Walmart works to censor UPSTREAM: Refuses to debate Closed-Loop-Fund

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Matt PrindivilleAs UPSTREAM fans may remember, we recently advertised that we were invited to participate in an upcoming webinar, Increasing Packaging Recycling in the United States on February 5th. We were to provide a counterpoint to the industry perspectives of Ron Gonen, from Walmart’s Closed Loop Fund, and Keefe Harrison, Executive Director of the Recycling Partnership. If you’ve been following our blog, you know why our perspective is important.

Walmart’s Closed Loop Recycling Fund (CLF) and the new Recycling Partnership 571-600x600-scaleare voluntary corporate initiatives: one to loan money to municipalities and the other is a grants/technical assistance program to help boost recycling in the United States. As we’ve said before, there is nothing “wrong” with these programs. Frankly, we’re excited that they’ve been developed because they are a direct indicator that the pressure we and our partners have been putting on Corporate America to end packaging waste – is paying off.

However, these voluntary corporate programs are a drop in the bucket to what’s really needed to boost recycling in the United States. As I pointed out in The Guardian, the amounts of corporate money in these “public-private partnerships” are insignificant when compared to the amounts of money that taxpayers and ratepayers pay to clean up after them.

The Closed Loop Fund aims to raise $100 million from companies to loan to local governments to further ensconce public responsibility for managing private goods. A recent UPSTREAM study showed that New York City taxpayers alone pay $600 million each year to manage packaging and printed paper. Guy Crittenden got it exactly right in a recent article: “The Closed Loop Fund continues the cynical tradition founded by the major soft drink companies that gave seed money to the Ontario Blue Box curbside recycling program in the 1980s: Pay a few million dollars here and there to keep local governments distracted from the fact that they’re saving industry billions in waste recycling and disposal costs.”

To get to the point, we were excited to be invited to share these perspectives on the February 5th webinar and have an open discussion with representatives from Walmart’s CLF and the Recycling Partnership. You can imagine my surprise when I learned that they refused to be on the panel with UPSTREAM. Apparently, they don’t want their perspectives critically examined and are afraid of ours gaining broader acceptance.

Here’s why UPSTREAM’s perspective is scary to Walmart and other consumer goods companies: we are on the verge of passing extended producer responsibility (EPR) for packaging legislation in the United States, which would make Walmart, and the other corporate sponsors involved in the CLF, financially responsible for paying to recycle their packaging waste.

Here’s why we’re on the verge of passing legislation: When Nestlé Waters North America came out in support of EPR for packaging nearly four years ago, it marked a watershed moment. For the first time, a major consumer goods company had admitted that they bore financial responsibility for increasing the recycling of their packaging and that all other consumer goods companies should share that same responsibility.

To briefly sum up the last four years of history on the subject, the US EPR packaging discussion got bogged down in debates around the relevance of (and problems with) foreign EPR models, fear of “loss of control” by local governments and recycling businesses, and the pursuit of “winnable policies” on the business side to get additional corporate support.

We also learned some valuable lessons: First, although consumer goods companies increasingly understand that they bear some responsibility for the packaging they put on the market, these corporations are not going to step forward and assume major new obligations voluntarily.  Second, Nestlé Waters put forth an EPR model without first consulting the local governments and private businesses that are currently managing their wastes. The lack of details and specter of loss of control created fear and confusion among stakeholders downstream. Third, much of the discussions and subsequent controversy focused on a 100% producer-financed and controlled recycling system and the massive power-shift inherent in this approach.

What was lost in this debate was the incredible opportunity that is now on the table: Since Corporate America has admitted that they bear some responsibility for recycling their packaging – it is up to local governments, public-interest groups, and recycling businesses to determine how much responsibility they bear and how that responsibility should be implemented.

That was UPSTREAM’s conclusion following our recent discussion with local governments which led to the creation of Advancing Local Governments Interests through EPR for Packaging. In several states around the country, public-interest NGOs, local governments and some recycling businesses have already been organizing to move EPR packaging policy forward. What we need now is for these groups to organize around policies that determine 1) how much corporations should contribute to recycling their packaging, and 2) how much control they should have over the systems they are investing in.

Our advice to US recycling advocates: Stop wasting time discussing British Columbia, or waste incineration in the EU, or what you might “lose” and focus on the incredible opportunities to gain from increased investment in recycling infrastructure in the US. We understand that the 100% producer-financed and controlled model is controversial, so let’s talk about other models and get to solutions. Here are a couple of ideas.

On financing:

  • Shared Responsibility Producer/Municipal Cost-Sharing Model: Start with shared responsibility following from the model in Ontario where producers pay a fixed percentage of municipal recycling costs. Tie this investment to achieve an overall packaging recycling rate of 75 to 85% across a state, with individual recycling targets set for each commodity (glass, PET, aluminum, etc.). Include an evaluation period to determine the optimum level of producer financing and/or control. While there are problems with this model, it begins the process of consumer goods companies paying their fair share to recycle the packaging they put into the marketplace.
  • Functional Split (Between Collection and Processing) Model: Split financial responsibilities by function, with local governments assuming the costs for collection and producers assuming the costs for processing and moving collected materials into commodities markets. Tie new investment in the system toward achieving an overall packaging recycling rate of 75 to 85% across a state, with individual recycling targets set for each commodity (glass, PET, aluminum, etc.).
  • Fixed-Cost Producer Fund Model: Start with a fixed amount of producer contributions. Make all covered producers of packaging (above a deminimus level of sales) contribute to a fund that will make targeted investments to achieve an overall packaging recycling rate of 75 to 85% across a state, with individual recycling targets set for each commodity (glass, PET, aluminum, etc.). The fund would be capped at a specific amount to be spent annually, so producers would only have to collectively fund the program up to a certain amount. *Note: Advocates were a few votes shy of passing the first EPR for pharmaceuticals bill in the United States (in Maine in 2010) with a similar funding approach.

On implementation and control:

  • Third-Party Organization Model: We would like to credit our friend, Dick Lilly, from the City of Seattle, for originally articulating this idea. This model proposes developing a third-party organization to administer funds – raised by covered producers – to achieve increased recycling rates. This organization would be similar to an industry-run stewardship organization, but the governance would be balanced by statute among producers, recycling businesses, NGOs and local governments. In this way, it would function more like a utility structure governed by appointed commissions or boards of directors. Costs to producers and payments to service providers can then be negotiated in a transparent forum similar to the way utility rate cases are handled. Funds raised could be invested in a wide variety of strategies to increase recycling rates, including statewide outreach and education campaigns, investments in MRFs, expansion of curbside programs and away-from-home recycling, etc. *Note: A similar organization, called the Recycling Public Advisory Council, functions to administer funds raised from a fee on beverage containers to boost recycling rates across the state, as part of Delaware’s 2010 Universal Recycling Law.

What’s important for all stakeholders to realize is thatState House these are not “pie-in-the-sky” ideas. These are winnable solutions in today’s political climate in states across the country. All that is needed is for the parties – that have a vested interest in boosting recycling rates and lowering government costs – to recognize the power that they have in working together to get Corporate America to help pay for recycling. The details are simpler than many are making them out to be.

It’s time for local governments to stop begging for crumbs through voluntary efforts like Walmart’s Closed Loop Fund, and instead – get organized and demand a seat at the table to get their fair share through mandated public policy.

Walmart and the other CLF corporate sponsors already pay into EPR packaging systems across the world. My question and challenge to US recycling advocates is why are we letting them pay for first-rate recycling systems in the rest of the developed world, while allowing them to get off the hook here in the United States?

For more information, check out our sustainable packaging policy page.

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