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6. The Role of Regulation and Other Interventions

This section aims to canvass a range of possibilities, ideas and policy options aimed at expanding and enhancing the role and outputs associated with product stewardship in the New Zealand whiteware sector.

As noted in the project brief and other relevant documents, the goal of the study has not focused on how to regulate the sector per se. While regulatory interventions are potentially valid and necessary in some cases, there is scope for environmental change and improvement through other, non-regulatory means. The success of non-regulatory measures would depend significantly on the level of voluntary commitment, foresight and resourcing from the sector, the Government and other relevant stakeholders.

The first part of this section outlines a series of non-regulatory and enabling propositions and measures, while the second part engages with the options discussed in the product stewardship discussion document as well as an additional option emanating from the whiteware sector group (and Fisher & Paykel in particular).

6.1 Non-regulatory interventions, funding support and incentives

Government policy, together with a proactive whiteware sector, could drive and resource a range of very specific measures that target different aspects of the whiteware life cycle with a view to maximising waste avoidance and resources recovery in a cost-effective manner. The list below represents such measures in concept form only and is by no means conclusive. It is indicative of the types of non-regulatory initiatives adopted for a broad range of product categories and waste streams in Australia, Europe and North America.

i) Sector-wide collaboration and support

  • Assess how a national waste levy could be used to further expand and enhance the role and outputs associated with whiteware product stewardship across the entire sector. Through its role in the whiteware sector group, The Warehouse believes the potential of a national landfill levy to fund or subsidise further research and actual operating mechanisms for more robust product stewardship (where there is clear evidence of market failure and environmental harm) is worthy of urgent exploration. The Warehouse added that the '... the design of any such levy ... be sized to meet projected waste minimisation and resource recovery demands based on a clearly defined policy matrix which would identify qualifying candidate programmes'.
  • Develop and implement a public reporting initiative to provide a more transparent view of how the whiteware sector is performing on product stewardship implementation and, in particular, DfE and materials efficiency improvements as well as resource recovery initiatives such as end-of-life take-back schemes, etc.
  • Develop an agreed industry code of practice or accord specifically focused on whiteware and featuring targets for collection, processing/recycling, community awareness and action.
  • Continue to fund industry collaborative research initiatives on sustainability such as that provided by the Foundation for Research Science & Technology.

ii) Design for environment

  • Fund product development (potentially via a national waste levy) to support local producers to trial and implement specific DfE features that maximise cost effective disassembly and recycling.
  • Harmonise with EU RoHS Directive to help ensure that non-RoHS compliant product does not enter the New Zealand market. In the first instance, such harmonisation could be attempted in the form of a voluntary code of practice.
  • Government to initiate dialogue with all producers (New Zealand and off-shore manufacturers) requesting more specific detail on how DfE is being applied to products entering the New Zealand market.

iii) Consumer education and information

  • Research consumer and community awareness and behaviours in order to inform and shape initiatives developed by the whiteware sector.
  • Develop and promote reader-friendly (jargon-free) consumer information and education initiatives about whiteware recycling, for point of sale application and driven by retailers in collaboration with whiteware producers/suppliers.
  • Assess the relevance and potential value of environmental labelling such as that possible through the Environmental Choice programme and the New Zealand Ecolabelling Trust.
  • Develop sustainable whiteware purchasing guidelines for government departments (relevant to laundry equipment and cooking equipment in hospitals, schools and other relevant facilities).

iv) Market development for recovered materials

  • Fund market development (potentially via a national waste levy) to target problematic materials not currently being processed and/or recycled from end-of-life whiteware in New Zealand (eg shredder floc from the metal recycling process, printed circuit boards and plastics).
  • Undertake research to identify and assess potential synergies and collaboration between different product sectors (eg end-of-life vehicles and whiteware) with a view to maximising economies of scale for materials processing and securing end-markets.

v) End-of-life management - collection and processing

  • Review national product and materials handling to assess how to streamline the refrigerant degassing process for end-of-life refrigerators, freezers and air conditioners with a view to maximising the overall, product recovery and recycling rate. In other words, what can be done to improve efficiencies so that ozone-depleting substances can be effectively managed while also increasing the collection, partial disassembly and recycling rate of end-of-life whiteware.
  • Co-fund (whiteware sector, Government and recyclers) the establishment of a New Zealand e-waste recyclers association or consortium to develop and improve collection and recycling infrastructure.
  • Develop a national scrap metal recycler code of practice. The Auckland Regional Council together with the Scrap Metal Association is developing a voluntary code of practice for scrap metal operators. This should be expanded to become a national initiative.
  • Use funds from a national waste levy for the purpose of offering consumer rebates, bounties and other financial incentives to encourage responsible disposal and recycling of whiteware. Such incentives may be temporary and be designed to stimulate action rather than as a continuing measure.
  • Assess the relevance and cost benefit of temporary or limited-term collection events for whiteware, especially for rural or more remote locations.
  • Conduct a LCA to quantitatively establish the respective environmental impacts and priorities associated with different disposal options for whiteware eg landfilling versus metal recycling versus partial disassembly and some plastics recovery. This work could extend to assessing the specific impacts and issues resulting from shredder floc. This work could also be expanded to include life-cycle costing research.

6.2 Evaluation of potential regulatory and non-regulatory options

Table 10. Option 1 - Status quo (industry-driven and voluntary schemes) - whiteware focus

Key features

  • Entirely voluntary and industry driven.
  • Does not reflect sector-wide involvement or commitment.
  • Weak and unconnected expression of product stewardship principles as per the Discussion Document.
  • Landfill diversion and recycling of end-of-life whiteware primarily facilitated by local councils.
  • Funded by individual whiteware companies, retailers, collectives and/or participating retailers.
  • Builds competitive advantage for proactive producers and retailers.
  • Absence of any Government intervention.
  • Reflects a least-cost, producer responsibility or a shared product responsibility model.

This option should:

This option would not:

  • Enable a relatively low level of waste avoidance and/or resource recovery involving whiteware producers and retailers.
  • Give sector-wide flexibility.
  • Be attractive to whiteware companies generally regarded as environmentally proactive or pioneering.
  • Enable participating companies to develop, evolve, expand and improve their schemes over an indefinite timeframe.
  • Allow new schemes at any time without Government approval and intervention.
  • Benefit local whiteware producers.
  • Continue to rely heavily on local councils to divert end-of-life whiteware from landfill.
  • Allow non-EU RoHS compliant whiteware to be supplied to the New Zealand market.
  • Encourage or facilitate whiteware suppliers currently not operating a product stewardship scheme.
  • Provide a scheme framework with set collection and recycling targets or key performance indicators.
  • Encourage whiteware suppliers to collect data and report publicly.
  • Achieve high levels of sector-wide whiteware collection and recycling.
  • Benefit smaller whiteware importers.
  • Encourage a stronger product stewardship model involving whiteware producers and suppliers.
  • Increase general community and consumer awareness about whiteware product stewardship.
  • Effectively address issues associated with existing or future orphaned whiteware.
  • Demonstrate any significant and long-term commitment and action from Government to address the issue of whiteware product stewardship.

It is the consultants' view that this option is highly unlikely to achieve sector-wide product stewardship schemes and activities. Whether partial or sector-wide, this option lacks any transparency and any means of accurately and consistently measuring environmental and economic performance. It is also vital that any data collection and reporting activities associated with high levels of transparency do not unnecessarily increase business costs without any overall economic and environmental benefit. Data collection, collation and reporting needs to be purposeful and productive given the scheme's broader goals.

In relation to the definition and principles of product stewardship, this option demonstrates a very weak expression of product stewardship. The fact that the vast majority of end-of-life whiteware in New Zealand is channelled through disposal pathways other than producers and suppliers highlights the general absence of a strong and measurable industry role.

In other words, the predominant role of local councils managing end-of-life whiteware does not constitute product stewardship, despite the legitimate role councils play at present. Whether or not this is a bad thing, if there is already a high rate of diversion from landfill, is a debatable issue. It is important to note that diversion and treatment of whiteware by local councils fails to address how shredder floc could be reduced in any significant way. This does not exclude a continuing role for local councils in any future sector-wide scheme(s), which may reflect greater participation and involvement of producers and retailers.

Generally, this option does not enable small volume whiteware importers to establish a collection and recycling scheme that is cost effective. In this case, several importers and/or suppliers could investigate setting up a collective product stewardship programme.

This option is not recommended if sector-wide action is considered desirable by industry and Government.

Table 11. Option 2 - Industry-led schemes with free-rider regulation - whiteware focus

Key features

  • Product stewardship agreements between industry, Government and other potential stakeholders eg retailers, local councils, recyclers, service and repair centres, second-hand market, NGOs.
  • Establishment of industry-led schemes under agreements complete with targets, KPIs and public reporting.
  • A balance of industry flexibility and minimal Government intervention.
  • Funded by individual whiteware companies, retailers, collectives and/or participating retailers.
  • Builds competitive advantage for proactive producers and retailers.
  • Increased scheme transparency over the status quo.
  • Legislation providing for the regulation of free-riders unwilling to participate.
  • Enables a relatively low-cost producer responsibility or a shared product responsibility model.
  • Potential inclusion of a phased landfill ban on unprocessed end-of-life whiteware as an incentive to participate. This would necessarily include a landfill ban on shredder floc.

This option should:

This option would not:

  • Ensure a relatively high level of waste avoidance and/or resource recovery involving whiteware producers and suppliers.
  • Provide an explicit agreement between parties as the basis for product stewardship schemes that establish specific responsibilities.
  • Provide incentives for potential free-riders to join schemes and possible regulation to ensure a 'level playing' field for all whiteware producers and suppliers within the sector.
  • Enable the establishment of schemes involving the entire whiteware sector.
  • Provide the means to effectively deal with orphaned and historical whiteware.
  • Result in increased consumer and community awareness and action on whiteware product stewardship, particularly on end-of-life collection and recycling.
  • Accommodate a diversity of schemes and approaches, both individual company schemes and collective initiatives.
  • Force an unwilling whiteware producer or supplier into the establishment of product stewardship agreements.
  • Make the establishment of a whiteware scheme mandatory, or give the Government power to set scheme performance requirements such as design, collection, recycling or reporting targets.
  • Smother or constrain innovation in whiteware product stewardship.
  • Require all schemes to be similar or identical.
  • Be effective without adequate Government resourcing and commitment to enforcement of free-riders.

It is the consultants' view that this option has considerable merit and provides a relatively streamlined approach to maximising sector-wide participation in whiteware product stewardship. Greater clarity is required on the definition of a 'free-rider' and the extent to which it would or should include not only producers but disinterested retailers as well.

A key element in this option is to ensure that any free-rider regulation is simple yet effective to stimulate potential non-participants into practical and measurable action. In other words, any regulation needs to 'bite' early and provide little or no choice for producers and/or retailers but to adopt a responsible corporate position on whiteware product stewardship, either individually or as a collective.

This option is undermined by its failure to include non-regulatory incentives and interventions in the form of Government funding, infrastructure investment, market and product development support, or a consensus based sector-wide code of practice. There is clearly a role for specific non-regulatory instruments to help bolster a safety net or backstop type approach to regulating the sector.

This option is worthy of further investigation and assessment as a viable direction.

Table 12. Option 3 - Mandatory approach to product stewardship schemes - whiteware focus

Key features

  • Legislation requires whiteware product stewardship schemes.
  • A landfill ban on unprocessed end-of-life whiteware and shredder floc.
  • Prescribed targets for collection, recycling, community awareness, action and reporting.
  • DfE requirements, standards and/or guidelines dealing with RoHS-type requirements as well as DfD and DfR requirements (in guideline form).
  • Allows for specific tools to be implemented.
  • Sector-wide involvement of all whiteware producers, distributors, retailers and service companies active in the New Zealand market.
  • Government drives the process with less input from, and flexibility for, the whiteware sector.
  • Mirrors similar policy and legislative instruments being applied in the EU, Japan and some USA states eg Washington and California.

This option should:

This option would not:

  • Ensure a very high level of waste avoidance and/or resource recovery involving whiteware producers and suppliers.
  • Provide a 'level playing field' for all whiteware producers and reduce the risk of competitive disadvantage.
  • Provide certainty and stability for all stakeholders.
  • Provide clear performance expectations as well as firm goals and targets.
  • Give Government control over the performance of product stewardship activities being conducted by whiteware producers.
  • Require significant Government resources to ensure effective and efficient development, administration and enforcement of relevant legislation and regulations.
  • Provide a range of economic and other tools to back up schemes.
  • Provide a powerful instrument to address orphaned and historical whiteware.
  • Result in increased consumer and community awareness and action on whiteware product stewardship, particularly on end-of-life collection and recycling.
  • Give the flexibility of industry-led approaches to whiteware product stewardship.
  • Provide significant market-based incentives for industry to reduce scheme costs through DfE features.
  • Smother or constrain innovation in whiteware product stewardship.
  • Require all schemes to be similar or identical.
  • Be effective without considerable Government resourcing and commitment to enforcement of free-riders.

It is the consultants' view that this option is a mismatch given the broader environmental, social and economic issues associated with whiteware in New Zealand. Mindful of the criteria for prioritising action on waste as outlined in the New Zealand Waste Strategy, the costs would significantly outweigh the benefits of developing, administering and enforcing a mandatory product stewardship scheme for whiteware.

Criteria related to volume and harm, achievability, public concern and cost-effectiveness do not elevate end-of-life whiteware to a priority status given the (limited) available data from Government, industry or other sources.

While the environmental outcomes of this option would be considerable and directly require a sector-wide approach, the implementation costs would be exorbitant for industry, and the costs of administration and enforcing the regulation would be excessive for Government.

The essential value of this option - should the 'volume and harm' criteria be established as significant - is the opportunity to ban whiteware and shredder floc from landfill, as well as being able to mandate targets for collection and recycling.

This option is not recommended.

Table 13. Option 4 - voluntary and regulatory mix of approaches - whiteware focus

Key features

  • Product stewardship agreements between the whiteware sector and Government.
  • Legislation can regulate whiteware companies unwilling to initiate, develop or participate in a product stewardship scheme.
  • As a backstop, regulation could require the whiteware sector to operate a product stewardship scheme, either collectively, company by company, or both.
  • Prescribed targets for design, collection, recycling, community awareness, action and reporting.
  • Potentially allows for specific tools to be implemented.
  • Sector-wide involvement of all whiteware producers active in the New Zealand market.
  • Potential inclusion of a phased landfill ban on unprocessed end-of-life whiteware.

This option should:

This option would not:

  • Ensure a relatively high level of waste avoidance and/or resource recovery involving whiteware producers and suppliers.
  • Enable a whiteware sector-led scheme(s).
  • Allow a range of economic and other tools to be used to back up a scheme(s).
  • Provide certainty, stability and a level playing field for whiteware producers, suppliers and retailers.
  • Give Government control over the performance outcomes of whiteware product stewardship activities if/where required.
  • Provide clear performance expectations as well as firm goals and targets.
  • Result in increased consumer and community awareness and action on whiteware product stewardship, particularly on end-of-life collection and recycling.
  • Rely significantly on sector-led schemes for whiteware product stewardship.
  • Avoid regulation entirely; regulation may be needed for those whiteware producers and suppliers unwilling or indifferent to adopting a product stewardship approach for whiteware.
  • Smother or constrain innovation in whiteware product stewardship.
  • Require all schemes to be similar or identical.
  • Be effective without adequate Government resourcing and commitment to enforcement of free-riders.

It is the consultants' view that this option has the greatest merit and can accommodate and combine effective approaches, instruments and tools that are regulatory and/or non-regulatory. It is potentially more desirable that Option 2 due to its ability to enable more stringent levels of regulation compared to just free-rider regulation. This option allows the scenario of no regulation whatsoever should the whiteware sector demonstrate that is able to increase recovery and recycling rates (including floc reduction) on a voluntary basis.

This option provides the opportunity for proactive and forward-thinking companies to develop and implement their own schemes - either individually or collectively - and benefit from minimal Government intervention.

Also valuable as part of this option is the ability to set relevant targets and key performance indicators on aspects such as DfE, end-of-life whiteware collection, processing and materials recycling, consumer awareness and action, as well as transparent public reporting. As part of the mix of tools, the option of a phased landfill ban on unprocessed end-of-life whiteware could be used to accelerate the interest and participation of otherwise indifferent producers and retailers.

Importantly, this option also allows Government to demonstrate its commitment to the process and to helping achieve the desired outcomes. Such commitment could be in the form of funding and knowledge support or policies and programmes that remove barriers and stimulate and expand external investment.

Particularly critical is the need for Government, industry and other affected stakeholders to comprehensively identify and assess the impact of any potential regulation, its direct consequences and its side effects, as well as the long-term implications for national industry policy and competition.

This option - in its generic format - appears to have the in-principal support of Fisher & Paykel Appliances, Electrolux New Zealand and The Warehouse. It enables voluntary initiatives to take place where they perform effectively, yet it also provides the possibility to regulate free-riders as a way of explicitly involving producers, suppliers and retailers that might otherwise choose to avoid their product stewardship obligations.

Electrolux, for example, highlights the need for a mixed voluntary-regulatory approach, noting that some form of mandatory instrument is essential in dealing with free-riders and/or potential free-riders: "... the regulatory approach must ensure that manufacturers, manufacturer importers and agencies are sharing the responsibility equally with regards to product design, packaging and end-of-life disposal".

While Electrolux believes whiteware should not end up in landfill, the company is concerned about obligations for orphaned and historical products:

"Electrolux agrees that whole appliances should not end up in landfill, however end-of-life disposal will often fall to the company which sells the new product by default. Electrolux views this area with some concern, as Electrolux has limited control over what was manufactured in the past. Electrolux ensures it uses a high composition of reusable materials and its packaging is completely recyclable, therefore even with product disassembly and sorting of reusable components, Electrolux would view a ban on landfill for whiteware components to be onerous."

Electrolux would view a mixed approach favourably if it ensured that the administration costs of any scheme did not exceed the benefits. A similar view is held by Fisher & Paykel Appliances.

This option is strongly recommended for further investigation, development and assessment.

Table 14. Option 5 - Mandatory refund system - whiteware focus

Key features

  • Requires that a retailer must accept an approximately equivalent appliance (whether working or not) if the customer wants to trade it in and refund a set amount from a fixed scale (probably with levels set under the jurisdiction of MfE).
  • Includes a phased landfill ban on unprocessed end-of-life whiteware introduced on a regional basis.
  • Eliminates free-riders and effectively addresses issues associated with existing and future orphaned whiteware.
  • Includes an opportunity to retire older, energy and water in-efficient whiteware; a synergy that addresses multiple resource use efficiency objectives.

This option should:

This option would not:

  • Ensure a relatively high level of waste avoidance and/or resource recovery involving whiteware producers, suppliers and retailers.
  • Move significant volumes of whiteware away from local councils if they no longer want to collect/receive end-of-life whiteware.
  • Minimise the collection cost to both councils and the appliance industry.
  • Allow new schemes at any time without Government approval and intervention.
  • Eliminate illegal dumping of old appliances.
  • Have the potential to be self-regulating provided the scheme is promoted and non-compliance is reported.
  • Require no Government funding other than for administration/enforcement.
  • Have the potential to capture more refrigerant at end-of-life.
  • Encourage whatever scheme that makes the best economic sense to operate
  • Provide a level playing field for whiteware producers, suppliers and retailers.
  • Result in increased consumer and community awareness and action on whiteware product stewardship, particularly on end-of-life collection and recycling.
  • Smother or constrain innovation in whiteware product stewardship.
  • Require all schemes to be similar or identical.
  • Be effective without some Government promotion and policing.
  • Completely eliminate curb-side recycling.
  • Give Government absolute control over every last scrapped appliance.
  • Intrinsically require reporting to Government of recycled numbers etc (though this could easily be added if it could in any way be justified).
  • Stop local councils from continuing whiteware collection and benefiting from metal recycling revenues.

In some respects this is a relatively simple option. It attributes value to end-of-life whiteware and (provided the economic value is sufficient) will 'pull' the majority of old units back to the retailer's collection point, thus also offering a potential logistics solution. This option also would minimise the illegal dumping of now valuable, old appliances.

This option also has the ability to encourage the timely retirement of older energy and water inefficient appliances, especially refrigerators and freezers. Testing shows that older appliances are significantly less water and energy efficient than their modern replacements. Old appliances (particularly refrigerators) are often kept running because their owners see no advantage in disposing of them. This option would push up the net price of whiteware for the customer who does not have (and can not find) an old unit to trade in, however, it should reduce total cost as it would have the tendency to use the final part of the delivery chain for recovering old appliances.

Retailers may choose to give the consumer a voucher or rebate (typically high-street retailer with shortage of access or the "cash & carry" retailer would be expected to select this option). A consumer could redeem (say, for $50) when the old appliance is returned to a suitably convenient and retailer-authorised collection centre. The collection centre could either pay the refund directly or "stamp the voucher" for the customer to take back to the retailer who would then pay the customer. Any cost or benefits for the recycling centre would be negotiated commercially outside the customer refund system. This option still enables local councils to remain involved in whiteware collection and establish or further expand an existing revenue stream from sale of end-of-life whiteware to metal recyclers.

This option is strongly recommended for further investigation, development and assessment.


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