Changing course on container collection

30/09/2020 - 10:00

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From October 1, Western Australians will be able to exchange their used bottles for cash, but how will the scheme operate?

Changing course on container collection
Tim Cusack says half of the businesses contracted by WARRRL are commercial businesses and 35 per cent not-for-profits. Photo: Gabriel Oliveira

Tara and Michael Simpson moved their family across the country to open a recycling refund facility as part of Western Australia’s new container deposit scheme, Containers for Change, which launches next month.

Mr Simpson, a self-employed carpenter, and Ms Simpson, a part-time teacher’s aide, had been living in northern NSW, collecting containers with their kids as part of that state’s scheme. 

When they found out a similar scheme was starting in WA (where, years before, Mr Simpson finished his schooling), the pair decided to move to Perth and start a new business. 

“When we realised it was coming to WA … we were keen to jump on board and move over west,” Ms Simpson told Business News.  

They have since established for-profit company WA Container Exchange, and will run a depot-style site in O’Connor and two pop-up locations, in Hamilton Hill and Coogee. 

The Simpsons plan to work at the depot and employ up to six staff, depending on demand, having already ordered automatic counting machines from South Australia. 

Ms Simpson said the community was enthusiastic about the scheme, and the couple hoped this support would help them create a successful business. 

“It all depends on the community, as well as us, and reaching out to everybody,” she said. 

“What we have heard from other depots is they have been quite successful over east.” 

WA Container Exchange is one of the 76 organisations contracted by the scheme coordinator, not-for-profit group Western Australia Return Recycle Renew (Ltd), to operate a refund location. 

WARRRL chief executive Tim Cusack said half of the organisations contracted were commercial businesses, 35 per cent were run by social enterprises and not-for-profits, and 15 per cent by local governments. 

There will be 94 depots, which process a refund on the spot, and 53 bag drop locations, allowing people to drop their containers and receive a refund later.

People will also be able to drop off their beverage containers at 47 pop-up stations at well-patronised public locations, such as farmers markets.

In addition, there will be six reverse vending machines located across Perth, including in the CBD and Belmont, which can scan and count containers and offer a refund on the spot.

A WA customer survey commissioned by the state government in 2018 found a preference for refund points being located at or near places consumers were visiting on a regular basis, such as shopping centres. 

Supporting this finding was international research by Reloop Pacific, which showed schemes with the highest return rates had container return facilities at shopping centres.  

Most refund points in the WA scheme were in industrial or light industrial areas, Mr Cusack said. 

He said WARRRL was aiming to collect 65 per cent of containers sold in WA to be returned for recycling in the first year, and 85 per cent after that. 

Disability services provider Ability Centre has been contracted to run depot-style collection points in Midvale, Bibra Lake and Cannington for at least the next five years.

Chief executive Jacquie Thomson said the organisation recognised the container deposit scheme as a great opportunity to provide employment opportunities for people with a disability.

“We hope through the skill development that this provides, some of them may then move to more open employment and we actually get a new cohort through as others move on,” Ms Thomson told Business News

“The skills they will be learning and developing will be around customer services, money handling, sorting and counting, traffic management, warehousing and logistics, and they are very transferable skills into the open market, so that’s our ambition.”

Ms Thomson said about 30 people with disabilities would be employed at the three sites, which were expected to break even at the beginning and eventually return a profit.  

“We hope that, over the five-year period, we will be growing the business and maybe even looking at additional sites to actually be returning a profit,” Ms Thomson said.

Ability Centre can also earn money through donations, as people are encouraged to offer their refund to the organisation running the collection point. 

Schools and community groups will be able to fundraise at refund points by creating a scheme ID and encouraging people who support the organisation to nominate the ID when they deposit containers. 

Several local councils have signed up to run refund stations, including the City of Stirling

To help with the operation of its refund point, the city is working with the third-party contractor that collects its kerbside recycling. Under the arrangement, the contractor will isolate container deposit scheme items. 

A City of Stirling spokesperson said the council had entered into a profit-sharing arrangement with the contractor, and the small income generated from the scheme would offset ongoing cost increases in waste disposal and recycling programs. 

Once the materials are collected from the various refund points, contracted logistics and processing organisations, including recycling company Cleanaway, are in charge of collecting the materials and storing them at their depots. 

WARRRL then advertises the collected containers in an online portal to be auctioned to buyers, who will recycle the materials to create new products.

Who will pay?

A product stewardship scheme, Containers for Change requires that beverage companies fund the recycling of the products they produce. 

In accordance with the Waste Avoidance and Resource Recovery Amendment (Container Deposit) Act 2019, all drinks companies, from small craft beer operators to multinational giants, are required to contribute [to the scheme] per container sold. 

In WA, the estimated cost to the manufacturer per container will start at 11.39 cents for aluminium, 11.76 cents for polyethylene terephthalate, 11.84 cents for glass, 11.85 cents for high-density polyethylene, and 12.17 cents for LPB, excluding GST.

Beverage companies can absorb the costs themselves, pass them on to the consumer, or impose the cost on retailers. 

A report from Queensland’s Productivity Commission found the price of non-alcoholic beverages increased 9.5 cents and alcoholic beverages increased 8.7 cents, after the introduction of its container deposit scheme.

Craft brewer Blasta Brewing Company sales manager, and Western Australian Brewers Association treasurer, Mike Morgan said while the scheme would have financial implications for small producers, overall it would be good for the community.

At this stage, Mr Morgan said, Blasta planned to pass on the cost when selling wholesale products, but would absorb it in sales from its takeaway fridge. 

Larger corporations, including Lion and Coca-Cola Amatil, have previously campaigned against container deposit schemes because of the costs. 

In 2013, Coca-Cola Amatil, Schweppes and Lion went to court to oppose the Northern Territory’s container deposit scheme, arguing the extra 10 cents added to the price of their products was unfair to consumers.

While they won the case, the scheme was reinstated a few months later. 

Coca-Cola Amatil and Lion now operate their own container deposit schemes in several states, including Queensland. 

The beverage giants also won the contract from the WA government to establish the WARRRL, and have representatives on its board. 

The chief executive of environmental association Boomerang Alliance, Jeff Angel, was worried about the influence of the beverage companies on the scheme. 

“We are most worried about convenience, which is fundamental to maximising the return rate, and also the financial risks to refund point operators, including not-for-profit groups and small business,” Mr Angel told Business News

“While it can be expected there will be an initial surge of enthusiasm, we think there are some big challenges to get a high rate of recovery.” 

In a recent statement campaigning against Coca-Cola Amatil and Lion running the container deposit scheme in Victoria, Mr Angel questioned beverage companies’ enthusiasm for the program. 

“Put simply, the more containers that are recycled the more it costs the beverage industry, so it’s not in a beverage company’s interest to create a system that adequately promotes recycling and encourages use of the scheme,” Mr Angel said. 

Coca-Cola Amatil group head of container deposit scheme implementation and packaging sustainability Jeff Maguire said a return-to-retail network depended on each jurisdiction and its requirements. 

“We had some fairly significant [demands] in terms of engaging with social enterprise,” Mr Maguire told Business News.

Despite concerns from environmental groups, Mr Maguire said the WA scheme would have a sense of convenience and accessibility for consumers. 

“We really want a well-run, cost-efficient CDS, but most importantly, it needs to be accessible and convenient for consumers … I believe we have achieved that in terms of the sites when you see them roll out,” he said. 

Mr Maguire said paying for the scheme and sitting on the board of WARRRL did not present a conflict of interest. 

“I don’t think it’s a conflict, I think it’s something we need to do to meet the expectations,” he said.

“If we can put a bottle out there, and bring a bottle back and turn it into another bottle, then that’s a great outcome.”

Mr Maguire said Coca-Cola Amatil’s participation in the scheme was about corporate social responsibility, as it offered no financial return to the company. 

WARRRL’s Tim Cusack said the scheme was built so no-one would have to drive very far to get to a refund point. 

“In Perth-Peel, we are required under legislation to ensure that customers don’t have to go more than five kilometres from where they live to a refund point,” he said. 

“We have 100-plus refund points in greater Perth-Peel and they have been widely dispersed across the whole metropolitan area; as part of that, we will be the only scheme in Australia with refund points in the CBD.”

Waste Management and Resource Recovery Association of Australia chief executive Gayle Sloan said it was important to support Containers for Change to ensure its success.

“The key thing is we are able to roll this scheme out and support those who are working really hard to deliver it in challenging times,” Ms Sloan told Business News

“We think that there are alternative models that could have been considered, however, we are determined to ensure that this is a success for WA.”

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