Victoria green lights split responsibility CDS model

The Victorian Government has announced the final design of its container deposit scheme (CDS), with the chosen split responsibility model supported by 85 per cent of participants during public consultations.

The split responsibility model, which is already operating in NSW and the ACT, involves a Scheme Coordinator who runs the administration and finance for the scheme, while a separate Network Operator runs the network of Refund Points.

Energy, Environment and Climate Change Minister Lily D’Ambrosio said the scheme – set to start in 2023 – will maximise the return of used drink cans, bottles and cartons for recycling, while reducing Victoria’s litter by up to half.

“The community was seeking the most accessible, best performing CDS for Victoria. In considering the final design, we have ensured that it will provide easy access for all Victorians, encourage greater recovery of waste and create new employment opportunities,” she said.

The scheme will create new economic opportunities and jobs, D’Ambrosio added, with responsibilities for running the scheme split between a scheme coordinator and network operators.

“This model was chosen following detailed analysis of schemes operating internationally and interstate to make sure Victoria has the best possible CDS,” she said.

Contracts for the roles of Scheme Coordinator and Network Operators will be awarded through an open tender process after the legislation has been approved by parliament.

“The state government will also ensure materials collected through the scheme are sold on the broad market to interested parties for remanufacturing in Victoria,” D’Ambrosio said.

Waste Management and Resource Recovery Association Australia (WMRR) CEO Gayle Sloan has welcomed the Victorian Government’s announcement, hailing it as a strong commitment to access and accountability.

“The government released its CDS framework today and despite relentless lobbying from VicRecycle, it has not bowed to pressure and has stuck to its guns to ensure an open market where all will have equitable access to the scheme,” she said.

“The Minister must be congratulated for sticking to a split responsibility model and going to market through a transparent and public tender process that is open to all interested parties.

“Her decision today shows that the government is committed to designing a scheme that will give the Victorian community maximum access and benefit.”

According to Sloan, the split responsibility model avoids a “monopolist beverage-designed scheme.” Thereby ensuring there is a genuine balance of power that manages the inherent conflicts of interest associated with the beverage industry, where higher container return rates impact commercial interests.

“WMRR has and continues to advocate that there is a role for all industries in the Victorian scheme, and there is nothing to stop interested parties from all sectors participating in the public tender for a role,” she said.

Sloan added that the public tender presents an opportunity for all parties to prove their suitability to the roles on offer, and called for all efforts to be channeled to the tender and “not wasted on mindless politicising of empty rhetoric.”

“WMRR would also encourage Victoria to go one step further than any other state, given its commitment to Recycling Victoria, and require all containers registered under the scheme to contain Australian recycled content,” she said.

TOMRA Collection Solutions – NSW, Queensland, Northern Territory and Western Australia scheme technology provider – congratulated the Victorian Government on choosing the new scheme structure.

“The Andrews Government has stood its ground and backed the best model for the environment, the economy and the charity sector,” TOMRA Collection Solutions Pacific President Ryan Buzzell said.

“After thorough consultation and consideration, Minister Ambrosio has locked-in a CDS design that will lift recycling, cut litter and create hundreds of new jobs in the circular economy.

“What’s more, the new Victorian CDS will provide unique opportunities for hundreds of charities, community groups and local sporting clubs to participate as both fundraisers and collection point operators.”

According to industry stakeholders, a key strength of Victoria’s chosen design is that it empowers and incentivises an independent network operator to achieve the highest return rates possible.

“Today’s decision is a big win for Victorians. Minister D’Ambrosio has chosen a CDS design that prioritises what works best: convenience for consumers,” TOMRA Head of Business Development Markus Fraval said.

“Virtually every high-performing system around the world partners with retail locations to ensure recycling becomes part of people’s everyday routine. Victoria is now poised to do the same.

“Co-locating reverse vending machines in shopping centres and supermarket carparks makes returning empty containers and collecting the refund as easy as possible for as many people as possible.”

PRODUCER RESPONSIBILITY

VicRecycle, which was formed by the beverage industry to advocate for the alternative community, producer responsibility model, is calling on the Victorian Government to clarifying that charities, community organisations and sporting clubs will be able to access maximum benefits from the scheme.

In Western Australia, Queensland and South Australia, these organisations are able to take part as network operators, earning the full 6.5 cent per container handling fee by contracting directly with the scheme coordinator.

This is in addition to any 10 cent refund donated by a consumer returning their containers.

VicRecycle Chair Paul Klymenko said that in NSW, these organisations are “forced to subcontract to the monopoly network operator” rather than the scheme coordinator, and receive 3.5-4.5 cents per container, plus any 10 cent refund from consumers.

“Minister D’Ambrosio’s announcement today is positive in ensuring community organisations should have a key direct operational role to play in the CDS,” he said.

“We’re hopeful community organisations, charities and sporting clubs will be able to directly take part in the scheme as collection point network operators and not have to subcontract through a third party.”

According to Klymenko, if Victorian charities, community groups and sporting clubs are forced to sub-contract to take part as operators in the CDS, they will lose up to $50 million in revenue.

“We’re also concerned that an over-reliance on unstaffed reverse vending machines will mean less jobs for Victorians,” he said.

Klymenko added that VicRecycle is positive that that the government would welcome multiple network operators taking parting in the CDS if it meant the best outcome for Victorians.

“A monopoly operator won’t benefit Victorians – but an open market where everyone can take part will,” he said.

“We would like the government to consider mandating a minimum quota for community organisations participating as network operators running collection points.

“The government should also ensure that the Scheme Coordinator is not for profit, so it cannot profit from the scheme.”