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Steward & Stakeholder Consultation: Update on Registration and Governance

This consultation provides an update on the registration process for stewards and discusses governance issues. It also addresses market development and preliminary fees for 2005.

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Steward & Stakeholder Consultation: Update on Registration and Governance

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  1. August 31, 2004 Steward & Stakeholder Consultation TOPICS: Update on Stewards’ Registration Governance & Market Development: Phase II Preliminary Stewards’ Fees for 2005 Slide 1

  2. Consultation Process • Two phased consultation to address issues identified in approved Blue Box Program Plan (BBPP) • governance structure • market development • Phase I – Round Table Discussion held July 15 • Circulated discussion notes to registrants for accuracy • Posted notes for comments from all stakeholders • Received comments Slide 2

  3. Phase II Considering Options: • Seek opinions on issues in approved BBPP only • Timing of “enhancements” requested by Minister; potential impact on fees unknown Slide 3

  4. Today’s Objectives • Inform stewards about key activities of the organization • Ensure fee setting is transparent • Request feedback on matters before the Board of Directors • Fulfill requirements of approved BBPP Slide 4

  5. Today’s Agenda - Morning Slide 5

  6. Today’s Agenda - Afternoon Slide 6

  7. Today’s Instructions • New participants from all stakeholder groups • 2nd audience listening on-line • Those on-line: • we’ll note the number as we change the slide • e-mail questions/comments  from your regular email program  to the address below info@stewardshipontario.ca • Webcast available in archives – 180 days Slide 7

  8. Update on Stewards’ Registration Gordon Day Slide 8

  9. Update on Stewards’ Registration • Summary of steward reports to date • Summary by sector categories • Compliance & enforcement procedures Slide 9

  10. Summary Of Steward Reports* • 2,484 organizations have registered • 1,416 declared as stewards • 481 Blue Box Waste (BBW) but under $2 million • 587 registered as “no BBW” • Reported weight: 75.6% of projection/basis for setting fees • Reported fees: 90.2% of projection/basis for setting fees * As of August 20 Slide 10

  11. Still Outstanding • Adjustments to stewards submissions (<50) • Registered, but have not reported (300) • No response to notification letter (2,000) • New steward notifications (400) Slide 11

  12. Summary of Reported Stewards Slide 12

  13. Compliance Procedures – 4 Stages • Stage 1 – Notification of Potential Stewards • Stage 2 – MOE Confirmation Letter • Stage 3 – MOE Enforcement • Stage 4 – Stewardship Ontario Audits Slide 13

  14. Stage 1- Notification • First class letter to all identified potential steward organizations in January • Phone calls to key potential stewards (Top 300) • Thorough review & paring of original list • Follow-up phone call (call centre) to all non-respondents in May/June • Final warning letter part of procedures before MOE Enforcement Slide 14

  15. Stage 2 – MOE Confirmation Letter • Primary purpose to confirm legitimacy of Stewardship Ontario (feedback following call centre activities) • Supported by MOE Enforcement • Mailed August 30th with supporting Stewardship Ontario instructions • Letter targeted at the outstanding notified & registered potential stewards Slide 15

  16. Stage 3 – MOE Enforcement • MOE recruiting & training two dedicated enforcement officers • Preparing 2-3 test cases for enforcement procedures • Stewardship prepares & transfers file of evidence & contacts • Once enforcement procedures begins, MOE proceeds to charging Slide 16

  17. Stage 4 – Stewardship Ontario Audits • Initial advisory group meeting set for September 1st • Members include RCC, CCGD, FCPMC, LCBO, Refreshments Canada, BDO Dunwoody • Decision to be taken on percent of stewards & percent of reported quantities to audit • Target start date is October Slide 17

  18. Questions & Comments info@stewardshipontario.ca Slide 18

  19. “Governance” Derek Stephenson & Dennis Darby, Chair of the Board Slide 19

  20. Process to Date Future Structure Committee reviewed: • Slides presented at July workshop & webcast • Notes on Round Table discussions circulated for review & comment by participants • Comments/submissions received following workshop & notes posted • Draft discussion paper prepared Recommendations of Committee approved by Board of Directors for purposes of consultation Slide 20

  21. Discussion Paper Included: • Overview of consultation process & timing • Profile of registered stewards • Key functions of Stewardship Ontario & key stakeholders identified • Key governance issues to be addressed • Broad options for structuring board • Copies of all background material Slide 21

  22. Options Identified • Board consisting of stewards only with voting allocated on basis of: • fees only • modify existing board to reflect fees paid by sector, or • combination of fees paid & quantities of Blue Box waste reported • Board consisting of stewards & representatives from industry supply chain • Board consisting of stewards, suppliers & other stakeholders Slide 22

  23. Principles Identified • Structure must fairly represent members who pay fees • Basis for setting fees must be transparent • Information used to set fees must be accessible • Board must be accountable to membership Slide 23

  24. Preliminary Recommendation Voting representation for board by stewards only Rationale: • WDO serves as multi-stakeholder body • provides oversight of activities of Stewardship Ontario • Other affected stakeholders have successfully made their views known to WDO, the Government of Ontario & Stewardship Ontario Slide 24

  25. Preliminary Recommendation Rationale, continued: • Key issue for AMO is calculation of annual net cost of Ontario’s Blue Box program • input is assured through equal representation on MIPC (which undertakes this work) & through their role on WDO • Need remains for an industry-only body to manage obligated stewards’ affairs • Effective mechanism required for input from other key stakeholders • NGOs, waste management companies, suppliers Slide 25

  26. Current Board Structure • Founding Board of Directors represent 7 existing industry sectors represented on WDO expected to be designated stewards Slide 26

  27. Size & Composition of Revised Board • 10 - 15 members with representation by industry sector through delegate steward or trade association Slide 27

  28. Board Sectors • Should be weighted to reflect fees paid by sector • Preliminary weightings based upon stewards reports to date: Slide 28

  29. Review Sectors Annually • Adjust defined sectors & sector weightings if the relative percentage of fees paid by any sector varies by ± 10% • Staggered appointments for individuals to board would be for three year periods • Board restructuring through election by membership at Stewardship Ontario’s 2005 Annual General Meeting Slide 29

  30. Feedback Appreciated On… • Proposed board governance model • Sector weightings • Inclusion of “other” industry sectors • Options for other stakeholders to have access to board • top-to-top meetings with industry sectors • committees of board • observers • Size of board Slide 30

  31. Next Steps • Review of comments by Future Structure Committee • by September 7 • Review & decision of board on September 14 • Forward to WDO Slide 31

  32. Questions & Comments info@stewardshipontario.ca Slide 32

  33. Market Development Geoff Love Slide 33

  34. Market Development Backgrounder 3 Part Presentation 1) Review 2003 Blue Box Recovery Rates 2) Present Market Development planned activities for 2005 & impact on fees 3) Invite comment for final input to Stewardship Ontario Board of Directors Slide 34

  35. Background • Discuss market development activities as per approved Blue Box Program Plan (BBPP) – i.e. 50% Blue Box recovery by 2006 • Recognize that Minister’s request for 60% diversion of Blue Box materials by 2008 will likely require: • additional market development • enhanced recovery efforts (i.e. beyond approved plan) Slide 35

  36. Summary of 2003 Residential Blue Box Recovery by Material Category (tonnes) Slide 36 * Including polycoat

  37. Blue Box Recovery Summary • Approved BBPP set target of 50% recovery by 2006 • system needed addition of about 35,000 tonnes/year of curbside recycling from 2002 to 2006 (i.e. total of 145,000 tonnes) • In 2003, almost 53,000 more tonnes were recycled • up from about 33,000 more tonnes in 2002 • Generation of obligated printed papers & plastics are down based on additional waste audit information & in the case of ONP, stewards’ reports • Projected Blue Box recovery rate has increased from 46.1% in 2002 to 53% for 2003 • Steward reports & an aggressive audit program (through the E&E fund) will be used in 2005 to continue to improve accuracy of Blue Box generation estimates Slide 37

  38. Three Part Market Development • The BBPP contains a three part market development program to meet material specific targets: • mixed glass, • “green” procurement & • “other material” plans Slide 38

  39. Glass Market Development Investment Program Two Glass Funds • REOI (longer term) 2. Glass Business Planning/Feasibility Study: “Glass Diversion Fund” (nearer term) Slide 39

  40. Glass Market Development Investment Program 1) REOI (longer term) • Up to $2 M (from glass Stewards) for 2004/05 • Initiating meetings with GTA municipalities re: mixed glass tonnes available • Detailed RFP for qualified applicants (fall/winter) Slide 40

  41. Glass Market Development Investment Program 2) Glass Business Planning/Feasibility Study: “Glass Diversion Fund” (nearer term) • $500K business planning & feasibility study fund to support projects up to $25K (matching funding basis) e.g. local investment opportunities • Funding guidelines now posted on Stewardship Ontario website - first project funding expected in fall 2004 PROGRAM GOAL - stabilize markets, higher value uses, reduce net costs by at least $10/tonne focused on GTA/Golden Horseshoe tonnes Slide 41

  42. Heard at July Consultation • Five written responses to July 15 workshop materials: 1 steward; 4 material suppliers • Common comments: • Quality control & increased recovery are of higher importance for most materials than market development • Need for regular “state of the market” meeting for all stakeholders • Limited interest in green procurement • Concern regarding Stewardship Ontario’s role on the issue of cooperative marketing • Two targeted materials requiring market development are mixed broken glass & plastics #3 to #7 Slide 42

  43. Stewardship Ontario Green Procurement Plans for 2005 • BBPP commits Stewardship Ontario to a business planning process that examines potential benefits of launching a new green procurement program • Steward reaction to research to date has been neutral at best • Stewards want to see tangible benefits before making a major investment • Whatever might be done must be voluntary in nature • Not seen as a 2005 high priority given other pressures & current overall system performance against 50% target Slide 43

  44. Green Procurement Recommendation • Focus procurement activities on tangible opportunities (e.g. examine/promote glass-in-aggregate applications developed through the glass fund) • Participate in MOE & /or WDO – led procurement discussions that may result from Minister’s 60% goal • On-going business planning to examine potential benefits & costs Slide 44

  45. “Other Material” Market Recommendations • No substantial new “Other Material” market development activities recommended until 2005/2008 targets are established by Minister • Initiate planning for film/other plastics REOI in mid 2005 (for 2006 fees) = $100K in 2005 fees • Develop “Enhanced Recovery” program plan in 2005 (for 2006 implementation) based on detailed analysis of February 3, 2004 datacall results • Priorize “least cost next tonne”/enhanced recovery projects though E&E Fund in 2005 Slide 45

  46. Questions & Comments info@stewardshipontario.ca Slide 46

  47. Lunch Break Slide 47

  48. Preliminary Stewards’ Fees for 2005 Guy Perry Slide 48

  49. Overview • Key Factors affecting Fees Overall • 2005 Blue Box program costs • Generation & reporting of Blue Box waste • Board decisions for 2005 fee setting • Preliminary 2005 fee calculations • Relative changes for each material • Next Steps Slide 49

  50. Background Information • February 2003 Blue Box Program Plan (BBPP), particularly, • Section 9.10 - Setting Fees • Appendix XI - Pay In Model, and • Appendix IX - Cost Allocation Principles • On the Stewardship Ontario website • March 2 Presentation on preliminary fees for 2004 • Cost Allocation Study - Final Report, March 2004 Slide 50

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