Eye into the past invokes opportunity

In part three of Waste Management Review’s COVID-19 challenges and opportunities series, retired waste industry leader Max Spedding recalls how he overcame challenges in the past. He eyes opportunities for the future on the other side of the crisis.

While Australia and the globe as a whole are undoubtedly facing one of the worst collective economic and health crises since the Great Depression, there are always lessons we can gleam from the past.

So far the response from Australian federal, state and territory governments to the health crisis has been swift. At the time of writing, the number of confirmed COVID-19 cases in Australia was less than 7000, with more than 4000 recovered. The health crisis is very much intertwined with the economic one.

That said, there are always stories of resilience that can shed some light into how we can deal with future challenges. To that end, Waste Management Review explores how waste industry stalwarts got through challenging times in the past and their thoughts on what lies ahead for recycling.

While the International Monetary Fund expects real gross domestic product (GDP) to shrunk by 6.2 per cent this year, the 1980’s drought-related recession saw a 2.2 per cent decrease throughout 1982. Likewise, the 1990’s recession infamously referred to by former Prime Minister Paul Keating as the “recession we had to have” saw a fall of 1.7 per cent. All of these instances were linked to global pressures.

The characterisation of the current economic situation has been compared by many commentators to the Great Depression, where GDP fell by 10 per cent between 1929-31. The Great Depression of the 1930s led to a revaluation of the country’s understanding and implementation of macroeconomic policies, with Keynesian economics being developed during and after the period.

According to a speech by the Australian Treasury Macroeconomic Group in 2009, the key elements of the modern monetary policy framework has over time provided capacity for flexibility and a rapid and aggressive response to macroeconomic shocks. It cites rapid easing of Australian monetary policy in late 2008 to 2009 as an example of this flexibility. The lessons proved useful in staving off the significant impacts of the 2008 Global Financial Crisis.

The unknown territory Australia now faces itself in is how to deal with the re-build, and the three stimulus packages, valued at a collective $213.6 billion, is only one step of the way. The Federal Government has flagged that policies discussed pre-election will now be re-visited. This means tax cuts, deregulation and industrial relations reform may be a few areas looked at on the other side.

Those who have lived through multiple crises will understand that there are opportunities at the other end, and resilience is important.

Max Spedding started his career in ready mixed concrete and finished it with the National Waste and Recycling Industry Council, leading the influence of federal government policy reform on waste and resource recovery. He’s lived through multiple economic crises, including the 1973 oil crisis and 1987 stock market crash.

Spedding started his career more than 50 years ago in 1970 in the Shire of Korong north of Bendigo. After working in local government for a year, he joined Pioneer Concrete – now Hanson – in Australia and in 1971 went to the UK followed by Italy in 1973-74. He immersed himself in concrete and quarries for the next decade, focusing on managing profit and loss in his various divisions.

“In fifty years, we’ve never seen anything quite like this, but it is interesting when you reflect on problems of the past,” Spedding says.

He recalls working in Italy under 30 per cent inflation and fuel price changes. The 1973 oil crisis began after the Organization of Arab Petroleum Exporting countries proclaimed an oil embargo targeted at nations perceived as supporting Israel during the Yom Kuppur War.

While the US, UK and Canada were targeted, an article published by the Università del Salento indicates Italy was highly affected due to its lack of primary sources of oil.

Spedding says conditions were also challenging while the terrorist and guerrilla organisation Red Brigade remained active – a group responsible for kidnappings and robbing’s throughout Italy.

“You just couldn’t keep up with inflation, but the interesting thing was that although it took a year or so to get through it, but we did, we got there.

“Of course it was economic rather than medical, but you’ve just got to live by the day and wait for new opportunities arise.”

“It’s surprising how you have a period of intense inflation and it sort of clears the deck and establishes a new platform on the value of your investments and you can then go forward again. It’s a matter of being able to batten down the hatches and hold on and then look at the new reality that comes out and take advantage of the difficulties.”

Fast forward to 1984 and Spedding returns to Sydney to manage Pioneer’s concrete division. Things get tricker as the company becomes vertically integrated and begins to lose thousands each month, he says.

“What Pioneer taught me is to make sure you have all the information on the table and you remain focused on what the intent of it is. If you’re intent is to make money, you have to make money – overall as a group – not just one aspect of it.”

In 1987, he decided to put his learnings to greater use joining a company called Hooker Corporation in a newly formed resources division.

“That was all doing well but unfortunately George Herscu invested heavily in America in supermarkets and they went belly up and the holding company went into bankruptcy.

“That left our little resources division which was quite profitable with positive cash flow hanging out there.”

He says all team divisions were brought into the corporation under a negative pledge arrangement which saw him presented with a request for $340 million despite the division having a value of around $20 million.

“At the same time we had the 1987 crash and all of my options I had negotiated in taking on this new role went out the window.”

“But the net result was we sold off the resources division and only one bit of it failed, all the rest of it continued and is now in the hands of others.”

He says going through a liquidation and the 1987 crisis, amid incredibly high interest rates, was extremely difficult to manage but he emerged in 1989 with a role with Browning Ferris Industries (BFI) – now owned by SUEZ in Australia – running the development of new landfills in Australia and New Zealand. He developed the Lyndhurst Landfill in Taylor’s Road, one of the first lined landfill in Australia which is still in existence today.

In 1992, he took on  managing waste-to-energy market developments for BFI in Thailand, Indonesia and the Philippines. Two years later, he took over as Managing Director of the BFI in Australia.

“That got me into the international waste industry. The interesting thing there was we had the Asian share market economy meltdown in 1996/97. My response to our American owners at that time was our caution in developing WtE in Asia proved to be successful. Because when the crunch came although the projects/companies we were involved in failed, we virtually had no exposure.”

“That’s one crisis that was avoided because we were probably a bit too conservative, but sometimes you have to be.”

He recalls attending a larger conference in 1996 with BFI with over 500 managers from around the world. Every third person was asked to stand up.

“The CEO says just imagine you all just lost your jobs: that’s how much the industry is going to go to recycling and unless we embrace recycling, all you guys will be out of work.”

More than 20 years’ later, he says recycling is still a real challenge for the industry.

He says we need to keep it simple and the three RRRs – reduce, reuse and recycle showed what practically can be done. He says that while metals work in the global economy and fibre works locally plastics have always been a challenge.

“Throughout my life I’ve always targeted the 80 per cent solution as this gives you the highest amount of efficiency and return and sustainability. As soon as you start to focus on the top one or two per cent, you get in trouble.”

But recycling really changed around a decade ago when organisations found a reliable outlet in China. At that point, Spedding was doing some consulting work and CEO of the Australian Landfill Owners Association until 2015.

“This model was basically to do the minimum amount of sorting and produce a bulk product with five per cent contamination or less. You offloaded it to China which had very cheap labour and poor environmental condition,” he says.

“The interesting thing that most people don’t think about is that it’s not only the cheap labour. So much material is coming to Australia as a major market for the Chinese manufacturing sector. All of the containers had to be taken back to China and they all went back empty so basically you got almost free backloading in those containers of this material.

“So using China as a low labour but also as a low cost destination because of the empty container. It was a perfect marriage, if you like. The only problem was that it wasn’t sustainable.”

He officially formed the National Waste and Recycling Industry Council in early 2017 with the backing of its national members – Alex Fraser Group, Cleanaway, J. J. Richards and Sons, Solo Resource Recovery, Suez, Toxfree, Remondis, ResourceCo and Veolia.

In mid 2017, China announced to the World Trade Organization an intention to ban the import of waste products from US, Japan, Australia and other source countries, to take full effect by the end of 2017.

He says councils went from paying $40 a tonne to offload their recyclables to suddenly being paid $10 a tonne for the material.

Spedding says that while industry was concerned, the Federal Government seemed to have little understanding about the implications.

“This was the public perception that recyclables had a value. There’s no doubt they do, but where is the value positive is the issue,” he says.

“It doesn’t start positive, it’s positive somewhere along the line from sorting and processing  down into a producing a raw material again.”

He believes the value of waste doesn’t begin at a household level, it begins at stages of sorting and processing across the supply chain and back down into a raw material.

“The issue [now] is COVID-19 has disrupted the economy totally. But the biggest thing, is that I think coronavirus has spelt the end of globalisation as we previously knew it,” he says.

“Through the 90’s globalisation was a concept being pushed by everyone by countries, companies and individuals. We had the beginnings of a truly global economy.”

He adds that COVID-19 has exposed the weakness of globalisation and our dependence on supply lines and cheaply produced components overseas.

“As we come out of the coronavirus and look at all of these policies, recycling in particular, we are going to have to re-consider the world and the approach to globalisation.”

He points out that while everyone has been talking about a circular economy, that was practical up until China closed its doors on waste exports.

“While China was producing and was part of the circular economy, that was fine, but as soon as they closed the doors and wouldn’t take the waste back, the circular economy couldn’t include them.

“Therefore, it’s no good talking about circular economy in a global situation. But now we have a situation where globalisation will certainly be on the table for review and our circular economy that we’ll be talking can be geographically smaller.”

He says that as supply chains are broken by COVID-19, Australia can consider looking a more local specialised manufacturing including from recycled materials. Additionally, it can prompt a re-think of sustainable local services, whether it be closer food supplies, medicine or equipment, improving the climate in the process.

“I’m hopeful one of the positives that will come out of this is a refocus in Australia on manufacturing and product sustainability.”

“There is an opportunity for a new approach and a greater focus on a resilient, self-reliant Australia as a result.”

“There can be a lot of positives that will come out of this as long as we return to work not thinking it’s all the same and try to go back to where we were. We need to be looking at where we can be, and how it can be better.”

Close the Loop Founder Steve Morris says the company’s brands take a long-term view in its licence to operate.

“I’ve always found that resource recovery, product stewardship and circular economy…all of that seems to be growing independent of market ups and downs,” he says.

“Right now we are expecting some big decisions coming out of government like the Recycling Victoria policy, NSW EPA and incentive work on our road products.”

He says there were many scenarios in which circumstances looked uncertain over the years, including the development of its TonerPlas product.

“Our biggest challenge there is getting a government procurement professionals to actually buy the product, to specify the product.”

He says fortunately the company has received extensive support from agencies such as Sustainability Victoria. This has helped drive the product forward and the company has worked towards long-term sustainable outputs.

“It’s certainly been risky but we’ve been 100 per cent committed all the way,” he says.

Steve says Close the Loop, which has been value-adding on-shore, was reasonably insulated from National Sword, if not feeling bullish about the policy.

“National Sword to us was a risk we became aware of two or three years before it really hit. We were feeling fairly safe because of the value-add we give the polymers here before they go through brokers into other countries.”

He agrees the way forward in a post COVID-19 world is a renewed interest local manufacturing in Australia and an increase in regional supply chains. This should be supported by state, territory and national circular economy policies.

This is the second part of a four part series on challenges and opportunities during COVID-19. You can read part one by clicking here. Part two can also be read here.

To subscribe to Waste Management Review with free home delivery click here

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NWRIC appoint new CEO

The National Waste and Recycling Industry Council (NWRIC) has announced the appointment of a new CEO, effective 1 August.

Rose Read will take up the position with 20 years of experience in the waste, recycling and environmental sectors. She has lead commercial and not-for-profit organisations like the Australian Mobile Telecommunications Association’s MobileMuster and Clean Up Australia.

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She is currently the CEO of the product stewardship arm of MRI E-cycle Solutions and will transition out of the role are MRI to take the position of CEO of NWRIC.

“I am very excited to have the opportunity to work with Council members and State affiliates in addressing key national issues facing the industry,” Ms Read said.

“As a key enabler of the circular economy the recycling industry has much to contribute to Australia economically, environmentally and socially. I look forward to being part of NWRIC and collaborating with members and key stakeholders to create a more vibrant and sustainable waste and recycling industry,” she said.

MRI E-cycle Solutions Managing Director Will LeMessurier said Ms Read has played an important role in setting up MRI’s product stewardship arm over the past two years.

“She will continue to be involved in MRI on a part time basis over the next six months or so as we transition to our new structure. We wish her well in her new role and the continued positive influence she has over our industry,” he said.

The news follows the announcement of outgoing CEO Max Spedding’s retirement after 30 years of experience in the waste and recycling sector.

“Setting up the Council over the past two years has been a challenge but now we have all of the key national companies and state associations on board we are starting to see real and positive outcomes,” said Mr Spedding.

“With our current recycling problems and the urgent need for better infrastructure planning across Australia, Rose and her team have a busy time ahead. I wish them every success.”

NWRIC calls for national register of waste providers

The National Waste and Recycling Industry Council (NWRIC) has called for two major reforms following its October 12 meeting.

The industry advocacy group, which represents some of Australia’s largest waste management companies, called for a national database of waste and recycling service providers.

It also argued that a national standard and audit of combustible waste stockpiles is needed. The council members comprise national waste companies and all mainland state waste and recycling associations, including Alex Fraser Group, Cleanaway, J. J. Richards and Sons, Solo Resource Recovery, Suez, Toxfree, Remondis, ResourceCo and Veolia.

In regards to the call for a national database, NWRIC Chairman Phil Richards said effective waste management and recycling requires high standards which protect workers, the public and the environment.

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He said governments should therefore register all facilities and transporters undertaking waste processing, recycling or waste transport to assist their compliance activities.

“The NWRIC was setup to protect and raise standards in landfill, recycling, processing and waste transport. An enhanced registration program will give state Environmental Protection Authorities the power to protect standards.” At a previous meeting, the NWRIC suggested that landfill levy revenue could be used to improve compliance activities .

In addition to a program to register all waste transporters, the council called for state government action to ensure that all waste processing facilities hold an Environmental Protection Licence.

The council argued licensing of all facilities is urgently needed to maintain equal standards, and to ensure that compliance activities cover all facilities, regardless of size.

Key standards the industry are concerned about include; the stockpiling of combustible material, landfill levy avoidance, poorly managed small landfills, illegal dumping for commercial gain and fraudulent activity involved in cash for scrap.

“In some instances, the fines for operating an illegal or a substandard facility are lower than the cost of going through the licensing and compliance measures,” said Max Spedding, NWRIC CEO.

“Regulators must ensure that compliance costs apply to all facilities, and that fines and regulatory action protect those operators that put in place standards at or above compliance requirements.”

At its October 12 meeting, the NWRIC also called for the development of national fire management standards for waste and recycling facilities. The council believes this standard is needed to protect public safety and restore trust. These fire control standards should apply to all waste and recycling facilities.

“Following a series of major fires, we’re calling on regulators in every state and territory to conduct audits of stockpiles of combustible material to ensure future fires do not harm public safety and further tarnish the reputation of our industry,” Mr Richards said.

“We note the recent regulatory action by the Victorian Environmental Protection Authority, and urge other states and territories to follow their example.”

To enhance the program, industry leaders also called for a national register of waste transporters, along with a new program by regulators to licence all waste processing facilities and landfills, regardless of size.

Related to the stockpiling of combustible material is new concerns of an export slowdown, particularly for China, in regards to plastics. Additional government support to enhance markets for paper and plastics is urgently needed to reduce the commercial pressure for operators to stockpile.

Programs which will stimulate recycling markets are available in the NWRIC Policy Roadmap for a Circular Economy.

Used tyres stockpiles also represent a critical fire hazard. The council believes that a mandatory product stewardship scheme, under the Commonwealth Product Stewardship Act 2011 , should be introduced without further delay. Tyre stockpiles exist in all Australian jurisdictions.

National Waste and Recycling Industry Council headlines Waste Expo

Max Spedding, Chief Executive Officer of the newly formed National Waste and Recycling Industry Council, is set to present one of his first public addresses at Waste Expo Australia.

Mr Spedding will address some of the barriers to achieving a circular economy with sustainable recycling, highlighting issues the council’s members are facing in a heavily regulated industry, including disparities with state landfill levies, interstate transportation and the stockpiling of waste.

He will encourage governments to work together, while also calling for state financing arrangements from accumulated landfill levy funds, allowing for better infrastructure to be provided for waste re-use, recovery and recirculation.

Mr Spedding said he hopes the ongoing work of the council will also encourage greater support for new infrastructure, education programs, research and development, and regulatory enforcement.

“Currently, 60,000 tonnes of waste per month travels from Sydney – where levies are the highest in Australia – to Queensland, where no levies exist,” Mr Spedding said.

“This example alone demonstrates the ineffective and uneven landfill levy policies currently in place, and is one of the many reasons why the council is calling on state governments to make much needed changes to policies and regulations.

Mr Spedding said Waste Expo Australia provided an opportunity for the council to demonstrate a united voice for its members, facilitating meaningful and sustainable recycling together.

“We’re here to make changes towards a circular economy, and we’re in a position and at a stage where we can do so to benefit not just our members, but all Australians.”

Waste Expo Australia will feature more than 70 exhibitors.

Visitors at this month’s exhibition and conference will have the opportunity to hear from more than 35 of the sector’s most reputable leaders as part of Waste Summit, a seminar program. The program is the largest free-to-attend waste management conference in Australia, with 30 topical and informative sessions, keynote presentations, practical case studies, lively panel sessions and white paper discussions.

The Waste Summit provides an opportunity for attendees to learn from industry peers and stay informed across areas including policy, legislation, circular economy, waste-to-energy, solid waste management, new technologies and advancements.

Waste Expo Australia will be held at the Melbourne Convention and Exhibition Centre on Wednesday 11 and Thursday 12 October. It will be co-located with All-Energy Australia 2017, the country’s premier clean energy and renewables event, as part of Australian Sustainability Week. To register for Waste Expo Australia, head to their website. 

Max Spedding will present Waste and Recycling in Australia – Where to next, at 10:15am on Wednesday 11 October, at the Melbourne Convention and Exhibition Centre.

National Waste and Recycling Industry Council to advocate for industry

A new body working to create a cohesive national vision for Australia’s waste management industry has officially formed. We spoke to the organisation’s CEO Max Spedding about his plans.

Read moreNational Waste and Recycling Industry Council to advocate for industry

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