Under Extended Producer Responsibility, Who Owns the Resources?

By Helen Spiegelman, Board President

The question of who owns recyclable resources is one that has lurked outside the normal discourse of recyclers. It's time to start talking about it.

The recycling industry has traditionally relied on a unique type of resource: not “raw” resources, but resources with significant value-added. In fact, the greatest part of the value of the recycler's stock-in-trade is the value-added. This is what makes recyclers different from mining companies. Recyclers tend to emphasize the social benefits of their business, but there has been surprisingly little discussion of a potential vulnerability: an open question about the recycler’s right to access discarded materials.

The recycler’s access to discards is premised on a broad social tendency to consider discards as valueless. It is also premised on a market in which manufacturers relinquish any sort of prior rights to the materials to which they have added value. With rare exceptions, manufacturers have not attempted to exercise any claims on their discarded products.

EPR for packaging and printed paper is a threat to recyclers because it introduces the possibility that the original producers may have prior right to the value-added in their discards. We feel comfortable with EPR for discards with negative value (toxic or useless products). But when EPR is extended beyond household hazardous waste to include discards with real value, recyclers rightly see a major disruption of their business.

My sense is that this will be a healthy challenge for the recycling industry - as long as we make sure that EPR policy works for the planet and its inhabitants.  EPR policy must include robust mechanisms to prevent abusive practices by producers and producer responsibility organizations (PROs) that may be formed by producers to discharge their responsibilities under EPR laws.   If there is only one PRO authorized by producers of a certain product or resource, the effect can create a monopsony (think monopoly, except in the reverse where you have one buyer and many sellers).

We need to have a vision of a strong, diversified recycling industry with competitive access to discarded resources protected by regulation if necessary. The original brand owner's “rights” are constrained by a new obligation to ensure that its discards don’t go to waste, and by an obligation to trade fairly with businesses and social enterprises that provide recycling and reuse solutions for those discards; just as the recycler's “rights” are constrained by the acknowledgement of the brand owner's contribution to the value of a discard.

This is how we are going to grow recycling beyond a boutique industry, where a relatively small number of businesses and social enterprises operate at the margins of a vast tipping floor and most of the value-added resources go to waste.