By Rafael Vergara, Felipe Meneses and Bernardita Larrain
The Extended Producer Responsibility (EPR) practice in Latin America is still in a fledging stage, however, it is moving steadily away from voluntary approaches towards more demanding and consistent EPR laws. Countries like Colombia, Costa Rica and Chile have been the first in the region to introduce EPR as a policy approach that seeks to address the problems of pollution and overflowing landfills by implementing new alternatives for waste management that include every actor involved in the life cycle of a product. It is vital that countries with few or no EPR frameworks take note of what other countries have attempted in order to learn from their experiences and create state programs that establish a framework for strong national and even regional EPR regulation.
I. GENERAL BACKGROUND
The management and final disposal of waste, as well as the costs associated, has become an increasing concern for countries all around the world. Concepts such as waste collection, re-use, recycle, post-consumption, co-processing, principles of product stewardship, have become the starting point for the evaluation of waste management systems and for the development of sustainable programs, leading to numerous state laws and manufacturer policies, some more advanced than others.
In this regard, a variety of environmental management instruments have been created, and the EPR is one of them. The EPR consists of a policy approach that requires manufacturers to assume the costs of recycling or ensure a safe disposal of products that are discarded by consumers. EPR aims to reduce economic and environmental costs of waste management by extending the responsibility of the producers for their own products (including product packaging) to include the full social costs of waste management, including the environmental impact of waste disposal1. The central idea of EPR is to transfer the costs associated with waste management from the public sector (handled mainly by municipalities and state governments) to producers and manufacturers, based on the grounds that the collection and disposal of almost every product that is no longer wanted by the consumer, is generally financed on behalf of broad taxation or the use of charges levied on households and/or business. Municipal waste management programs often end up saddled with the burden of dealing with all sorts of waste2, which in many cases is inappropriate, considering the characteristics and functions of waste management programs.
II. EPR IN EUROPE
Since the 90s, Europe has played an active role in the development and establishment of EPR laws and programs. Germany was the first country to implement an EPR program, in 1991. Following this example, Belgium, Ireland, United Kingdom, Netherlands and 40 other countries continued this initiative that lead to a recycling rate of 25% in 2000, which grew to 43% in 2013.
The Directive 2006/12/EC of the European Parliament and of the Council of April 5, 2006, established the legislative framework for the handling of waste in the European Community. This Directive defines key concepts such as waste, recovery, recycling and disposal, and outlines requirements for waste management, in accordance with the polluter-pay principle which states that the cost of waste disposal must be assumed by the holder, previous holders or manufacturers.
The Directive 2008/98/EC introduces the “polluter-pays principle” and the “EPR”, so that the Member States may take legislative and non-legislative measures and waste management and prevention plans, to ensure that any natural or legal person who professionally develops, manufactures, processes, treats, sells or imports products (producer of the product) has extended producer responsibility.3 This Directive includes two new recycling and recovery targets to be achieved by 2020: (i) 50% waste preparation for re-use and recycle of determined waste material from household and other similar sources, and (ii) 70% waste preparation for re-use, recycle and recovery of waste from constructions and demolitions.
III. EPR IN THE UNITED STATES
The United States has also been an active participant in EPR frameworks, with an evolution of EPR programs beginning in 1991. In the following decades, more than 70 EPR laws were enacted throughout the country for specific products, and manufacturers implemented voluntary programs for the collection and recycle of products discarded by consumers. Additionally, new coalitions of various interested groups established effective EPR programs that have led to the enactment of 40 new laws, within the period of 2008–2011. Maine, Minnesota, Vermont, California and New Jersey are some of the states that stand out as EPR leaders. Nevertheless, EPR is still considered an underdeveloped policy in the United States, where federal lawmakers have not embraced it completely, except to remove some barriers to state-level initiatives.4
There is a persistent lack of consistency regarding criteria for the development of new EPR programs that has impeded the broad development of EPR laws, such as post evaluation programs, overall cost of waste management, reduction in the use of resources and decrease of the public sector burden.
IV. EPR IN LATIN AMERICA
During the past years, solid waste management has become a key issue for the environmental agenda in Chile. Waste production has increased during the last decade, and its management and final disposal has created high environmental, social and economic costs for municipalities which generally either provide these services directly or contract private waste collection companies.
According to a study conducted by the Chilean National Environmental Commission5, in 2009, Chile produced an estimated 16.9 million tons of solid waste, of which 10.4 million tons came from industrial waste and 6.5 million tons came from domestic waste. Of the domestic waste, 33% was potentially recoverable materials. This study also classified Chile as one of the countries with highest rates of waste generation in Latin America with a recycling rate of only 10% of its annual solid waste production.
Chilean authorities recognized the need for new mandatory frameworks to manage the recovery, recycling and final disposal of waste.
In 2005, the Governing Board of the National Commission on the Environment (“CONAMA”) approved the Solid Waste Management Treatment Policy, with the purpose of ensuring that solid waste management was carried out with minimum risks to health and the environment, promoting a comprehensive view of waste and ensuring a sustainable and efficient development. For the implementation of this new policy, executive secretariats were created at both the national and regional levels.
Likewise, in 2005, the Organization for Economic and Co-operation Development (“OECD”) established a series of recommendations to promote the recovery of waste in Chile. In August 2013, a bill was sent to the Congress, which approved it in April 2005 and concluded with the enactment of Law No. 20.920 (“EPR Law”), which establishes the framework for Waste Management, Extended Producer Responsibility and Promotion of Recycling, published in the Official Gazette on June 1, 2016.6
Law No. 20.920 establishes the framework for Waste Management, Extended Producer Responsibility and Promotion of Recycling, with the objective of decreasing the generation of waste and requiring re-use, recycling and valuation, through the EPR and other management instruments.
The EPR is understood as a special regime of waste management, under which producers are responsible for the organization and finance of the end-of-life management of waste that results from the development, manufacture, process, sale and import of priority products7. Additionally, the producer must comply with a series of obligations determined by the EPR law, such as registration in the Registry of Emissions and Transfer of Pollutant, provision of information to the competent authorities8, completion of collection and valuation goals and other obligations associated to them and assurance that waste management is executed by authorized entities, among others.
The EPR regime considers different actors9 which are identified throughout the life cycle of the products, and are forced to comply with particular obligations, according to their participation in the life cycle of the product. Nevertheless, the EPR law goes deeper into the obligations that manufacturers and producers will have and the performance goals that they must achieve throughout their operations, in compliance with the management systems instituted by the EPR law. Likewise, the EPR law enables the establishment of agreements with authorized waste managers, municipalities and associations of municipalities in order to perform selective collection, waste separation, establishment and operation of reception and storage facilities, among other actions that ease the implementation of this law.10
Currently, the complete enforceability of Law No. 20.920 is subject to the enactment of six regulations regarding: (i) Procedural Regulation; (ii) Cross Border Movement of Waste Regulation; (iii) Recycling Economic Fund Regulation; (iv) Modification to the Urbanism and Construction Ordinance Regulation; (v) Regulation for Sanitary Authorizations and (vi) Modification to the Registry of Emissions and Transfer of Pollutant Regulation.
The first three regulations have already been submitted to open consultation, and are currently undergoing the final two procedures required for their enactment. The last three regulations are being formally processed by the Ministry of the Environment. According to Law No. 20.920, these regulations should enter into force by June 1, 2017.
B. OTHER COUNTRIES IN THE REGION
Colombia has enacted Law No. 1.672/2013 which establishes the guidelines for the adoption of a public policy for the integral management of electrical and electronic equipment waste. The law is applicable to the complete life cycle of the product, including the different actors involved from the development of the product to its final disposal. The producer is bound to establish a collection and waste management system, administrate and finance it, guarantee the correct management with authorized companies, properly inform its consumers of the parameters for an adequate return of the product and develop informative campaigns.
Likewise, Colombia has developed post-consumer programs for used batteries, medicine, computers and printers, fluorescent light bulbs, used tires and pesticide containers, regardless of their classification as solids or hazardous, and a co-processing program for cement kilns, governed by the atmospheric emission standard, Resolution No. 909/2002.
The Uruguayan legislature passed Decree No. 182/013 which establishes the Regulation for the Environmental Adequate Management of Industrial Solid Waste and Similar Wastes. This regulation sets a liability for damages to human health and the environment caused by solid waste management, despite the authorizations and approvals granted under this regulation.
There is also a current discussion on the initiative to legislate, on a general level, all waste categories.
Paraguay has passed Law No. 3.956/2009, the Management of Solid Waste Regulation of the Republic of Paraguay. This regulation, is intended to guarantee the management of solid waste without jeopardizing the public’s health or the environment, prioritizing the reduction of waste production and promoting new planning and control programs that encourage efficiency and safety in solid waste management activities. The liability established in this regulation is a joint accountability, when breaches to this regulation have been committed by a legal entity. In this scenario, the managers, administrators, directors and executives will also be responsible for infringements committed.
Mexico has enacted the General Law for the Prevention and Management of Waste (GLPMW) and the Law of Solid Waste of the General District. The GLPMW is the former regulation for the stipulations established in the Constitution of Mexican States which refers to the protection of the environment through the prevention and management of waste throughout the national territory. The provisions of the GLPMW are matters of public order and aim to guarantee the constitutional right of every person to live in a healthy environment and promote sustainable development through the prevention of waste generation, valorization and management of hazardous and solid waste. The liability system imposed in the GLPMW is for damages caused by contamination and those responsible for the generation and management of solid and hazardous waste must take remedial actions as stated in the GLPMW.
B.5. Costa Rica
Costa Rica enacted Law No. 8.839/2010 regarding Waste Management, which seeks to rule the waste management procedures and promote the efficient use of products before they turn into waste. The liability enforced in this law is from an EPR for manufacturers and importers of products that produce waste, which requires a special management program as determined by the Health Ministry of Costa Rica. In these situations, producers and manufacturers are obliged to adopt recovery, re-use, recycle and valuation measures, participate in management programs already established by the sectorial area affected or by the type of product that caused the waste, embrace a restitution program for consumers to return the products they no longer want and establish strategic partnerships with municipalities to improve collection and management systems.
Brazil established a National Policy for Solid Waste through Law No. 12305/2010, which establishes the principles, main goals, instruments and guidelines for a complete management of solid and hazardous waste, as well as the accountability of producers and government authorities and the economic instruments that are applicable.
This law establishes a joint liability considering the life cycle of the products, where each stage of the product’s development will consider the accountability of the corresponding actor, who must strictly comply to the different obligations stipulated (producer, importer, supplier, final consumer and public authorities in charge of urban cleaning).
Peru has enacted Law No. 27.314, corresponding to the General Law of Solid Wastes, which seeks an integral and sustainable management of solid waste. In this regard, the liability mechanism introduced by this regulation is of an EPR for companies that produce, import and commercialize mass consumer goods and consequently contribute with an important quantity of waste generation. Likewise, municipalities also have a joint accountability, for the execution of waste management programs.
V. FINAL COMMENTS
The elaboration of EPR programs in every country will reflect local and national realities that differ from one another, and will necessarily include cultural, economic, social and political elements. Despite this, the broad experience in Europe and United States in EPR programs is relevant to countries in other regions, including Latin America, to learn from and apply practical experiences.
Environmental frameworks concerning waste management have been developed in Latin America with regulations that define basic concepts, such as waste, recycling, re-use, recovery, management programs, environmental risks, sanitary landfills, incinerators, costs associated to waste management, contamination and negative environmental effects, etc. From this starting point, the unique challenges faced by each nation have led to the development of new and varied policies, which include different liabilities for actors in the life cycle of waste generation.
Still, the majority of Latin-American countries have implemented liability programs for the different actors of the life cycle of products and their waste generation. EPR has had a strong application especially in Colombia, Costa Rica and Chile, seeking an end to contemporary contamination and environmental contingencies associated with landfills and finding new alternatives for waste management. In this context, EPR programs must include collaboration between local and regional authorities to ensure the successful implementation of new management systems for priority product waste.
5 Levantamiento, Análisis, Generación y Publicación de Información Nacional Sobre Residuos Sólidos de Chile, por la Comisión Nacional del Medio Ambiente.
6 Furthermore, Chile’s current legal framework, which refers to solid waste management, contains the following regulations: (i) the Sanitary Code (ii) Law of Municipal Taxes, that refers, among other subjects, to municipal costs for the collection of solid household wastes and environmental and recycling programs; (iii) Municipal Law, which established the privative function of municipality of cleaning and ornament of the commune; (iv) Supreme Decree No. 685/1992 where Chile ratifies the Brasilea Agreement concerning the cross border movement of hazardous wastes; (v) Regulation of Sanitary and Environmental Basic Conditions of Workplaces, which refers to the conditions that must be present in the disposal of industrial liquid and solid waste in workplaces, and (vi) Regulation for Hazardous Waste Management, establishing safety and sanitary conditions within the generation, storage, transportation, treatment, re-use, recycle and final disposal of hazardous substances.
7 Law No. 20.920 defines a priority product as a substance or object that once transformed to waste, and considering its volume, dangerousness or presence of profitable resources, is subject to the obligations established under the EPR regime. Article 10 of Law No. 20.920 establishes the priority products that will be subject to the EPR which are the following: (i) lubricants oils; (ii) electrical and electronic equipment; (iii) batteries; (iv) containers and packaging; and (v) tires.
8 This information refers to (i) amount of priority products commercialized within the country, during the precedent year; (ii) collection, valuation and elimination activities performed during the same period; (iii) amount of collected valued and eliminated wastes, during such period; and (iv) inform whether the collection and valuation activities are performed individually or collectively.
9 Law. No. 20.920 recognizes the following actors: (i) consumer; (ii) industrial consumer; (iii) generator; (iv) manager or operator; (v) producer or manufacturer; and(vi) recycle agent.
10 Furthermore, this framework provides producers and other actors with support mechanisms which are related with environmental education and preventive awareness arising in the community, the establishment of faculties of local authorities to work together with EPR actors in the end-of-life products cycle, a recycling economic fund, joint collaboration with recycling institutions, specific normative regulations in sanitary and building matters for future receptions and storage facilities and a public information system available for the acknowledge of authorized producers, waste management systems, dealers and retailers of priority products, reception and storage facilities, compliance with collection and valuation goals and every necessary information established in the specific regulations that set forth the goals and obligations related to each priority product.
Rafael Vergara - Partner of Carey and co-head of the firm’s Natural Resources and Environment Group. His practice focuses on natural resources, mining, water rights, energy, environment, surface lands, project financing, and corporate and commercial law.
Felipe Meneses - Counsel of Carey’s Environmental Group. He concentrates his practice in environmental law, indigenous regulations and regulatory matters in general by advising in project development and environmental assessment, legal opinions, environmental audits, litigation, amongst others
Bernardita Larrain - Member of Carey’s Natural Resources and Environmental Group. Her practice focuses in environmental law, especially in project development, due diligence and Environmental Impact Assessment System, among others.