Environment laws update of July 2015

This SA environment laws update of June 2015 includes municipal compliance, waste landfills, electronic waste, tyre recycling, and Waste Act charges.

Member of Parliament Ms J Steenkamp (DA) asked the Minister of Environmental Affairs; (1) What is her Department doing to ensure that local municipalities comply with their responsibilities to (a)(i) monitor and (ii) control, (aa) littering, (bb) the burning of waste and (cc) uncontrolled salvaging of waste from landfill sites, (b)(i) enforce and (ii) update by-laws to prevent (aa) littering, (bb) the burning of waste and (cc) uncontrolled salvaging of waste from landfill sites; (2) what steps is her Department taking against municipalities that are not complying with these requirements?

The minister of Environmental Affairs replied; “1. Regarding monitoring and control of littering, burning of waste and uncontrolled salvaging of waste from landfill sites, in terms of the Section 156 of the South African Constitution read with schedule 4, 5 and 6 of the same Constitution, functions of spheres of government are clearly elaborated.

“The national sphere of government is required to support Provincial and Local spheres of government where necessary. This support is not an equivalent to taking over the functions of any sphere of government.

“In case of total lack of performance, a full intervention to be followed can be through application of sections 100 and 139 of the Constitution of the Republic of South Africa. There is currently no need to apply these two sections of the Constitution.

“A full response was given recently when I responded indication the support we are giving to the Municipalities in full licensing all the landfill sites. The process of licensing landfill sites entails total management of landfill sites up to a point of post licensing and continued monitoring.

“National Department of Environmental Affairs is primarily mandated to regulate hazardous waste landfill sites, and Provincial Departments of Environmental Affairs (the Competent Authorities) are mandated to regulate general waste landfill sites.

“Municipalities are responsible for the provision of waste collection services as well as the monitoring and control of the illegal burning of waste and littering.

“All Waste Management Licenses issued by Competent Authorities are issued with strict conditions that are regularly monitored. The licensing conditions are clearly articulated in the regulations.

“The applicable conditions that are contained in the approved license to each waste disposal facility include the following:

The license Holder must prevent the occurrence of nuisance conditions or health hazards.

  1. No general and hazardous waste is burned at the facility
  2. The license holder must ensure a high fence is erected downwind to prevent litter being blown from the site.
  3. The license holder must make sure that the incoming waste is compacted and covered on a daily basis in order to prevent waste from being blown away by the wind.
  4. The license holder must ensure strict access control is enforced to control illegal or uncontrolled salvaging, so as to prevent people from illegally entering and litter in the landfill site.
  5. “Regarding enforcement on littering, burning of waste and uncontrolled salvaging of waste in landfill sites, the Environmental Management Inspectorate (EMI) (National and Provincial) is charged with the responsibility to conduct compliance monitoring and enforcement measures.

“The Department of Environmental Affairs has trained EMIs in all different provinces to deal with environmental-related non-compliances. The three spheres of government conduct joint site inspections in all prioritised sites when necessary.

“The action taken may range from remedying the problem and where a need arise after all attempt fail closing down operations to implementing measures to ensure environmental protection.”

Waste landfill site answers

MP Ms J Steenkamp (DA) also asked the Minister of Environmental Affairs: “(1) Does all legal landfill sites in South Africa comply with her Department’s requirements, in that they have (a) a clear noticeboard, (b) well managed access control, (c) a weighbridge, (d) a waste compaction area, (e) a leachate control dam, (f) drainage systems, (g) dust suppression systems and (h) gas monitoring probes; if not, (i) why not and (ii) what is her Department doing to ensure compliance; (2) is compliance with these requirements been monitored; if not, why not; if so, what are the relevant details of the monitoring?”

The minister answered; “The provincial authorities are responsible for authorising and managing general waste landfill sites of municipalities, including compliance and enforcement while the national department authorises and manages hazardous waste landfill sites.

“In terms of the Section 156 of the South African Constitution read with schedule 4,5 and 6 of the same Constitution, functions of spheres of government are clearly elaborated.

“The national sphere of government is required to support Provincial and Local spheres of government where necessary. This support is not an equivalent to taking over the functions of any sphere of government.

“In case of total lack of performance, a full intervention to be followed can be through application of sections 100 and 139 of the Constitution of the Republic of South Africa. There is currently no need to apply these two sections of the Constitution.

“1. (a) Yes. In terms of the information at our disposal; Yes. This can however, be confirmed with the relevant provincial and or municipal authorities. This overarching response is applicable to (a), (b), (c), (d), (e), (f), (g) and (h) of question 1.
(b) Yes.(c) No. (i) Due to lack of funding in some municipalities.
(d) No. (i) Due to lack of funding in some municipalities.
(e) No. (i) Not all landfills are required to have leachate control dams. Where required, these do exist.
(f) Yes. (g) No, due to lack of funding in some municipalities
(h) No. (i) not all are required to have gas extraction systems. (ii) Not applicable.

“2. Yes. All licensed landfill sites are being monitored for the above, which are conditions of their license approvals where applicable. Compliance monitoring is carried out by the relevant competent authorities.

“The permit holder is required to contract an independent third party auditor to carry out the monitoring and forward the compliance monitoring audit reports to the relevant authorities.

“The audit findings are also presented to Community Monitoring Committees meetings which are attended by the DEA, Provincial Departments of Environmental Affairs and the Department of Water and Sanitation.

“Non-compliance with permit conditions is enforced by the relevant authorities, and any the appropriate action gets taken to rectify any unlawful activities where applicable.”

Electronic waste and recycling answers

MP Mr D Carter (Cope) asked the Minister of Environmental Affairs; “Whether her department is implementing an effective countrywide programme to help South Africans dispose of electronic junk such as (a) out of date computers, (b) discarded cell phones, (c) non-functioning printers and (d) any other junk in an environmentally friendly manner and thereby ensure that opportunities for jobs in the recycling sector were created in the process; if not, why not; if so, what are the relevant details of the achievements in the past five years?”

The minister replied; “The National Waste Act of 2008 is being implemented as per the National Waste Management Strategy, give effect to a universally accepted waste hierarchy approach in the management of waste streams, which encourages recycling, reuse, recovery and refurbishment of waste.

“Recent amendments to the act provides for a new pricing mechanism for waste as well as the establishment of a new institutional mechanism namely The Waste Management Bureau that would oversee the implementation of Industry Waste Management Plans (IndWMP) including the disbursement of revenue and incentives to support enterprise development in the waste sector.

“The Act also provides the Minister with a mandate to request industry sectors to submit specific waste stream Industry Waste Management plans in accordance with the principle of extended producer responsibility.

“The Department has thus in the last three years initiated a process of engagement with the electronic and electrical equipment (EEE) sector over the past few years in the development of an industry waste management plan (IndWMP) that will outline how the sector will ensure sound management of EEE which includes, amongst others, computers, printers, cell phones, kitchen appliances, microwaves, fridges, televisions, computer and network hardware and software devises.

“The IndWMP, which will give effect to extended producer responsibility, will include details of how the waste will be managed to ensure implementation of the waste hierarchy by means of best environmental practices giving priority to reducing, reusing and recycling of e-waste.

“The plan will also include details of how job creation and skills transfer, particularly to previously disadvantaged individuals and the informal sector already involved in waste management, will be integrated into the IndWMP.

“There have been several initiatives and industries that recycle electronic waste that have been operating in South Africa for many years with high volumes of waste being recycled mainly computers, cellphones, and network devises with a significant amount of jobs which have been created.

“Notwithstanding this, the department has realized that the sector has the potential to create many more jobs. In this context the department is in the process of aligning these initiatives and operations with the new pricing strategy which would be finalised within the next three months that would ensure an effective country wide programme to maximize job opportunities through the recycling of electronic waste in South Africa.”

Waste tyre industry set up

The waste tyre fee paid by product producers and importers, is being used to set up a tyre recycling industry, said REDISA.

“Where manufacturers are encouraged to regulate themselves, some do and some don’t. In Germany, 60% to 70% of tyre manufacturers pay an industry body to discharge their extended producer responsibility for them. In South Africa, the figure stands at 99.8%.

In South Africa, it is mandatory. By law, every tyre manufacturer and importer must pay a waste management fee of R2.30 + VAT per kg to the Recycling and Economic Development Initiative of South Africa (REDISA). Retailers recover the loss of the fee from consumers.

“Given the lack of success of plastic bag tax, where the money collected from plastic bag sales goes to the state fiscus, funds collected by REDISA is not handled by the state. REDISA spends the money as outlined in the gazetted REDISA Plan.

REDISA director Stacey Davidson, said once tyre manufacturers pay the fee, they area not required to handle recycling of the tyres themselves. REDISA has taken over this responsibility and is “ultimately developing an industry whereby old tyres are being recycled into new products.”

Waste Act charges and fees

The Minister of Environmental Affairs gave notice to establish the National Pricing Strategy for Waste Management Charges, under Section 13A, read with Sections 72 and 73 of the National Environmental Management: Waste Act, 2008 as amended.

Some extracts from the very detailed notice are given below.

The Waste Act allows for targeting of economic instruments to specific waste streams to serve as incentives or disincentives to encourage a change in behaviour towards the generation of waste and waste management by all sectors of society.

The National Pricing Strategy for Waste Management (NPSWM) is a legislative requirement of the National Environmental Management: Waste Amendment Act (Act 26 of 2014) and gives effect to the National Waste Management Strategy (NWMS).

The Waste Act, as amended in section 13B, calls for an Act of Parliament to give effect to the pricing strategy, including details on 13B (b) determination of waste management charges and the review of these waste management charges from time to time. Section 13B(c) includes procedures for collection of charges through the national fiscal system.

In line with the requirements of the Waste Amendment Act’, this strategy contains guiding methodologies for the setting of waste management charges, aimed at funding the re-use, recycling or recovery of waste; implementation of industry waste management plans (IndWMP) for those activities that generate specific waste streams; and the operations of the Waste Management Bureau.

The selection and use of economic instruments (Els) must also be aligned with the “polluter pays principle” where all generators of waste (including businesses and households) are responsible for the costs of managing the waste generated.

South Africa is estimated to generate 108 million tonnes of wastes (as at 2011), of which 98 million tonnes (or 90%) is disposed of to landfill. With a value of at least R25.2 billion per year, these secondary resources are mostly lost to the South African economy.

Recycling figures vary for the different waste streams, from less than 20% for tyres, plastic and WEEE to in excess of 80% for metals and batteries.

By international standards, certain waste streams generated in South Africa have achieved encouraging levels of recycling through voluntary programmes, while other waste streams are lagging behind that of other developed and developing countries.

The South African Government has implemented numerous pieces of waste legislation over the past five years with the aim of reducing the impacts of waste on society and the environment, and on increasing the diversion of waste away from landfilling towards reuse, recycling and recovery.

These command-and-control instruments are one of a number of possible policy instruments which can be applied in the management of waste.

Economic instruments, as an alternative, have been successfully applied internationally in driving waste up the waste hierarchy, by creating a set of incentives and disincentives through pricing.

Pricing of waste can offer another cost-effective and dynamic form of regulation than the traditional command-and-control approach. The NPSWM provides a methodology and approach for pricing of waste in South Africa.

South Africa currently has both mandatory and voluntary waste management charges in place.

Mandatory environmental charges are currently levied on certain plastic bags, waste tyres and electric filament lamps (incandescent light bulbs), electricity generation using non-renewable or environmentally hazardous fuels (e.g. coal, gas, nuclear), motor vehicle carbon dioxide (CO2) emissions’.

Voluntary charges are levied on numerous products, product groups and waste streams including, amongst others, paper and packaging (plastic, glass, metal), waste oil, waste batteries.

The voluntary charges are collected and managed by product responsibility organisations (PRO)s that are often established and/or overseen by local producers and government. In certain instances the producers fulfil this role directly without a dedicated PRO.

The NPSWM builds on the extensive work conducted as part of the NWMS, including the Research Papers on “Producer responsibility and consumer awareness” and “Macroeconomic trends, targets and economic instruments”.

The NPSWM also draws heavily on the research undertaken by the CSIR, over the past seven years, on economic instruments for solid waste management in South Africa.

The research conducted in 2009, in support of the NWMS, undertook to assess the feasibility of introducing EPR Programmes within the constraints of South Africa’s socio-economic and policy environment, and based on the status and evaluation of international programmes, makes recommendations for its implementation in South Africa.

These remain very relevant issues and these documents should be consulted when specific charges or EPR schemes are developed.

The development of the NPSWM has been guided by a consultative process, as required by the Waste Amendment Act. This has included consultation and scoping with government, including relevant national and provincial government departments, consultation with business, and public participation (Table 1).

Disposal taxes

Where it is not feasible to monitor the quantity of waste collected from individual waste generators, an alternative is to apply the environmental tax at the disposal stage (over-and-above existing disposal fees, e.g. landfill tipping fees; provided that these fees already address the full financial costs associated with disposal).

In the case of landfill taxes, the level of the tax should ideally be based on the external costs (e.g. air, water and soil pollution; health impacts and `disamenities’) per tonne of waste disposed of to landfill. These types of valuations require fairly in-depth studies and are highly site-specific.

Ideally, charges should be based on valuations that have been conducted (or at least adjusted) specifically for the site in question. Nevertheless, in those cases where landfill taxes with explicit environmental objectives have been implemented (e.g. in the UK and New Zealand27); the level of charges tends to be determined at the national level.

A differentiated landfill tax system is applied within the EU, depending on the waste type or landfill type. While there are usually a limited number of tax levels (1-3), more than 20 tax rates have been applied, e.g. Poland. Landfill taxes are significant, ranging from 30-70 per tonne (± R400-R1000 per tonne), however lower tax rates are typically applied to inert wastes.28′ 29

Product taxes

Product taxes work in a similar way to input or material taxes, the main difference being that they are generally levied on a per-unit basis on the production or sale of finished products; rather than on a weight basis for materials or inputs used in the production process.

They can be levied either on producers (and importers), per unit of output (thereby creating incentives to reduce overall production); or on consumers, per unit purchased (thereby creating incentives to reduce consumer demand).

Typically, however, as with material and input taxes, product taxes levied on producers tend to be shifted onto consumers in the form of higher prices; such that the effect on consumer demand is similar in both cases. In either case, the overall intention is generally to remove the product from the waste stream.

UNEP finds that product taxes levied on consumers are more effective in reducing consumption than taxes levied on producers; but at the expense of a higher administrative burden30. Specifically, it is found that administrative costs associated with monitoring and collecting levies from consumers is much higher as compared to levies on producers.

UNEP therefore recommends that in developing countries, product taxes should generally be levied on suppliers (producers and importers) rather than consumers.

Nevertheless, the contrasting examples of Ireland and Denmark show that a tax levied on consumers, as in the Ireland case, is more effective in terms of removing the product from the waste stream. It is therefore clear that this decision needs analysis of the cost-effectiveness analysis for the specific country and industry in question.

In principle, product taxes should be set in such a way as to reflect the marginal external costs associated with the product, either throughout its lifecycle, or, more commonly, at specific stages of its life cycle (e.g. post-consumer). In practice, however, few product taxes are true Pigouvian taxes (i.e. set at an optimal level in accordance with external costs).

This is largely due to the difficulties associated with assessing the downstream environmental damages of a specific product. Specifically, there may be considerable variation in the environmental impacts of the product depending on the precise nature of downstream use and disposal31.

The tax level would therefore typically need to be set in such a way as to reflect average external costs, taking into account typical patterns of use and disposal of that product for the country in question.

For example, in the case of both the Irish plastic bag levy and the Belgian eco-tax, no attempt was made to assess marginal external costs as a basis for setting the tax at an optimum level.

At the same time, however, as with any tax, it is important that due diligence and consultation be conducted in the setting of the tax level, rather than setting taxes at an arbitrary level, which can often do more harm than good.

In the Irish case, for example, the setting of the plastic bag levy took into account consumers’ maximum willingness to pay (WTP) for plastic shopping bags32.

Estimates of WTP must be based on rigorous survey-based research, using an economic valuation methodology such as the Contingent Valuation Method.

On the other hand, Akullian et al. propose a methodology for assessing the externalities arising throughout the life cycle (including production, distribution and disposal) of plastic bags in the US state of Rhode Island, and show how an optimal Pigouvian tax rate can be determined based on the resulting estimate.

External costs per bag are calculated, based on a review of economic valuation studies of the various damages associated with plastic bags through their life cycle (taking into account energy use and oil consumption associated with production, as well as CO2 emissions and other damages throughout the life cycle). A tax per bag equal to the overall external cost per bag is proposed.

In either case, in addition to economic valuation studies to determine an optimum tax level (based on external costs) or a ‘second best’ tax level (based on consumers’ WTP); extensive consultation with the affected industry and consumers must be conducted.

For example, the effectiveness of the Irish plastic bag levy can largely be attributed to it being set at a sufficiently high rate (more than six times the average maximum WTP), the intention of which was to motivate a change in behaviour.

However, it should be borne in mind that this high rate was politically feasible in the Ireland case, because Ireland imports most of its plastic bags, such that the impact on job losses was minimal.

However, in cases where the product in question is produced domestically to a large extent; the setting of tax rates should be cognisant of the potential loss of employment.

Advance recycling fees (ARFs)

Advance recycling fees (ARFs) are a special type of product tax that are based on the estimated costs of collection, processing and recycling; revenues from which are often used (or intended to be used) to cover the costs of recycling.

Such fees “may be visible to the consumer… as a separate line item on the bill, similar to sales tax – or they can be assessed upstream on producers and later incorporated into the product price” (Walls 2006: 3).

Like product taxes, they are generally assessed per unit of the product sold, but they can also be assessed on a weight basis.

The main distinction between ARF’s and product taxes is that ARFs are intended primarily to raise revenues to cover recycling costs, with potential secondary benefits in terms of reducing demand; while product taxes are designed primarily to reduce demand by ensuring that external costs are internalised in product prices.

As such, unlike in the case of product taxes, ARFs do not require economic valuation of the external costs associated with the product. Instead, the level of the ARF is determined (generally by an industry association) based on the estimated costs of collection, treatment, recycling, re-use and/or recovery of the product. In turn, the incentives provided by an ARF depend largely on what is done with the revenues.

Revenues from ARFs can be used either to cover the costs of managing waste or to cover infrastructure costs, in a lump-sum fashion; or, they can be used to fund financial incentives payments) to consumers, collectors or processors per unit or on a weight basis of material returned, collected or recycled, thus increasing the quantity of materials supplied for recycling.

This combined ARF/incentive system (an ARF combined with a recycling subsidy) is essentially a type of deposit refund scheme (see Section 3.2.5), where the ARF acts as a ‘deposit’ at the point of sale, while the payment acts as a refund that is paid upon return of the used product for recycling. Such schemes could also be designed in such a way as to create incentives for producers to design for recyclability.

For example, “lower fees or higher refunds could be paid for those products by which the waste management costs are reduced through actions such as redesigning the product for easier disassembly or with more homogenous material composition” (OECD 2001: 43).

A combined ARF/recycling subsidy is generally regarded as superior to an ARF alone, since the latter encourages source reduction, while the former encourages both source reduction and recycling.

EPR fees

Extended Producer Responsibility (EPR) fees are implemented in the context of an Extended Producer Responsibility (EPR) scheme. EPR fees are levied on obligated industries (typically producers and importers) per product unit, weight, or market share, and are typically collected by the PRO.

The main purpose of EPR fees (and hence the basis for their calculation) is to provide funding to cover the costs of establishing and implementing systems for collection, sorting and other treatment required prior to the sale of materials to recyclers; or the provision of incentives, subsidies, infrastructure and/or information to consumers, collectors and/or processors; so as to increase the supply of recyclables.

Typically, EPR fees cover the collection, sorting and treatment costs of separately collected waste management minus the revenues from recovered material sales (thus the full net cost).

EPR fees are differentiated not only according to the weight or unit of the material, but also according to the type of material. EPR fees in practice do not differentiate completely between the actual costs for collection of the specific materials, and cross subsidisation between the different materials types is observed39.

The level of the fees is ultimately determined by the market, i.e. what the PRO considers possible to charge their clients and what obligated industries are willing to pay.

Some EPR schemes include mechanisms that lower the fees for eco-designed products or penalize (through higher EPR fees) difficult to recycle products. This ensures that EPR fees also reflect recyclability in order to drive eco-design or design for recycling.

As with material and input taxes, EPR fees are often passed on by producers to consumers in the form of higher product prices, essentially incorporating externalities associated with production into the product price.

This would in turn create incentives for consumers to reduce their demand for products containing large volumes of packaging.

The impact of passing these costs on to consumers, particularly in the case of packaging and packaging waste, which is likely to directly influence food prices, must be assessed.

Taxes on materials and EPR fees are not mutually exclusive, although such combinations should be designed in an integrated way so as to avoid ‘double taxation’.

Proposed EPR Scheme

Collection and disbursement of funds will depend on whether charges are collected as an EPR fee (by industry) (left panel) or a lax’ (by government).

According to section 13B of the Waste Act, a money Bill must be tabled in Parliament within 3 months of the publication of the pricing strategy. However, it is also possible to collect levies through the Customs and Exercise Act, 1964.

This is the same mechanism that is being used for certain environmental products. Hence, this strategy proposes the EPR tax (Government managed) EPR scheme is being proposed, with the allowance of a transitional period of two years from the date of signing of this Strategy for the industry managed to be aligned with this Strategy through becoming government managed.

The selection of either the EPR ‘fee’ or EPR `tax’ option should be based on a model of least socio-economic impact to consumers and businesses. Noting that industry designed, operated and managed EPR schemes can more easily implement adaptive management systems that respond to a changing industry.

The disbursement of funds collected through EPR fees should be informed by Industry Waste Management Plan(s) in the case of industry collected EPR fees DEA and the Bureau’s Strategic Plans and IndWMP(s) in the case of National government collected EPR fees

For certain products, product groups or waste streams, the Department may wish to consider EPR schemes in combination with a product tax, to allow producers and importers to use the voluntary (and paying the associated EPR fee) or mandatorily pay the product tax.

In terms of section 17 (6) of the Waste Amendment Act, all existing Industry Waste Management Plans must align with this strategy and the within 6 months of the publication of this strategy and the relevant revenue collection system.

Transitional arrangements

In the case of EPR schemes, Section 17 of the Waste Amendment Act provides the detail with respect to the transitional arrangements for any existing IndWMPs which may be affected should a waste stream be prioritised by government; be prioritised for the implementation of waste management charges; or be identified for the implemented on EPR schemes.

If a waste stream has not been prioritised by the Minister for the implementation of a waste charge, and should voluntary EPR schemes (with associated PRO fees) be operating for that waste stream, then these voluntary systems should continue operating to ensure minimal disruption to current waste management activities.

These voluntary EPR schemes may however be ‘influenced’ by DEA, through the approval and implementation of the relevant IndWMPs (e.g. requiring greater support of EPR schemes to municipalities, setting of recycling targets, monitoring and evaluation by government, etc.).

Where new economic instruments are planned for implementation, their effect on the existing economic instruments in the waste sector should be evaluated so that the DEA can consider whether both sets of instruments are required or a hybrid of them.

For example, should a mandatory EPR scheme (with EPR fees) be required of the paper & packaging sector, the need for (and the role of) the plastic bag product tax (“Plastic carrier bags and plastic flat bags” regulations) should be evaluated.

The same will apply to the “Waste Tyre” regulations. If existing charges are shown to no longer be necessary, in light of new economic instruments, these regulations may need to be amended, repealed or replaced by mechanisms given effect through the NPSWM.

This strategy will be reviewed after a period of 5 years. The government managed EPR scheme is being proposed and there is provision made for the existing EPR schemes to be aligned to the Pricing Strategy by becoming government managed and the Act within a period of two years from the date of signing of this Strategy.

This transition does not change the operations of the PRO, but more align the funding model with what is contained in the Act and the monitoring to be done by the Waste Management Bureau.

In line with the Waste Act, the strategy also indicates various and relevant role-players for performing certain actions in order to achieve our recycling economy, through the use of the EPR.

These roleplayers and their actions are indicated in the Action Plan (Annexure A) of this strategy document. Also contained in the Action Plan are the associated timeframes for implementation by responsible parties.

  • Sources; Government Gazette. PMG. DOL. Redisa. DEA.
  • This post is limited to some environment laws, does not contain complete government notices, and does not constitute legal advice.
  • South African Health and Safety law updates are posted separately on Sheqafrica.com
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