INSIGHT

What the Packaging and Plastics Bill means for you

By Nick Li
Food & Beverage Industrials Intellectual Property

In brief 7 min read

The Product Stewardship Amendment (Packaging and Plastics) Bill 2019 (Cth) (the Bill) aims to combat the use of single-use plastics in Australia by establishing a mandatory product stewardship scheme for manufacturers, importers and distributors. The content of the Bill in its existing form, however, may present some practical challenges and concerns for businesses from all sectors, which we outline below.
Anyone concerned about the potential unintended consequences of the Bill is encouraged to make submissions before the deadline of 13 December 2019.

How does this affect you?

  • The product stewardship scheme is aimed at reducing and eliminating the use of non-recyclable and non-compostable single-use plastics from packaging and from certain products.
  • The proposed measures, which include prohibitions of certain plastics within specified timeframes, imposition of labelling requirements and possible financial contributions, may present compliance challenges for affected industries.
  • As the Bill prescribes penalties for non-compliance, it is important for affected industry stakeholders to voice any concerns before the Bill is passed.
  • The Senate Committee is seeking submissions on the Bill until 13 December 2019. Clients from sectors using non-recyclable, non-compostable single-use plastics (including healthcare, pharmaceuticals and those dealing in fast-moving consumer goods such as food and beverage) should consider whether any of the concerns discussed below are likely to materially affect them, and make submissions addressing their concerns.

Who in your organisation needs to know about this?

Legal, and teams involved in new product design and packaging.

What do you need to know?

The Bill seeks to amend the Product Stewardship Act 2011 (Cth) (the Act) to establish a mandatory product stewardship scheme for manufacturers, importers and distributors of consumer packaging and certain single-use plastics. The scheme introduces targets, prohibitions, design and labelling requirements, and financial contributions in relation to packaging and products identified under the scheme.

The Act, in its current form, provides the Governor General with powers to make regulations imposing obligations on manufacturers, distributors, importers and other persons to reduce waste from products. To date, no regulations have been made under the Act. The Bill proposes to amend the Act and adopt targets based on the voluntary targets set by the Australian Packaging Covenant in 2015, and is similar in some respects to the EU Directive on the Reduction of the Impact of Certain Plastic Products on the Environment.

The targets proposed to be adopted are that:

  • all packaging used in Australia will be reusable, recyclable or compostable by 2025;
  • 70% of packaging used in Australia will be recycled or composted by 2025;
  • 70% of plastic packaging used in Australia will be recycled or composted by 2025;
  • all packaging used in Australia will include, on average, 30% recycled content by 2025;
  • problematic and unnecessary plastic packaging will be phased out through design, innovation or the introduction of alternatives;
  • by 2025, the consumption of single-use food containers and cups made of plastic will reduce by 25% compared to 2019 levels;
  • in relation to beverage containers besides cups:
    • from 2025, 80% used in a calendar year will be recycled in that year;
    • from 2023, plastic caps/lids must remain attached to the container during use; and
    • the creation of a national deposit scheme by 2021 that refunds at least 20 cents per container.

The Governor General may also make regulations prescribing additional targets.

If enacted, the measures in the Bill would only apply to constitutional corporations (ie entities incorporated in Australia).

Key measures

The Bill provides that the Governor General may make regulations requiring specified companies to take, or not to take, a specified action in relation to a specified product, provided the Minister has published a draft of the proposed requirements, considered any submissions received and is satisfied the requirements further the objects of the Act and are directed towards achieving the targets. This includes directing that specified companies must make a financial contribution towards the cost of raising awareness, disposing of, or cleaning up litter from food and beverage containers (including flexible material for packaging), balloons, sanitary products, wet wipes and cigarette filters, containing plastic.

The Bill also proposes to ban:

  • lightweight plastic carrier bags and products consisting of microbeads by January 2021; and
  • by January 2023:
    • single-use plastics in cotton buds, balloon sticks and connected rings;
    • non-compostable single-use plastics in straws, stirrers, cutlery, plates, bowls, dishes and kitchen utensils; and
    • expanded polystyrene and oxo-degradable plastic in single-use food or beverage containers.

Larger companies with annual turnover of $5 million or more would be required to submit a written report for the financial year (which will be made public by the Minister), setting out both the actions taken by the person to achieve the targets and the actions the member will take to achieve those targets.

The Bill imposes additional labelling requirements on sanitary products, wet wipes, balloons and cigarette filter tips containing plastic, which from 2021 would need to be labelled with a statement that the product is harmful to the environment if released or incorrectly disposed of.

The Governor General is empowered under the Bill to make further regulations to apply to more products, or to exempt certain products from the operation of the scheme. Consultation on draft regulations is required, and the minister must be satisfied the regulation is directed to achieving the targets before the Governor General can make such further regulations.

The Bill includes a tiered penalties regime for non-compliance, including penalties ranging from $4,200 for strict liability offences to civil penalties of $42,000 for each contravention.

Concerns for industry

Greens Senator Peter Whish-Wilson said of the Bill in his second reading speech:

… the Bill responds to the twin crises that are a result of our current approach to packaging and plastics: a recycling industry that is in disarray; and a torrent of plastic waste that is choking our oceans.

The content of the Bill in its existing form, however, may present some practical challenges and concerns for businesses from all sectors.

  1. The target that all packaging used in Australia will be reusable, recyclable or compostable by 2025 may be difficult to achieve. Particularly in the healthcare, pharmaceutical and food and beverage sectors, there may be non-compostable, non-recyclable plastic packaging, the use of which is necessary for safety or product functionality reasons. The Bill currently provides circumstances which may warrant certain products to be exempted from the prohibited plastics provisions: eg where the exemption is necessary to satisfy medical purposes or food safety requirements. We believe that those grounds should be extended to enable the Governor General to make regulations exempting specific products from the scheme as a whole if the Minister is satisfied of the relevant circumstances, such and applied to exemptions from the scheme as a whole.
  2. Notwithstanding the Minister must invite submissions from affected companies to make submissions on any proposed regulations prior to the Governor General formalising them, the Bill does not currently propose to make any of the Minister's considerations under the Act the subject of a 'reviewable decision' by the Administrative Appeals Tribunal.
  3. In cases where the Minister is not satisfied that a particular measure furthers the objectives of the Act or the attainment of the targets, that decision may be vulnerable to challenge by judicial review in court on application by interested groups alleging the Minister did not make their decision on proper grounds.
  4. The Bill does not require the Minister to redact or remove any commercially sensitive information from reports submitted by companies prior to their publication.
  5. The Bill does not apply equally to everyone doing business in Australia. Except for liability relating to prohibited plastics, the Bill does not otherwise apply to entities doing business in Australia that are not a constitutional corporation. One possible unintended consequence of this is that Australian businesses may be placed at a commercial disadvantage to competitors based overseas supplying products into Australia.
  6. For companies required by regulation to make a financial contribution, the Bill does not provide any means to review the basis on which the quantum of that contribution is calculated.

The aim of the proposed legislation (in the words of Senator Whish-Wilson) is to 'force industry to act' to reduce non-recyclable, non-compostable single-use plastics. However, it appears much of the implementation will be effected through the making of regulations. Accordingly, businesses that may be affected by the Bill should consider whether the scheme – as proposed – will have an unintended and significantly adverse impact at a general level (especially in light of the issues outlined above), and continue to monitor this space for specific draft regulations if the Bill is passed.

Actions you can take now

  • The Environment and Communications Legislation Committee is currently receiving submissions on the Bill until 13 December 2019.
  • Any business concerned about the potential unintended consequences of the Bill is encouraged to make submissions before the deadline.