THE NATIONAL
PACKAGING COVENANT
MOVING FROM REGULATION
TO CO-OPERATION
THE NATIONAL
PACKAGING COVENANT
A new approach to the life cycle
environmental management of packaging
How will your Company maximise its
benefits?
INTRODUCTION
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Regulatory approaches to management of
packaging waste are being replaced and
augmented by voluntary mechanisms
 Benefits come from a more co-operative approach
which, although outcome oriented, can be more
flexible and reduce overall cost
 The future is for a more comprehensive ‘total
system’ approach based on better understanding of
waste realities and the nature of consumption
OVERSEAS TRENDS
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Germany – Packaging Ordinance (DSD) (1990)
European Packaging and Packaging Waste
Directive (1994)
OECD ‘Guidance Manual’ for EPR (2001)
Canadian “Shared Responsibility”
American ‘market based’ approach including ‘Pay
as You Throw’
Packaging Covenants in NZ and The Netherlands
EUROPE
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Fees for the German DSD now exceed
DM 4 billion p.a.
Total system costs exceed twice that figure
Total fee costs in Europe exceed US$10 billion
p.a.
Costs passed on through higher prices which erode
consumer purchasing power and reduce
employment
Environmental outcomes less than optimal
GERMANY
Weight based fees ranging from
DM 0.15 – DM 2.95/Kg
(paper)
(plastic)
- Volume based fee from 0.1 pF to 1.2 pF per
unit
-
DANISH PACKAGING TAX
Aluminium
PVC/EPS
Steel
Glass
HDPE/PET
Flexibles
Paper
35c/Kg
32c/Kg
26c/Kg
26c/Kg
19c/Kg
5c/Kg
0.5c/Kg
CANADA
“Shared Responsibility”
-
Industry Funding schemes being developed
at provincial level
-
CDL in all provinces for beer and soft
drinks
EARLY APPROACHES
- Australia 
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Regulatory - Vic Resource Recovery Act
Voluntary ANZECC agreements
Based on concept of ‘a waste hierarchy’ and
focused on post consumer packaging
Performance ‘targets’ and industry funding a
common feature
Lacked flexibility/equity
Gave businesses responsibilities for outcomes
beyond their control
INDUSTRY PLANS

Tended to make industry take the role of driver of
change in a product area or segment when the
system as a whole needed improvement
 Contribution focused e.g. NSW Industry Waste
Reduction Plan
 No matching mechanism for other actors in the
overall chain
 State based rather than National
NATIONAL PACKAGING
COVENANT
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Holistic approach
Voluntary in nature
National in scope
Focuses on fixing the system not the symptoms
Based on ‘Shared Responsibility’ – do what you
can in your own sector or stage and the system
benefits from the sum total of action at each stage
SHARED RESPONSIBILITY
Total System
Raw Material
Producer
Packaging
Manufacturer
Filler/
Marketer
Retailer/
Distributor
Consumer
Collector
Sorter
Reprocessor
NPC – WHAT IS IT?
In August 1999, after 3 years of discussion and negotiation
Australia’s governments (federal, state, local) and
representatives of the packaged goods industry signed the
National Packaging Covenant.
The Covenant is a voluntary, self regulatory scheme which
takes a nationally consistent approach to the life cycle
management of packaging.
It covers the three tiers of government and all companies in
the “packaging chain” from raw material production
through to retail.
WHAT AND WHO DOES IT
COVER?
What
 All consumer product packaging and paper
 In store packaging and multipacks
Who
 Raw material producers
 Packaging Manufacturers
 Packaging Users (fillers/markets/brand owners)
 Wholesalers & Retailers
 Paper Manufacturers/Suppliers
WHY SHOULD I SIGN?

It supports a voluntary approach to the regulation of
packaging
 It puts the company in control of what it can contribute to
environmental improvement
 It allows the company to focus on its OWN business rather
than post consumer recycling
 It is a low cost approach to regulatory compliance
 It avoids being caught up in the compulsory regulatory
mechanism (NEPM) – which is a costly alternative
 IT PROVIDES A POSITIVE BOOST TO COMPANY
ENVIRONMENTAL IMAGE
WHAT ARE THE BENEFITS?
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The Covenant process has resulted in identification of clear
roles and responsibilities for government and industry
This includes the recognition that local government is
responsible for recycling collection and its cost
It recognises the need to make recycling “market based”
i.e. NO INDUSTRY subsidies or contributions to
collection and sorting costs required
It allows companies to focus on the things they can
improve within their own business
WHAT HAPPENS IF WE
DON’T SIGN?
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Brand owners who don’t sign (or fall out of the Covenant
process) must comply with their state’s version of the
NEPM for Used Packaging
This is a regulation that will require the company to
recover product packaging from consumers (or pay for it)
to the level achieved by the rest of the system
It also has extensive data provision requirements
Failure to comply attracts heavy financial penalties
COVENANT SIGNATORIES ARE EXEMPT FROM
THE NEPM
WHAT HAPPENS IF WE
SIGN?
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The company must, within 6 months submit a Covenant
Action Plan
This outlines the company’s voluntary commitments to the
Covenant – from a menu of options
Report progress annually
Commit to the Covenant’s principles and the Packaging
Environmental Code of Practice
Contribute to the National Packaging Covenant
Transitional Arrangements
COVENANT ACTION PLANS
Typical First Commitments
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Plant/facility waste audit
Minimise production waste
Labeling for recyclability
On-pack litter warnings (where appropriate)
On-pack community education of packaging
benefits
COVENANT TRANSITIONAL
ARRANGEMENTS

A program jointly funded by government and
industry aimed at improving the cost effectiveness
and sustainability of council recycling collections
and the development of markets for collected
materials
 This will facilitate the withdrawal of subsidies
 $34.9 million over 4 years
 Contribution according to turnover and place in
marketing chain
TYPICAL CONTRIBUTION LEVELS
(Packaging Users)
Company
Turnover
1-3 Billion
750m – 1 billion
500-750 million
250-500 million
100-250 million
75-100 million
50-75 million
25-50 million
Less than 25 million
Contribution
Year 1
Years 2,3 & 4__
$20,000
$30,000
$10,000
$15,000
$7,000
$10,500
$4,000
$6,000
$2,000
$3,000
$1,000
$1,500
$600
$900
$500
$750
$500
$500
NEXT STEPS
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Industry -vs- individual action plans
 Promote broader participation
 Promote real change within your company