Productivity Commission Inquiry into
Waste Generation & Resource Efficiency

Comments on Draft Report

By

Australasian Paper Industry Association

July 2006

The Secretary
Productivity Commission
Locked Bag 2, Collins Street East
Melbourne, Vic 8003

Dear Sir,

Inquiry Into Waste Generation and Resource
Efficiency: Comments on Draft Report

This submission is being put forward on behalf of the Australasian Paper Industry Association Limited (APIA).

About APIA
APIA was established 15 February 2006 after extensive consultations between the Independent Paper Group (IPG) and the National Paper Council (NPC) to amalgamate and form APIA.  The new body now comprises some thirty-one senior executives of paper importers, overseas mill agents, the local paper producer and major paper distributors and merchants supplying the overwhelming majority of papers, including office papers, to the Australian paper markets, including the printing and paper converting industries, as well as consumers, through various wholesalers and retailers.  A list of current members of APIA is attached at Attachment A.

Concerns Regarding EPR For Office Paper Waste
An earlier submission was not put to the Commission due to the APIA formation process and some divergence of opinion on the manner in which the paper industry as a whole should respond to the NSW Government’s push for office paper waste to be included in its Extended Producer Responsibility program.  In this regard, some members of APIA had concerns regarding the costs and benefits of an EPR for waste paper.  Nevertheless, APIA agreed to join the recently formed Paper Round (Printing and Writing Papers Stewardship Association) comprising major local producers, importers, distributors and printers, to examine the issue of reducing the amount of office paper going to landfill, as required in the NSW Government’s Extended Producer Responsibility Priority Statement 2004.
Despite APIA’s agreement to join and contribute to the funding of Paper Round, we still have concerns regarding the EPR approach for office paper waste for a number of reasons including:
•	The wide disparity in the reported volumes of office waste paper allegedly going to landfill.
•	Details are outlined in APIA’s letter to the NSW Minister for the Environment.  Refer  Attachment B.
•	The understatement of the amount of office paper waste being recycled into newsprint and packaging;
•	The admission in the Government’s Priority Statement that “commercial arrangements may be as effective as an EPR scheme in promoting resource recovery and recycling of office paper.  This product is not toxic or hazardous; is not generally illegally dumped or littered; and is not currently the subject of significant community concern”.
•	The apparent failing of the National Packaging Covenant (NPC) to achieve any real benefits for the high costs involved;
•	Any proposed EPR scheme for office paper waste would require co-regulation and therefore be similar to the NPC.
Given the above, it is difficult to understand that not only is office paper considered by the NSW Government to be a waste of concern but it has now been elevated to high priority status along with computers, televisions, NiCad batteries, used tyres, plastic bags and the like.

Comments on Draft Report
Put in the above context, APIA was pleased that the Commission’s Draft Report on Waste Management addresses the major concerns of APIA members.  While we are in agreement with most, if not all, of the Commissions’ draft conclusions, findings and recommendations, we find the findings and recommendations in relation to recycling of waste products and EPR/Product Stewardship Schemes most pertinent to our situation and, whether or not office paper waste is suitable for such schemes.  In this regard we are in total agreement with the Commission’s draft conclusions, taken from the overview at page xxxv of the draft report:
“Concluding Comments
Waste management policy in Australia needs to be refocused on ways in which the externalities in disposal can best be managed.  Too many jurisdictions have become obsessed with waste minimisation as an end in itself.  They are driving recycling to ever-higher levels, without adequately considering the costs and benefits or regional implications.  The externalities of landfilling seem to have been seriously overstated, at least for a modern best practice landfill.  And the benefits of additional recycling seem also to have been exaggerated.  Recycling is beneficial, up to a point.  But when its starts to consume more resources than it recovers, it becomes economically and environmentally unsound.
Product stewardship schemes and alternative waste technologies epitomise the new thrust in waste management policy, and may well have a place in a soundly developed policy framework.  But if indiscriminately applied, they will drive up costs without necessarily yielding commensurate environmental and social benefits.
Those responsible for waste management policy would actually do more for sustainability by rejecting nostrums such as ‘recycling is good, more is better’, and adopting good policy-making principles.  Policy makers and community attitudes need to be guided by open and rigorous analysis of costs, benefits and risks if waste management measures are to best serve the community.”

Based on the above draft conclusions, the Commission makes the following draft findings and/or recommendations in relation to waste data, recycling and EPR/Product Stewardship schemes:
•	Australian waste data are collected from a range of sources.  Differences in definitions and collection methodologies between data sets, and inherent difficulties in collecting data on waste mean the data have substantial gaps and biases;
•	governments should not directly or indirectly impose waste minimisation and recycling targets as part of waste management policy;
•	mandatory standards for including recycled content in products are unlikely to produce net benefits for the community; and most importantly;
•	mandatory product stewardship and extended producer responsibility schemes – involving either industry-government co-regulation or government regulation – tend to be costly.  They are unlikely to deliver a net benefit unless:
•	there are considerable benefits to society from avoiding the products inappropriate disposal, for example because it is hazardous;
•	only a small number of parties need to be targeted to make the requirements effective, and those parties will remain in the industry over the long term, and
•	compliance with the requirements can be readily measured and enforced.
The Commission is not convinced that many of the products currently being targeted by governments – including packaging, computers, televisions and tyres – satisfy all of these requirements.
Given the many thousands of producers, importers, converters, printers and office paper wholesalers and retailers as well as building managers, waste collectors and sorters and office workers involved with the waste paper issue, it is apparent that, based on the Commission’s draft findings and recommendations, an EPR for office paper waste is unlikely to deliver a net benefit because:
•	There are no real problems for society from disposal to landfill;
•	Many thousands of parties would need to be targeted to make the requirements effective (co-regulation would be required for “free riders”);
•	Compliance with the requirements would not be able to be readily measured and enforced.
The above criteria also apply to packaging waste and it is little wonder that the National Packaging Covenant has not been effective despite the high costs involved.  APIA would not like to see the office paper waste issue move in the same direction.

We would be pleased to elaborate further at public hearings on this issue.

Yours Sincerely,

A. S. Wood
Chairman

Non-Confidential Attachment A

Current List of Members

of

Australasian Paper Industry Association

Australasian Paper Industry Association 
Members Listing
Robyn Scott
Director, Bus. Devel & Marketing	Business	(02) 9960 4519
Ahlstrom Australia Pty Ltd	Fax	(02) 9968 1917
Office 2, 6 Gurrigal Street 	Mobile	(0419) 208 375
MOSMAN NSW 2088	Email	robyn.scott@ahlstrom.com.au

Kelvin Tan
Country Manager	Business	(02) 9087 6037
APRIL International Marketing & Services Pty Ltd	Fax	(02) 9087 6035
Suite 6, Level 2 North Tower 1-5 Railway Street	Mobile	(0412) 868 191
CHATSWOOD NSW 2067	Email	kelvin_tan@aprilasia.com

Nicholas Harvey
Managing Director	Business	(03) 9853 7800
Asia Paper Markets Pty Ltd	Fax	(03) 9853 7755
Suite 209/1 Princess St 	Mobile	(0416) 275 396
KEW VIC 3101	Email	nick.harvey@asiapapermarkets.com

Simon Talbot
Corporate Relationship Manager	Business	(03) 8540 2382
Australian Paper Pty Ltd	Fax	(03) 8540 2284
307 Ferntree Gully Road 	Mobile	(0419) 108 928
MT WAVERLEY VIC 3149	Email	simon.talbot@australianpaper.com.au

Bong Yu
Managing Director	Business	(02) 9884 9901
Bong-Yong International Pty Ltd	Fax	(02) 9884 9902
Suite 217, 1 Katherine Street	Mobile	(0418) 466 120
CHATSWOOD NSW 2067	Email	bongyu@bigpond.net.au
Rob Glas
Managing Director	Business	(03) 9881 6200
Central National Australia Pty Ltd	Fax	(03) 9881 6211
Level 1, 420 Burwood Hwy 	Mobile
WANTIRNA SOUTH VIC 3152	Email	rob@cennat.com.au

Bernard Cassell
Managing Director	Business	(03) 8587 3503
CPI Limited	Fax	(03) 9239 3708
PO Box 113 	Mobile
BRAESIDE VIC 3195	Email	bernard.cassell@cpigroup.com.au

Anthony Wood
Managing Director	Business	(03) 8795 5210
DaiEi Australasia Pty Ltd	Fax	(03) 9799 8911
1 Remington Drive 	Mobile	(0418) 374 330
DANDENONG SOUTH VIC 3175	Email	tony@daieiaust.com.au

Ken Bishop
General Manager	Business	(03) 9764 7407
Dalton Paper	Fax	(03) 9759 2058
7 Dalmore Drive 	Mobile
SCORESBY VIC 3179	Email	ken.bishop@dalton.com.au

Simon Cameron
Business Admin Manager	Business	(03) 9765 0825
Dalton Web Papers	Fax
PO Box 476 	Mobile	(1800) 109 080
FERNTREE GULLY VIC 3156	Email	simon.cameron@daltonweb.com.au

Dale O'Neill
Director	Business	(03) 8586 6222
Direct Paper Supplies	Fax	(03) 9588 1600
60 Bond Street 	Mobile	(0417) 105 468
WEST MORDIALLOC VIC 3195	Email	direct2u@lab.net.au
Bill Eichhorn
Director	Business	(03) 9542 3900
Domain Paper Australia	Fax	(03) 9542 3949
43-47 Cleeland Road 	Mobile	(0438) 123 444
OAKLEIGH SOUTH VIC 3167	Email	bill@domainpaper.com.au

Angel Lijauco
Sales Director	Business	(02) 9424 3400
Double A International Business (Australia) P/L	Fax	(02) 9424 3499
Unit 80, Level 8 18-20 Orion Road	Mobile	(0412) 700 189
LANE COVE NSW 2066	Email	angellijauco@doublea.com.au

Tony Dragicevich
Managing Director	Business	(02) 8746 8746
Edwards Dunlop Paper	Fax	(02) 9742 6593
457 Waterloo Road 	Mobile
CHULLORA NSW 2190	Email	TonyD@edpaper.com.au

Steven Fitzgerald
Managing Director	Business	(03) 9888 1600
Ekman Pty Ltd	Fax	(03) 9807 7125
Suite C 63 Wadham Parade	Mobile	(0419) 006 107
MOUNT WAVERLEY VIC 3149	Email	ekman.australia@ekman-co.se

Stephen Hawkes
Managing Director	Business	(02) 9980 2800
Elof Hansson	Fax	(02) 9980 2822
Suite 3 265-271 Pennant Hills Road 	Mobile	(0411) 856 603
THORNLEIGH NSW 2120	Email	stephen.hawkes@elof-hansson.com.au

Ross Black
Director	Business	(03) 9550 4000
Focus Paper	Fax	(03) 9550 4001
P O Box 798 195 Forster Rd	Mobile	(0425) 708 105
MT WAVERLEY VIC 3149	Email	ross@focuspaper.com.au
David Vawser
Managing Director	Business	(02) 9872 1666
Holmen Paper Pty Ltd	Fax	(02) 9872 1666
Suite 2 7 Lloyds Avenue	Mobile	(0419) 295 840
CARLINGFORD NSW 2118	Email	david.vawser@holmenpaper.com

Mark Johnson
Director	Business	(02) 9976 1300
Jackaroo Pty Ltd	Fax	(02) 9976 3040
Level 5, 22 Central Avenue 	Mobile
MANLY NSW 2095	Email	mjohnson@jackaroo-pl.com.au

Hirofumi Oya
Managing Director	Business	(02) 9956 7618
Japan Pulp & Paper	Fax	(02) 9956 6477
Level 5 154 Pacific Highway	Mobile
NORTH SYDNEY NSW 2060	Email	oya@jppau.com

Simon Doggett
Director	Business	(03) 8470 2244
K.W. Doggett & Co. Pty Ltd	Fax	(03) 8470 2277
67 Gower Street 	Mobile
PRESTON VIC 3072	Email	sdoggett@kwdoggett.com.au

John Walker
Managing Director	Business	(02) 9957 3177
Paper Agencies (Aust & NZ) Pty Ltd	Fax
Suite 5 102 Alfred St 	Mobile
MILSONS POINT NSW 2061	Email	john.walker@m-real.com

Graham Neeson
Manager	Business	(03) 8809 3333
Paper Force (Oceania) Pty Ltd	Fax	(03) 8809 3300
Suite 10 255 Whitehorse Road	Mobile
BALWYN Vic 3103	Email	graham.neeson@paperforce.com.au
Graeme Ross
Managing Director	Business	(02) 8746 8600
Raleigh Paper Company	Fax	(02) 8746 8666
457 Waterloo Road 	Mobile
GREENACRE NSW 2190	Email	graeme.ross@raleighpaper.com.au

Paul Matthews
Managing Director	Business	(08) 9494 2626
Rebel Paper Pty Ltd	Fax	(08) 9494 2637
4 Coolibah Way 	Mobile	(0418) 660 790
BIBRA LAKE WA 6163	Email	paul@rebelpaper.com.au

Tim Schafer
Managing Director	Business	(02) 9410 2911
Sappi Trading Australia Pty Ltd	Fax	(02) 9410 2844
Level 5, South Tower 1-5 Railway Street	Mobile
CHATSWOOD NSW 2067	Email	tim.schafer@sappi.com

Tony Gallagher
Managing Director	Business	(07) 3348 2266
Special Equipment (Aust) Pty Ltd	Fax	(07) 3348 2366
115 Gosport Street 	Mobile
HEMMANT QLD 4174	Email	spec_equip@b022.aone.net.au

Tony Bertrand
General Manager	Business	(02) 9735 2626
Spicers Office Papers	Fax	(03) 9335 2600
21 Worth Street 	Mobile	(0439) 359 147
CHULLORA NSW 2190	Email	tony.bertrand@spicersoffice.com.au

Greg Street
General Manager	Business	(03) 9730 9730
Spicers Paper Limited	Fax	(03) 9730 9744
No. 7 Dalmore Drive 	Mobile
SCORESBY VIC 3179	Email	greg.street@spicers.com.au
Paul Teague
National Sales Manager	Business	(02) 9955 4855
Stora Enso Australia Pty Ltd	Fax	(02) 9955 7933
PO Box 1621 	Mobile	(0418) 865 775
NORTH SYDNEY NSW 2059	Email	paul.teague@storaenso.com

Marcus Lindh
President	Business	(02) 9334 5000
UPM-Kymmene Pty Ltd	Fax	(02) 9411 8228
Level 13 124 Walker Street	Mobile
NORTH SYDNEY NSW 2060	Email	marcus.lindh@upm-kymmene.com

Non-confidential Attachment B

Copy of APIA Letter to

Mr Bob Debus, NSW

Minister for the Environment

20th April 2006

Mr Bob Debus
Minister for the Environment
Level 36, Governor Macquarie Tower
1 Farrer Place
Sydney  NSW  2000

Re: MOF20898

Dear Minister,

I refer to the letter sent to the Independent Paper Group in January.  As you may recall, at that time we were undergoing a major industry association change with the proposed merger of the Independent Paper Group and the National Paper Council.  I can now confirm that the change has taken place.  The two groups have been merged to form the Australasian Paper Industry Association Limited.
The formation of this single industry association doesn’t alter the fact that the fledgling group comprises many diverse interests, hence the existence of the previous two associations. It comprises companies generally competing in the marketplace. With this composition, progress on such a complex issue as EPR represents significant challenges due to the varying perspectives that exist.
At our inaugural meeting it was agreed that our group will have input into and match the funding being provided by the Printing Industries Association of Australia to support their EPR initiative. This is now in the process of finalisation.
We note that subsequent to our meeting, the 2005 – 2006 priority statement has been released which calls for submissions to be made by June 30.  Our association will be making such a submission in conjunction with other interested parties, however in the meantime, there was agreement that we write to you in order to canvas some issues raised at our meeting.
Firstly, as suppliers of paper we are in agreement that our products are recyclable, renewable, biodegradable and non-toxic.  Your own 2004 priority statement in relation to Office Paper reads in part:
“Commercial arrangements may be as effective as EPR schemes in promoting resource recovery and recycling of office paper.  This product is not toxic or hazardous; is not generally illegally dumped or littered; and is not currently the subject of significant community concern”. (Page 13, 2004 Priority Statement)
With this as background it’s difficult to understand how we now find ourselves on the priority list along with computers, televisions, NiCad batteries, used tyres, plastic bags and agricultural chemicals.  
In our discussions we concluded that there could be only two reasons for our inclusion in the priority waste list.  Firstly the widely held (but incorrect) view as expressed in the Extended Producer Responsibility Report Preliminary Consultation Program stating “Increasing use of computers in the workplace has accelerated office paper use.  Consequently, office paper is a significant waste stream that continues to grow”.
Secondly, the consistent reporting of volume numbers that are massively inflated.
To the first point - computer usage did significantly increase the consumption of reprographic papers (copy paper).  However as office printing moved predominantly to A4, it did so largely at the expense of continuous forms, which is a paper market that has all but died out completely.

In the industry, it’s generally considered that A4 copy paper now makes up the bulk of paper usage and therefore waste in an office environment.  Total production and imports of this grade peaked in 2001 at a total of approximately 250,000 M/T.  The volume has since fluctuated as digital storage and retrieval are more widely used and the propensity to print out every arriving email lessens.  The usage fluctuation is being impacted by both environmental factors and by companies simply wishing to save paper costs.  It’s not true that this stream is continuing to grow, and it may actually be stagnant or in decline.     
Copy paper is now at around 235,000 M/T in total.  This represents both home and office consumption spread around the country.  Some 35,000 – 45,000 M/T of this total is now being used in the home / home office, leaving 200,000 - 210,000 M/T for office consumption throughout Australia.  While a significant quantity, we can’t understand how we can go from this consumption number of the predominant paper used in every office to reach the sort of figures now being seen in the 05 – 06 Priority Statement. 
For NSW the Priority Statement reports that consumption of office paper (in 2003) was 620,000 M/T.  Assuming, on population ratios, that NSW offices consumed 33% of the copy paper used in Australian offices, this would account for 70,000 M/T of the stated total. On this basis 550,000 M/T of “other” office paper consumption is still to be identified.  We simply cannot agree that in any office, for every carton of copy paper used, there’s 8 times the volume of some combination of other paper grades consumed.  
Aside from the factual error, this incorrect reporting causes massive distortion to the recycling percentages.  The Priority Statement Reports that there was 83,000 M/T of office paper recovered in NSW.  That number looks very significant when considered in conjunction with realistic usage numbers.   
As mentioned, we will be part of an industry submission as called for in the Priority Statement, in the meantime however, we wished to put these thoughts to you as a matter of concern to the members of the group.
We are, of course, happy to have discussions in relation to the above with yourself or members of your department at any time.  In the meantime, we simply cannot understand our elevation to the number 1 priority list and believe the transition was made based on questionable assumptions.

Yours sincerely,

A. S. Wood
Chairman