Recycling the recycling industry could lead to major job losses
SA’s recycling industry is a huge success even by international standards, writes Hugh Tyrrell, so changing it could be disastrous
Major change is on the cards for the South African recycling industry. Following the department of environmental affairs call, the paper and packaging industry has submitted five-year plans on how they will take extended producer responsibility (EPR) for the end-use of their products, and how they intend to address transformation of the industry at the same time.
The department, meanwhile, is empowered by the National Environmental Management Waste Act of 2008 to introduce a tax on waste-generators, which it is seriously considering. This tax would profoundly affect the wider recycling industry, and especially the producer responsibility organisations (PROs).
These organisations, such as The Glass Recycling Association, Petco, Polyco, The Paper Recycling Association of SA/Pamsa, Collect-a-Can and others, were established by the raw material producers, reprocessors and brand owners, which pay a regular levy to their PROs to support and promote the recycling of their respective material packaging. These PROs have been the mainstay of the recycling industry in SA for decades, and have made this country’s recycling rates a success story worldwide.
For example, figures for the recycling of plastic PET beverage bottles reached 2.15-billion in 2017, or 5.9-million bottles collected for recycling every day. This is on a par with international standards. Recycling activity, driven mostly by industry, is supporting more than 60,000 jobs.
The vertical integration of the recycling PROs with their industry material producers and reprocessors (such as MPact, Sappi, ArcelorMittal and Consol) has, over the years, helped the recycling industry stabilise into a well-running system generating revenues for all participants, including those at the bottom of the pyramid, such as pickers on the streets and landfills ,as well as emerging entrepreneurs.
However, the government is always on the look-out for sources of revenue to add to the general fiscus, which has social grants and all the rest to pay. Revenue from a proposed waste tax will (according to the Treasury rules) not be able to be ring-fenced for the recycling economy.
This is being seen by industry as unfair. Worse still, if the tax hits the large producer companies and brand owners who fund the PROs, they are likely to resist paying a “double” tax — both the government tax and their own industry levy — to the PROs.
As a tax would be mandatory, the PROs could lose their main source of income and become inoperative. The country’s recycling industry infrastructure, which has taken decades to construct, may start to collapse like the proverbial pack of cards. Income and job losses would be huge, affecting a section of society that needs it most.
There are some sticking points on the department’s side in that, should the tax be introduced, collections from it by the Treasury and diversion back into the department will only start in a year’s time; that is, in the 2019-2020 budget. This may put the implementation of the tax on hold until then.
At present, the department is considering the industry waste management plans submitted on September 5. Their responses will be open for public comment from mid-December to mid-January.
The government’s decisions on whether to introduce a waste tax or continue with the industry’s own levy system, and how much the government and industry can work together for the development of recycling as a sector, are due to be announced on February 28 next year.
• Tyrrell is director of environmental communications and behaviour change consultancy GreenEdge.