Compliance Update – How should producers react to Romania’s new waste management Ordinances?
by James Gibbs at 09:11 in Packaging
Producer obligations for packaging waste in Romania are undergoing some changes. The Romanian Government has passed two Emergency Ordinances into law which are having a profound impact upon the waste sector. These Ordinances have not only expanded liability, but also introduced uncertainty for producers and waste management companies alike. The question for companies then is: What do these changes mean on paper and in practice?
The first Ordinance (no. 38/28 2016) would appear to make compliance with packaging waste regulations easier for producers. The Ordinance provides that producers can recover and recycle any packaging on the market to satisfy their recovery targets, provided that they recover waste of equivalent weight to what they produce. In theory this gives producers more flexibility in their waste management practices.
To meet targets set by the Government, producers have the option to independently contract with waste management companies, recycling plants and sorting stations. However, companies who choose to take this route must obtain extensive paperwork which documents the origin of the packaging and proof of recycling quantities and outcomes. Failure to provide satisfactory proof can result in significant penalties imposed by the relevant authorities. Therefore, this approach creates an administrative burden and additional risk.
Alternatively, producers can contract with Extended Producer Responsibility (EPR) schemes who take ownership of potential liability to ensure correct reporting and collection is completed. This approach is typical of producer responsibility systems throughout Europe.
However, the second Ordinance has complicated the EPR model. Under this new Ordinance (no. 39/28 2016) the number of companies in the waste management sector who could face penalties has increased. Therefore, prices in the waste management sector are expected to increase due to risk.
This expansion of risk and penalties has resulted in some uncertainty and therefore we understand EPR schemes throughout Romania are unwilling to take on new clients or manage large quantities of waste. If costs rise, then packaging waste management could decrease throughout the supply chain.
The end result is that producers are left with limited options. They must either contact all EPR schemes and hope to transfer liability in a market that is unwilling to take on new clients, they could establish their own individual system by contacting waste management companies and take on an administrative burden and risk, or simply set aside finances equivalent to the penalty they may face for non-compliance at the end of the year.
None of these options are very desirable and if the situation is not resolved by the introduction of another Amendment or Emergency Ordinance we may see a significant waste management slowdown in the country which currently has the lowest recycling rate in the EU.
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