Three problems with the amendments to the Packaging Act

The Chamber of Commerce sent to the Ministry of the Environment its opinions regarding the draft act amending the Packaging Act, which will inter alia alter the obligation to audit packaging reports, impose recycling target for sales packaging and specify the scope of responsibility of packaging undertakings. The address composed by the Chamber of Commerce has been supported by five professional associations and NPO Eesti Taaskasutusorganisatsioon.

Possible abolishment of the obligation to audit packaging reports

Today, an undertaking that annually places on market more than five tons of packaging must have its packaging reports audited. Pursuant to the draft act prepared by the Ministry of the Environment, the audit control will no longer relate to the quantity of packaging placed on market. In the future, the Environment Agency will compose a sample of packaging undertakings by randomly choosing packaging undertakings that are be required to arrange an audit.

According to the Chamber of Commerce, the draft act gives the Environment Agency too much freedom to decide on the number of companies, whose packaging reports must be audited. Essentially, the draft act makes it possible for the Environment Agency to include in the sample all packaging undertakings or just a few packaging undertakings.

We made proposal to the Ministry to exclude from the Packaging Act provisions regarding auditing of packaging report. Auditing obligation has been in force for several years and packaging undertakings have improved their methodology of packaging reporting. Therefore, auditing obligation does not provide further value added, causing remarkable cost for companies instead. Implementing the proposal of the Chamber of Commerce would reduce administrative burden of ca 1,000 packaging undertakings and save companies the total of at least 2 million euros a year.

Packaging undertakings still need to be supervised, but this should be the obligation of a state agency, not auditors. If there are any significant reasons why state agency cannot execute supervision today, such issues should be solved, including necessary changes in legislation.

Draft act increases the costs incurred by packaging undertakings

By introducing the draft act amending the Packaging Act, the Ministry intends to set a recycling target for sales packaging. Currently, the state has set an aggregated recycling target for all packaging (transport packaging, grouped packaging and sales packaging), but individual target will be established for sales packaging in the future. As sales packaging constitutes remarkable percentage of domestic waste, Ministry intends to use this amendment to increase recycling of domestic waste.

For packaging undertakings, the introduction of recycling target for sales packaging would very likely lead to increased costs. This is due to the fact that, as a rule, recycling of a sales packaging is more expensive than recycling of other packaging. Such amendment may cause increase in fees paid by packaging undertakings to recovery organisations.

The Chamber of Commerce along with several other organizations do not support this amendment. Considering that the obligation to impose recycling target for sales packaging does not arise from EU directives and it would mean additional expenses for companies and the state apparently has no capacity to exercise control over the achievement of the target, the ministry should refrain from imposing such requirement.

There are other solutions for achieving domestic waste recycling target than establishment of recycling target on sales packaging. It remains unclear, why the Ministry of the Environment has chosen that particular one among a variety of solutions. Also, there is no impact assessment, although it represents an amendment with significant impact.

Responsibility of packaging undertakings needs more precise limits

Draft act introduces a new definition to the Packaging Act – the principle of extended producer responsibility. According to that, packaging undertakings must ensure handling of packaging and packaging waste of packaged goods placed on market and incur resulting costs. Packaging undertaking may choose whether to perform such duty individually or award relevant contract to a recovery organisation.

In its letter to the Ministry, the Chamber of Commerce brought forward several bottlenecks regarding the principle of extended producer responsibility. For example, we pointed out that law must prevent a situation, where local government, waste handler or another person collects and/or recycles packaging waste and demands compensation for costs incurred with regard to such operations by packaging undertaking or recovery organisation without relevant agreement between the parties. We also suggested including in the Packaging Act a principle that in the course of organising the collection of packaging waste, a local government must provide packaging undertakings with an opportunity to participate in the organisation of recovery of such waste in accordance with their market share. Otherwise, packaging undertakings are not able to meet legal requirements regarding the handling of packaging cost efficiently.

The Ministry of the Environment intends to enforce the amendments on July 5, 2020.

Other organisations that share the position taken by the Chamber of Commerce include:
Estonian Traders Association
Estonian Chemical Industry Association
Estonian Food Industry Association
Estonian E-Commerce Association
Estonian Plastics Association
NPO Eesti Taaskasutusorganisatsioon (ETO)