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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
13/04/2011
Product Stewardship Bill 2011

CHAIR —Welcome. Do you have a brief opening statement before we go to questions?

Dr Wright —Yes, I do. I would like to thank the committee for this opportunity to appear today and for the opportunity to make a short statement before taking questions from the committee. The Product Stewardship Bill seeks to implement a commitment made in the national waste policy and endorsed by the Council of Australian Governments to introduce a national product stewardship framework underpinned by legislation. The bill establishes a national framework to enable Australia to more effectively manage the environmental health and safety impacts of products and particularly those impacts associated with the disposal of products.

Considerable analysis and consultation have been undertaken to develop this bill. The analysis has included economic analysis for the national waste policy regulatory impact statement, which was published in October 2009. This analysis showed that a national framework approach to product stewardship for problematic waste, compared to separate jurisdictional approaches, generated savings of $147 million over 20 years. Consultation has included extensive consultation on the national waste policy itself plus the release of a consultation paper on the Product Stewardship Bill. This paper was released on 11 November 2010 and was accompanied by public meetings in Sydney, Melbourne, Brisbane, Perth and Adelaide. Forty-six submissions were received in response.

The department is also currently consulting on regulations which would be made under the product stewardship legislation to support a national industry run recycling scheme for televisions and computers. This proposed scheme was subject to a separate regulatory impact analysis which showed that it would provide a net benefit to society in the range of $517 million to $742 million over the period 2008-09 to 2030-31.

A consultation paper on these regulations was released on 8 March, and public meetings were held around Australia. Submissions closed last week and 52 submissions have been received. Following analysis of those submissions, further consultation will be undertaken in developing the regulations. Consultation on the bill and regulations indicates broad support from the community, local government and industry for national product stewardship legislation.

CHAIR —Maybe we can commence where we finished with the last witness. Do you have any comment on the definition that Mr Welford was trying to place on waste?

Dr Wright —I understand Mr Welford’s perspective. To seek to adopt a broader definition which would be difficult to pin down in precise terms would be quite problematic in enacting legislation. As you indicated, the approach proposed by Mr Welford has not been adopted anywhere else in the world, so it would be very difficult to use that sort of definition in a practical way.

CHAIR —A number of the issues that have been raised today go to the question of the bill being imprecise and that it could lead to every product on the supermarket shelf being covered by the bill. Obviously that is not a bad thing if we can get rid of waste—

Senator FISHER —At any cost?

CHAIR —but it could be a practical problem in terms of prioritising, so how do you see this issue of the scope of the bill and how do we prioritise?

Dr Wright —Firstly, what has been agreed by COAG is for framework legislation, so that is where the overarching rules are in the head legislation and the detail is in the regulations. This is not a new approach. The EPBC Act is framework legislation. New South Wales, WA and the ACT also have framework legislation for their waste minimisation approaches. In order to provide flexibility but not be open ended, both the objects which are anchored in the national waste policy itself and the criteria need to provide flexibility so that what is subject to regulation is appropriate and the regulations themselves are fit for purpose.

The framework legislation also seeks to cater for three types of approach to product stewardship. Product stewardship itself seeks to cover all those involved in the manufacture, supply, use and disposal of products. So, to go back to the previous comments by Mr Welford, extended producer responsibility deals specifically with end of life; product stewardship can deal with different aspects of a product throughout its life and at end of life. So we are talking about product stewardship in the broad not just end of life, but it includes end of life.

For mandatory and co-regulatory approaches to product stewardship, as is articulated both in the second reading speech and the explanatory memorandum, a regulation impact assessment would be undertaken. So the regulation impact assessment would be cognisant of the objects of the legislation and those criteria, and it would then assess different products or materials that came up through various mechanisms, and we can talk about that. So the filters for selecting products that are subject to regulation are anchored in processes that have been longstanding. The regulation impact assessment process is COAG endorsed; it dates from 1994 National Competition Policy and was re-endorsed in 2006.

So that is a fairly major step and assessment of that will inform both state and Commonwealth governments’ decisions. As others have drawn attention to today, not every product or material will get through the regulatory impact assessment and be a suitable candidate for regulation. As I think Senator Ludlam advised, end-of-life tyres were subject to a regulation impact assessment. They did not get over the line to be regulated because it did not deliver a net benefit to the community. However, the Commonwealth government and the jurisdictions have been working with the tyre industry, the importers, retailers and recyclers in Australia, over the last 12 months, with a view to developing a voluntary scheme which could be subject to accreditation under this legislation, and we are pretty close to that coming to realisation. The target is for May this year for there to be agreement within the industry to undertake some form of product stewardship.

The framework legislation seeks to allow for different approaches for different products and for tailored approaches. So, if it is not that a product is suitable for regulation, there is a process for accreditation so that the consumer can be assured that what the scheme proponents say will happen will indeed happen and that it provides for transparency and accountability in the public domain. Third-party audits would also be a requirement so that the accreditation has integrity and the consumer can trust that as opposed to other product stewardship schemes.

In the mandatory space, one of the things that has been looked at is changing international requirements for Australia to manage and deal with hazardous substances that are included in product and articles, and those substances are there during and at end of life. One of those which is front of mind is, for example, mercury. There has been agreement internationally to develop a legally binding instrument on mercury to seek to reduce the use of mercury, to encourage the alternatives to mercury and to ensure that mercury is made safe at end of life. If Australia signs up to such an international agreement, one of the tools that would be available to the Commonwealth—it is the Commonwealth that is responsible for making sure that Australia meet its international obligations—would be to use product stewardship as part of its approach to mercury. Mercury is found in many products—for instance, in electrical components and fluorescent lights, particularly commercial fluorescent lights—so it could be that there is a need to encourage the reduction of mercury in products, to require labelling of mercury in products. If passed, this legislation would enable government, following appropriate assessment, to deal with that issue as one of the tools in its approach.

So the objects and criteria are part of the story and they are the ones that are appropriate to be in framework legislation. But there are many other checks and balances that will ensure that those things that are appropriate for regulation can be regulated and that those that do not require it—and government is hopeful that there will be a number of schemes that come forward in this space, and we have already had considerable interest—but need an accreditation and ability to demonstrate to the public that this is going to deliver can operate in this space too and avoid the regulatory scheme.

CHAIR —Thank you. Dr Wright, I do not want a detailed analysis in response to this now so would you take on notice to provide us with the definition of ‘net benefit’ and how net benefit is determined—that is, what processes are used for net benefit, what the definitions are and some outcomes.

Dr Wright —The approach to assessing community benefit is articulated in the Office of Best Practice Regulation handbook and forms part of the Commonwealth—

CHAIR —Dr Wright, I do not carry that around with me. If you can get that for me and give us that definition—

Dr Wright —We can provide it for you. We have a copy here.

CHAIR —Yes, thanks. And some practical examples of how it has been used.

Dr Wright —We can certainly do that, and there is a website run by the Office of Practice Regulation which publishes all regulation impact statements. So the national waste quality ones are there, as are many others, and the application of that assessment can be seen from those regulation impact statements. So we can provide you with a link to that website.

CHAIR —So, a link to the website is the best you can do?

Dr Wright —No. Certainly we can take it on notice, but there are a large number of regulation impact statements there which could inform how this is dealt with. It depends on what information is available. It includes assessment of both qualitative and quantitative factors, so it is not just an economic analysis. For some areas quantitative information is not available, particularly when you are looking in international negotiations. So there is not one clear metric or formula, because it is both quantitative and qualitative.

CHAIR —Okay. I look forward to that more detailed response.

Senator FISHER —Chair, further to that, Dr Wright has said that the department has in the room a copy of the Office of Best Practice Regulation handbook. I think it would assist the committee if the department could either provide a copy of that handbook or photocopies of the relevant bits so that we could ask about it in the time available today. Can you do that, Dr Wright?

Dr Wright —I think you will find that we will need to understand the regulation impact assessment guidelines in their entirety before the way benefits are assessed.

Senator FISHER —So it is not easy to work out?

Dr Wright —That is one of the reasons why I was suggesting that looking at the Office of Best Practice Regulation website might give one an appreciation of the different approaches, depending on the nature of the assessment, the information that is available and the statement of problem. We can certainly provide some examples but there is not a one size fits all.

Senator FISHER —Well, you are the expert, why can you not answer Senator Cameron’s questioned today?

CHAIR —Because I did not ask for the answer. I asked her to take it away and have a look at it, thanks very much.

Dr Wright —Certainly I am not the expert. The experts are in the Office of Best Practice Regulation.

CHAIR —Dr Wright, we had submissions today from AgStewardship Australia and Croplife and one of their major complaints in relation to the bill was about the duplication of regulation. They outlined their obligations under the ACCC regulations for the voluntary processes that they undertake. Are they correct that there would be a duplication of regulation?

Dr Wright —There are a couple of issues. The drumMUSTER scheme, which has been in operation since 1998, is a voluntary scheme, so it is not subject to regulation but does require authorisation by the ACCC. That is on approximately a three- or four-year basis. The ACCC has statutory requirements to ensure that there is no cartel type behaviour. We have had many consultations with the ACCC. In terms of the process and the administration of the voluntary component of the scheme, which in itself will be subject to broad consultation as we develop the details, what is envisaged is that as far as possible the accreditation process would align with ACCC processes in terms of information, data and reporting requirements. So there would be minimum add-on to meet accreditation requirements rather than two totally separate parallel processes. The fine detail of that is still to be worked out. We will be issuing a consultation paper, possibly around August-September. We have had many conversations with product stewardship organisations like drumMUSTER. We are very aware of the ACCC requirements. Indeed, we are consulted currently when those authorisations are subject to assessment. We understand their concerns. We do not believe that there will be duplication or, if there is some, it will be minimal.

CHAIR —Thanks, Dr Wright. Senator Ludlam, we will go to Senator Fisher, Senator Birmingham and then come to you. We have got an hour so there is plenty of time.

Senator FISHER —Thank you, Chair. I will ask some questions and if there is time I will have more, but I will try to limit them. I just want to ask initially about the consultation, Dr Wright. In your opening statement you said that there had been considerable consultation and extensive consultation. Are you referring to the consultation that happened in November and December last year and the 46 submissions?

Dr Wright —I am including that. What I am referring to is that there was substantial consultation in the development of the national waste policy itself, of which strategy No. 1 is product stewardship. There was considerable interest in that. I think there were some 120 submissions on the national waste policy and many, many seeking to have a national approach to product stewardship.

Senator FISHER —Let us go to product stewardship, which of course is the subject of this bill. What consultation has been held on the provisions of the bill as drafted?

Dr Wright —We established nearly 12 months ago a stakeholder reference group which has had a couple of face-to-face meetings and has had regular papers and information provided to it.

Senator FISHER —When did the members of that group see the bill?

Dr Wright —The bill has not been subject to an exposure draft. Whilst that is desirable, there was equally significant concern from community and businesses to stick to the publicly articulated time frame of 2011 for seeking to establish a national product stewardship framework.

Senator FISHER —So the time frame is more important than the guts of the legislation?

Dr Wright —That is not what I said. I said that we had established a stakeholder reference group, which has some 32 representatives from a very—

Senator FISHER —When did they see the bill?

CHAIR —Senator Fisher, I have said this on a number of occasions: if you ask a witness a question, I am determined the witness will answer the question without constant interruption. Dr Wright, if you are answering the first question, please continue.

Dr Wright —I believe that I have answered Senator Fisher’s question. The bill was not subject to an exposure draft. There was a consultation paper released, there were submissions on that paper, there was a series of national public meetings and there was a stakeholder reference group. We also have a subscription service on the National Waste Policy website where we provide considerable information. We have advertised in the press. We have sought to engage. We have engaged across the Commonwealth. We have had a working group under the Environment Protection and Heritage Council to ensure that jurisdictions are involved. So we believe that we have had broad consultation. The development of product stewardship legislation, and in particular the implementation of a television and computer scheme, was endorsed by the Australian Local Government Association at its national meeting. There is considerable support for this. We believe that we have undertaken comprehensive consultation, but we do acknowledge that there was not an exposure draft.

Senator FISHER —How do you know that every member of the consultation council has seen a copy of the bill?

Dr Wright —Because when the bill was introduced we made sure that there was a link made available to all those that had registered and all those on our stakeholder reference group.

Senator FISHER —That was on 20 March this year?

Dr Wright —The bill was introduced on 23 March.

Senator FISHER —Are you able to say whether each and every member of the consultation council saw a copy of the bill prior to 23 March and, if so, on what basis do you say so? I would have thought no.

CHAIR —Why don’t you let the witness answer?

Senator FISHER —Because time is limited, Chair.

CHAIR —Maybe if you let the witness answer we will get the response. Do not keep interrupting.

Dr Wright —We provided a comprehensive consultation paper which covered all the areas that were envisaged to be covered in the bill in November last year, and—

Senator FISHER —Is the consultation paper the same as the bill or are there differences?

Dr Wright —The consultation paper is a consultation paper. There was no exposure draft of the bill. Releasing an exposure draft of the bill, as I believe many are aware, requires the agreement of the Prime Minister.

Senator FISHER —I have not asked about that. I have asked whether the consultation paper was the same as the bill. Let me ask the same question a different way. Are there any differences between the consultation paper and the bill?

Dr Wright —Yes. The consultation paper seeks to provide context and explain issues and possible approaches to inform the development of the bill. The bill is informed by the submissions, the intelligence gained from stakeholders. The bill is also drafted by the Office of Parliamentary Counsel. It is a legal document. The consultation paper is not a legal document.

Senator FISHER —So am I correct in understanding that the earliest date upon which you are able to reassure this committee that each and every member of the consultation body saw this bill was on 23 March, when it was introduced into parliament?

Dr Wright —The stakeholder reference group that I think you are referring to was briefed. Presentation was made to the stakeholder reference group on the approaches—

Senator FISHER —Did they see the bill?

Dr Wright —taken to the bill. As I have already answered, there was no exposure draft of the bill, so the first point at which those people—and parliamentarians—saw the bill was when it was introduced, and this is normal practice. This is not unusual.

Senator FISHER —Would you expect organisations like the Australian Industry Group, the Australian Chamber of Commerce and Industry, the Master Builders Association, the Pharmacy Guild of Australia, who potentially have products and substances covered by this, to have made a submission, for example, to your consultation group? I am not sure what you call it, but I am going off the website of, I think, the environmental department. It lists, I understand, the 46 submissions to which you referred, probably. But I cannot see, for example, submissions from AiG, ACCI, the MBA or the pharmaceutical guild. Would you not expect organisations like that to have expressed an interest in your consultation paper, and did they even though they are not listed?

Dr Wright —I can certainly double-check that, but I can advise you now that we did receive a submission from AiG.

Senator FISHER —I cannot see them listed. I can see those listed under ‘I’. They are in alphabetical order. I cannot see them there.

Dr Wright —Certainly we can provide you with a list.

Senator FISHER —Okay, so that is AiG. What about ACCI, what about the Masters Builders Association, what about the Pharmaceutical Guild? There are many other examples.

Dr Wright —We can certainly take that on notice.

Senator FISHER —Was ACCI a member of the stakeholder group?

Dr Wright —If you could give me one minute, we can check on that because we have the list of members in the room.

Senator FISHER —It might help if you are able to table that list as the hearing proceeds.

Dr Wright —There is no problem with that at all.

Senator FISHER —The objects of the act talk about the impact on the environment and on health and safety, ‘reduce the impact that products and substances have on the environment and the health and safety of people’. Is it intended that the bill only address negative impacts and, if so, why doesn’t the bill say that?

Dr Wright —It is not only negative impacts. Perhaps I can use an example. You have heard from drumMUSTER today.

Senator FISHER —Yes.

Dr Wright —With the drumMUSTER voluntary scheme, while the initial focus of the scheme was on collecting chemical drums at end of life, part of the product stewardship agreement between the various players was targeted at reformulating products, developing new approaches to formulations and delivery to reduce the need for containers and reduce wastage and making sure there was better application. That has had a positive impact on the environment. So to just contain this to negative impacts would not allow for product stewardship approaches, particularly in the voluntary space, to address other things that are further up the manufacturing chain, including green design, reduction of hazardous substances and the like. That is part of the thinking behind using this terminology rather than focusing on negative impacts.

Senator FISHER —So the objects of the act are one of the filters to which you referred earlier?

Dr Wright —They are. The objects of the act are based on the aims of the national waste policy. They have been slightly adjusted to be legislative, but they are essentially a translation of the overall aims of the national waste policy.

Senator FISHER —I think a layperson would interpret a filter to lessen that which comes out once it has been through the filter. If the objects, as the first limb of the filter, are talking about both positive and negative impacts on environment and health and safety of products and substances, what products and substances in the world could be argued to have neither a positive nor a negative impact on the environmental health and safety of human beings? What could possibly be left out of that filter?

Dr Wright —One of the things to remember is that this legislative framework seeks to embrace mandatory, co-regulatory and voluntary product stewardship. With voluntary product stewardship you could envisage that there are many things that would benefit from organisations and companies getting together to improve their products and deal with end-of-life issues. If one had tighter definitions of the objects and those criteria, then that would preclude many of the voluntary schemes they would need to sit outside the legislative framework. Also, not everything is in the legislation—

Senator FISHER —Clearly.

Dr Wright —nor should it be in the legislation. In the national waste policy itself, it articulates the mechanism and the forum through which products will be assessed, where there will be consultation and assessment of any other products that are to be considered to sit within this framework—that is, the Environment Protection and Heritage Council. That is quite important because the focus of this is a national framework and to have a national framework there needs to be agreement and commitment from all jurisdictions to its implementation. A lot of the assessment sits outside the legislative framework and that also is quite usual.

Senator FISHER —Thank you. So you have suggested that the objects need room to allow for positive impact for voluntary things. Are you saying that you also need to allow room for positive impacts for mandatory things and if not where does the bill say you need negative impacts before you can mandate?

Dr Wright —Your question is based on the premise that there is a need to say negative or positive and to distinguish between the two.

Senator FISHER —I am trying to see how industry is going to distinguish and how we are actually going to achieve this. It sounds good, but that does not mean it is going to do good. Could you answer the question, please continue, I am sorry I interrupted.

Dr Wright —I am not sure that I understand the thinking behind the question—

Senator FISHER —Does that matter? Can you answer it?

Dr Wright —because of the fact that assessments need to occur before a product can either be accredited under voluntary or subject to mandatory. There would be few products, articles and material that did not need a number of aspects addressed or meet a number of the criteria.

Senator FISHER —Exactly.

Dr Wright —For example, recycling an aluminium can would provide resource recovery and also delivers greenhouse and energy benefits above the use of virgin materials, but it would only be regulated if it met the regulation impact test. If not then a separate system is being developed—it is not fully developed yet—on voluntary accreditation.

Senator FISHER —And you cannot tell us in simple terms what that regulatory impact assessment test would mean, can you?

Dr Wright —As I have said—

Senator FISHER —Have a go?

Dr Wright —There is a process and guidelines have been issued by the Office of Best Practice Regulation. There is also, as my colleague has just pointed out, a short summary in the explanatory memorandum of the bill.

Senator FISHER —What page are you on?

Dr Wright —Page 3, which is headed, Circumstances in which obligations may be imposed.

Senator FISHER —What in that summary, for example, says how you balance a positive or a negative impact on the environment or health that can be addressed, so meeting the objects, with for example the costs that would be imposed on industry to meet any standards be they mandatory or voluntary?

Dr Wright —That is exactly what a regulatory impact analysis does.

Senator FISHER —On what basis do you reassure us it will do that in each and every case in respect of each and every product and each and every substance that could be subject to stuff flowing from this bill?

Dr Wright —Because it is any formal requirement of COAG that all regulation and standard setting bodies undertake a RIS where something is considered to be subject for regulation. Regulatory approaches and voluntary approaches are assessed as part of that regulation impact assessment. There is a detailed economic analysis. There is an assessment of qualitative aspects as well.

Senator FISHER —So would you say that that test has been met in respect of tyre recycling then?

Dr Wright —As I think I stated earlier, a regulation impact assessment was undertaken on tyres. That assessed a regulatory approach to tyres against a voluntary approach. The regulatory approach did not deliver an overall community benefit. Therefore end-of-life tyres were not considered suitable for a regulatory approach to product stewardship. So the tyre sector is currently working to develop a voluntary scheme and would seek, subject to agreement, for that scheme to be accredited under this framework.

Senator FISHER —Has the department heard from the tyre industry that any experience thus far has been that middle men are taking monetary benefits out of any sort of recycling so that it is not in the interests of the industry to bother—that is, the costs of meeting the bureaucratic red tape and then the things that come down underneath outweigh any incentive to the industry to comply?

Dr Wright —I am not sure that I fully understand your question because currently there is no product stewardship scheme for tyres in Australia. There is some tyre recycling, which is run by independent recyclers and collection agents who may have bilateral arrangements with particular companies. There is no national scheme. There is no national regulation. There is some regulation on the movement and storage of tyres, which is state legislation, but no Commonwealth legislation.

Senator FISHER —Could those tyre recyclers, for example, if the bill were passed, use criteria (f) to argue that you can make money out of reducing the impact on the environment of tyres? Let me quote criteria (f):

(f) taking action to reduce those impacts will offer business opportunities that would make a contribution to the economy.

Dr Wright —No. A regulation impact assessment has been made and, unless there is significant change in the market and the dynamics, one would not redo that regulation impact statement.

Senator FISHER —In respect of tyres?

Dr Wright —Yes.

Senator FISHER —Thanks.

Senator BIRMINGHAM —Dr Wright, it is always good to see you again. On the area of the objects where Senator Fisher was, before we jump on, we heard evidence today questioning whether the focus on life cycle and discussion of the product life meant that the real focus on end-of-life clean-up and end-of-life usage was potentially missed somehow within the legislation. Do you care to rebut those suggestions?

Dr Wright —Certainly end of life is included. The term used in the first object, 1(a), does include end of life. It is not specifically spelt out there but it does include end of life and my colleague will point you to another part of the legislation which covers this.

Mr Bennett —That is the definition of life of a product in clause 6. As I understand it, if one followed through on the comment made by the earlier submitter from ACOR, I think what would be proposed is pulling out or expanding ‘throughout their lives’ to include ‘throughout their lives and once the product is waste’ or words to that effect. The current wording is really for brevity of expression and has been adopted for that reason by the Office of Parliamentary Counsel. We have sought advice in light of the submission as to whether any change would be suitable. It would be a minor drafting change rather than affecting the substance of the provision.

Senator BIRMINGHAM —Does the advice suggest change is necessary?

Mr Bennett —We have not received that advice yet.

CHAIR —Senator Birmingham, can I interrupt for a second before you go to your next question, in case I forget. You were going to table the stakeholder reference group list. Is that available?

Dr Wright —I am sure I have it. I have too many papers on the desk, so just bear with me.

CHAIR —I have seen it on the website. We can print it off the website and then it will be tabled. Is that okay?

Mr Bennett —Yes.

CHAIR —Dr Wright, you do not need to worry about it. We have got it.

Dr Wright —Okay.

Senator BIRMINGHAM —I will now go to the criteria issue which Senator Fisher finished on. I know you rebutted to an extent questions Senator Fisher asked about tyres in relation to part (f), but can you tell me what part (f) actually means? It says: ‘taking action to reduce those impacts will offer business opportunities that would make a contribution to the economy’. It does not necessarily suggest that it is a positive contribution. It certainly does not suggest that it is a positive environmental contribution. It seems to be an incredibly sweeping statement.

Dr Wright —The criteria are intended to provide a high-level guide to intent, and products should meet at least two criteria. This was intended to indicate that there could be a reason to take action where you have an emerging issue of problem waste where technology becomes available and there is now an ability to deal with it whereas five years ago there may not have been. So it is not the sole driver. In order for something to be considered to be subject to this framework, first of all it needs to meet the objects of the act, and they are quite clear. This is an additional provision. It is done with that in mind—to cater for what may previously have been considered to be an intractable issue when circumstances change and it can now be dealt with, remembering that this is to cover voluntary as well as mandatory and co-regulatory.

Senator BIRMINGHAM —There has been a fair bit of commentary and some criticism around clause 5 today and around meeting two or more criteria and how they interact. Is the department considering any possible amendments to that?

Dr Wright —Those issues were raised in the consultation process.

Senator BIRMINGHAM —Yes. Now, though?

Dr Wright —I was getting to that. The issues that have been raised through the submissions are really restating those. It was looked at very closely and we consulted with our colleagues in the jurisdictions. On balance, the outcome is that they would stay as the original proposal in the consultation paper. In the consultation paper, we do raise the issue as to whether criterion (a) should be mandatory—

Senator FISHER —As a precondition?

Dr Wright —Yes, and we probably had equal views both ways. For example, there were comments that perhaps criterion (a) was a bit broad. But, when you try and think about various products or materials that you may wish to cover, what constitutes a national market could be quite different. You could have importers that are based in only one state but they sell nationally. You could have mail order. So it is very difficult to say that it has to be in absolutely every jurisdiction or in two or more jurisdictions. The more you try and refine it, the more problematic it becomes.

We did take that feedback quite seriously and we looked at different ways of adjusting the criteria. We ran different potential candidates through the criteria to see whether they were too broad or too limiting. You could use a number that we tried. One is products containing mercury, and we need to be cognisant of possible changes in international requirements. It could be something concrete like tyres or something that is used quite broadly like packaging. We ran each of those through the criteria and they are all quite different, so we needed to see that this is fit for purpose, given that this is framework legislation and that there are other controls and methods of consultation and scrutiny and that any product that was to be regulated would need to get the agreement of all jurisdictions as well as the Commonwealth to actually be enacted.

Senator BIRMINGHAM —My problem does not lie with (a) in any event. The question really is: why wouldn’t you have some variants of (c) as a mandatory criteria? That gets to the crux of the environmental outcomes you are seeking, not whether it is a national market or not. Did you run that possibility through the scenarios?

Dr Wright —Certainly. If you made (c) mandatory and if you wished to take action on products and materials that contain mercury or brominated flame retardants, if the driving force was, for example, international requirements under the Basel or the Stockholm conventions, then they would not get through the gate because (c) would not apply because you are dealing with hazardous substances, not conservation of materials or reduction in greenhouse gases. So, yes, we did.

Senator BIRMINGHAM —I accept the couple of exceptions you have shown us there. It does strike me that there should be ways to handle those exceptions without having what seems to be a fairly sweeping approach to the criteria of two or more: in a national market and a hazardous substance are two pretty broad things, and (a) and (f) are two pretty broad statements as well. Yes, I realise you are arguing that there are the objects to be met too. But it would seem that you could eliminate some of the concerns by having a far more specific requirement and then dealing with the other factors in an alternative way, even if there has to be, for the one-off area of hazardous substances, some type of exemption created.

Dr Wright —But hazardous substances is one of the key reasons for it being appropriate for the Commonwealth to regulate in this space because of its obligations under international conventions, as opposed to just going on a jurisdiction-by-jurisdiction basis. That is actually quite an important aspect of these criteria. I appreciate your concerns, but this goes to the heart of the difference between framework legislation and product specific legislation, as in the current product stewardship for oil legislation which was enacted in 2000.

Senator BIRMINGHAM —We already meet our obligations under those international conventions, don’t we?

Dr Wright —We do. However, as I said, there is currently a legally binding instrument on mercury that is being negotiated. There have recently been an additional nine chemicals added to the Stockholm convention, including brominated flame retardants, and more prospectively. So international obligations do not remain static. This framework legislation seeks to provide for those sorts of changes to be accommodated, and where appropriate, where government decides, the mandatory or coregulatory approach could be a tool in Australia’s kit bag to meet its international obligations.

Senator BIRMINGHAM —So essentially this will be a better approach for handling something like bromide in the future than what we have done with mercury already.

Dr Wright —Mercury is prospective in terms of being an international legal requirement. Currently we have a voluntary scheme to recycle mercury-containing lamps—that is commercial lamps—and that started in July 2010. That is where mercury is, and that is only one component of products in the market that contain mercury. But prospectively, should Australia sign up and should the Australian government, through the treaty-making process and regulation impact statement assessments, decide that part of its approach to meeting its obligations for mercury would be product stewardship then, yes, you would have legislation in place where you could develop a fit for purpose approach through regulation with full consultation that would meet those needs without the need to have a stand-alone piece of legislation with the associated costs, compliance regime and difficulties for business dealing with various pieces of legislation rather than one single piece of legislation.

Senator BIRMINGHAM —This is the last thing I have on this and then I want to quickly cover another point. Are there any circumstances or products that you can envisage that would not meet proposed subsections (b) or (c)?

Dr Wright —One of the things that could not conceivably be covered by product stewardship legislation would be—

Senator BIRMINGHAM —Sorry; I was asking about items that you wish to be covered by product stewardship legislation that would not qualify under proposed sections 5(b) or 5(c). I am not trying to re-ask Senator Fisher’s question: is there something that couldn’t possibly fit?; I am looking to see if there are things that you would want to have fit that would not fit under proposed sections 5(b) or 5(c).

Dr Wright —We were asked earlier what on the supermarket shelf would not fit. I will take an extreme example to throw this into relief. You probably would not have a national product stewardship scheme for flower pots and gardening tools. They may be products that are in the national market but they do not offer these opportunities. There may be a local nursery which recycles its own containers but that is not the sort of thing that would be subject to product stewardship because it is not national.

Senator BIRMINGHAM —Yes, but if there is a national market for them and there is an economic contribution recycling can make, they do fit the criteria.

Senator FISHER —And you are saying they should, are you?

Dr Wright —No. I was trying to—

Senator BIRMINGHAM —I am trying to find a serious example that you would want to have fit the criteria that could not manage to clear the hurdles of either proposed sections 5(b) or 5(c) were you to make one of those two mandatory.

Dr Wright —We would need to take that on notice because this framework legislation is intended to cover mandatory, co-regulatory and voluntary. The mandatory and co-regulatory clearly have a much tighter and more formal assessment process to get through to be regulated. They need to demonstrate an overall community benefit. There may be a significant benefit through a voluntary approach but it may not deliver it to the same extent. That is not to say that it would not be worth while to encourage an accredited voluntary scheme in that space. Certainly, with voluntary the intention is it would need to be not just an individual commercial decision but something that did deliver beyond business as usual for the community.

Senator BIRMINGHAM —I look forward to seeing what examples you can provide in that space.

Senator FISHER —On a number of occasions, Dr Wright, you have properly said that the bill covers mandatory, co-regulatory and voluntary in trying to answer well intended questions. Why can’t the bill distinguish between mandatory and co-regulatory versus voluntary to mean that you could answer Senator Birmingham’s question?

Dr Wright —Because this is framework legislation that is designed to provide for a future world which we cannot entirely see, to provide appropriate checks and balances for products and materials that may be assessed and to provide an avenue for encouraging voluntary schemes where regulation is not needed or where there is not a demonstrated community benefit. We have had considerable interest in the voluntary space. A lot of our submissions have seen that as the way forward. One example I have given is that the tyre industry is looking at this. One role of government is to encourage action in the absence of regulation. Regulation is not necessarily the best approach.

Having the suite trying to apply the same objects and criteria and provide for a stricter test—that is, an overall benefit test—for regulatory mandatory, as opposed to voluntary, schemes is what we have been tasked to do. This bill seeks to deliver an even-handed approach. But it is framework legislation like the EPBC Act, and one needs to look at what the checks and balances are to make sure that, on the one hand, you do not let everything through the gate but, on the other hand, you can provide for a broad range of possibilities in future from wanting to act in this space on mercury, which is in many products, to encouraging voluntary product stewardships on tiles or printer cartridges or mobile phones or have a drumMUSTER come on board.

Recently PACIA, the Australian Plastics and Chemicals Industry Association, have sought ACCC authorisation to impose a 2c a litre levy on paint nationally to have a trial in Victoria to deal with paint at end of life. We have been engaging with PACIA and they are quite keen for that approach to come under the voluntary chapeau. Two years ago that scheme was not in view.

There is a need to balance between being flexible and—yes, indeed—being too broad. We have sought through the bill and the framework that sits outside the legislation to provide appropriate checks and balances and for parliamentary scrutiny. All regulations will be disallowable instruments. There is always broad consultation on regulations. It is much easier to issue exposure drafts on regulations to make sure that the industry is consulted. Our department does that regularly in terms of changing regulations on the requirement to manage ozone-depleting substances.

Senator BIRMINGHAM —I do appreciate that you are trying to fit a range of things into three different models. Equally, just as you need the flexibility to have lots of different options for voluntary, that needs to be balanced by having at least—if not applicable to the voluntary option, applicable to the other two—appropriate safeguard mechanisms to ensure that industry are confident in the operation of this scheme.

Can I go to how each—voluntary, co-regulatory and mandatory—is initiated. Very briefly, what is the initiation process for each of the three types of schemes? How does the ball get rolling?

Dr Wright —There are a couple of paths through which a product or material could be assessed for mandatory and co-regulatory. One is, as I indicated earlier, through changing international obligations, in which case the Australian government would undertake an assessment and would consult. That would include with business and jurisdictions, and there are formal processes before Australia takes on international obligations.

In addition, in the table in the national waste policy under strategy 1, it states that the Environment Protection and Heritage Council will be the vehicle. In July 2010 the Environment Protection and Heritage Council issued an implementation plan on the national waste policy, and it has already issued a status report in November. Cluster group 1 deals with strategies 1 and 3 and is looking at what products should be assessed for product stewardship. But it is not that there is an existing list that needs to be worked through. Lists have been used in the past. I think New South Wales has some 17 priorities on its product stewardship list and none of those have been implemented. Through jurisdictions and the ministerial council and through the Australian government, there may well be occasions when industry wants to engage, but that would be channelled through the working group, through the Environment Protection and Heritage Council, for assessment.

The details of the voluntary component will be subject to full consultation. It may be that there is a call for expressions of interest on an annual basis and then those are assessed. The details of that are yet to be worked out. The actual accreditation process and submissions aspect sit outside the regulatory framework; the minister will issue determination on what that framework will be and there will be consultation before that is put in place.

Senator BIRMINGHAM —Thank you. Section 25 under ‘co-regulatory’ indicates that an administrator of the co-regulatory arrangement may apply. It does surprise me that there does not seem to be a complementary section in the voluntary space that has scope for some administrator or otherwise of a voluntary arrangement to apply. But it is not the voluntary space that I am so worried about; it is the mandatory and the co-regulatory space.

Dr Wright —To clarify: under mandatory and co-regulatory it has to have been decided by government that a product or material will be subject to regulation. Then, when those regulations have been made, liable parties will either be able to set up their own arrangement or to form a product stewardship organisation, and those will have to be assessed as being fit for purpose and being able to deliver the outcomes. So that is after you have got through the hoops of the regulation impact statement and you are in. It is not that a company can come and say, I want to set up an arrangement for tyres; if tyres have not passed the regulation impact assessment and there has not been a decision by government then it is not part of the mix.

Senator BIRMINGHAM —The EPHC is the official body, isn’t it?

Dr Wright —No, it is the ministerial council.

Senator BIRMINGHAM —Okay. So the national waste policy states that it is the vehicle for identifying areas for consideration—save for those that may be covered by international obligations. Why is it not, as far as I can see at least, mandated in the bill that EPHC be the initiating vehicle?

Dr Wright —Because it is not normal to enshrine policy and government policies in legislation because they change over time. EPHC was established in 2002; prior to that it was ANZECC. There has been a review of the ministerial council, and the environment ministers council is about to be renamed so it is not standard to enshrine such things in black letter law.

Senator BIRMINGHAM —One last thing: it is not unusual or impossible to require some form of consultation with the states at the initiating phase in legislation. The bill does appear to leave it totally open within the bill for the Commonwealth or the minister to self-initiate. Is that correct?

Dr Wright —However, the regulation impact assessment process requires formal consultation and it is a COAG agreed process—

Senator BIRMINGHAM —Those can change too, Dr Wright.

Dr Wright —They can indeed, in detail; however, the need for a regulation impact assessment has been part of government policy since 1994. The guidelines have evolved over time but that requirement is part of National Competition Policy which was reaffirmed in 2006.

Senator BIRMINGHAM —Thank you.

Senator LUDLAM —To ease the concerns of my coalition colleagues: is it not the case that, if we went through a RIS process for all of these different product streams, it would take tens of thousands of years? We are in no danger of rushing, as far as I can tell. But I wonder whether you have heard the concerns of, I think, every witness who came before us today who said, ‘We want some idea of the government’s priorities. Can you provide that please?’

Dr Wright —Maybe I can answer that in two ways. Firstly, as I said, the ministerial council has a cluster group established under the national waste policy to look at any other priorities and what they may be. As I believe you are aware, there is currently a regulation impact assessment process being undertaken on the impacts of packaging and litter.

Senator LUDLAM —I am very aware of that one. I have been banging my head on that one for two years.

Dr Wright —One of the options that it has been stated will be covered in that RIS is container deposit legislation, which is a proposed legislative instrument and therefore requires a RIS to be undertaken. Should that be one of the options adopted by governments, then that could be accommodated under this legislation. So litter and packaging is one of the areas that is being assessed as we speak. Of the other products that have to date been on either international product stewardship schemes or in the lists of products in jurisdictions, there is a lot happening in this space that would be accommodated not necessarily with the need for a regulation impact process. There is already a market for used lead-acid batteries and that is working quite effectively in Australia. A voluntary approach to product stewardship of tyres is under development. We have a scheme already in place for dealing with fluorescent lighting tubes at their end of life. There is MobileMuster for phones. Printer cartridges are dealt with by Planet Ark. We have paint cans being dealt with on a trial basis at the moment by—

Senator LUDLAM —Sorry, but rather than going through each one by one, which could take quite some time, I am more interested in the overarching framework. Every witness who has come has said this. What is the government’s intention from here on? Which product categories are going to be handled voluntarily? Which will be co-regulatory? Which will be legislated for? Which ones are you going to do first? How long is this all going to take? It took several years for the tyres ones to be rejected, and that sent us back to square one; seven years for e-waste; goodness knows how long it is going to take for container deposits. As I said to one of the witnesses before, this is a portfolio for extremely patient people. At what point will we get a clear idea of what the governments’ targets are and how they plan to handle the different product streams?

Dr Wright —At present there are no specific targets. Litter and packaging is subject to assessment at the moment. The working group under EPHC is looking at whether there are any other products or materials that may warrant consideration for mandatory or co-regulatory. It could be that the Product Stewardship for Oil scheme, which is now 10 years old, may benefit from review and being brought under this framework. Equally, the Australian Packaging Covenant is a co-regulatory approach that exists under different legislation in each jurisdiction. At the first review of the new covenant it is going to be considered to be brought in under this framework. It is possible, as I mentioned, that if there is a legally binding instrument on mercury then product stewardship could be a tool that is employed there. Looking down the New South Wales list, currently we have televisions and computers, which will be dealt with should this legislation be passed. Mobile phones may well come under voluntary. Paint is subject to a voluntary trial. Plastic bags are already being dealt with in each jurisdiction. Tyres—

Senator LUDLAM —Sorry to interrupt but we are very short of time. Could I ask you to table what you are reading from, because I am not even sure that we have access to that.

Dr Wright —What I was reading from was the New South Wales priority list. As part of the national waste policy we did look far and wide. There are two published studies on product stewardship in North America and Europe and then in Asia. We looked at all the products that were on those lists and we looked at what was of interest to jurisdictions. At present the majority of those either have pending voluntary schemes or have been considered for co-regulatory. The only outstanding two that are on the New South Wales list, and I am happy to provide that list to you, are cigarette butts and treated timber.

Senator LUDLAM —Does the Commonwealth have a priority list, or does it intend to develop one?

Dr Wright —Ministers have asked the working group to have a look at what else could be considered for product stewardship legislation assessment, but at the moment there is no list of specific programs.

Senator LUDLAM —When does that working group intend to report? Will it report internally or to the public?

Dr Wright —It has only been recently—I think it was at the November meeting of the EPHC—that it has been asked to address this issue. I would have to get back to you. It would be a decision for ministers as to whether those deliberations are made public. I could also point you to the national waste policy regulation impact statement, which was based on an assessment of between one and five products being subject to the regulatory side of this legislation over time. It was not a huge list, which is recognising that many products and materials could be dealt with through a voluntary approach.

Senator LUDLAM —I suppose all I can ask you to do is perhaps table whatever you have there that would give us any inkling as to how the Commonwealth intends to proceed, because there is something about debating these issues that just makes me want to lose the will to live. It is very difficult to identify when something—

Senator FISHER —What a waste!

Senator BIRMINGHAM —Hang in there, Scotty!

Senator FISHER —Can we have a risk assessment of that?

CHAIR —Settle down! Senator Ludlam is only speaking rhetorically.

Senator LUDLAM —And only speaking for myself, I’m sure. I will leave it there, but if there is anything at all you can provide us with. I gather you have probably listened in to what some of the witnesses have told us today, and I share their concerns. From industry right through to NGOs, nobody knows where this is heading. We are setting up an empty framework that eventually some things might find their way into and eventually they might not, and it is really very difficult to tell what the point of the whole exercise is. So could we have some clarity provided on that—whether we have targets, priorities, who is actually creating some kind of sense of urgency—because it is very difficult to detect. Thanks.

CHAIR —Dr Wright, just to follow on from what Senator Ludlam indicated, there is a model, the EPBC Act, which is a framework act. Can you give us some examples as to how that act has moved from a framework to operating effectively?

Dr Wright —A better example would be some of the state waste legislation or New Zealand; they would be more relevant and give you greater insight. We could take that on notice and provide that.

CHAIR —Those examples you are going to give, will they give us an insight into how priorities are determined in those other jurisdictions?

Dr Wright —Yes. We can use New South Wales as an example. One of the reasons we would be happy to provide you with a list of those things that have been regulated overseas or been on EPHC’s list for consideration or any of our state jurisdictions is so that you could have a look at those. Many countries have been doing this for longer than Australia, so more products are covered.

But it is not a large list, and that is why those studies were used as the basis for the National Waste Policy regulation impact statement, which looks specifically at the benefits of national framework legislation. That is the reason for the number five. Clearly something of interest to both the federal government and jurisdictional governments, who all signed off on the National Waste Policy, was to have some degree of comfort that in the regulatory space we were not talking about hundreds. So it was on that basis. We would be happy to provide you with a table so you can see what the usual candidates are, which might give you a degree of comfort that it is not everything on the supermarket shelves. There are some key candidates which virtually self-nominate for consideration, and once you have looked at those they may or may not pass the test for regulation. There are a couple of things prospectively like, as I said, dealing with international conventions, but the ultimate list is not likely to be large.

CHAIR —You spoke earlier about two studies, one in North America and I think one in Asia. Is that right?

Dr Wright —Yes, the Asia-Pacific region. It looked at China, Taiwan, Japan and Korea. They are both publicly available.

CHAIR —Could you provide links to those studies?

Dr Wright —Yes.

CHAIR —And can you just extrapolate a little bit on what those studies found?

Dr Wright —They looked at what was covered by product stewardship legislation around the world, how those schemes were implemented and whether there were any lessons to be learnt that were applicable for implementation in Australia. The conclusion of those studies was yes, there are a lot of signposts for things to consider, but there was not one fit-for-purpose approach that you could just pull off the shelf from Europe or North America and put in place in Australia. Indeed, I think in the United States they have taken a state-by-state approach and they have 32 states with 60 product stewardship laws and nine product categories. That is the sort of end point that the Commonwealth and jurisdictions are seeking to avoid by using national framework legislation. There are a plethora of individual pieces of legislation that are all totally different but may apply to the same sectors.

CHAIR —There is a National Waste Policy implementation plan—less waste, more resources—dated July 2010. Does that provide us any direction in relation to priorities?

Dr Wright —No, but in the last two pages it does give you the groups that have been set up to implement the different strategies and who is chairing those groups. It does not give you the details of where those working groups are up to, but it is envisaged that some of that information will be put into the public domain when it has been through ministers.

CHAIR —I am just trying to find out who is chairing and who is involved in these working groups.

Dr Wright —Under cluster 1, product stewardship, which is strategies 1 and 3, the chair is the Australian government. The second one, markets and standards, which is strategies 2, 4, 5 and 6, is chaired by New South Wales and Victoria. This is at the end of the implementation plan.

CHAIR —Yes, I have that. Rather than go through all of that, I am happy you pointed that out to me. But these are governmental groups. One of the issues that was raised today was the need for more community involvement—more openness in decision making processes and more community involvement in determining the priorities. Are there any examples we can look at where there has been wider community involvement than is envisaged in this process?

Dr Wright —Over time a number of products were placed on the Environment Protection and Heritage Council’s list to look at. They included televisions, computers, tyres, plastic bags and packaging. I think there were a couple more—I cannot remember. That was a catalyst, in a way, for the National Waste Policy and looking at product stewardship as a mechanism for dealing with those issues. In terms of consultation on specific products, with the television and computer scheme the regulatory impact statement had widespread consultation. I can provide you with the details separately, but there was national consultation in regional and major urban centres, as there was with the National Waste Policy. A broad range of people attended those meetings. They were not just from business and they were not just from government. In addition, with the television and computer scheme there was a specific study called a ‘willingness to pay’ study. An economic analysis called choice modelling was undertaken, and that surveyed in a very technical, specific and scientifically sound way 2,500 people in the community across different profiles of age groups, economic status and so forth.

CHAIR —I am sorry—we have run out of time, but really what I was asking for is this. I understand New South Wales has a standing committee that advises government, and that standing committee has business and community involvement. It helps determine priorities. You should take this on notice because we have run out of time, but could you have a look and see if there are any other examples anywhere, including international best practice, on establishing a committee to assist government in managing waste and determining priorities?

Dr Wright —Yes.

CHAIR —Thanks very much, Dr Wright and Mr Bennett.

Senator FISHER —Chair, I will just place one question on notice. Dr Wright, is it intended that the bill be able to apply product stewardship stuff to, for example, farmers applying chemicals to their crops?

CHAIR —Thanks, Senator Fisher. That concludes today’s proceedings. I think all witnesses for their informative presentations. Thanks also to Hansard and Broadcasting and the secretariat.

Committee adjourned at 4.02 pm