Corporate Responsibility

The Australian Packaging Covenant commenced immediately following the expiry of the National Packaging Covenant on June 30 last year. But what does that mean, and how does it affect hardware retailers and suppliers? The Australian Packaging Covenant (APC) is an agreement between companies in the supply chain and all levels of government to reduce the environmental impacts of consumer packaging. It is a voluntary initiative designed to minimise the environmental impacts arising from the disposal of used packaging, conserve resources through better design and production processes, and facilitate the re-use and recycling of used packaging materials.

The APC establishes a framework for the effective life-cycle management of consumer packaging and paper products that will be delivered through a collaborative approach. It aims to achieve, with the help of all participants, a recycling target of 65% for packaging and no further increases in packaging waste disposed to landfill. Companies, government agencies and industry associations sign the covenant and commit to certain obligations that contribute towards achieving the covenant performance goals and KPIs. Anyone involved in the packaging supply chain is invited to become a signatory.

The covenant is based on the waste hierarchy, i.e. it puts high priority on avoiding and minimising packaging waste, followed by reuse, recycling, recovery and finally, disposal. Signatories to the covenant acknowledge that packaging has economic and social benefits, which include the containment, preservation, protection, marketing, distribution and branding of goods. Packaging also has environmental impacts throughout its life cycle that need to be managed.

Signatories agree to work together to implement and promote the principle of product stewardship for packaging. This means that responsibility for managing the environmental impacts of packaging is shared throughout the supply chain (raw material suppliers, packaging manufacturers and suppliers, brand owners and retailers) and by consumers, waste service providers, recyclers and all levels of government.

Who Has Signed Up?

The list of signatories and their Action Plans are detailed on the APC website (www.packagingcovenant.org.au).

What Does It Cost?

Companies are classified according to their activities. Brand owners, raw material suppliers, wholesale retailers and waste management organisations fall under the contribution classification G. Packaging manufacturers and suppliers are included under a PM classification. Contributions start from $1,100 for G-classified companies with up to $5 million in packaging related turnover to $786,500 for PM-classified manufacturers and suppliers with a turnover of more than $15 billion. Imports are included in calculations, at the point of entry into the Australian supply chain. Exports are excluded.

Companies that come under several classifications can contribute under the classification applicable to the dominant portion of their business, if that portion represents 80 per cent or more of the company turnover. If this is not the case, contributions need to be calculated for each segment of the company’s business, according to the portion of the total turnover applicable to each classification.

Are You Liable?

As an independent hardware rretailer, you are not obliged to sign up to the APC. Nor are you subjected to alternative regulations, such as the less flexible National Environment Protection (Used Packaging Materials) Measure (NEPM).How Long Do They Last?

Action Plans must be submitted for a period of five years. The next Action Plans are due on March 31, 2011. Action Plans can vary in content and intent from one year to the next, but the purpose of the covenant is to ensure that companies do what they say they’ll do. It makes them accountable to themselves and the covenant by addressing the goals and KPIs in their Action Plans.

Is It Mandatory?

While participation in the covenant is voluntary, brand owners who choose not to become signatories or who fail to comply with the covenant requirements will be regulated under the NEPM in each of the states and territories in which the company sells its products. The NEPM is enforced by the relevant regulatory authorities in each of the states and territories.

The APC is self-regulatory, so dishonesty may occur. However, a substantial report is required to be lodged each year detailing what a business was able to achieve versus what they said they would achieve. These reports are audited. Should it be required, audits can include onsite physical checks. Non-compliant signatories will be removed from the register of signatories, and organisations that are brand owners will be referred to the states and territories for consideration under the regulations in each jurisdiction. Each signatory must publish its action plan and annual reports on its website (if it has one).

Signatories will be considered non-compliant if they fail to meet one or more of the covenant requirements:

  • Submit an action plan within three months of becoming a signatory that includes information set out in a detailed schedule.
  • Implement the submitted action plan and the Sustainable Packaging Guidelines.
  • Submit an annual report.
  • Agree to an independent audit of an annual report and action plan implementation if required.
  • Pay the required contribution to the Covenant Fund.
  • Maintain and make available records of the implementation of action plans that can validate the data submitted in annual reports.
  • Assist the Covenant Council in responding to complaints about action plans or the design and use of packaging.

What’s NEPM?

Under the NEPM, brand owners must still submit action plans and annual reports. The difference between APC and NEPM plans and reports is that the APC allows flexibility. There are set goals, targets and KPIs. However, how signatories address each is flexible. The NEPM requires action plans to demonstrate ‘take back’ initiatives for packaging and that reports are submitted providing rigid data and information. If this information is not supplied or is deemed inadequate, local governments may recover kerbside collection costs from brand owners that contribute to the kerbside waste stream.

For further information, contact APC on (02) 9416 0821 or look up www.packagingcovenant.org.au.

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