Wednesday, 31 October 2007
Hospitality Association of New Zealand
Local Government and Environment Committee
Supplementary Order Paper on the Waste Minimisation (Solids) Bill
31 October 2007
Hospitality Association of New Zealand
Level 2, Radio Network House, Corner Abel Smith and Taranaki Streets
PO Box 503, Wellington
Phone: 04 385 1369
Fax: 04 384 8044
Members of the Select Committee
SUPPLEMENTARY ORDER PAPER ON THE WASTE MINIMISATION (SOLIDS) BILL
The Hospitality Association of New Zealand represents a diverse variety of New Zealand hospitality businesses including restaurants, cafÃ¯Â¿© bars, hotels, off-licenses and a wide array of short and long term accommodation providers.
The Association is voluntary and is primarily funded by membership subscriptions. Our membership of approximately 2350 plus members employ 11,610 full-time and 19,674 part time employees for a total of around 30,000 people. Approximately 83% of the Association's members are small businesses and owner operated. The Association asserts that this figure mirrors the wider hospitality industry.
There is also a perception that the Association speaks for and represents the interests of the hospitality industry as a whole.
The Association has considered the bill and makes appropriate comment on selected aspects of the bill.
The Association would like an opportunity to be heard before the Committee on its submission.
Bruce H Robertson
Hospitality Association of New Zealand
The Association acknowledges the significant changes that the SOP proposes to the original Waste Minimisation (Solids) Bill, in effect replacing the Bill.
Overall, the SOP is a significant improvement on the original Bill from the perspective of the Association and its members.
Removed from the original Bill are some of the more draconian measures including the creation of a Waste Minimisation Authority and waste control authorities, requirements for waste management plans for all businesses, public procurement policies and public reporting.
It is the Association's view that all of these measures would have increased the cost of doing business for a marginal, if any, real effect on waste minimisation per se.
The Association, in its original submission on the Bill strongly opposed the Bill and the Association still stands by all the comments made in our earlier submission.
It is the Association's view that:
The Supplementary Order Paper on the Waste Minimisation (Solids) Bill not proceed.
Without prejudice to the above recommendation, the Association, as originally recommended, further recommends that:
(a) If the Bill is to proceed, that a thorough independent cost/benefit analysis be undertaken and appropriate recommendations considered, including further changes to the Bill.
(b) Actions other than regulation be considered to help reduce waste, including education and advisory services and support for industry-led initiatives.
(c) Market driven and industry-led solutions for waste management such as voluntary product stewardship schemes be encouraged and supported, with monitoring of outcomes if necessary, or at the very least increasing significantly the scope for the involvement of individual businesses and industry organisations in any government-led waste minimisation strategies.
(d) Any government action aimed at reducing waste below normal business practice should be funded through general taxation and not through the imposition of levies.
The Association further recommends that:
(e) Any regulations and declarations made under the Bill be subject to a Regulatory Impact Statement and a Business Compliance Cost Statement along with a rigorous cost/benefit analysis.
(f) That more effort be made in sending individuals, households and businesses appropriate pricing signals for waste collection and disposal before considering interventions such as waste levies.
(f) That landfill waste levies not be introduced because they are not based on legitimate costs.
(g) That only in clear cases of market failure and where voluntary private initiatives have proved unworkable and ineffective should the Minister potentially use powers to declare products priority products and subject to product stewardship schemes.
(h) That clause 7(2) (b) of the SOP be deleted.
(i) That clause 18(1) (a) be deleted.
(j) That if a decision is made to proceed with the proposed waste levy, and then the whole of the proposed waste levy (excluding any collection associated costs) go into a contestable fund rather than 50% going to territorial authorities on a per capita basis.
1.0 General Discussion
1.1 The Association notes, with some comfort, that the SOP proposes significant changes to the original Waste Minimisation (Solids) Bill, in effect replacing the original Bill.
1.2 Overall, the SOP is a significant improvement on the original Bill from the perspective of the business community. Removed from the original Bill are some of the more draconian measures including the creation of a Waste Minimisation Authority and waste control authorities, requirements for waste management plans for all businesses, public procurement policies and public organisation reporting.
1.3 It is the Association's view that these measures would have increased the cost of doing business for a marginal, if any, real effect on waste minimisation per se.
1.4 The Association notes that the SOP provides for potentially wide use of regulations to cover a number of issues in the Bill and the Association is concerned that the SOP gives the Minister extensive powers to regulate provided that the Minister has obtained and considered the advice of the proposed Waste Advisory Board and the public has had adequate opportunity to comment.
1.5 Regulations often deal with relatively minor issues such as forms and fees which arguably do not need rigorous scrutiny. However, in the case of regulations provided for under the SOP, the potential for significant cost impositions on the business sector, as well as households for example as businesses pass on costs to consumers, cannot be ruled out.
1.6 The Association therefore considers that the use of any such regulations being subject to a Regulatory Impact Statement and Business Compliance Cost Statements alongside a rigorous cost/benefit analysis.
1.7 The Association also considers that more effort needs to be made in sending households appropriate pricing signals for rubbish collection and disposal and waste management.
1.8 Indeed, many councils still fund waste disposal out of general rates as a public good suggesting that there is little apparent connection between the amount of rubbish disposed of and the costs associated with disposal. Significant improvement in pricing is therefore required before considering interventions such as waste levies.
1.9 The Bill provides that the Minister will be allowed to identify Ã¢€Ëœpriority products' for a product stewardship scheme. While the declaration of priority products will require extensive consultation, in essence the Minister will be able to require certain products to have effective product stewardship schemes. This effectively means that the Minister will be able to require specific schemes to be developed including such directions on recycling, disposal bans and other such controls.
1.10 Before making regulations, the Minister will be required to take advice from the Waste Advisory Board, and adequate consultation with those affected by the regulations will need to have taken place.
1.11 While sounding reasonable, the Association is concerned about the draconian nature of this aspect in the SOP, including for example the Ministerial power to prohibit the sale of a priority product unless it has an accredited product stewardship scheme (clause 18(1)(a)).
1.12 And so while the emphasis may be on voluntary industry-led approaches to product stewardship, which the Association supports, the potential nevertheless exists for the Minister to introduce an increasing and perhaps onerous list of priority products and associated requirements.
1.13 The potential for this to add unforeseen costs to doing business in New Zealand must therefore exist and should be considered.
2.0 Comments on Specific Clauses in the SOP
Clause 3: Purpose
2.1 Waste cannot be completely eliminated, including recycling, without cost and utilisation of resources in doing so and while waste may be able to be reduced, beyond a certain point the marginal cost of taking action to minimise waste becomes progressively higher, while the potential returns from taking action become less.
2.2 Therefore, it pays for organisations and individuals to invest in waste minimisation strategies up to the point at which the marginal cost equals the marginal benefits of taking action.
2.3 Specifically, the costs of time, energy and money to make decisions as to whether to dispose of waste in landfills and what types of products may be recycled.
2.4 It therefore makes sense that in seeking to reduce waste that we should not waste resources by diverting them from other and more valuable uses.
2.5 The Association considers that this needs to be understood when making regulatory and legislative decisions in respect to waste management.
Clause 7: Declaration of priority products
2.6 In addition to the recommendation that regulations to administer the Bill's objectives be first be subject to a Regulatory Impact Statement and a Business Compliance Cost Statement, alongside a rigorous cost/benefit analysis, the Association considers that only in clear cases where voluntary initiatives have proved unworkable and ineffective should the Minister potentially use powers to declare products priority products. Provision for this check should be included in clause 7.
2.7 The clear message here is that the case for mandatory product stewardship schemes should not be made lightly, but based on sound science and reason.
2.8 In this respect, the Association is concerned that part of the criteria for the Minister to determine whether or not a Ã¢€Ëœdeclaration' should be made is if 'there is significant public concern about the nature or level of environmental harm arising from the product at the end of the product's life', see clause 7(2)(b)).
2.9 Public opinion provides absolutely no rationale for providing declarations unless such opinion is based on sound scientific data and unless the public are aware of rigorous scientific data providing them with independent information, they will not be in a position to make informed decisions on whether or not there is justification for any products to be declared priority products and subject to a product stewardship scheme.
: Regulations in relation to priority products and accredited schemes [and]
: Regulations in relation to products (whether or not priority products) and materials
2.10 These clauses are further examples of the wide powers given to the Minister to regulate in respect of priority products.
2.11 As previously outlined, the Association considers that the use of such regulations should only be applied when (a) there is a clear case of market failure and (b) where voluntary arrangements have been pursued and clearly failed.
Waste disposal levies
2.12 The Association is totally opposed to the adoption of a landfill levy as outlined in our earlier submission. Our arguments are not repeated here, suffice to restate that the economic justification for such a levy is not clear.
2.13 The Association further considers that clearer pricing signals should be provided to consumers in respect to the disposal of waste. Currently there are relatively weak pricing signals provided by territorial authorities and these signals often bear little, if any, resemblance to the actual costs of disposal.
2.14 Indeed, the clearer pricing signals and/or full-cost pricing of waste disposal, the better the incentives for individuals, households and businesses to make efficient decisions in respect of waste disposal. However, this should not be confused with waste levies (taxes) which are additional costs over and above the costs associated with disposal, which as stated, the Association does not support.
3.1 The Association is clearly of the view that any of the Bill's proposed measures should first be subject to a thorough and independent cost/benefit analysis and that the Bill reflect this in its purpose and objects.
3.2 The Association believes that mandatory product stewardship schemes and waste levies should not be considered given the potential costs to both producers and consumers, the potential for reduced consumer choice and the potential to reduce innovation in product development.
3.3 The Association however welcomes opportunities for involvement in a comprehensive cost benefit exercise to investigate the scope of any waste management problems and appropriate solutions.
3.4 The Association also considers that a more effective role for government is through education and support alongside business expertise in actual implementation of waste minimisation and management strategies.