Industry News

Packaging chain beware: waste levy is imminent

packaging-sa-Charles-MullerSINCE 2009, when first mooted, much has been said and written about the National Environmental Management Waste Act – a controversial piece of legislation designed to reform the regulation
of waste management in South Africa. 

Throughout the intervening years, PACSA (the Packaging Council of South Africa) has played a key role in formulating an industry response to this proposed legislation and, following comprehensive dialogue with stakeholders in the glass, paper, plastics and metal packaging industries, submitted its first draft Industry Waste Management Plan to the Department of Environmental Affairs (DEA) in 2011.

However, in June last year, the DEA gazetted the Waste Amendment Act which, inter alia, lays out provisions for a Pricing Strategy. Outlining options for setting waste management charges, the Act is aimed at funding the reuse, recycling or recovery of waste; the implementation of industry-specific waste management plans; and the operations of a Waste Management Bureau to oversee all such waste management plans.

As a result, PACSA executive director, Charles Muller, delivered a revised and updated ‘draft’ Industry Waste Management Plan to the DEA. He reports, however, that so far this document has not been formally acknowledged! After several months’ hiatus, a ‘Discussion Document’, titled the National Pricing Strategy for Waste Management was published.

So what does this mean for South Africa’s packaging industry?

There is concern that stakeholders – from raw material suppliers to retailers – may be required to pay some form of mandatory EPR (Extended Producer Responsibility) tax set by government and collected by SARS.

‘Exactly what the quantum will be, and from which part of the value chain it will be collected, is still unclear, but it’s of major concern to the entire industry,’ comments Charles Muller, who has been working tirelessly to establish communication with the DEA to discuss PACSA’s levy proposals (contained in last year’s updated Industry Waste Management Plan).

‘Our fear is that this will become another Buyisa-ebag saga – that funds collected will simply disappear into the fiscus,’ he adds. ‘We believe the right course of action is for the packaging industry to allow PACSA, as its chosen partner, to engage with the DEA to resolve this important issue and, through close collaboration, create an EPR scheme and levy that’s feasible for the industry and in line with government’s admirable goals to clean up South Africa, divert waste from landfill and create a viable secondary economy.’

Critical topics for immediate discussion include dealing with ‘free-riders’, determining where funds will come from and how much they will be, and where the money collected should be spent – with a list of viable actions and alternative revenue sources.

First published in PACKAGING & Print Media March issue

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