Governance of Producer Responsibility Organizations

By Christina Seidel, Executive Director, Recycling Council of Alberta

Extended producer responsibility mandates are often carried out by collective non-profit Producer Responsibility Organizations (PROs) that discharge individual brand owner responsibilities.  The makeup of the PRO governing board can determine the extent to which an EPR program serves broader commercial interests and achieves outcomes in the public interest.

PRO governing boards should include multi-stakeholder representation. This provides for more robust discussion around the board table, which is where the real decisions are made. It broadens the discussion to include important issues like the environment, in which producers have little expertise or often even interest. Purely producer PROs tend to focus on compliance and economic efficiency unless there is a broader conscience on the board. This conscience can be provided by other stakeholders.

At the same time, the list of stakeholders is likely best to not include those directly benefitting financially from the legislation, such as the recyclers/ haulers who are directly paid by the organization. This is just good board governance not to have these stakeholders at the table. However, their input is still desirable, so this is where an advisory group can come in. That way their input is still incorporated but not in a potentially conflicted way.

However, advisory groups can end up being a token gesture if there are no stakeholders on the governing board other than producers. There is no mechanism that requires the governing board to take the advisory board’s input into consideration.

Producers can be threatened by the notion of other stakeholders on their board. But, there are examples of multi-stakeholder boards that operate effectively. I think the best model is one where no single group has a majority vote, requiring more consensus building around the table. However, it may be necessary to compromise by giving producers a majority vote. This may provide them with the feeling of control they want, while still bringing broader opinions and expertise to the table.

An example of a multi-stakeholder stewardship board with broad representation is the Alberta Recycling Management Authority. This board manages the tire, electronics and paint stewardship programs in Alberta. Board representation includes one member from each of the tire, electronics and paint industries, as well as urban and rural municipalities, professional engineers association, environmental services association, Recycling Council of Alberta, Alberta Environmental Network, and public at large. In addition, there are three industry councils to address issues specific to tires, electronics or paint, and present recommendations to the Board.

An example of an industry-oriented board that incorporates some external stakeholder representation is the BC Used Oil Management Association. Its board is comprised of seven industry members from manufacturers, brand owners and retailers, as well as one municipal member and one from the public-at-large. The other used oil management boards across the country have similar board make-up.

It is somewhat intuitive that broader stakeholder representation will raise a wider range of issues at the board table, as well as bring an increased range of skills and expertise to the decision-making process.  Getting the right mix on the governing board is an important consideration in enabling legislation or regulations.