Tag Archives: Product Management Alliance

7 Reasons Why AMERIPEN’s Stance on EPR is Flawed

Five years ago, the government members of the Product Stewardship Institute identified packaging and printed paper as the next priority waste stream. The reason was simple: recycling rates have stagnated for over a decade, the costs of managing garbage have risen, and recycling jobs continue to disappear into garbage trucks as valuable materials are carted off to landfills and incinerators.

These government officials have known for quite a while that they need a new strategy. And so, they did what government agencies always do: they earnestly attempted to engage the companies whose products and packaging cost taxpayers millions of dollars in waste management fees each year—dollars that might otherwise be used to hire teachers, firemen, and police. Unfortunately, most of those companies did not participate in PSI-facilitated multi-stakeholder discussions to which they were invited. And many refused to take part in other collaborative efforts.

Fast forward to today, and we see that very little has changed. We at PSI have recently learned that AMERIPEN—the U.S. lobbying arm for Procter & Gamble, Colgate-Palmolive, ConAgra Foods, General Mills, Owens-Illinois, Kellogg Company, Tetra Pak, and other companies—has developed an internal policy statement on EPR that, in short, disparages EPR and its supporters.

Yet, what is perhaps most dubious is that AMERIPEN crafted this position statement before completing its own EPR research. This indicates several things: that AMERIPEN is fearful of facts, dismissive of government interests, and unable to have a meaningful conversation with those with whom they disagree.

The following is a list of some of the most misleading statements that AMERIPEN makes in its internal position paper:

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Misleading Statement #1:

AMERIPEN states that: “We are working in collaboration with the states, and this work should be allowed to progress before embarking on the type of radical systemic change that would be created by a packaging EPR program.”

PSI’s Take:

AMERIPEN has only invited two state officials and one local official to participate in its meetings. PSI, which represents the varied interests of 47 states and hundreds of local governments on product stewardship issues, has offered to facilitate discussion with a representative government group, but AMERIPEN has not agreed to engage.

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Misleading Statement #2:

AMERIPEN states that: “The group’s intent is to assess the unique recovery and EPR programs across the globe using a non-biased, fact-based approach.” 

PSI’s Take:

AMERIPEN’s own EPR research team has refused to collaborate with PSI. How can AMERIPEN produce a non-biased, fact-based report when it has already come to the anti-EPR conclusion stated in its draft policy? By contrast, PSI has conducted its research on EPR programs in a fully transparent fashion through another North American industry association of brand owners, retailers, recyclers, and other businesses seeking to reduce packaging waste.

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Misleading Statement #3:

AMERIPEN states that: “…much of the current discussion does little to advance potentially useful goals that focus on environmental outcomes; rather, it centers on simply changing the responsibility of who recovers municipal waste… AMERIPEN believes in broader discussions that truly consider overall program objectives…”

PSI’s Take:

AMERIPEN’s statement mischaracterizes the nature of the discussions taking place in the U.S. and its focus on environmental outcomes. The EPR movement would not have been started in the U.S. if recycling rates were not stagnant. AMERIPEN has refused numerous invitations to engage in exactly the type of broad discussion it says it wants – one focused on reaching overall system goals. PSI has repeatedly tried to engage AMERIPEN members in a discussion about their view of the problem, their overall goals, the barriers to achieving those goals, and a comprehensive set of potential strategies to consider (including voluntary initiatives, EPR, and other regulatory approaches).

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Misleading Statement #4:

AMERIPEN states that: “There is currently no clear EPR model in existence that is designed for the U.S.”

PSI’s Take:

There are many U.S. EPR models for other products, numerous EPR models for packaging and printed paper around the world, and several U.S. EPR models for packaging and printed paper that have been developed by PSI, Recycling Reinvented, and others. AMERIPEN cannot refuse to discuss whether and how those models might work, and then complain that there are no models. In the U.S., our goal should be to develop a basic model that balances stakeholder interests in a broad fashion, and then leaves it up to the stakeholders in each state to flesh out the details based on geographic variation and preference. Some states might prefer an EPR approach as part of a comprehensive strategy, while others prefer a purely voluntary approach. Even states taking an EPR approach will likely seek a variety of complementary strategies.

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Misleading Statement #5:

AMERIPEN states that: “…research on programs currently in place around the globe demonstrate that the goals of an EPR system in the U.S. will probably not be met…”

PSI’s Take:

AMERIPEN’s statement relies on two flawed studies – one conducted by the Grocery Manufacturers Association and the other by the Product Management Alliance, both of which hired the same consulting firm, SAIC, to piece together bits of data to produce the anti-EPR conclusions that their clients wanted. These studies make their own assumptions about the goals of EPR programs without asking those who advocate for, and run, those programs, then claim that their (SAIC’s) assumed goals are not being met. EPR programs are being proposed to boost recycling, reduce waste, create recycling jobs, save taxpayers money, and solve problems that have existed for decades. Packaging EPR laws have been passed in over 30 European countries over the past 20 years, as well as in four Canadian provinces (with the others to follow in the next few years), Israel, Japan, South Korea, Brazil, and other countries. These programs would not be spreading and perceived as successful if their goals were not being met.

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Misleading Statement #6:

AMERIPEN states that: “A key consideration in the U.S. is to balance the drivers and intended outcomes of an improved recovery system… Any state considering improving its recovery system must define and align critical outcomes before advancing a solution.”

PSI’s Take:

The basic job of any state and local government official is to balance the multiple interests of companies, environmental groups, and their citizens. AMERIPEN’s statement implies that states have not yet figured out the basic outcomes they seek. In fact, most states know exactly what outcomes they want to achieve, and an increasing number of states have publicly stated, often in published solid waste master plans from up to a decade ago, that EPR is a main part of their overall waste management strategy.

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Misleading statement #7:

AMERIPEN states that: “We are committed to increasing recycling and recovery rates in the U.S. through collaboration and teamwork among key stakeholders, by bringing more efficiency into our existing system, and incorporating best practices, all without the financial and administrative burden of an EPR system.”

PSI’s Take:

This statement sums up the problem with AMERIPEN’s EPR policy. I have not met a stakeholder group that does not want to increase recycling, increase efficiency, and incorporate best practices. However, AMERIPEN will not achieve these goals without involving a significant number of local and state government officials who manage the existing diverse and complex system. By engaging with these officials, AMERIPEN will better understand those systems and their challenges. AMERIPEN’s strategy to optimize the current system is certainly a worthy approach. Unfortunately, they have yet to articulate what policies or programs they believe will optimize the system. In addition, if solely optimizing the current system could solve the problem, it would have been done long ago.

I also have not encountered a program without financial and administrative burdens. Managing waste is a significant burden to taxpayers and government, but not the same burden to manufacturers and consumers. What is completely lacking in AMERIPEN’s policy is an acknowledgement of their role and responsibility for reducing the external costs of their products on taxpayers who spend billions of dollars every year to cart their packaging to landfills and incinerators. Also lacking is an understanding of the hundreds of millions of taxpayer dollars that governments have already spent to develop and maintain the current recycling system. AMERIPEN cannot talk about financial and administrative burdens without understanding how those burdens are currently allocated. It is far easier for AMERIPEN to oppose efforts to internalize the true costs that their products impose on taxpayers rather than engage in collaborative discussions to alleviate those costs and impacts. What they might find, however, is that in-depth collaboration can actually satisfy their own interests in obtaining a low-cost, high quality, consistent stream of recycled materials. Only real collaboration will result in true innovation.

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The Conclusion

AMERIPEN members comprise many multi-billion dollar companies that, for the most part, are led by packaging experts. Unfortunately, these same people do not understand solid waste management. AMERIPEN has convinced itself of a solution while shutting out any possibility that they may be wrong. By closing themselves off to new information from those who are truly experts in managing waste, AMERIPEN’s members have operated from a place of fear and, unfortunately, ignorance.

AMERIPEN has driven its stake into the ground, and then told the rest of us to go take a hike while they fix the problem. How much longer should we wait? There is little hope that recycling for packaging and printed paper will increase in the U.S. to the extent needed unless AMERIPEN’s member companies, as well as other non-AMERIPEN companies, understand that they have something important to learn from others, and become willing to engage in a reasonable discussion with those with whom they disagree.

I believe in the ability of people with different viewpoints to come together and find common ground. I have experienced it many times, and I am not immune to major changes in perspective myself. But it takes a willingness to be proven wrong, and a confidence and ability to show others why you think you are right. AMERIPEN’s new EPR policy illustrates that it currently lacks both.

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AMERIPEN Member Companies

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Failure to Launch: U.S. Good at Throwing Away the Gold

For the 11th year in a row, Massachusetts has failed to pass electronics EPR legislation. It is now 12 years since the Commonwealth became the first state in the country to ban the disposal of lead-bearing cathode ray tubes, sparking the electronics recycling industry in the U.S…and placing the financial burden to manage electronics on Massachusetts cities and towns. It was the classic ban without a plan. Unlike the stellar U.S. women gymnasts who earned Gold in London yesterday, our country fails miserably at passing legislation that will keep gold and other valuable materials out of our country’s landfills and incinerators.

What a waste. What a shame. To watch our great and mighty companies offshore jobs, complain about it being the only choice they have, but do little to create thousands of green jobs that are there for the asking if they would engage with PSI and other stakeholders to develop extended producer responsibility (EPR) laws and other strategies that meet their own interests.

The powerful corporate self interest that has blocked movement on product stewardship and EPR in the U.S. is the same one that unknowingly is weakening itself, just as the U.S. auto industry’s fight against fuel efficiency standards weakened itself, causing the need for a government bail-out.

I just finished yet another book that chronicles ways that U.S. companies and policy makers are failing to take actions that will strengthen our economy, instead resulting in the slow decline of U.S. economic power. Edward Luce’s Time to Start Thinking shows what the product stewardship movement experiences on a smaller scale – a failure to launch.  Look no further than the microcosm of the product stewardship field, where many unenlightened companies fight against policies that will save billions of dollars for U.S. taxpayers, reduce waste, and generate thousands of recycling jobs.

These companies operate under the guise of groups like the Product Management Alliance, which evaluates EPR laws by showing that the laws that they weaken actually don’t perform well. How enlightening! The powerful corporate self interest that has blocked movement on product stewardship and EPR in the U.S. is the same one that unknowingly is weakening itself, just as the U.S. auto industry’s fight against fuel efficiency standards weakened itself, causing the need for a government bail-out.

As I wake up this morning to yet another failed attempt to pass an e-waste bill in the all-Democratic Massachusetts Legislature (and with its Democratic Governor), I wonder what this failure is all about…was Dell so bent on passing a bill that ensured that any goals included would already be met before the law went into effect? Or was the House leadership frozen in political gridlock on matters far removed from the bill itself? It is clear that there was no consensus on the bill, but how can stakeholders be so far apart for so long that we cannot figure out a way to act in all of our own self interest?

Close your eyes…and envision a time when we in the U.S. really went for the gold…like those women Olympic gymnastic heroes of today. Rather than burying our gold in the ground and mining raw materials in an endless cycle of waste, we owe it to ourselves to find a way to break out of this malaise together.

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Why We Need Regulation for Fair and Effective Stewardship Programs and Why Voluntary Systems are not the Answer

Last month, as the Product Stewardship Institute celebrated its 10th Anniversary at our national forum, a new coalition of manufacturers seeking voluntary programs announced its creation. The Product Management Alliance (PMA) launched a press release stating that it seeks to “…support voluntary market-based extended producer responsibility efforts and voluntary incentives for increased recovery and sustainable product and package design.” PMA is comprised of manufacturers of carpet, electronics, toys, paper, packaging and transportation materials, mattresses, plastics, personal goods, and pharmaceuticals. But while voluntary programs have a definite role in reducing the health and environmental impact from consumer products, they are no substitute for balanced regulation, which is often a better way to foster innovative market-based solutions.

One good place to start is with the facts. Voluntary, market-based approaches will result in high collection rates only when a product has value at the end of its useful life greater than the cost to collect and transport that product to a secondary market. For example, many retailers collect toner cartridges because they can refill and sell them at a profit. No regulations are needed because the value of the used cartridge is greater than the cost to collect, transport, refurbish, and resell the refurbished cartridge. Retailers have the incentive to heavily market the return of those cartridges. In another example, a car battery left on the curbside will magically disappear because some enterprising scrap dealer will always pick it up and bring it to market for the value of the lead. Unfortunately, though, the cost to properly manage many other consumer products – including carpet, mattresses, electronics, toys, and all the other products whose manufacturers have formed the Product Management Alliance – is much greater than the market value of the used product.

After nine years and a signed agreement, the carpet industry’s best efforts to put in place a voluntary collection and recycling system has resulted in the recycling of only 4.5 percent of all the carpet available for recycling in 2010. The rest of that carpet material – more than 95 percent, or nearly 2.9 million tons – was disposed of in landfills and incinerators. Not only was this material wasted, but it causes operational problems at these disposal facilities, resulting in extra costs. The 13-year old voluntary industry thermostat recycling program reached only a 5 percent recycling rate before governments started to regulate. And the voluntary industry recycling program run by the rechargeable battery recycling industry for the past 17 years has posted only a 10-12 percent rate.

Wasted resources result in lost jobs and economic value. This is not a band wagon to hop on and emulate.

Don’t get me wrong. PSI supports voluntary programs under certain circumstances. Voluntary programs work well as a ramp up to regulated programs. They can grease the wheels so that, when a regulated system kicks in, the players know what they are supposed to do. These programs can also allow an industry leader to spark an innovative program. PSI worked with Staples in 2004 to develop the country’s first computer take-back program, which was piloted, then scaled nationally after two years. This voluntary program is available to everyone, and it resulted in innovative programs by others in the office supply sector, such as Office Depot and Office Max, as well as Best Buy. And voluntary programs can operate in areas where no laws, or weak laws, are in place.

But relying on manufacturers to voluntarily collect their products is like trusting that people will stop at intersections with no stop lights or signs…and no threat of enforcement.

Some people will have the sense to do it, but most will not. This is why the environmental movement was born nearly 50 years ago. It was because the market cannot police itself, resulting in environmental externalities in the form of pollution that impacts all of society. Do we really have to explain this concept all over again? Have we regressed this much?

Imagine a professional ballgame with minimal rules, no common goals, and no referee, where each player performs according to his own definition of success, and where there is no penalty for not playing. Like this imaginary game, voluntary product stewardship programs create a competitive advantage for those companies that will not act unless forced to do so. And, in every case, there will be a significant number of those companies. This reticence is unfair to those corporate leaders that know what is needed, have the ability to reach high performance, but get dragged down to the least common denominator.

The buzz among the product stewardship community is that the formation of the PMA is an indication that the product stewardship movement has gained steam, attention, and credibility. There is an interest in finding ways for voluntary industry initiatives to integrate with regulated programs. But there is also a concern that PMA is promoting voluntary programs to block sensible laws that will require them to take greater responsibility, even if the results will be better for the common good. There are other concerns about voluntary programs. Since they rely on the good will of companies, they could be here today but gone tomorrow. And it is often hard to know how effective they are since program operations are often not transparent, and companies selectively report data.

For the past 30 or 40 years, there has been a creeping sense among some in politics that all government officials are inept bureaucrats tying companies in knots, preventing job growth, and wasting investment dollars for little benefit. To be sure, those officials exist. But most officials I know are interested in using their authority to create a level playing field for fair competition that will result in more recycling jobs from materials that previously polluted the environment. They want to set broad performance targets and allow companies the flexibility they need to innovate and reach the targets at minimum cost. That is the type of balanced regulation and progress we need.

Government product stewardship regulations will result in fair and effective systems. Voluntary actions will not.

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