We welcome Mr. Andrew Hetherington, the chief executive of Repak, and his colleagues. Before members of the group begin their presentations, I draw their attention to the fact that members of this committee have absolute privilege, but this same privilege does not apply to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice that members should not comment on, criticise or make charges against a person outside the Houses, or an official by name, in such a way as to make him or her identifiable.
Waste Management: Presentation.
Mr. Andrew Hetherington
It is very kind of the committee to invite us here today. Before beginning, I shall introduce my colleagues. They are Mr. Maurice Pratt, the managing director of C&C and a board member of Repak; Mr. Darrell Crowe, the marketing manger of Repak; and Mr. Tony O'Brien, the membership services manager of Repak. We have a very young management structure because when we started, it was not possible to have the required expertise as it did not exist. We have built that expertise over the past six years. We are now in a position to become a "can do" type of organisation and we are delivering for our members and for the people of Ireland on very stiff targets.
Waste management and recycling have emerged as a mainstream issue for many of us, particularly in terms of our national infrastructure. The question is whether we can cope with the volumes of material that we are targeted to collect and recycle. Against the odds, Ireland - through the efforts of Repak and other stakeholders - successfully met its 2001 EU targets for the recovery of packaging waste, but we have an even bigger challenge ahead. The next key landmark is 2005, and then 2009.
My colleagues and I will outline for you the positive role that Repak has played in exceeding Ireland's packaging waste targets over the past six years. We will also outline our aspirations and plans for working in partnership with other stakeholders, such as the EU, national and local politicians from all parties, the public sector and, most importantly, the general public. Repak was established in 1997 to meet the recycling targets in the Waste Management (Packaging) Regulations 1997 on behalf of our 1,400 members. These targets arise from our obligations under the EU packaging and packaging waste directive.
There is some doubt as to for how much of the total packaging market our members are responsible. On the basis of EPA data, Repak members would only account for 54% of the tonnes placed on the market, but that would mean that Ireland's per capita packaging usage is the highest in Europe, and 50% higher than that of the UK. This seems unlikely and we are contributing, alongside the Department of the Environment and Local Government and the EPA, to an independent study that will, we hope, give us a much greater understanding of the real levels of usage here.
Ireland's target for 2001 was to recycle or recover the energy from 200,000 tonnes of packaging. Since we have no energy recovery facilities - that is, incineration - this all had to come from recycling. Officially, Repak only had to meet its members' obligations - 54% of Ireland's target - but our members agreed to meet the target for Ireland as a whole because they understand they have a real part to play in this. They actually exceeded that target. By 2005, Ireland's target could be more than double the 2001 target - about 450,000 tonnes - and unless the dynamics of membership and enforcement dramatically change, it will obviously be much more difficult for those contributing to our initiative to pay for everybody. That is the crux of our problem. Where do we go next? I am happy to say that we have great relationships with the Department of the Environment and Local Government and local authorities, and, slowly but surely, enforcement is really starting to bite. We just need to make sure that there is no hiding place for people who break the law. We call these people "free riders", as if they were riding around in the midlands and were robbing from the rich, but they are not, they are law breakers and gradually we are catching these law breakers.
In 2002 we funded the recycling of more than 300,000 tonnes and levied about €13 million from our members. For 2003 it is forecast to be about €14 million We have invested the fees levied on our members in supporting recycling collection infrastructure in Ireland. We have paid about €19 million, at the sharp end, in funding approved recovery operators and local authorities during the past two years. This year we anticipate that we will invest in excess of €15 million in direct recycling support.
Mr. Maurice Pratt
I will cover briefly some of the national campaign activity in which Repak has been engaged. The composition of the board of Repak comprises a spectrum of members representing large businesses but also small business interests. Generally speaking, industry support for Repak has grown as Repak has improved its performance. One of the key planks of Repak's five year strategy about which Mr. O'Brien will speak later is an emphasis on education and awareness, which are critical to any recycling initiative. It would be fair to say that recycling and Repak are now synonymous in Ireland. The organisation has saliency with the public and it has got credibility with industry and key opinion leaders which allows us to believe that the strategy we have put down can be achieved. To meet our own targets for recycling, however, we must and will maintain that momentum that we have generated by achieving 300,000 tonnes of recycling so far.
Mentioning some of the key programmes which we will run and fund this year will give the joint committee a flavour of the breadth of the activities Repak undertakes. We have Repak national recycling week of which many members will be aware and also Repak green Christmas. This is a series of awareness campaigns designed to increase awareness of the need for more recycling in Ireland among the public. Green Christmas is now in its third year of execution. The success of those campaigns is proven in the statistics because we have managed to increase the overall volume of recycling by 50% in 2002. This indicates the extent of the momentum. Repak cash for cans which in its current phase is run in almost 700 primary schools, almost 35% of primary schools. We use it as a means of educating and engaging school children in recycling. It is intended to extend the scheme to other materials such as plastic bottles and beverage cartons. The Repak bring bank initiative has set aside funding of just under €4 million to help expand the number of bring banks by an additional 850, thereby helping to increase the density to closer to one per 1,000 head of population. For the first time this year we will get involved in and support the anti-litter initiative run by An Taisce, the national spring clean initiative. One of the key elements of that initiative is the street recycling units which we have seen around Dublin. We also support the regional tidy towns awards in order to help local communities see bring banks as a local amenity, of which they should be proud and should support. They should ensure they are maintained and supported by the local community. We are involved also in an initiative with Tetra Pak to develop and expand the level of recycling of beverage cartons in Ireland. A plant has been identified in Scotland which can recycle these cartons. We hope to get that initiative up and running. Critical to many of these areas, and particularly to getting more engagement from consumers, are the local bring banks, which has been slow to get the level of engagement we would wish. It is a critical part of the overall initiative and our desire to hit the targets which Mr. Hetherington has outlined.
I shall speak about the future strategy, Ireland and Repak within the European context. In 2001, Repak led, and with external support, developed Ireland's five year recycling strategy through dialogue and co-operation with key stake holders to address these issues together. The targets set out in this plan can only be met through pro-active involvement by all stake holders, as well as commitment to time scales and costs. At this stage, we are already concerned that this involvement and commitment to time scales are not being given the urgency that is required from all stake holders. We will elaborate on this in the course of our presentation.
On the basis of our experience over the past six years, we strongly argue that our national recycling targets could only be delivered through meaningful action in the following areas: the need to eliminate "free-riders" through effective enforcement and the need to develop a national recycling infrastructure facilitated through innovative incentives and initiatives. The closure of the Ardagh-Irish Glass plant last year highlighted our current national weakness in the area of indigenous national recycling infrastructure. Without a national recycling infrastructure, there will be no outlets for materials and no incentives to set up a collection system. This will result in a total reliance on markets abroad to accept materials collected here at a very significant cost.
EU and national policy makers need to acknowledge that Ireland's geographical location and small economy, within a European context, will have a permanent impact on our ability to develop end markets and, therefore, our ability to increase recycling levels in a sustainable manner.
The current Packaging and Packaging Waste Directive requires member states to recycle or recover the energy from at least 50% of the packaging placed on the market, and recycle at least 25%, including a minimum recycling rate of 15% for each of the main packaging materials - paper and board, glass, metals and plastics.
Twelve member states had to meet these targets by 30 June 2001 but Ireland, along with Greece and Portugal, was given a derogation until December 2005 to achieve the targets. The obligation on Ireland and the other derogated states for 2001 was to recover - in practice, recycle - 25% of packaging waste.
The rationale in the current directive for Ireland's derogation is the presence of rural and mountain areas. This would suggest that when the directive was adopted in 1994, the legislators considered that it presented problems of adjustment, which could be solved through allowing a longer period to meet the targets.
The reality is that Ireland is at a permanent geographical and structural disadvantage. Whatever the timescale, it is unrealistic to expect that we can meet the 2005 targets in either an environmentally beneficial or economically viable manner. Our estimates show that to reach the 2005 EU targets Ireland would be required to recycle 215% of the packaging produced in Ireland. Currently there is no recycling infrastructure to take much of this packaging waste. The bar will be raised even higher after that. The directive is currently being revised, using as a benchmark the recycling rates being achieved by the best performers. We would argue that this might not be appropriate for island countries which are geographically isolated and, because they rely heavily on imported packaged goods, use much more packaging than they produce.
Ireland agreed to the 2005 targets in 1994, but the next set of targets to hit us somewhere between 2009 and 2012 have not yet been finalised. The Government took up Repak's proposal that there should be a permanent derogation for member states with permanent disadvantages arising from geography and industrial structure. Unfortunately, the other EU members have not accepted this.
The EU Environment Ministers did not include the Irish proposal in the political agreement they reached last October, so the idea is dead until the next set of discussions. The European Parliament will begin its Second Reading in March, and the revised directive is expected to be adopted in the autumn. However, the Commission is preparing a discussion document for its thematic strategy on recycling, which is part of the sixth environmental action programme, and it will give us another chance to press for more realism within the Irish context.
The derogation we wanted was that in respect of member states with no energy from waste plants - Ireland, for instance - there should be no increase on the recycling percentages in the current directive. There should be no increase on the recovery percentages for member states which have energy from waste plans.
This proposal is targeted to the Irish position but could also provide a solution to others. In particular, it could address the problems that will undoubtedly be faced by applicant countries Cyprus and Malta, which are also geographically isolated island nation states with a high dependence on imports. If this proposal were to be accepted, Ireland would still be faced with recycling recovery targets of 50% overall, with a minimum 15% recycling per material. Although we exceeded the target of 200,000 tonnes by the end of 2001, our next target could be more than 450,000 tonnes by the end of 2005 - more than double the tonnage but could be more than double the cost of the 2001 level. We will conclude our presentation on these targets and how they will be met, subject to the involvement and support of all key stakeholders.
The only way to meet the targets and the challenges ahead is through true partnership. During the second half of 2001, our chief executive officer chaired a five year strategy group of key stake holders with the objective of drawing up a five year plan to meet Ireland's packaging recycling targets by the end of 2005. This group included representatives from the Department of the Environment and Local Government, IBEC, the Environmental Protection Agency, recyclers, collectors, local authorities, Repak members and external advisers.
We are now convinced that the 2005 targets, which are set by Europe and adopted by our own Government, will only be met through the development of a stakeholder covenant. This would take the form of a partnership agreement where each stakeholder accepts responsibility to deliver agreed actions by agreed timescales. The stakeholder covenant would enshrine a commitment by each partner to work in partnership together to a common end of meeting the 2005 recycling and recovery targets; accept responsibility to deliver agreed actions by agreed timescales; commit to add resources, both human and financial, by due dates if the final target is to be achieved; and agree and commit to an escalation process in order to resolve areas of blockage. The bottom line is that Repak cannot solely be held accountable for actions and costs which are the responsibility of other stakeholders.
Three required regulatory public policy initiatives are needed to deliver on these targets. First, the development of an effective enforcement regime. Second, continued and increased allocations towards the capital development costs of recycling infrastructure by both the Department of the Environment and Local Government and local authorities. Third, support the economics of separate collection of used packaging through initiatives such as the introduction of statutory local authority recycling and recovery targets for packaging; the introduction of producer responsibility for news print and mail shots; and, more importantly, the introduction of weight based charges for domestic refuse collection.
We welcome the new packaging regulations which come into effect on 1 March, and are due to be signed into law imminently, which will ban from landfill specified packaging materials arising from the commercial sector. However, in order to reduce the volumes of waste going to landfill from the domestic sector, the current system of waste charges should move from annual flat charges to a weight based system. This would provide a real incentive for householders to reduce the amount of domestic waste going to landfill and to actively encourage and provide an incentive for household recycling.
Repak cannot deliver these policy and regulatory initiatives but we pledge to work within a regulatory environment when they are delivered. The five year programme is a fixed menu. It is not an a la carte listing of optional extras or expenditures. Already, after a year, the due deliverables have not been met. This situation cannot continue if Ireland is to continue to be successful in meeting the imminent EU 2005 targets in this regard. Perhaps the creation of a separate packaging unit in the Department would allow a greater degree of central Government supervision of this initiative to ensure each member of the partnership is contributing in full as agreed.
I will cover briefly the EU Directive 2000/53/EC on waste electrical and electronic equipment, which comes within the remit of this committee.
With regard to the WEEE directive, as it is known, we understand the Department of the Environment and Local Government is liaising with the Northern Ireland Department of the Environment to develop an all Ireland approach to the problem. We welcome such an all Ireland approach and we will expand upon this view. It is understood that in 2002, as a result of these discussions, tenders were sought on behalf of local authorities for the provision of a service for the management of waste refrigerators and freezers and we understand an announcement on that is imminent.
Given our experience in driving and delivering on EU targets, as the first producer responsibility initiative, we believe that Repak could make a positive contribution in this area in assisting local authorities to develop a system and infrastructure both to set and collect levies in order to meet the EU targets.
The benefits of Repak becoming involved in the WEEE directive are as follows: no start-up lags. Repak has the resources and experience to ensure the initiatives are operational within the shortest practical period; proven track record. We have a proven track record and expertise in operating, managing and delivering on producer responsibility schemes such as Repak and Irish Farm Films Producer Group, which is responsible for silage wraps in this country; and synergy of operations. Repak is already dealing with a significant number of recovery operators likely to be involved in WEEE as currently approved Repak collectors. Also, many current members of Repak are likely to be producers of electrical equipment and are thereby liable and obligated under the WEEE directive.
Mr. Hetherington
From a purely practical perspective, we believe there is a real need for an all Ireland recycling solution so that the geographic area will be treated as one single entity in terms of packaging and other types of waste. This should include common or at least similar legislation throughout the island. We are a relatively small peripheral land mass where geography and demographics make for difficult economies of scale and anything we can do to pool our resources, experience and markets to enhance economies of scale should be welcomed by all.
Who are Repak? We are an organisation that needs others. We cannot be successful on our own. We need to partner with others and they need to partner with us. I thank you, Chairman, and the members of the committee for inviting us to make this presentation today. We would be more than happy to take any questions you might have.
Thank you very much, Mr. Hetherington. We will now take questions or comments from members of the committee. Deputy Gilmore.
I welcome the representatives of Repak to the committee and compliment them on the targets they have reached and the work they have done. The presentation today was quite comprehensive.
Are you telling the committee that recycling is hitting the wall, that you have reached certain targets and are going to find it difficult to reach the next wave of targets, that we do not have the infrastructure or the enforcement and that, therefore, you are seeking a derogation from the next wave of targets which are due to be set in EU directives and regulations? Are you telling the committee that recycling, as a nice idea, has gone as far as it can and that serious initiatives will now have to be taken to provide the infrastructure?
What is your assessment of the amount of materials which are exported for recycling? What is the extent of the recycling carried out in the State? Most people feel good about putting bottles in the bottle bank but do not think about what happens to them afterwards. If one asks anybody these days for a solution to the waste problem, they will mention recycling. Will you address the issue of the export of material for recycling? What is being sent out? What is being recycled here? What needs to be done in order to develop a recycling industry here?
It is alarming to hear the main player in the recycling industry in this country say it wants Ireland to seek an open-ended derogation from any future targets set by the EU.
Mr. Hetherington
That is not exactly what I was saying. We are saying that the partnership model that has been established in terms of Repak working with industry and the legislators needs to become stronger. It needs to evolve and develop to an even greater level so that it is not seen as Repak pushing one particular path but that we are working closely together to arrive jointly at the decisions we need to make. One of the peculiarities at present is that the EU directive has forced industry, not only in Ireland but throughout Europe, to come together to make national plans, to deliver on those plans and to be measured on them. Many member states have targeted their public authorities in the same way so that each authority, regionally and nationally, has to form its national view and they merge industry's and public authorities' plans together. We do not have that, at least not yet. That needs to happen if we are to go beyond the high targets beyond 2005.
The Deputy touched on a number of pertinent points. What we are really saying is that we need to waken up and understand that recycling is not a cheap option. It is an expensive option. If we limit ourselves to that option alone, we will run into problems in terms of costs. Who pays the costs? We will run into problems in terms of whether this is the only solution. One starts to look at the economies of scale we have in a small land mass. Is it possible, does it make sense and is it sustainable to develop our own internal market for recycling? The answer will be negative in the case of many of these materials.
We will never have an aluminium smelter in this country. It would not make sense. Nobody would build one, regardless of the inducements, because the markets are somewhere else, which is the problem. It is not that we could not sustain a recycling plant. However, we would need to send the recycled material to where the markets are to make it into other materials. If we paid a lot of money to induce people to come here to produce secondary products, they would need to send the secondary products to the markets because they would be external as well. Some of the problems we have are almost insurmountable. They relate to our location and the number of people.
What we were saying to the EU was not that we want a derogation, that is, lower targets, but flexibility. We said the reason Ireland initially got a derogation was for the reasons I have outlined. The EU recognised that we were on an island at the extremity of Europe with no infrastructure. That is the reason it gave us a derogation. It was not that the EU thought we were poor or could not do it. It knew we had certain inbuilt problems so we were given time. We were saying that those problems still exist; they have not gone away. We were asking to be allowed meet the same targets our way. Where it made sense for us to do much more of one material, but the EU target provided that we should do less of that and more of something else, we asked that we be allowed to decide. Overall we will still hit the same targets. We want to, but it does not make sense to blindly follow global targets that only apply well on mainland Europe.
We are saying we need to work together more. There has to be a debate about how we plan our way forward and we are all involved in that. It is expensive to make recycled products. If somebody buys recycled Christmas cards, envelopes or writing paper, it is more expensive. We should, perhaps, look at fiscal measures such as reducing VAT levels. Perhaps we should consider incentivising industry to use more recycled materials.
The Deputy's question is well put and it comes at the right time. That is the reason we are here to raise it with the committee. There are some major decisions to be made. We will meet the 2005 target. Looking beyond that, however, industry starts to worry that we have not got the plans and procedures in place to deliver.
I welcome the delegation and thank you for the briefing. It is interesting that you suggest we consider fiscal measures. You have a wide role in terms of how you operate and what you operate on. You are a forum for industry but you also appear to be a lobbying organisation. I note with interest your comments on packaging directives and other such instruments. I am glad to hear you suggesting the use of fiscal incentives. Have you produced a policy paper in that regard?
Last summer, as you highlighted in your newsletters, the Irish Glass Bottle plant closed in Ringsend. Did you make any approach to Government at that time? You appear to be very vocal on many issues concerning recycling and waste, but I do not recall you being to the fore in leading the debate on the closure of the plant. My party has proposed the imposition of a levy on beverage containers, the proceeds of which should be partially used to assist recycling within the country. It would also assist those recycling or reusing containers. What are your views on this?
Your presentation referred to the difficulties of Ireland's geographical location, which I understand, but you also referred to the problems of our demographic structure, which makes for difficulties in terms of economies of scale. Could you expand on this?
A key to the issue under discussion is the need to create strong markets for recyclables. The key to making recycling work is to promote products from every spectrum, including design, marketing and the entrepreneurial aspect. While you have various fora looking into this, how do you propose to stimulate markets for recyclable materials?
I am aware you have working groups for each waste stream. What do you consider to be the most problematic area? For example, composite products is a difficult area and I note you work with Tetra Pak (Ireland) Limited. Prices for paper pulp fluctuate widely and it would make more sense if Departments used more recycled paper.
Mr. Hetherington
The Deputy raised a number of good points.
He is the brightest student in the class.
Not necessarily in that order.
Mr. Hetherington
Despite what people might think, we do not seek to attract publicity. I said at the time that the closure of the Irish Glass Bottle plant at Ringsend was a disaster, not only for the workforce but for Ireland and the future of glass recycling. We were involved with the Department and other key stakeholders, including the management of Ardagh. The underlying difficulties of the business were far greater than we could solve. If they were concentrated just on the recycling side, I am sure we would have done something out of the ordinary to try to retain the plant. Like many businesses now, it is volume driven. The sheer physical size of the plant meant it could not compete with the larger facilities in the rest of Europe, even in its home market. However, I still believe the closure was a disaster. At the time the workforce of the company wrote to me thanking Repak for its support because it considered it was not getting much from elsewhere in its efforts to try and keep it open.
We have not done any great study on fiscal measures, but we will do so. As usual, I believe the best way to proceed is by considering what is happening elsewhere. In the United States and some parts of Europe innovative ways are being considered in terms of using fiscal measures to incentivise and promote recycling products. I will send you copies of that information as soon as we have it.
Very few countries have the same demographic profile as Ireland. One that is similar is Belgium, which has a very large city, Brussels, a couple of smaller cities, such as Bruges and Ghent, and then what I may term small town Belgium. This creates difficulties in trying to manage expectations. It means that in the big population centres there is as much involvement as possible in kerb-side and door to door collections, whereas the rural areas should have high amenity bring facilities, but no door to door collections because the cost of that type of service is unsustainable.
Practical problems of managing expectations also arise. Those who live locally want their needs addressed and do not understand that, ultimately, they will pay. It is a fine balance in terms of giving people the ability to act locally and think nationally, because our targets are national. The country has a difficult demographic structure in terms of planning national solutions. I am a great believer in thinking and acting locally, but sometimes it is difficult if funding mechanisms do not match expectations.
Markets for these materials are very important. The European Union is introducing more directives that will help to support us. These include the recycled content of packaging. We will not have a big role in that debate. We can shape it, but so many of our products are imported from larger member states, who are being forced by these directives to look at these issues. It means that we will be the beneficiaries of the good work that is happening elsewhere. We need to consider more innovative ways of achieving that.
Public expenditure, and the need for it to be directed in a way that avoids the cheapest cost option, is difficult when Departments are faced with constraints in terms of delivering value for money. I do not know how that can be resolved, but there must be something that can be done. As usual, fiscal measures will be a key driver.
The problem areas in terms of specific types of packaging materials are complex. What we put in packaging is highly complex. One would think it would make good sense for milk to be sold in recyclable glass bottles, until the costs involved are considered. The problems faced by the Irish Glass Bottle company is an example. When the full picture is considered, including life cycle analysis, other issues emerge. For example, it would not be as possible to put as much milk on delivery vehicles and it would be costly to transport the product around the country. The product could also degrade quicker because it is exposed to sunlight. There are some areas where it makes sense to use what some people would term a material which is not as good. It can improve shelf-life. It can keep the product fresher. It allows us to provide more information about the product. For example, if you are allergic to nuts, you want to be able to read clearly on the product whether it contains nuts.
It is a really difficult area. We are challenging industry as part of our best practice programme. It is only when we get them to understand the materials they are using that they can then start to look at the models which exist and question whether it is the right type of material. For example, one of our members which packs potato crisps was really worried because it has gone from a polypropylene bag to a multi-foil laminate and they were asking where was this going to place them in the future. When you look at it, however, it has given them, and us as consumers, a leap forward in terms of freshness. The committee will remember the damp, slightly off potato crisps we used to buy. Therefore for certain types of products it makes good sense to use certain types of materials. Going forward, we will understand much more clearly the nature of that issue.
Where we are really making inroads is in challenging our members' commonly held misconception that extensive product branding will make it sell more. In some cases it may but in many cases it does not. If we can get lots of ink off the packaging, we will make it much more recyclable and much easier to deal with.
The important issue of deposits and particular taxes on specific types of packaging was raised. If you think about what I have just said about the difficulty of deciding what is good and bad, the question is where to start and end. It would be a breach of the understanding industry had with Government when it formed the voluntary Repak whereby industry pays to us instead of paying taxes.
There is a plastic bag tax. I do not know whether it has been successful. It depends how you judge it. Undoubtedly it reduced the amount of carrier bags that our members gave away for nothing. Therefore it has helped industry in one respect. However, the sales of peddle-bin liners have gone through the roof, with an increase of 300% in sales. Therefore, I do not know whether it has reduced the amount of plastic bags going out to the home. It has not raised the amount of money we thought we would raise to do good work.
It is a difficult issue. When you look at direct taxation, you sometimes - as we have seen with the plastic bag tax - get a reaction in that there is not as many carrier bags, but you seldom raise the money expected. You cannot apply it to the good works because you do not get it. It also does not stop the amount of bags, bottles or cans.
We are obviously not in favour of this measure because it would automatically exclude those products from our revenue stream because you cannot ask people to pay twice. It would start to dilute the really strong planning arrangements we have in place with all of the key stakeholders of which we spoke which will allow us work together towards nationwide solutions. Industry is not in favour of more taxes and such taxes do not deliver the desired results.
Has Mr. Hetherington a negative or neutral view of the plastic bag levy which is in force?
Mr. Hetherington
We have a negative view of it. It has reduced the amount of bags but our members are reporting to us - I am sure Mr. Maurice Pratt can speak about his past experience - that the level of pilfering has gone through the roof. The number of trolleys and small baskets going missing has dramatically increased. I do not know that it has been a great success.
Mr. Pratt
It is a difficult question to answer at this stage. The jury is still out on it. I would not want the committee to misunderstand our position. As citizens, and I as a business person, support entirely what was behind the plastic bag initiative. The concerns retailers had at the time were that they, not the State, would be seen to be imposing the tax. As it turned out, the Minister's decision to apply a tax of 15c had the necessary behavioural change and was probably required to bring that about.
The core issue is whether, when it all settles down, the net effect will be good. It is too early to say. The reason is that many of the other initiatives we need to have in place, such as more bring centres and charging by weight for waste, need to be in place. They are the real initiatives which will actually reduce the amount of non-core recyclables which will go back into landfill.
The one significant negative retailers have observed is that shoplifting increased by an estimated €10 million per annum as a consequence of the introduction of the plastic bag levy. That is one obvious negative result, which clearly industry would be slow to mention but which is probably fair to say.
Has that increased level of shoplifting been sustained, or was it a one-off effect around the time of the introduction and have the retailers taken measures to reduce it at this stage?
Mr. Pratt
It is fair to say that when retailers, like all good business people, see a problem, they seek to introduce management practices to eradicate it as best they can. One can see evidence of it through behaviour in the stores. One can see how easy it is now in relative terms to identify a potential shoplifter. The problem will not remain at the levels reached during the introduction. That is a fair comment.
I join in welcoming Repak to the committee. Will the delegation brief us on how Repak is financed and on its total budget? Repak will invest in excess of €15 million in direct recycling. It is putting out money at a great rate and I want to know how it is financed and its total budget.
What markets have we established in Ireland for recycled materials? What has been done since this great recycling drive started? My local authority was recycling waste in ten or 11 ways. We have now reduced that to six or seven ways, in other words, we began mixing it up again because it was going nowhere. We were separating at house level in Galway City. There were 20,000 separating cardboard, paper, dry plastic and milk cartons. We are now putting them all back into one bin and they are being baled up and sent somewhere. In other words, we are going backwards because we reached the limits of what we could do. What efforts have been made to establish markets for the materials? I do not think Deputy Gilmore's question of whether this material was being exported was clearly answered, or else I missed it.
I take issue with some opinions on the plastic bags levy and the thumbs down to taxable measures to support recycling. It is clear that the plastic bag levy has been a success. Considering again my city, there are 20,000 houses in Galway, estimated to have been using 200,000 plastic bags in one year, which ended up somewhere - lying in bins - to become landfill eventually. They were non-biodegradable, so they would remain there. I do not think those households are using that many bags now. I do not accept the arguments about the increase in bin liners. I do not know what material they are made from, but there is nothing to stop people using newspaper, which is biodegradable. I would not throw in the towel on taxes to help in the recycling or elimination of plastic bags. I am not qualified to speak on the increase in shoplifting - maybe it is to do with the increased cost of everything and is not related to plastic bags at all. As Deputy Cuffe said, I am quite sure that businesses have taken measures to eliminate or investigate shoplifting.
We are financed by our members - the 14,000 people about whom we talked. We levy our members in accordance with the amount of packaging they place onto the market, so there is a clear financial incentive to our members to reduce the amount of packaging they place around their products. We also levy our members in accordance with the different types of packaging. We do not charge a flat fee irrespective of the type of packaging used. We have a variable scale that takes account of the different types of packaging materials being put onto the market, ranging from as low as €7 for glass up to nearly €70 for plastics, which have a higher cost in terms of recycling. There is a clear financial incentive there for our members. As I said, this year we will levy nearly €14 million on our members. It is through our members that we get that money to put back into recovering and recycling packaging.
Mr. Hetherington
Mr. Crowe is quite correct. I did leave off my earlier answer about the development of markets. We are in a difficult position, in that we cannot be seen to be a cartel. We cannot be seen to be funding collection at the shop end, as we are doing, and then trying to develop and establish markets. We encourage the collectors we subsidise to establish markets. It is a very entrepreneurial sector; they have established many new outlets for recycled materials in new markets, virtually all of them outside Ireland. We had Smurfit's mill and Irish Glass. We also have one or two other small facilities, but those are the two predominant recycling facilities we had. We have lost one of them, because it is predominantly a volume-driven business. The same applies to Smurfit's mill. It is a good mill and, I am sure, very profitable, but it is a volume-driven business. How long will it be there? They do not know and I do not think we do either. It is profitable right now.
In the future, we will have to consider bigger plants to get better economies of scale. We will not be able to compete with that because there is not enough of us and the home market is not large enough. There are areas in which technology can help us, however. Looking at plastics, for example, the technology has really developed dramatically - even in ten years - and has allowed plant size to be dramatically reduced. We could consider encouraging a plastics recycler to come in. We have not been successful, and one must ask why this is so. Everybody in Europe is trying to encourage a plastic recycler to come in, so we are competing with the bigger EU member states and also states outside the EU - much of the recent development has gone into Romania, Bulgaria, the Czech Republic and Slovakia because of the low labour costs. Many of the big investments are being made with all costs in mind, plus access to markets.
The future is in the area of adding value and also adding cost. We should be looking at how we can pre-treat and improve the quality of what we collect before we send it to someone else, creating more value back in the system for ourselves. We may be forced down this road anyway, because the big recyclers can pick and choose and already our collectors are reporting that the quality standards are being constantly raised. Even on the glass collection side, there have been discussions very recently with Quinn Glass in the north and with the collectors we fund in the Republic, including Rehab, because Quinn Glass is upping the standard in order to compete in the marketplace. It is a very depressing view in terms of doing it for ourselves, although I am great believer in that. Those who were involved in the five year strategy group will tell you that was my aim. I wanted as much here as we could get, but it is really not practical in some areas and it is becoming even less so as we go on, because we do not have the economies.
We are all beginning to realise that recycling is not a cheap option and that we have no energy recovery here. Might the solution of incineration solve all the recycling problems?
I thank the team for its presentation. Its members may be aware that we recently discussed the environmental protection Bill in both Houses. It dealt with waste management, charges and enforcement measures based mostly on the principle of "the polluter pays." I would be interested in getting their views on those charges, both domestic and commercial, their enforcement by the local authorities and the future they see for those charges in the medium and long-term.
I have two short questions arising from the presentation. One concerns the three measures proposed by Repak. With regard to the introduction of weight-based charges for domestic refuse collection, what do they say to the studies done by some local authorities suggesting that if charges are based on weight for domestic refuse collection, larger and poorer families will end up paying the higher charges? What are the implications in practical terms of the introduction of producer responsibility for news print and mail shots?
Mr. Hetherington
We welcome the developments that are taking place. What we are doing is introducing some form of accountability and control in regard to the final users of products. We talk about producer responsibility as a key plank in what we are doing, and industry takes these responsibilities very seriously. This goes hand and hand with the "polluter pays" principle. Who is the polluter and who is the producer? In our case the producer could be someone in Germany or France because such a high proportion of products are imported. Paul Kelly of Brown Thomas, and others, have worked hard to try to get Chanel and other companies to reduce the amount of packaging on their products. However, they have not been successful. We have limited influence in persuading producers from outside the country to reduce packaging.
Producer responsibility means we organise, make plans, get money in and fund the system. "Polluter pays" means the person who holds the produce last has a responsibility. I recall when I first went to Germany in 1988 and became involved in the whole area of packaging waste. People say the Germans would want to co-operate. They did not want to co-operate. They opposed the proposal just as it is being opposed elsewhere. Is it Coca Cola or the person who throws away the can at Croke Park who is the polluter and bears responsibility?
What we have done here is very sensible. We introduced the regulation and forced industry, where it needed to be forced, and we are continuing to do so. Ireland was not the first country to do this, so it was not a surprise to the multinationals. They have co-operated and worked forward. As one becomes successful, one wants to be associated with success. That is what we have tried to do, and we now need accountability.
There is always a debate as to whether people should pay by weight or by some other measure. If it is by visit, what does that mean? The only way we will be successful, and we are very good at it here, is if we set targets and measure ourselves. That is how we become successful in Ireland. If one considers Ireland's success industrially, it is because of a new breed of manager, entrepreneurs, who set hard numbers in their businesses. If one looks at the success we have had in the public sector in Dublin, business is managed in the same way, with hard numbers. They set targets and measure themselves.
How can one do that if one is charging by visit? There is no compunction on anyone to reduce waste. If we are not inclined, we do not take the waste to a bring facility because it does not reduce the bill. We do not decide to buy something in a heavier or lighter container. Householders do not have a say. One pays by consumption, therefore, bigger householders will not pay more because they have more waste. However, they can make the choice and buy bigger containers with more produce. There must be a mechanism to support people who do not make enough so they can afford to pay the same as everyone else. We do not talk about our targets in terms of visits. Europe measures us by weight. Our national targets are by weight and it does not make sense for local authorities to do something very different. It is a very different mechanism. It is being one across Europe - that is how they used to attribute local authority costs, not just in Ireland but throughout Europe. A system was worked out whereby they knew how much it cost to service a house. There is now much benchmark information throughout Europe in terms of tonnage costs per house. We could make a huge difference if we made that one change.
I am curious about newspapers.
Mr. Hetherington
It is not that I have anything against newspapers - in fact, I love them. I am sure the Deputy's house is just like mine. Every Sunday I end up with a pile of newspapers and glossy magazines. This is a big proportion of what people have in their bins. We speak to many householders and the one question we are asked is: if you are calling on us, why can you not take these away? Surely we must be able to get the news print, paper or something back out of it. I think there is a genuine feeling that we should not be throwing this waste into a hole in the ground. There is beginning to be a willingness throughout Europe on the part of newspaper proprietors to look at voluntary ways - or mandatory measures if necessary - we can engage with them. It would make sense to do these things. We could add another bank to bring centres for this purpose, but we would need a financial contribution from newspaper proprietors.
On behalf of the committee, I thank Mr. Hetherington and his colleagues for their presentation. Most members will have found it interesting and informative. It is something we will continue to monitor and no doubt we will consider it again in the future. I thank members of the delegation for their time. We can make available to members material we received from Liam Woods who represented the health authority on the day.
The joint committee went into private session at 15.51 and resumed in public session at 15.55.