to be withdrawn.
How do I identify the classes of person involved in my scheme?
The Act
An accredited product stewardship scheme must list the classes of person involved in the design, manufacture, sale, use, servicing, collection, recovery, recycling, treatment, and disposal of the product (section 14(d)).
What does this mean?
A scheme must describe, at a high level, the potential groups involved in a product during its life (for example ‘retailers’ or ‘recyclers’). These people will not necessarily sign up to the scheme, as it is not necessary to name specific organisations or individuals, but the scheme application should make it clear who they are. This provides confidence that all affected groups have been identified and that:
- relevant arrangements have been made to ensure that the scheme will be effective
- measures to minimise waste will not cause greater environmental harm over the life cycle of the product.
The groups identified in section 14(d) do not need to confirm their participation as:
- their participation may not be required for the scheme to achieve its objectives
- the participation of any specific individual may be unimportant and, rather, the participation of a certain proportion of the group is all that is required (for example, it may be necessary only to have 10 per cent of convenience stores participating).
Example
Parents with babies are a class of person involved in a nappy scheme.
How do I identify the participants in my scheme?
The Act
An accredited product stewardship scheme must list the persons who have agreed to participate in the scheme and assign responsibility to them for meeting the scheme’s objectives (section 14(e)).
What does this mean?
A scheme must identify persons (including businesses) who have agreed to participate in the scheme and have been assigned responsibility for achieving some or all of the scheme’s objectives.
Examples
Examples of participants with a responsibility in the scheme are:
- producers who have chosen to use the scheme to cover their brand
- a recycler who has undertaken a partnership with the scheme to provide the recycling service and infrastructure needed.
A product stewardship scheme is an agreement between the participants. In agreeing to be part of the scheme, these participants agree to undertake the actions required to implement the scheme and help it achieve its objectives.
Evidence of the participant’s commitment to the scheme could be in the form of a:
- declaration signed by the person or company officer
- contract
- voluntary accord
- memorandum of understanding.
This is different from those people listed in section 14(d) of the Act who have not accepted a responsibility in relation to the objectives.
Examples
Examples of participants who have signed up to a scheme are:
- tyre dealers for car tyres
- IT businesses for electronic waste.
What is good governance?
The Act
An accredited product stewardship scheme must specify the arrangements for making decisions under the scheme, the control and overall operation of the scheme, keeping records and making reports under the scheme (Section 14(f)).
What does this mean?
Proper governance is necessary to ensure that the scheme:
- carries out what it says it will
- provides a process for decision-making with appropriate checks and balances
- is monitored and reviewed regularly
- can adjust to advice, challenges, criticisms and opportunities
- is an equitable scheme, including managing conflicts of interest and giving all participants an opportunity to provide comments and be aware of the actions performed on behalf of them
- records all important information and reports it to relevant stakeholders.
Participants in a scheme should consider what an appropriate governance structure, including legal structure, is for the scheme, particularly when handling money flows (such as an advanced recycling fee). Many product stewardship schemes are formed as separate entities and referred to as a product stewardship organisation (PSO) or a producer responsibility organisation (PRO).
The Act does not specify a particular governance or legal structure for a product stewardship scheme. As part of the accreditation process, the Minister will look at schemes on a case-by-case basis to ensure that the governance, and if necessary, legal structure adopted is suitable for the scheme’s design and objectives. The governance could include recycling guidelines, agendas and meeting minutes, reporting and review of procedures, appointing a chairperson, setting quorum rules, and having a decision-making process.
Examples
If a product stewardship scheme involves collection of end-of-life products, then the scheme manager may formally contract:
- retailers and independent collection depots to collect the end-of-life product, on the basis of number of items collected or hours open (terms of reference, memorandum of understanding or statement of work)
- a recycler to collect and recycle the product (contract or service level agreement).
A board is set up consisting of representatives from several companies participating in the scheme so decisions can be made on issues such as how collection points will be managed and who will be responsible for managing recycling of the collected product.
What is meant by ‘processes for compliance and enforcement of any agreements’?
The Act
An accredited product stewardship scheme must identify the processes for compliance and enforcement of any agreements between participants to the scheme (section 14(h)).
What does this mean?
A system is needed to ensure that participants identified in section 14(e) of the Act keep to the obligations they have committed to as part of a scheme. It is up to scheme participants to define their own enforcement mechanism. Typically this is achieved through legal contracts for the provision of services and the maintenance of agreements with participants.
Examples
The types of tools you could use to ensure compliance to the scheme are:
- signed contracts with the providers which can be cancelled if the provider breaches the contract
- protocol agreements which can be severed if the parties fail to comply
- performance management indicators to monitor how well the participants are meeting their obligations.
How do I report on my scheme's performance?
The Act
An accredited product stewardship scheme must provide for assessing the scheme’s performance and for reporting on its performance to the Minister (section 14(i))
and
the Secretary may monitor the performance of an accredited scheme (section 20).
What does this mean?
The Secretary for the Environment needs information to monitor scheme performance and report to the Minister for the Environment.
To ensure success, a scheme must outline how it will go about monitoring progress towards its objectives and how it will convey this information to the Secretary and the Minister. Accreditation is a form of endorsement by the Government and so it is necessary that the Secretary and the Minister are confident the endorsement is justified on an ongoing basis.
It is important to consider not just what information will be reported on and how often, but what assessment method and information gathering method will be used. Monitoring of waste flows is difficult and can be subject to a high degree of uncertainty or be very expensive to obtain. To help the Secretary and the Minister assess the likelihood of this requirement being met, you must provide detail on how the targets will be measured.
For non-priority products there are no statutory minimum reporting requirements set out in the Act. The scheme must provide the information necessary to show that the scheme objectives and targets are being met. If necessary, the Secretary and/or the Minister can request additional information.
What is reported is not necessarily limited to the objectives. It may be useful to provide other measures to help build a more complete picture, highlight opportunities and weaknesses, and demonstrate efforts to achieving the scheme objectives.
Examples
You could report in any of the following ways:
- the number of collection outlets provided
- the amount and type of media coverage of the scheme
- public surveys as to knowledge or satisfaction with the scheme
- design improvements made
- progress towards meeting targets
- cross-stakeholder workshops or other events held
- examples of publication material, including new web content
- feedback from participants to the scheme
- expenditure that relates to meeting the scheme objectives
- material produced and recovered.
Note: Information provided to the Ministry in support of product stewardship schemes is subject to the Official Information Act. Page 13 provides detail of how the Official Information Act applies to accreditation for product stewardship schemes.
How could I publicise my scheme?
The Act
An accredited product stewardship scheme must set out a strategy for publication of the scheme and set out how information will be provided to purchasers, users, and handlers of the product to which the scheme relates (section 14(j) and section 14(k)).
What does this mean?
Publicising a scheme is important in achieving behaviour change as it:
- provides purchasers and users with reliable information on what the scheme is doing and how well it is doing it
- informs the purchaser or user of their role in the scheme.
It is important:
- to ensure that the information is available for any purchaser, user or handler of the product
- that the information is appropriately targeted to the intended audience and different formats, media and methods will have to be used for each audience.
Additionally, it helps purchasers to be properly informed when making choices about purchasing the product and how to manage it when it reaches its end-of-life.
As mentioned above, given that information reported to the Minister may also be subject to public release, participants should consider releasing these reports to the public as well.
Examples
Clear, obvious signage in a shop specialising in a product may be sensible even for non-critical information, but not in a shop that handles hundreds of different products. Multiple methods should be considered, such as:
- websites (for example, www.encorp.ca)
- annual company reports
- newspaper, radio and television advertisements
- direct customer contact
- point-of-sale information (leaflets, spoken, posters)
- dissemination through trade or consumer associations
- product labelling
- leaflets
- media articles
- information at disposal sites (for example, information at landfills alerting users about recycling locations)
- holding workshops
- sponsoring events or awards.
How could I fund my scheme?
The Act
An accredited product stewardship scheme must clearly outline how the scheme is to be funded (section 14(l)).
What does this mean?
The five main areas where schemes require funding are:
- setting up infrastructure
- administration (including governance, monitoring, publicity and reporting)
- recovery or disposal operation
- research and design for environmental issues, particularly in relation to waste reduction
- communications and publicity.
These funds could be provided from internal business accounts, through membership fees or through product fees or price increases.
The aim of any product stewardship scheme is to internalise the costs. Instead of the end user or disposal facility having to pay for managing the end-of-life product (such as rates or disposal facility charges) the costs are built into the product life cycle and the price.
Example
A recovery operation where the value of the recovered material provides a significant level of funding, perhaps enough to fund all of the scheme costs.
How do I determine the environmental impact of my scheme?
The Act
An accredited product stewardship scheme must reduce the environmental impact of the product overall (section 15(1)(c)).
What does this mean?
The Minister can only accredit a scheme if it is likely to promote waste minimisation or reduce the environmental harm from disposal without causing greater environmental harm over the life cycle of the product.
Example
If a scheme proposed that a small amount of toxic material be removed from the manufactured product, but the effect of this drastically increased energy usage, then the Minister would need to consider whether the environmental benefits from the reduced end-of-life waste impact were likely to be exceeded by the environmental costs of higher energy usage over its operational life.
Where relevant, depending on the nature of the scheme, the Minister may make this decision based on an understanding of the life cycle impacts of a product, and so it is helpful if the scheme considers this information and presents it to the Minister at the point of accreditation.
There is no minimum requirement for the reduction of environmental harm under the Act for non-priority schemes. However, the scheme must operate within the stated scope and demonstrate a reduction in environmental harm. Assessment of a product stewardship scheme will require evidence of any environmental benefits made. This could be in the form of contracts or agreements. The application should be able to demonstrate that there is no significant increase to environmental harm elsewhere in its life cycle as a perverse outcome of the scheme. The scheme must be able to provide evidence of its duty of care, both up and downstream.
An Environmental Choice licence, if the product has one, supports the life cycle impact assessment of the scheme.
A complete life cycle analysis (LCA) can be a very complex and expensive exercise. It is not the intention that a scheme must do this to be accredited. However, a life cycle ‘philosophy’ is expected.
For more guidance on this section please refer to the Assessors’ Specification Guidelines for Accreditation of a Product Stewardship Scheme and the Guidance to Completing the Application Form for Accreditation of a Product Stewardship Scheme available on the Ministry website. See http://www.mfe.govt.nz/issues/waste/product-stewardship/accredited-schemes.htmlfor these guidance documents and forms.
