ITIA and ITWRA write to Minister opposing waste compliance scheme

The Irish Tyre Industry Association and Irish Tyre Wholesalers Association have jointly written to Denisd Naughten TD, Minister for Communications, Climate Action and Environment outlining their opposition to forthcoming waste compliance scheme.

A copy of the letter is reproduced here:

Denis Naughten T.D.
Minister for Communications, Climate Action and Environment
29 – 31 Adelaide Road
Dublin 2
14 August 2017
Dear Minister

The tyre industry has always promoted and supported the need for a proper recycling scheme, which drives compliance in a commercially responsible way. Indeed, TRACS, set up to meet our obligations under the 2007 regulations, achieved 90 per cent + compliance with producer and retail waste. However, it did not have control of the waste industry and it did not have control of the issuing of licences to waste collectors. This was a major flaw which resulted in tyre waste stockpiles. This continues to be a waste collector compliance problem and control of the waste stream will resolve this issue.

We continue to seek a resolution to this ongoing issue but are frustrated at the agenda being driven by parties who are less than au fait with the workings of the market and who paint the industry as obstructionist. We assure you we have no wish to obstruct a compliance scheme that is fit for purpose; in fact we would welcome it. However, we simply cannot ignore the major unforeseen consequences of the proposed scheme.

We have contended from the outset:

  • Northern Ireland suppliers need to be addressed. To date no Northern Ireland major supplier has registered with the scheme. (The only registered N.I. dealer has a retail operation in the South). As it stands, we foresee an immediate competitive distortion in the marketplace which will encourage Southern tyre dealers to be non-compliant simply in order to survive. We were assured this would not be an issue as N.I. suppliers would sign up to the scheme. This has not happened.
  • It is imperative that we have on-the-spot fines for those found to be non-compliant. We were assured throughout the Tyre Working Group consultative process that such enforcement would be part of the scheme. It appears it is not.
  • Enforcement is key. This was presented to us as a selling point of the scheme, however we know there are no further resources being allocated to the County Councils responsible. With 2000+ economic operators in the tyre industry, how are councils to enforce this new scheme within their existing resources?
  • We have never seen a business plan and budget for the operation of this scheme, despite have made more than 10 requests for same at meetings. While they are presented as a decision of the Department, in fact the charges are set by the compliance scheme operator, Repak. The maximum cost for collection and disposal of waste tyres, as verified by 5 major collectors and recyclers, is €1.50
  • There is total distrust of the currently anointed “Approved Body”. Unless this is addressed by an independent regulator, the scheme will be mired in yet more angst and accusations.
  • Market share information in any industry is crucial and is kept private by each company due to its commercial sensitivity. Under the reporting requirements of draft 27 of the regulations, the compliance operators will be able to work out each company’s market share. We have informed each company of this fact and they will be writing to you seeking your thoughts on how they can be protected.
  • The industry was advised from the outset that it was entitled to set up its own scheme, yet now we find out there are critical conditions to that.
    – It must await the establishment of the proposed scheme
    – It must charge what regulations dictate (as opposed to making the market competitive, so as to drive down costs for the consumer.)

We are a consumer business, driven by consumer needs and guided by the “The customer is king” principle. This scheme, as constituted, will create market distortion and will not meet either the consumer’s or our needs for a streamlined, simple solution to a waste problem.

The way to drive compliance is to:

  • Allow the industry to manage its own waste stream (as is the case with all successful PRI schemes in Europe). The tyre industry has a fundamental interest in reducing the cost of recycling for its customers and should be encouraged to run a competitive scheme to control these costs. The new tyre regulations enshrine the right to apply to run a compliance scheme.
  • Make the cost of compliance commercially appropriate by removing excess costs which will lead to black marketeering and non-compliance.
  • Make reporting simpler and bi-monthly for retailers. The reporting requirements in the new regulations are administratively complex and inappropriate for small- and medium-sized retailers and will lead to much confusion and non-compliance. As an example, while agri-tyres constitute only 15% of the total tyre waste stream, there are no fewer than 25 sub categories in agri to report!
  • Deliver on the promises made by successive Ministers of the Environment that the regulations would include robust enforcement remedies. Fixed penalty notices were to be a fundamental component of enforcement to aid LAs and WERLAs with cost-effective enforcement.  The new regulations make no extra provision for enforcement, which was a key recommendation of the original PRI Review undertaken in July 2014 and a fundamental premise underpinning all negotiations by the industry with the DCCAE.

Please be aware that we continue to ask for a workable solution; however, the scheme operators are setting up a scheme that suits their own ends without taking account of the tyre industry and its needs. The draft regulations are full of inconsistencies and are unworkable as currently constituted.

There is an alternative industry solution, which can both gain the support of the industry and sustain competition.

We would ask that you reconsider your proposals in the light of the reasoned arguments outlined here.

Yours sincerely,

Paddy Murphy
President
Irish Tyre Industry Association

Eamon Daly
President
Independent Tyre Wholesalers & Retailers Association