Internal Workings of Existing TPO’s Product Care: “Creating a national program ---

1. Internal Workings of Existing TPO’s Product Care: “Creating a national program --- one province at a time” Mark Kurschner – Product Care Association

2. About Product Care Association Overview: • Certain provinces have regulations requiring “producers” of “designated materials” to have a consumer take back system • PCA is an association of producers • Producers (or sometimes retailers) pay PCA fees • PCA manages paint and HHW stewardship programs

3. About Product Care Association • Multi material • Multi provincial • British Columbia – paint (1994), flammables, pesticides and gasoline (1997) • Nova Scotia: paint (2002) • Saskatchewan paint (2006) • more provinces in development

4. About Product Care Association • not-for-profit • >100 Industry members • Membership divided into sectors by material type • Board of 10 members, industry only, sector appointed

5. What is HSW? Paint is the predominant material in the Household Special Waste group (excluding oil, batteries) Paint

6. How the program works BC Program • admin./finance • collection • transportation • processing • recycling/disposal • communications

7. BC Program • admin./finance • collection • transportation • processing • recycling/disposal • communications • Members are manufacturers, major retailers (brand owners and first importers) • Members report sales to PCA and pay eco fees based on material and container size (e.g $0.40 for gallon of paint) • Members are subject to audit • Risk management is managed through insurance, reserve funds and good operating practices

8. BC Program • admin./finance • collection • transportation • processing • recycling/disposal • communications • depot system – 120 locations, mixture of contracted municipal, non-profit and private sites. • Program supplies collection bins. • Paint exchange program.

9. BC Program • admin./finance • collection • transportation • processing • recycling/disposal • communications Contracted trucks visit depots, dropping empty bins, pick up full bins and bring to central facility

10. BC Program • admin./finance • collection • transportation • processing • recycling/disposal • communications PCA manages the sorting and bulking facility, serving entire province of 4 million people

11. BC Program • admin./finance • collection • transportation • processing • recycling/disposal • communications Bulked materials are shipped for recycling, reuse, disposal to approved contractors

12. Consumer brochures • via 4000 retailers • via municipal distribution • recycling hotline • web page. • The message to consumers: • Buy what you need • Use what you buy • Dispose responsibly Objective: Reduce leftovers to 0% while increasing recovery to 100% BC Program • admin./finance • collection • transportation • processing • recycling/disposal • communications

13. Stewardship in Canada: • Beverage container programs: • Industry managed (BC, AB, QC, NB) • Gov’t agency managed (SK, NF, NS) • Voluntary programs (AB dairy, SK dairy) • Packaging/papers: industry managed (ON, QC pending) • Used Oil – industry managed (BC, AB, SK, MB, QC) • Tires: retailer/gov’t managed (all provs. except ON) • Paint/HHW: (BC, QC, NS) industry managed • Ewaste: (AB) ARMA manages • Pharmaceuticals (BC, AB) – industry • Car batteries (BC, PEI) – gov’t managed • Rechargeable batteries – voluntary program

14. Stewardship Programs in Canada

15. Internal Workings of Existing TPOs Factors influencing TPO structure: • Who regulates?: Federal or provincial jurisdiction • Product Type and product definition • Who is the Obligated party: manufacturer, distributor, retailer, or ? • Regulatory design • Government role vs. industry role • Enforcement system

16. Regulatory Jurisdiction The challenge: • In Canada, provinces have jurisdiction over waste management • Individual provinces pass regulations • Results in patchwork/checkerboard • Creates efficiency/compliance challenges for industry

17. Regulatory Jurisdiction Regulations vary in each province by: • Product definition • Definition of obligated party • Establishment of a multi material or supervisory board • role of gov’t, role of industry in managing program • Other: • Municipal role, if any • Stipulations re board composition (e.g municipal or NGOs) • Requirements to use certain infrastructure (e.g. existing depot system) • Product management (e.g. processor must be in the province, no incineration etc.)

18. Product Type and product definition Product type influences program design • Tires, used oil, car batteries  return to retail works well • Paint/HHW/ewaste  depot system works well

19. Product definition • Harmonized product definition (across jurisdictions) essential for ease of compliance and administration • Then producer administers same list of products in every jurisdiction • In Canada, a standard for definition of HHW has now been developed, CSA Z752, can be referenced in regulatory definitions

20. Who is the Obligated party (to pay fees)? • Distribution hierarchy approach: Manufacturer, but if not in jurisdiction, then brandowner, if not then distributor, if not then retailer • Variation: First importer/seller approach • Variation: let industry program decide via “rules”, obligated party must have a “commercial connection” • Retailer via tax return

21. Some categories of regulatory design: • File approved program(s) otherwise “return to retail” BC, QC, NS for paint • File an approved program (individually or collectively) • No fees stipulated in reg’n, but fees paid to association • Prescribed default reqs: return to retail (or “near retail”) must meet minimum prescribed standards, may be required to accept all brands (what about mail order/internet sales?), must manage collected material and report. • One mandated program only (AB, ON) all producers must pay fees to approved program whether or not a member (in Ont. have option of Independent Stewardship Program) • Special tax collected at retail - Gov’t managed Used tire programs, battery programs

22. What is the Government role, what is the industry role? Variations: • Gov’t supervisory role, Industry funds and operates program, gov’t enforces compliance (e.g. BC paint program, used oil programs) • Gov’t establishes “multi material board” to supervise, industry funds and operates programs, gov’t enforces (e.g. Ontario blue box) • Gov’t establishes gov’t agency to operate programs, industry funds, gov’t enforces (e.g. SK and NF beverage container programs) • Gov’t collects retail tax to fund program, manages program by contract (all tire and battery programs)

23. Who enforces? • In “approved program” approach, the issue of payment is between the program and its members, however non members subject to prosecution by gov’t for non compliance with reg’n • In “one program” approach, gov’t has greater role in enforcement for any non payers • Related questions: • Is the “producer” in the jurisdiction? • Can the reg’n be enforced outside of the jurisd’n? • What presence in the jurisdiction is needed? Building? Address? Sales representative?

24. Industry wish list to gov’t • Harmonize definitions/regulations with other provs. • let industry manage the program, gov’t’s role is to regulate/supervise • Limit the role of multi material boards – supervise not operate • Do combine requirement for local economic development (e.g. mandatory in-province processing) • Modify related waste management regulations e.g. transportation of dangerous goods, to allow programs to operate efficiently • Encourage municipal collection role, gives citizens “one stop”, the infrastructure is often already there • Encourage municipalities to allow depots outside of industrial zones • Don’t worry about the finances: industry itself does not want high fees or cross subsidization • Do not impose requirement for multi stakeholder board composition, boards are for managing, not for consultation • Provide effective enforcement system

25. Summary of Product Care’s approach as a TPO • provide “universal adaptor” and “one stop” for members. • Strive for harmonized fees, product lists, common audits. • Adapt to existing infrastructure where possible • Actively manage programs to achieve efficiencies • In-source, out-source services where beneficial • Multi sector governance model • Centralized administration • Work with other programs to achieve synergies

26. Program Performance in BC program • Industry management leads to program efficiency • In BC paint/HHW program: • Volumes have increased steadily • Per unit and total program costs have decreased • Eco fees have never increased and have reduced in many categories

27. Thank you !! Contact info. Mark Kurschner Product Care Association 604 592 2972 x 201 mark@productcare.org