PaintCare Paint Product Stewardship As presented to the Retailer & Specialty Distributors Forum

1. PaintCare Paint Product Stewardship As presented to the Retailer & Specialty Distributors Forum 14 August 2014

2. Product Stewardship In June 2013 waste architectural and decorative paint (Paint) was listed as a priority product under the Product Stewardship Act (2011) by theCommonwealth. Key reasons for the listing were: • Sold in a national market and contains hazardous substances which have the potential to harm the environment • Disposal of paint involves a significant cost to government • Waste paint is a high volume component of household hazardous waste collections • Potential to increase the recovery of resources and to reduce impacts on the environment through the better collection and recycling

3. Product Stewardship • Product Stewardship requires industry to take responsibility for it’s waste either on a voluntary, co-regulated or regulated basis • Regulated/Co-regulated schemes recognised as being onerous, less cost effective and result in industry stakeholders having less scheme control • Significant advantages in running a Voluntary scheme • Industry greater influence over design • Commercially sustainable outcomes • To achieve a Voluntary scheme we must work together

4. Voluntary Scheme • Objective • To collect and process unwanted residual paint products from retail consumers and trade painters at fixed locations and mobile sites funded through an industry applied levy collected at the warehouse gate. • Scheme Key Attributes • actively seek to achieve better environmental and cost efficiencies • create an excellent brand equity and scheme awareness • provide a transparent operation with robust stakeholder governance • aim to minimises “free riders” • funded by an ACCC approved Levy • operate within all relevant legislative frameworks • Scheme delivered by a new independent not for profit body ‘PaintCare Australia”

5. Paint Collected • Key points • For first 5 years : • Accepted - architectural and decorative paint (including woodcare) from Retail and Trade sources sold in containers from 1L up to 20L (both plastic and tinplate packaging). • Not Accepted - Spraypacks, bagged render, isocyanates, paint strippers, thinners, industrial and anti-fouling paints.

6. Paint Collected • Key points • Coverage : • Stage 1 - 70% population coverage (within Year 2) • Stage 2 - 75% population coverage (Years 3 – 4) • Stage 3 - 85% population coverage (Years 5+) • Use of fixed locations including existing collection points supplemented with mobile collections • * Coverage based on % population that has a collection site within 20km (metro)/40km (regional)

7. PaintCare Brand • PaintCarelogo style and user guide for actively participating paint companies and retailers. • PaintCare logo phased in on paint packaging. • Availability of PaintCare POS advertising & literature. • PaintCare web-site detailing all collection information with high visual presence of participating retail and paint manufacturer company brands.

8. Scheme Funding • How it works • Levy charged by paint manufacturer’s based on Levy/L • Sales* reported to independent third party • Paint manufacturer then invoiced based on sales • Payment made to PaintCare (non-for-profit • administrator of the scheme) • All financial transactions auditable / annual audit report • * Sales for paints under the scheme

9. Levy • Scheme to be funded by an ACCC approved Levy • Levy range (fixed over 5y) 12 – 15 cent/L* • Modelling to generate the proposed Levy calculation to be reviewed by athird party and approved by the ACCC • Multiple stakeholder sign-off of cost modelling • Competitive costing compared to overseas schemes • * Levy will also incur GST

10. Levy - Tax Invoices • Paint company invoices to include separate line indicating total Levy charged for scheme paint • Levy charge will be clearly visible on invoice separate from unit paint cost • Paints in the scheme indicated on invoice • Levy charge incurs GST

11. Levy - Retailer • We anticipate that the Retailer • Will pass the Levy through to the consumer • Promote the scheme through ‘in-store’ advertising with support from PaintCare • Become a ‘touch point’ for the consumer on the scheme backed up PaintCare support

12. Levy – Consumer • It is anticipated that Retailers will pass through Levy to end consumerensuring a ‘user pays’ model • Further ‘Willingness to Pay’ (WTP) focus groups to be conducted • WTP learnings to be fed into communication and broader PaintCare strategy

13. Levy - Free Riders • Over 90% of paint volume covered by participating paint manufacturers in the scheme • Scheme is Voluntary but…. • PaintCarebrand equity and awareness to encourage participation • Participating Retailers to work and encourage paint manufacturers & importers to join scheme • Active ongoing communication to all retailers/paint brand owners who are not engaged

14. Efficiencies • Cost and environmental efficiencies • Through a Voluntary Scheme: • actively create service provider competition (tenders) • investigate through R&D alternative end uses for waste • paint to drive better environmental and cost outcomes • continuously benchmark against world’s best practice

15. Governance • Scheme run by PaintCare (not-for-profit) • Headed by a CEO, reporting to the PaintCare Board • Board consisting of key stakeholder representatives • Annual reporting / independent auditing

16. Timings • Implementation during latter half of 2015 pending: • Final scheme definition and operating model • Reclassification of Trade waste paint • ACCC levy review and approval • Waste paint collection points established per roll-out strategy

17. Key points • A Voluntary Scheme is the best option • Scheme to be funded by an ACCC approved Levy • Stakeholder engagement and participation is key tothe success of the PaintCare program • We seek your ongoing feedback, questions and input

18. Contact Details Mr Richard Phillips Executive Director Australian Paint Manufacturers’ Federation Phone 02 98761411 richard.phillips@apmf.asn.au