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Producer Responsibility Scheme
The Ultimate Way of Waste Reduction

Green Country Vol.128 (Oct 2017)

The Chinese government has notified the World Trade Organization that from the end of this year it will ban the import of 24 types of solid waste, including waste plastic, waste paper that is not properly separated and electronic waste. At present, 98% of Hong Kong's collected municipal solid waste recyclables are exported to mainland China and other countries. Once the ban is in place in China, export of recyclables from Hong Kong will become difficult, and most of them may be sent back to the landfills. On the other hand, we will soon see the implementation of the Municipal Solid Waste Charging in 2019, when the public has to pay for every rubbish item and will certainly ask for more recycling channels. In any case, the government is charged with the responsibility of setting up a recycling system. Enacting a legally binding Producer Responsibility Scheme that requires producers to recycle their products seems to be a must. In the process, the local recycling industry can also be built up.

The concept of “producer responsibility” originates from a report by the Swedish environmental economist Thomas Lindhqvist submitted to the Swedish Environmental Department in 1988. In the report, Lindhqvist introduced the concept of “extended producer responsibility”, which obliges producers to take up responsibility for the entire life cycle of their products, which spans, apart from the manufacturing process, the recycling, reuse and treatment of the post-consumption products.

Post-consumption treatment also includes building and operating waste treatment facilities and control of pollution from such facilities. Sometimes medical expenditure might be involved too. Conventionally, manufacturers focus on procuring raw materials, and producing and selling their merchandise, as these are directly related to the cost and profit as calculated by typical accounting. Meanwhile, the burden of post-consumption treatment of their merchandise is transferred to consumers and society at large, and is even borne by the environment.

If manufacturers are not held responsible for their products after selling them for profit, they will not take into account the amount of packaging, whether the materials are biodegradable, and whether their products contain materials that are harmful to the environment.... In the manufacturing process, the design of products and their packaging and whether the materials are easily recycled are fixed at the very beginning. The manufacturers hence play a key role in the waste problem generated by their merchandise. They are liable to the various environmental and health problems arising from their merchandise.

The idea of producer responsibility, based on the principle of polluters pay, applies to the manufacturers as well as all parts of the distribution chain, including import traders, wholesalers and retailers. By being required to pay for treating and recycling their products, the producers would have the economic incentive to reduce packaging or use eco-friendly materials for the products and the packaging from the design stage onwards, so that post-consumption treatment and recycling can be made more efficient and less costly. This way, even when the producers focus on cost saving, the results would be more environmentally friendly.

If the producer responsibility scheme is in place, materials that were not recycled due to low market value in the past may be recovered and recycled now, under the new law and through providing subsidies to producers, and need not go to landfills as waste. Fee collected from producers can be used in local waste reduction and recycling projects, helping the recycling industry to develop in a high value-added and high-technology direction. This will benefit overall waste reduction and recycling in Hong Kong in the long term.

Germany is the first to enact Packaging Ordinance

Many countries have set up producer responsibility schemes for a variety of products. Germany is the pioneer in this respect. A Packaging Ordinance was enacted in 1991, requiring producers to recycle the packaging materials of their merchandise. Producers have to pay a third party which is in charge of post-sale handling, and a Green Dot Label is printed on their products. The consumers then place the labelled packaging waste in specific recycling bins.

In Japan, a Household Appliances Recycling Law was enacted in 2001, regulating the recycling, recovery and treatment of electrical appliances that have been disposed of. The cost is shared among the household appliance corporations, distributors and the consumers. In addition, there is the Containers and Packaging Recycling Law, which regulates the collection and recycling of all kinds of containers and packaging. The Packaging and Containers Recycling Association, appointed together by five government departments, is responsible for the recycling arrangements and public education. It receives a fee from specific manufacturers and industries.

South Korea implemented the Extended Producer Responsibility Scheme in 2003. This mandates producers and importers to recycle 19 products and packaging materials including plastic and synthetic resin. Business of a certain scale have to fulfill the recycling responsibility under the scheme. Each year, the Minister of Environment of Korea announces the mandatory recycling target for each item, and each producer has to take up their duty according to their market share.

Producer Responsibility Scheme in Hong Kong

In Hong Kong, the Product Eco-responsibility Ordinance (Cap. 603) was passed in July 2008, establishing the legal framework for producer responsibility locally. As most products in Hong Kong are manufactured outside the territory, the legislation covers producers as well as importers, wholesalers, retailers and even consumers.

The Environmental Levy Scheme on Plastic Shopping Bags is the first mandatory producer responsibility scheme under the ordinance. The scheme was implemented in two stages, in 2009 and 2015. Consumers have to pay for plastic shopping bags. In the first year of the scheme, the amount of plastic bags thrown away was drastically reduced by 90%. However, in the second stage of the scheme, businesses are not obliged to use the collected fee fpr recycling. The ordinance is effective in waste reduction, but not helpful in building up the local recycling industry.

In March and May last year, the Legislative Council passed the Promotion of Recycling and Proper Disposal (Electrical Equipment and Electronic Equipment) (Amendment) Ordinance 2016 and the Promotion of Recycling and Proper Disposal (Product Container) (Amendment) Bill 2015, respectively. The former ordinance obliges producers and importers of electrical appliances to pay for the recycling costs, and arrange free delivery for consumers to send used appliances to chartered recyclers. The other bill requires producers and importers of glass drinks containers to pay for recycling. The government will then hold an open tender, to attract bids from glass recycling contractors.

A Long Road of Legislation

From the previous examples, we can see that the legislation process takes a long time. The Policy Framework for the Management of Municipal Solid Waste Policy (2005-2014) had tabled the idea of the producer responsibility scheme in 2005. After four years, in 2009 the Environmental Levy Scheme on Plastic Shopping Bags was implemented. Yet it took another six years--so ten years in total--before the scheme covered all retail points. For the producer responsibility scheme for electrical appliances and glass drinks containers, public consultations were carried out in 2010 and 2011, and the bills were passed in 2016. We may have to wait another year before the legislation is implemented.

On the other hand, legislation often targets a certain type of products. For instance, the Promotion of Recycling and Proper Disposal (Product Container) (Amendment) Bill 2015 covers only glass containers for drinks (such as beer and soft drinks) but not containers for sauces and food. It is narrow in scope, and rather confusing for the public too. More importantly, there are many materials for drinks containers, such as plastic, aluminium and paper. Producers may just go for other options to avoid the charge.

One major benefit of the producer responsibility scheme is that it can support the recycling industry. In Hong Kong, this is particularly important due to the high land costs. The recycling industry requires a large space. The last paper recycling business was closed more than a decade ago. Without the local recycling industry, most of the collected recyclables are exported, so are vulnerable to external market influences. Take plastic for example: as the oil price goes down, we will see more cases of plastic recyclables going to landfills. Materials of low recycling value, such as paper drinks packs which comprise a mix of materials, are also typically disposed of in the landfills.

By contrast, if the producer responsibility scheme is in place, the charges collected from the producers can be used to procure equipment such as separation machines to facilitate recycling. Proper treatment of low value materials can add value by turning them into purer materials for export. Furthermore, turning recyclables into raw materials allows them to be less affected by external factors. For example, the 2013 Green Fence Action and the rejection of imported waste by the Chinese government targeted untreated recyclables. Properly treated raw materials are not affected.

Coverage to all product packaging

The 2017 Policy Address mentioned that the next step would be introducing a producer responsibility scheme for plastic containers. From past experience, it may take another decade for full implementation to happen. The alarming picture of accumulating piles of plastic bottles may just switch to yet another material. And then we would have to wait another 10 years to tackle the material. The Municipal Solid Waste Charging is expected to be launched in 2019, when the public will have to pay for all rubbish. With efforts to minimize the payments, the will to recycle and the actual amount recycled will certainly increase. The government should consider establishing a producer responsibility scheme for all product packaging instead of the piecemeal approach. Only then can the waste problem be solved.

Of course, before the implementation of the law, producers are expected to take up their corporate social responsibility and carry out proper recycling. Green Power has earlier launched a petition with regard to paper drinks containers. If the major drinks corporations can fulfil their environmental duty, we do not need to wait for the legislation. Recycling can begin immediately.

The implementation of a producer responsibility scheme will increase the costs for producers. This, however, should be their duty in the first place. The burden has been transferred to the environment and the society for a long time. A waste problem indeed entails more than economic concerns; it is an issue for the environment and society at large.

Text | Henry Lui & Dr. Cheng Luk-ki

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Where does duty end? Should producers take up responsibility for products that make profits for them?
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If improperly treated, electrical appliance waste will result in serious pollution. The recycling process is complicated. Many countries have set up a producer responsibility scheme for electrical appliances.
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It is the producers’ responsibility to reduce their packaging.
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Every day, over 15,000 tonnes of waste are sent to the landfills.
© Dr. Man Chi Sum
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The Environmental Levy Scheme on Plastic Shopping Bags is the first mandatory producer responsibility scheme targeting consumers.
© Henry Lui
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Metals, paper and plastic are the only common items of recycling in the community level in Hong Kong.
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Some 5 million plastic bottles are disposed each day in Hong Kong. These are the next target of the mandatory producer responsibility scheme.
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Fees collected from producers in the producer responsibility scheme can be used in recycling and waste reduction. There will be more resources for researching and developing value-added recyclables. (In the photograph are glass bricks made from waste glass.)
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Materials of low recycling value, such as paper drink packs, are not recycled. Around 43,000 tonnes of them are disposed of annually.

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