3 Work Subsequent to the Discussion Document

3.1 Product stewardship

3.1.1 Case studies

The Ministry has been working with a number of industries to examine industry-led schemes and how these could function in the future. In some cases this work is looking at extending the contribution of existing schemes that are already in operation. We are working with stakeholders in a number of sectors, and are commissioning work to examine how schemes could be developed and what benefits a product stewardship policy would offer on a case-by-case basis. The sectors being examined are:

whiteware appliances
mobile phones
agrichemical containers
paint
tyres.

The aim of these case studies is to show how schemes could result in improved environmental outcomes and allow us to better understand the practicalities of product stewardship policy. The work will focus on the minimum intervention needed to assist the sector − including whether regulation is needed at all. It is anticipated that this work will highlight any conflicts (or opportunities) with existing regulation. We will also be applying the lessons learnt from other sectors with successful schemes, such as the Packaging Accord and the Used Oil Collection Programme.

A preliminary analysis has highlighted several issues, some of which are discussed below.

Identifying responsibility for product stewardship

The case studies highlighted a variety of stakeholders in the supply chain who had chosen to take responsibility for the product. It needs to be made clear that a product stewardship policy does not limit responsibility to manufacturers. However, it is also important that the key player driving product design and use have some responsibility − brand-owners are often critical. Legislation would therefore have to reflect this shared responsibility between identified players in the supply chain.

Environmental impacts: in-use and end-of-life

Many products can have a larger environmental impact while they are being used than at the end of their lives - especially the more durable ones such as whiteware (from the case studies) and cars. Measures to manage products that have reached the end of their useable lives can affect how long people hold on to these products, and therefore might actually worsen the overall environmental impact (eg, if more efficient technology is available, or the old equipment is in a poor state). Alternatively, encouraging purchasing certain products based solely on their end-of-life disposal may mean more efficient products are seen as comparatively 'less environmentally friendly'.

This means some consideration of the impacts of a product during its useable life span needs to be done when dealing with end-of-life issues. In addition, any publicity/education on end-of-life issues needs to recognise the significant issues relating to life-cycle impacts, especially when labelling such as Environmental Choice is used. Overseas labelling schemes that have an environmental focus deal with both environmental effects in-use and at end-of-life.

Priority setting

The case studies highlighted the difficulty in establishing whether a product should be a priority for action. This is not just in terms of which criteria are used to evaluate priorities, but also from the point of view of the amount and quality of the information that is available to allow an assessment. Often there is simply not enough information − even at an international level − to categorically assess some of the criteria. The ability to set targets suffers from the same lack of information.

Scope of prioritised 'product'

Because product stewardship schemes have traditionally been undertaken on a voluntary basis, the definition of the types of product that are covered under a scheme has not been critical - stakeholders elected to participate, and so there was an element of self-definition. However, any scheme with a regulatory element would need to have a very clear definition of exactly what products it refers to, and this could provide a challenge.

For example, Tyre Track currently tracks truck and car tyres. However, from an impact point of view, motorbike tyres and large-wheel barrow and bicycle tyres (for instance) could be argued to have a similar impact.

Product stewardship agency

Some case studies suggested establishing a Product Stewardship Authority linked with Environmental Choice labelling. This is a common approach overseas. The agency would not have a regulatory function but would promote and support the establishment of schemes. On the other hand, this could be seen as unnecessary bureaucracy.

Mechanism for approving schemes where recognition is required

The case studies did raise instances where the industry wishes to continue with voluntary, industry-led schemes but wants some regulatory recognition. In the case of mobile phones, this would enable the take-back scheme to be recognised, which would help clarify requirements under the Secondhand Dealers and Pawnbrokers Act 2004. In other cases, it would be helpful if the customs service were able to supply the names of parties importing a particular product.

Mechanism for approving schemes where regulation is required

As explained in the discussion document, a key policy preference is to continue with industry-led, largely voluntary schemes, but include a mechanism to allow certain regulatory tools, such as a levy. In light of this requirement, the possible options could include some or all of the following mechanisms:

agreements (no legislative mandate needed)
statutory regulations, which could either cover a whole scheme or just parts of it
an enforceable plan prepared under a public process defined in the statute.

The issue is whether or not a mechanism provided for the development of an enforceable plan would be useful to have in addition to voluntary agreements and regulation from Government. Plans could be promoted by either the Government or industry, but they would need to be approved by the Minister before being notified for a process that involves stakeholder input. After final Government approval the plan would be enforceable.

Interactions outside of this policy

A number of the case studies highlighted the fact that a number of schemes interact with other policies or mechanisms. The Ministry is working to clarify these, and as some are still under development it is a case of co-ordinating the various work streams. Areas identified in the case studies are:

the fact that the current management of some products often involves council facilities to collect end-of-life product and is dependent on these facilities
interactions with a waste levy
funding the early stages of investigation for a product stewardship scheme
bans on land-fill disposal to ensure products go through the product stewardship mechanisms
bans on materials in particular applications
overseas regulations or practices.

Key issues

Following are the key issues for further discussion.

How do we assess which parties in the supply chain need to carry some of the responsibility?
How do we gain more data in order to be able to set priorities?
For each product stewardship scheme, what is the scope of the 'product'?
Would an oversight agency with non-regulatory functions be useful?
Would it be constructive to have an enforceable plan mechanism in addition to voluntary agreements and statutory regulation from Government?
How do we ensure that the product stewardship mechanism is supported by and complementary with other waste management initiatives (including waste levies and local authority management of solid waste)?

3.1.2 Other work

The Ministry is also engaging with stakeholders other than those involved via the case studies (particularly those who made submissions), and will expect to do so throughout the policy development process. In particular, we have been seeking to gain a better understanding of some of the opinions expressed in the submissions and how a policy could be best designed to resolve those issues.

The Ministry is also attempting to collate more information about the issues examined in the discussion document or highlighted in submissions. Overseas models and schemes are being studied in more depth, examining the framework adopted and analysing the tools, results and problems. Extensive consultation is being carried out with Australia and Canada, especially. This work will help us better understand how trends in product design and overseas regulations affect us. However, as discussed in many of the submissions, we are mindful of the unique aspects of New Zealand's situation.

3.2 Timing

3.2.1 Product stewardship

Once the work above is completed, we will report back to the Government. The report will cover this analysis of submissions and will present policy options for the Government, along with their advantages and drawbacks. The report will be accompanied by a Regulatory Impact Statement that outlines the various options examined and the costs and benefits of each.

3.2.2 Water efficiency labelling

Once technical issues raised in the submissions have been addressed with industry, a report will be prepared for the Government so a decision can be made on whether to put forward WELS legislation. The aim is to have a voluntary labelling scheme in place in January 2007, and to have a mandatory programme by July 2007.

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