Federal parliament has taken the first steps toward making companies responsible for the full lifecycle of their products by passing the Product Stewardship Act 2011 (the “Act”). The Act sets a legislative framework for a series of product-specific regulations which will introduce mandatory and non-mandatory schemes designed to improve the environmental, health and safety impacts associated with the product lifecycle.
Under the new legislation which commenced on 8 August 2011, a ‘liable party’ remains responsible for their products from the production phase to the disposal phase and must abide by either a voluntary, co-regulatory or mandatory product stewardship scheme. The Act is essentially designed to reduce wastage, improve recycling rates, eliminate hazardous substances and reduce the overall environmental impact of products as they reach the end of their useful life.
The Act also contains a number of civil penalty provisions and provides the Minister for Sustainability, Environment, Water, Population and Communities with certain investigation and enforcement powers.
The nature of the product stewardship legislative framework
The Act establishes three approaches to regulation:
- voluntary product stewardship schemes, involving non-mandatory accreditation programs designed to achieve the objectives of the legislation;
- co-regulatory product stewardship schemes, where ‘liable parties’ are required to join a product-specific scheme in order to meet certain targets and outcomes set by the regulations. Under a co-regulatory scheme, the liable parties have significant flexibility and control around the methods by which these targets and outcomes are achieved; and
- mandatory product stewardship schemes, where proscriptive regulations require particular actions to be taken in order to achieve set outcomes in relation to recycling, reuse, treatment or disposal of a class of products.
The meaning of ‘liable party’ will depend on the product-specific regulations, which are yet to be released. The Act makes it clear that a ‘liable party’ could extend to anyone who has at any time manufactured, imported, distributed or used a product in the relevant class in Australia.
The Act includes a series of enforcement and compliance provisions which impose civil penalties and empower the minister to issue infringement notices and to require enforceable undertakings from non-compliant parties. Importantly, monetary penalties apply to both individuals (up to $22,000 per infringement) and corporations (up to $110,000 per infringement).
The test case: The National Television and Computer Product Stewardship Scheme
The Federal Government has released a consultation paper on the proposed National Television and Computer Product Stewardship Scheme (the “Scheme”). This Scheme will be the first co-regulated product stewardship scheme created under the Act. The Scheme aims to increase the collection rates for televisions, computers and computer peripherals (not including mobile phones) from 10 percent to 80 percent by 2021.
Under the proposed Scheme, ‘liable parties’ will be “importers or domestic manufacturers of televisions, computers and computer peripherals”. Only importers who import more than 5000 units per year will be required to join the Scheme.
There is a considerable degree of uncertainty around who will qualify as an ‘importer’ for the purposes of the Scheme. The term is not clearly defined in the Act or the consultation paper. It is unclear whether this will be limited to the company that actually imports the goods, or whether this may extend to the company on whose behalf goods are imported (as is the case under the Competition and Consumer Act 2010). Further guidance may be provided in the regulations once they are made available.
If your company is likely to be substantially affected by the Scheme, it may be helpful to attend one of the public consultation meetings scheduled to be held over coming weeks. Details of these meetings are available here.
In any event, product manufacturers, importers and distributors should start to consider (particularly in relation to television and computer products):
- any current programs they have for the disposal and recycling of their products;
- their current position in the supply chain and the potential impact of the legislation on their business; and
- the broader approach to disposal and recycling of products in their industry and how this may be impacted by any future product-specific scheme.