The possible effects of government’s National Pricing Strategy for Waste Management on South African business should be publicly debated, as it could impact on companies’ business management, including smaller companies that might not be able to adjust their businesses to combat the strategy’s proposed taxes, says commercial law and litigation firm Fasken Martineau.
The pricing strategy is a legislative requirement of the National Environmental Management: Waste Amendment Act (NEM:WAA), which was promulgated in June 2014 and gives effect to the National Waste Management Strategy, as gazetted by the Department of Environmental Affairs in February 2015.
According to the department, the strategy aims is to provide the basis for and guidance in setting waste management charges in South Africa by providing an enabling environment for waste recycling, and contributing to the recycling economy in South Africa through recovery reuse and the recycling of waste.
Fasken Martineau South Africa environmental department partner Matthew Burnell tells Engineering News that the National Pricing Strategy for Waste Management is still only in draft form and, therefore, proposed strategies for incentivising parties to adopt alternative measures to landfill disposal are not likely to be formalised any time soon.
He believes that there is no immediate pressure on the industry to take steps to improve its waste management policies yet, as there is also no clear path delineating waste management implementation and incentives to businesses.
Similarly, the revised definitions related to waste in the NEM:WAA have not been tested nor have they come under scrutiny and, thus, it is difficult to determine whether the Amendment Act can be applied to an actual situation, Burnell points out.
The Act includes deleting various definitions of waste categories – including general waste, building and demolition waste, and inert waste – and incorporating these various components into the general definition of waste as either hazardous or general waste. Burnell says the purpose of this is to simplify the industry’s application of the Act.
“Fasken Martineau believes that the amendments to the definition of waste create a lot more certainty,” he says, pointing out that, as there was no obligation for parties to recycle, reuse or recover waste prior to the Amendment Act, the proposed amendments aim to bring about a change in the industry’s behaviour.
Research and Development Boost
Burnell further highlights the Waste Management Bureau, which is included in the Amendment Act. The purpose of the bureau is to incentivise the reuse, recovery and recycling of waste, and to implement and regulate national and regional waste management plans as well as municipal integrated waste management plans.
If the National Pricing Strategy for Waste Management imposes additional taxes on waste disposal and/or funding for alternative means of managing waste, disposal as the primary source of waste disposal will change, and all industries will need to find alternative solutions, he adds.
Burnell, therefore, expects companies to start investing more in research and development (R&D) to mitigate some of the taxes proposed in the strategy.
“This should stimulate R&D into finding more effective ways of reusing or recycling, which, if effective, will not only have a positive impact on the environment but will also generate new business and job opportunities.”
He further argues that the National Pricing Strategy for Waste Management, which aims to encourage companies to recycle, reuse or recover waste through economic instruments, is more in line with international best practice and more effective than traditional methods.
“The traditional ‘command-and-control’ penalties for noncompliance with the Act do not encourage businesses to reduce their waste, as there is no incentive to adopt more expensive waste management options that will boost their bottom line,” he explains.
However, Fasken Martineau believes that financial incentives will compel businesses to reconsider or revise their waste management practices.
Burnell admits that the difficulty is to strike a balance that is feasible and that will not put business – also smaller businesses – under significant strain. For example, businesses can be allowed to adapt and change within a stipulated, but significant, timeframe, particularly with regard to the retrofitting of factories, he adds.
“There should also be investment to support the establishment of businesses in waste recycling, recovery and reuse by historically disadvantaged individuals,” he concludes.