RECYCLING AND WASTE REDUCTION BILL 2020 Explanatory Memorandum

Commonwealth of Australia Explanatory Memoranda

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RECYCLING AND WASTE REDUCTION BILL 2020

2019-2020 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES RECYCLING AND WASTE REDUCTION BILL 2020 EXPLANATORY MEMORANDUM (Circulated by authority of the Minister for the Environment, the Hon. Sussan Ley MP) 0

CONTENTS GENERAL OUTLINE.................................................................................................................. 2 FINANCIAL IMPACT STATEMENT ........................................................................................ 4 REGULATION IMPACT STATEMENT .................................................................................... 5 STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS.............................................. 6 NOTES ON CLAUSES ................................................................................................................ 7 Chapter 1--Introduction ............................................................................................................... 7 Chapter 2--Regulating the export of waste material .................................................................. 14 Chapter 3--Product stewardship ................................................................................................ 60 Chapter 4--Administration ......................................................................................................... 92 Chapter 5--Other matters ......................................................................................................... 140 1

RECYCLING AND WASTE REDUCTION BILL 2020 GENERAL OUTLINE The Recycling and Waste Reduction Bill 2020 (the Bill) will establish a legislative framework to enable Australia to more effectively manage the environmental and human health and safety impacts of products and waste material. This includes, in particular, impacts associated with the disposal of waste materials and products. The Bill will implement the 2020 commitment of the Australian Governments (through the former Council of Australian Governments (COAG)) to ban the export of waste glass, plastics, tyres and paper. It does so by regulating the export of regulated waste materials such that only those that have been processed into a value-added material, which will be reused or remanufactured overseas, would be permitted for export. The commitment to ban the export of certain waste materials featured as Target 1 within the National Waste Policy Action Plan 2019. The Action Plan includes actions aimed at driving change in industry, businesses, governments and the community to turn waste into a reusable commodity. COAG's Response Strategy for Phasing Out Exports of Waste Plastic, Paper, Glass and Tyres, released in March 2020, sets out the system- level and material-specific challenges and opportunities that are central to the effective implementation of the waste export ban, and to the longer term transformation of Australia's waste and recycling sector. The Bill will replace the framework in the Product Stewardship Act 2011 which was recently reviewed. Product stewardship involves the shared responsibility for reducing the environmental, health and safety footprint of manufactured goods and materials across the life cycle of a product stream (including material streams). The Bill will encourage a circular economy for waste in Australia by enhancing voluntary product stewardship, supporting businesses to realise the full value of recyclable materials and to work towards more sustainable resource use. The Product Stewardship Act 2011 will be repealed by the Recycling and Waste Reduction (Consequential and Transitional Provisions) Bill 2020. The intention of regulating the export of waste material is to stop the export of untreated and unprocessed waste which is likely to have a negative impact on the environment or human health in the receiving country. This will maximise the ability of our waste management and recycling sector to collect, recover, recycle, reuse, and convert waste into new products. The review of the Product Stewardship Act 2011 found that whilst the existing legislative framework provides an appropriate framework for enabling product stewardship outcomes, there is scope to improve and broaden its reach and impact. The recommendations of the review included promoting product design and reparability within the objects of the Act, expanding product stewardship regimes to a broader range of products (including materials), addressing issues with free-riding in voluntary product stewardship schemes, increasing transparency with the Minister's product list, and improving the administration of co- regulatory schemes. 2

It is in Australia's interest to ensure appropriate regulation is in place to support recycling and waste reduction. The administration of this legislative framework should not be burdensome for government, businesses, community organisations, and individuals involved in the export of waste material and product stewardship schemes. The Bill will establish a flexible framework enabling the Australian Government to be responsive to change and issues as they arise. Objects of the Bill The objects of the Bill will include reducing the impact that products and waste material have on human and environmental health and realising community and economic benefits by taking responsibility for products and waste material. The objects will be achieved by regulating the export of waste material to promote its management in an environmentally sound way, encouraging reuse, recycling and recovery of products, as well as responsible product design. Export of waste materials Under the Bill, the export of 'regulated waste material' will be prohibited unless the prescribed export conditions set out in the rules are met. 'Regulated waste material' is waste material that is prescribed as regulated for export by the rules, for example in the rules that are anticipated to be made in relation to the export of waste glass. The Bill and the rules will set out the requirements for the export of certain waste material from Australia. The rules will be able to prescribe conditions that must be complied with depending on the waste material being exported. For example, the rules may require that:  a person must hold an export licence; and  for each consignment of regulated waste material, an export declaration has been given. Product stewardship The Bill will also set out obligations for manufacturers, importers and distributors of certain products identified in rules made under the co-regulatory or mandatory provisions of the Bill. The Bill will also provide for the accreditation of voluntary product stewardship arrangements. There are several key drivers for a national approach to product stewardship. These include a need to have the regulatory tools to respond to the growing, complex and potentially hazardous streams of waste from rapidly changing or evolving products and encourage responsible product management by producers, businesses and consumers. There is also a lack of information that prevents consumers and producers from understanding the impacts of certain products, and related issues around their reparability and reusability. Accreditation of voluntary product stewardship schemes can help Australian 3

consumers make better choices when purchasing and disposing of products, and to have confidence that the products they are choosing meet government accreditation requirements. Compliance, enforcements and audits The Bill will make provision for the authorisation of persons to exercise certain powers and perform certain functions under the Bill. These powers will include conducting audits of export operations and product stewardship arrangements and giving directions that must be complied with by regulated businesses and individuals. In order to deter conduct that contravenes the conditions and requirements of the Bill, and to ensure swift and effective enforcement, the Bill will provide for a range of powers that can be exercised by the Minister, Secretary or authorised officers, including those triggered from the Regulatory Powers (Standard Provisions) Act 2014. These powers will include actions such as revocation and suspension of an export licence and cancellation of an approval of a co- regulatory arrangement as well as administrative remedies of injunctions, enforceable undertakings, and infringement notices. For more serious compliance issues, the Bill will provide for a number of civil penalty provisions as well as criminal offences. The Bill will also provide for the Minister to make a number of decisions, some of which may affect the interests of individuals. The Bill provides for merits review to be available in relation to decisions by the Minister that affect individuals. Decisions will also be able to be reviewed externally by the Administrative Appeals Tribunal. Fees will be able to be imposed under the Bill, on a cost-recovery basis, in relation to activities carried out by, or on behalf of, the Commonwealth (for example, by authorised officers) in the performance of functions or the exercise of powers under the Bill. The administration of any waste material export charge is also provided for under the Bill. Finally, the Bill will delegate the power to make rules to the Minister. The rules will be legislative instruments and will be subject to the requirements of the Legislation Act 2003, including parliamentary scrutiny, oversight, disallowance and sunsetting. The existing regulations made under the Product Stewardship Act 2011, that is, the Product Stewardship (Televisions and Computers) Regulations 2011, the Product Stewardship (Voluntary Arrangements) Instrument 2012 and the Product Stewardship Regulation 2012 will be repealed and there will be new rules proposed to be made in respect of these product stewardship arrangements. FINANCIAL IMPACT STATEMENT The measures in the Bill are estimated to have a minimal financial impact on the Australian Government Budget. The product stewardship measures in the Bill do not introduce any new financial impacts as these are a continuation of the framework of the Product Stewardship Act 2011. The initial costs of regulating the export of waste material have been funded by the measure 'Taking Forward a Ban on Waste Exports' which provided $15.1m for 2019/20 and 4

2020/21. The Government intends to introduce cost recovery arrangements under this Bill in the future. REGULATION IMPACT STATEMENT A consultation Regulatory Impact Statement (RIS) and decision RIS were prepared for the Commonwealth, States and Territories' consideration in early 2020. The final decision RIS is attached (Attachment B) to this explanatory memorandum. This RIS process considered the implementation of the ban on exports of waste plastic, paper, glass and tyres as proposed by Australian Governments. A further RIS was not required for the measures included in the Recycling and Waste Reduction Bill 2020 (OBPR ID Number 42699). 5

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS The Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. The full statement of compatibility with human rights is attached to this explanatory memorandum (Attachment A). 6

NOTES ON CLAUSES Chapter 1--Introduction GENERAL OUTLINE Chapter 1 will deal with how the Bill is to be cited (when enacted), when its provisions commence and the objects of the Bill. Chapter 1 will also set out the Bill's application to the Crown and external Territories and its relationship with State and Territory laws, contain a dictionary listing every term defined in the Bill and contain substantive definitions for a number of key terms that are signposted in the dictionary. NOTES ON INDIVIDUAL CLAUSES PART 1--PRELIMINARY PROVISIONS Clause 1 Short title Clause 1 will provide that the Bill may be cited as the Recycling and Waste Reduction Act 2020. Clause 2 Commencement Clause 2 will provide that the Recycling and Waste Reduction Act 2020 will commence on a single day to be fixed by Proclamation. However, if the provisions do not commence within the period of three months, beginning on the day the Act receives the Royal Assent, they will commence on the day after the end of that period. Clause 3 Objects of this Act Clause 3 will set out the objects of the Bill. Subclause 3(1) will provide that the objects of the Bill will be:  to reduce the impact on human and environmental health of products, waste from products and waste material, including by reducing the amount of greenhouse gases emitted, energy and resources used and water consumed in connection with products, waste from products, and waste material;  to realise the community and economic benefits of taking responsibility for products, waste from products, and waste material;  to promote a circular economy that maximises the continued use of products and waste material over their life cycle and accounts for their environmental impacts;  to contribute to Australia meeting its international obligations concerning the impact referred to in the first paragraph. 7

Subclause 3(2) will then provide how the objects are to be achieved. The objects are to be achieved by:  regulating the export of waste material to promote its management in an environmentally sound way; and  encouraging and regulating the reuse, recycling and recovery of products, waste from products and waste material in an environmentally sound way; and  encouraging and regulating those responsible for using, designing, manufacturing and distributing products to take responsibility for those products, including by taking action that relates to: o reducing or avoiding generating waste through improvements in product design; and o improving the durability, reparability and reusability of products; and o managing products throughout their life cycle. The objects are directly relevant to a number of powers and functions under the Bill. For example, the Minister must have regard to the objects of the Bill when deciding whether to grant or renew an export licence in relation to regulated waste material. In the product stewardship context, the rules may only specify outcomes of co-regulatory arrangements that relate to the objects of the Bill, and must require the accrediting authority to refuse to accredit a voluntary arrangement if satisfied that an outcome of the arrangement will not further the objects of the Bill. The public interest tests in both the voluntary and co- regulatory product stewardship provisions will also require the Minister to have regard to the objects of the Bill. Clause 4 Minister to have regard to certain matters in exercising powers and functions Clause 4 will require the Minister to take a precautionary approach in relation to protecting human and environmental health when performing functions and exercising powers under the Bill. The term 'precautionary' in this clause is intended to have its ordinary meaning. The purpose of this clause is to ensure that the Minister performs their functions and exercises their powers under the Bill in a manner that minimises any potential harm to human and environmental health. Clause 5 Simplified outline of this Act Clause 5 will provide a simplified outline of the Bill. The simplified outline is included to assist readers to understand the regulatory schemes in relation to the export of waste material and product stewardship that will be established by the Bill. The outline is not intended to be comprehensive. It is intended that readers will rely on the substantive clauses of the Bill. 8

Clause 6 Act binds the Crown Clause 6 will provide that the Bill binds the Crown in each of its capacities. This will mean that all Australian Governments will be required to comply with the provisions of the Bill. However, in line with usual practice, subclause 6(2) makes it clear that the Crown is not liable to a pecuniary penalty or to be prosecuted for an offence. Subclause 6(3) will clarify that these protections do not extend to an authority of the Crown. Clause 7 Extension to external Territories Clause 7 will provide that the Bill extends to every external Territory of Australia. Chapter 4 of the Bill will clarify that the Regulatory Powers (Standard Provisions) Act 2014, as it applies in relation to the Bill, also extends to every external Territory. However, rules will be able to have the effect that the waste export regime, or a product stewardship regime, does not apply in external Territories or a particular external Territory. As an example, co-regulatory schemes requiring product collection points at certain locations may be expressed not to apply to external territories (or a particular external territory) on the basis that the requirement may not be practical for some external territories due to their size, population, and remoteness. This will give the Minister the flexibility to ensure product stewardship schemes have appropriate scope in external territories. This clause is also intended to ensure that the transit of waste material between external Territories and mainland Australia will not be subject to any of the regulatory controls that apply to the export of waste material in the Bill. Clause 8 Extraterritorial application Clause 8 will provide that the Bill extends to acts, omissions, matters and things outside Australia. This is intended to clarify that activities by an export licence holder outside Australia may be used, for example, to justify varying, suspending or revoking an export licence. However, it is not generally intended that the Bill will directly regulate activities outside Australia. Clause 9 Concurrent operation of State and Territory laws Clause 9 will provide that the Bill is not intended to exclude or limit the operation of a law of a State or Territory that is capable of operating concurrently with the Bill. PART 2--INTERPRETATION Clause 10 The Dictionary Clause 10 will provide definitions of key terms that are used throughout the Bill. As the definition of this Act includes the rules and the Regulatory Powers (Standard Provisions) Act 9

2014 as it applies to this Bill, the definitions outlined in clause 10 will also apply in relation those instruments. This clause will also include some 'signpost' definitions that refer readers to the clauses in which terms are substantively defined. These include definitions that are relevant for the export of waste material and definitions that are relevant for product stewardship. Some key concepts for the regulatory framework established by the Bill in relation to the export of waste material are an export licence and an export declaration. An export licence will be defined in clause 10 as an export licence granted under Part 4 of Chapter 2. An export declaration will be defined in clause 10 to mean a written declaration of an intention to export regulated waste material that complies with the requirements of clause 19 of the Bill. It is intended that exports of regulated waste material will only be able to be made by a person who holds an export licence and gives an export declaration to the Minister in respect of each consignment to be exported (unless the person has been granted an exemption under clause 26). A key concept for the regulatory framework established by the Bill and in relation to product stewardship is product. This term will be defined in clause 10 to mean a thing, including a substance, or mixture of substances, that is manufactured or that is prescribed by the rules. The definition is deliberately broad to provide flexibility for the Bill to apply to the full range of manufactured goods, materials and other things for which it may be considered appropriate to impose product stewardship requirements. A reference to product also includes a class of such things. Clause 10 will also define the concept of waste in relation to a product. This concept is primarily relevant to the product stewardship provisions, as the export provisions use the broader concept of waste material (as defined in clause 15). Clause 10 will also define terms relevant to both the export of waste material and product stewardship. For example, relevant Commonwealth liability will be defined to include a fee or charge payable under the Bill or an associated charging Bill, penalties for late payments, pecuniary penalties, or other liabilities imposed by or under a prescribed law. Clause 11 Definition of associate Clause 11 will define the term associate. This term is primarily used in the context of the fit and proper person test in clause 175 of the Bill, where the Minister is required to have regard to a number of factors concerning the person in question, and may also have regard to those same matters in relation to an associate of that person. The fit and proper person test applies to both exporters of regulated waste material and administrators of product stewardship arrangements. The term associate is also relevant to other decision-making powers in relation to the export of waste material, such as the power to refuse to grant an export licence to a person who is an associate of another person who has had a licence refused (see clause 63). 10

The definition will allow the Minister to take into account the association between a person who has made certain applications or to which certain decisions under the Bill may relate, and another person. This is intended to ensure that the Bill's objects are not undermined by a person using his or her associations to circumvent the requirements of the Bill in circumstances where there is a question as to the person's suitability to hold an export licence, or to be the administrator of an accredited voluntary arrangement or approved co- regulatory arrangement. Subclause 11(1) will provide that an associate of a person (the first person) includes:  a spouse, de facto partner, child (who must be at least 18 years old) or parent of the first person;  a person who is or was directly or indirectly concerned in, or in a position to control or influence the conduct of, a business or undertaking of the first person or a corporation: o of which the first person is an officer or employee; or o in which the first person holds shares;  a corporation of which the first person or any of other persons mentioned above is an officer or employee;  if the first person is a body corporate, another body corporate that is a related body corporate (which has the same meaning as in the Corporations Act 2001) of the first person. Subclause 11(2) will clarify that the reference to child in subclause 11(1) includes a stepchild or adopted child of the first person, or a child of the person within the meaning of the Family Law Act 1975. Subclause 11(3) will further clarify that the reference to a stepchild in subclause 11(2) includes a child of the first person's de facto partner. Subclause 11(4) will clarify that the reference in subclause 11(1) to the parent of the first person includes the stepparent or adopted parent of that person. Clause 12 Definition of entered for export Clause 12 will set out when waste material is entered for export for the purposes of the Bill. This concept is relevant to a number of offences and civil penalties under the Bill. Waste material will be entered for export if, in the course of export operations:  it is presented to the Minister, an authorised officer or another person who is authorised to exercise powers or perform functions under the Bill in relation to the waste material; or 11

 if information about the waste material is given to the Minister, an authorised officer or another person who is authorised to exercise powers or perform functions under the Act in relation to the waste material. An example is when an exporter gives an export declaration concerning a proposed export of waste material to the Minister, or where an exporter presents waste material to an auditor for the purposes of an audit. Clause 13 Definition of export operations Clause 13 will define the term export operations. Export operations will be defined to mean operations to export waste material, operations to produce, or prepare, waste material for export, or other operations in relation to waste material before it is exported. The concept of carrying out export operations will be an integral part of regulating the export of waste material under the Bill. For example, the granting of an export licence will be in relation to carrying out a kind of export operations in relation to regulated waste material. Operations to export waste material is intended to include the entirety of export. This includes, for example, operations to export waste material to its final destination, such as a recycling facility in an importing country. This will allow such operations to be subject to conditions on an export licence. Clause 14 When the product stewardship criteria are satisfied Clause 14 will set out when the product stewardship criteria are satisfied. The product stewardship criteria are relevant to Chapter 3 of the Bill, which deals with product stewardship. The Minister must be satisfied that the product stewardship criteria are satisfied for a product before accrediting a voluntary product stewardship arrangement for that product, or making rules under the co-regulatory or mandatory product stewardship provisions in relation to that product (see clauses 70, 77 and 93). Clause 14 will provide that the product stewardship criteria will be satisfied in relation to a product if:  the product is sold in more than one State or Territory; and  at least one of the following applies in relation to the product: o the product contains hazardous substances; o there is the potential to significantly increase the conservation of materials used in the product or the recovery of resources (including materials and energy) from waste from the product; 12

o there is the potential to significantly reduce the impact that the product has on the environment, or that substances in the product have on the environment, or on the health or safety of humans. The requirement that the product is sold in more than one State or Territory at paragraph 14(a) recognises that it may be more appropriate for the Commonwealth Government to regulate a product with wider reach, rather than in one State or Territory. It is intended that most products regulated under the product stewardship provisions of the Bill will be sold throughout Australia. Where products are in a national market, a national approach will avoid inefficiencies and inconsistencies associated with different approaches being adopted by State and Territory governments. However, it may be appropriate for particular products that are not sold throughout Australia, but are sold in two or more jurisdictions, to be regulated under the product stewardship provisions of the Bill. This is particularly the case in the context of voluntary product stewardship. The criterion at paragraph 14(a) provides the Minister with sufficient flexibility in this respect. The hazardous substance criterion (subparagraph 14(b)(i)) will be enlivened if the product contains hazardous substances. This criterion is relevant as hazardous substances in products can increase the impact that products have on environmental and human health and safety, including at the end of the product's life. The material conservation and resource recovery criterion (subparagraph 14(b)(ii)) recognises the benefits of conserving materials and recovering resources. This criterion may be satisfied, for example, where reuse or recycling requires less energy or water than the production of a new product. The impact criterion (subparagraph 14(b)(iii)) recognises the potential to significantly reduce the impact that the product has on the environment or on the health or safety of humans. This criterion may be satisfied, for example, by designing products to be easily repaired, rather than disposed of when a part malfunctions. Clause 15 Definition of waste material Clause 15 will define the term waste material. The term will be central to the application and scope of Chapter 2 of the Bill, which will regulate the export of waste material. Subclause 15(1) will define waste material as any substance or thing that is:  discarded, rejected, or left over from an industrial, commercial, domestic or other activity; or  surplus to or a by-product of an industrial, commercial, domestic or other activity; or  prescribed by the rules. 13

Subclause 15(2) will clarify that waste material can be a gas, liquid, solid or energy, or a combination of any of these. Subclause 15(3) will further clarify that a thing can be waste material whether or not it is of value, and whether or not it is or may be processed, recycled, re-used or recovered. The definition of waste material is intended to be sufficiently broad to capture all types of waste. However, the Bill will only regulate those kinds of waste materials that are prescribed for the purpose of clause 17 and which are referred to in the Bill as regulated waste materials. Chapter 2--Regulating the export of waste material GENERAL OUTLINE Chapter 2 will establish a framework to regulate the export of waste materials. It is intended that this framework will be used to regulate different waste materials consistently with Commonwealth Government policy and applicable international obligations. NOTES ON INDIVIDUAL CLAUSES PART 1--INTRODUCTION Clause 16 Simplified outline of this Chapter Clause 16 will provide a simplified outline of Chapter 2 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Chapter 2, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of the Chapter 2. PART 2--EXPORTING WASTE MATERIAL Overview of Part Part 2 will specify how waste materials may be regulated under the Bill. The rules may prescribe kinds of waste material to be regulated, called regulated waste material. Rules may also be made to prohibit the export of regulated waste materials unless prescribed export conditions are complied with. Part 2 will also set out a number of offences and civil penalty provisions relating to the export of regulated waste material. Clause 17 Rules may prescribe waste material for the purposes of this Act Clause 17 will operate in conjunction with clause 18 of the Bill and will allow the Minister to make rules to prescribe kinds of waste material for the purposes of the Bill. A kind of waste material prescribed in the rules will be a regulated waste material (subclause 17(2)). The Bill will only regulate the export of waste material that is regulated waste material. In other words, only waste material that is prescribed in rules made for the purposes of clause 17 will be subject to the regulatory controls set out in the Bill. 14

Allowing the Minister to use the rules to set the kinds of waste material that will be regulated will give the Minister flexibility to regulate different kinds of waste material as appropriate from time to time. It also allows the regulatory controls to adapt to changing circumstances, including updates in waste processing technologies and new human and environmental health challenges. It is intended that the first waste material to be prescribed will be waste glass. It is also intended that rules will be made in the future to prescribe waste plastic, waste paper and cardboard and waste tyres in accordance with the timeline agreed by the Commonwealth, State and Territory Governments. However, clause 17 will be sufficiently broad to allow for any kind of waste material to be prescribed. The note following subclause 17(1) will explain that the waste material may be prescribed for the purposes of clause 17 by reference to a class of waste material, consistently with the ordinary operation of subsection 13(3) of the Legislation Act 2003. Waste material prescribed as regulated waste material for the purpose of this clause may be defined broadly in the rules. However, to ensure the appropriate kinds of waste material are regulated, clause 17, in conjunction with subclause 188(2), will allow the rules to exclude a kind of waste material from a broader kind of regulated waste material prescribed in the rules. This includes exclusions by reference to a kind of waste material, the places to which the waste material is to be exported, or the circumstances in which the waste material is to be exported. For instance, waste glass may be prescribed as a regulated waste material, however it might be considered appropriate to exclude waste glass exported solely for household or personal use (as may be specified in the rules), from the regulatory controls in the Bill. Waste material excluded from a broader kind of regulated waste material prescribed in the rules will not be regulated for the purposes of the Bill. Rules excluding a kind of waste material from being regulated waste material will differ from the concept of exemptions in Part 3 of this Chapter, as the relevant waste material will be excluded from regulatory controls on an on-going basis for all exporters. This is in contrast to exemptions, which will be based on an application for an exemption from an individual, will be assessed on a case-by-case basis, and will only apply to that individual. Clause 18 Rules may prohibit export of regulated waste material subject to conditions Clause 18 will operate in conjunction with clause 17 of the Bill and will allow the rules to prohibit the export of regulated waste material unless it complies with certain conditions. It is intended that this will be a key provision used to regulate the export of waste material from Australia. For instance, it is anticipated that rules will be made to prohibit the export of waste glass if certain conditions are not complied with. Consistent with the decision of Commonwealth, State and Territory Governments, rules are also anticipated to be made in the future for other waste materials relating to waste plastic, tyres, paper and cardboard. Conditions prescribed by rules made under clause 18 will be known as prescribed export conditions. Setting the prescribed export conditions in the rules will give the Minister the 15

flexibility to regulate the export of regulated waste material to suit the requirements of a particular waste stream. For instance, it may not be appropriate for exports of waste glass to be subject to the same prescribed export conditions as exports of waste plastics, given the different properties of the waste material concerned. The note following subclause 18(1) explains that failure to comply with prescribed export conditions prior to exporting regulated waste material is both an offence and contravention of a civil penalty provision under clause 20. For the purposes of subclause 20(5), waste material is exported when the conveyance transporting the waste material from Australia starts its journey to a place outside Australia (whether or not that place is the intended final overseas destination for the waste material). Subclause 18(2) will provide a non-exhaustive list of examples of types of prescribed export conditions that may be included in rules made for the purposes of clause 18. These include conditions that:  require waste material to be exported in accordance with an export licence or in any other way prescribed by the rules;  require export operations to be carried out in relation to the waste material in accordance with an export licence or in any other way prescribed by the rules;  require the exporter to give an export declaration to the Minister within a specified period before the waste material is exported;  require the exporter to hold another kind of permission, consent or approval, granted as prescribed by the rules, to export the waste material. Allowing the rules to identify other matters that may form part of the prescribed export conditions will also provide the Minister with flexibility to respond to changes in Government or international requirements concerning the regulation of waste exports. Prescribed export conditions can be distinguished from conditions on an export licence under clause 35. For example, a prescribed export condition could require that an exporter of a particular kind of regulated waste material hold an export licence. The export of that kind of regulated waste material will therefore be prohibited unless the exporter holds an export licence covering the waste material (or the person has been granted an exemption under clause 26). Prescribed export conditions must be complied with by the time the conveyance transporting the waste material from Australia starts its journey to a place outside Australia (whether or not that place is the intended final overseas destination for the waste material) (see clause 20). In contrast, rules made for the purposes of clause 35 of the Bill might impose certain conditions on the export licence itself, such as the standard to which the waste must be processed, or that regulated waste material be exported to a specific place such as a recycling facility in an importing country. Conditions imposed on an export licence are continuous whilst the licence is in force and may apply to export operations both before and 16

after the conveyance transporting the waste material from Australia starts its journey to a place outside Australia. Different offence and civil penalty provisions will apply to a person who exported regulated waste material in contravention of a prescribed export condition, such as not holding an export licence (see clause 20), compared to a person who exported regulated waste material in breach of a condition of their export licence (see clause 59). Clause 19 Export declaration - general requirements Clause 19 will set out the general requirements that must be met for an export declaration. Clause 18 will make it clear that a prescribed export condition may include a requirement that the exporter provide an export declaration to the Minister in respect of each consignment of regulated waste material that is proposed to be exported from Australia. The first note after subclause 19(1) draws attention to this. It is intended that a requirement for an export declaration will be a prescribed export condition for most, if not all, regulated waste materials. Subclause 19(1) will require an export declaration to be made in the approved form (if any) and include the information and documents required by the approved form. The export declaration must also include any information or documents required by the rules and must be signed and dated by the exporter. The second note after clause 19(1) will explain that a person may commit an offence or be liable to a civil penalty if they provide false or misleading information or documents (clauses 146 and 147 of the Bill, and sections 137.1 and 137.2 of Schedule 1 to the Criminal Code Act 1995). This will include providing false or misleading information or documents in an export declaration. Additional offences and civil penalty provisions for making false or misleading representations in relation to an export declaration are set out under clauses 23 and 24. Subclause 19(2) will clarify that if the export declaration does not meet the requirements in subclause 19(1), the declaration is taken not to have been given. Subclause 19(3) will clarify that the Minister will be able to approve different forms for an export declaration for different kinds of waste materials, or a single form for an export declaration for more than one kind of regulated waste material. This is intended to be an avoidance of doubt provision. Clause 20 Exporting regulated waste material - non-compliance with prescribed export conditions Clause 20 will create an offence and civil penalty provision that will apply to a person who exports regulated waste material and fails to comply with the relevant prescribed export conditions. It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always 17

needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 20 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. The maximum penalty is five years imprisonment or 300 penalty units (or both) for the offence, and 600 penalty units for the civil penalty provision. A body corporate will be liable for five times this amount as a maximum penalty (see subsection 4B(3) of the Crimes Act 1914 and subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014). The size of the maximum penalty for both the offence and the civil penalty provision is considered appropriate as a deterrent to reflect the seriousness of failing to comply with the prescribed export conditions. Such conduct may undermine the integrity of the regulatory framework provided for by the Bill, which could in turn result in harm to human and environmental health. This conduct may also erode the confidence of trading partners in the Government's regulation of exported waste material and may therefore adversely impact market access. The consequence of non-compliant behaviour by one person may therefore impact the ability of others to export from Australia in the future. The maximum civil penalty of 600 penalty units is higher than the maximum penalty available for the criminal offence. This is intended to ensure that it will act as a deterrent, particularly for body corporates, and recognises that being found liable to pay a civil penalty does not attract imprisonment or a criminal conviction. Subclause 20(3) will provide that strict liability will apply to the elements of the offence in paragraph 20(1)(b) and (c) (that the waste material is regulated waste material, and that the export of the waste material is prohibited unless prescribed export conditions are complied with). This means the prosecution will only be required to prove the physical elements in paragraphs 20(1)(b) and (c) beyond reasonable doubt and will not be required to prove fault for these elements. The defence of honest and reasonable mistake of fact is available to the defendant (see section 9.2 of Schedule 1 to the Criminal Code Act 1995). The elements of the offence in paragraphs 20(1)(b) and (c) concern the legal status of the waste material in question and the content of the prohibition set out in rules made for the purpose of clause 18. It is appropriate for these elements to be strict liability because they do not involve any conduct by the exporter. The use of strict liability in paragraphs 20(1)(b) and (c) will not affect the need for the prosecution to prove fault elements for other parts of the offence, including that the exporter did not comply with the prescribed export conditions. Subclause 20(5) will have the effect of narrowing the ordinary meaning of when an export is concluded for the purposes of the offence and civil penalty provision in clause 20. For the purposes of clause 20, waste material will be considered exported when the conveyance transporting the waste material from Australia starts its journey to a place outside Australia (whether or not that place is the intended final overseas destination for the waste material). This is intended to operate as a timing point to ensure exporters comply with all prescribed 18

export conditions prior to leaving Australia. For example, if an export declaration is a prescribed export condition, a person must make that declaration prior to the regulated waste material leaving Australia, not after the conveyance transporting the waste material from Australia starts its journey. This will also make it clear that the offence and contravention of civil penalty provision is committed as soon as the conveyance (such as a ship) has commenced its journey, without having to wait until the waste material is landed in the importing country. This is considered appropriate for the offence against clause 20 because it is intended that a person comply with prescribed export conditions, which may include that the exporter hold an export licence, prior to the conveyance transporting the regulated waste material from Australia starting its journey to a place outside of Australia. This will allow greater opportunity for compliance action to be taken prior to the regulated waste material leaving Australia, if necessary. Further, depending on the circumstances, it may be appropriate to commence action for breach of the offence and civil penalty provision under this clause prior to the regulated waste material being landed in the importing country. Clause 21 Knowingly making false or misleading representation about regulated waste material that is entered for export Clause 21 will create an offence and civil penalty provision that will apply to a person who enters regulated waste material for export and represents (either expressly or by necessary implication) that the relevant prescribed export conditions have been complied with, knowing that the representation is false or misleading. It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 21 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. The maximum penalty is five years imprisonment or 300 penalty units (or both) for the offence, and 600 penalty units for the civil penalty provision. A body corporate will be liable for five times this amount as a maximum penalty (see subsection 4B(3) of the Crimes Act 1914 and subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014). The size of the maximum penalty for both the offence and the civil penalty provision is considered appropriate as a deterrent. It reflects the seriousness of knowingly making a false or misleading representation that prescribed export conditions have been complied with, which could in turn result in harm to human and environmental health. Such conduct may undermine the integrity of the regulatory framework provided for by the Bill. This conduct may also erode the confidence of trading partners in the Government's regulation of exported waste material and may therefore adversely impact market access. The consequence of non- 19

compliant behaviour by one person may therefore impact the ability of others to export from Australia in the future. The maximum civil penalty of 600 penalty units is higher than the maximum penalty available for the criminal offence. This is intended to ensure that it will act as a deterrent, particularly for body corporates, and also recognises that being found liable to pay a civil penalty does not attract imprisonment or a criminal conviction. Subclause 21(3) will provide that strict liability will apply to the elements of the offence in paragraph 21(1)(b) and (c) (that the waste material is regulated waste material, and that the export of the waste material is prohibited unless prescribed export conditions are complied with). This means the prosecution will only be required to prove the physical elements in paragraph 21(1)(b) and (c) beyond reasonable doubt and will not be required to prove fault for these elements. The defence of honest and reasonable mistake of fact is available to the defendant (see section 9.2 of Schedule 1 to the Criminal Code Act 1995). The elements of the offence in paragraphs 21(1)(b) and (c) concern the legal status of the waste material in question and the content of the prohibition set out in rules made for the purpose of clause 18. It is appropriate for these elements to be strict liability because they do not involve any conduct by the exporter. The use of strict liability in paragraphs 21(1)(b) and (c) will not affect the need for the prosecution to prove fault elements for other parts of the offence, including that the person knew the representation that the prescribed export conditions had been complied with was false or misleading. Subclause 21(5) will have the effect that the offence and civil penalty provision will not apply if the representation is not false or misleading in a material particular. The note after subclause 21(5) will explain that the defendant bears an evidential burden in relation to showing that the representation is not false or misleading in a material particular. This is because section 13.3 of Schedule 1 to the Criminal Code Act 1995 and section 96 of the Regulatory Powers (Standard Provisions) Act 2014 provide that if a defendant wishes to rely on an exception to, respectively, an offence or a civil penalty provision, the defendant bears an evidential burden of proof in relation to that matter. This is appropriate on the basis that knowledge of that matter would be peculiar to that person. Clause 22 Recklessly making false or misleading representation about regulated waste material that is entered for export Clause 22 will create an offence and civil penalty provision that will apply to a person who enters regulated waste material for export and represents (either expressly or by necessary implication) that the relevant prescribed export conditions have been complied with, reckless as to whether that the representation is false or misleading. It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries 20

with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 22 and is at the more serious end of the spectrum, or that involves a higher degree of malfeasance. The maximum penalty is 3 years imprisonment or 180 penalty units (or both) for the offence, and 360 penalty units for the civil penalty provision. A body corporate will be liable for five times this amount as a maximum penalty (see subsection 4B(3) of the Crimes Act 1914 and subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014). The size of the maximum penalty for both the offence and the civil penalty provision is considered an appropriate deterrent to reflect the seriousness of recklessly making a false or misleading representation that prescribed export conditions have been complied with. Such conduct may undermine the integrity of the regulatory framework provided for by the Bill, which could in turn result in harm to human and environmental health. This conduct may also erode the confidence of trading partners in the Government's regulation of exported waste material and may therefore adversely impact market access. The consequence of non- compliant behaviour by one person may therefore impact the ability of others to export from Australia in the future. The maximum civil penalty of 360 penalty units is higher than the maximum penalty available for the criminal offence. This is intended to ensure that it will act as a deterrent, particularly for body corporates, and also recognises that being found liable to pay a civil penalty does not attract imprisonment or a criminal conviction. Subclause 22(3) will provide that strict liability will apply to the elements of the offence in paragraph 22(1)(b) and (c) (that the waste material is regulated waste material, and that the export of the waste material is prohibited unless prescribed export conditions are complied with). This means the prosecution will only be required to prove the physical elements in paragraph 22(1)(b) and (c) beyond reasonable doubt and will not be required to prove fault for these elements. The defence of honest and reasonable mistake of fact is available to the defendant (see section 9.2 of Schedule 1 to the Criminal Code Act 1995). The elements of the offence in paragraphs 22(1)(b) and (c) concern the legal status of the waste material in question and the content of the prohibition set out in rules made for the purpose of clause 18. It is appropriate for these elements to be strict liability because the elements do not involve any conduct by the exporter. The use of strict liability in paragraphs 22(1)(b) and (c) will not affect the need for the prosecution to prove fault elements for other parts of the offence, including that the person was reckless as to whether the representation that the prescribed export conditions had been complied with was false or misleading. Subclause 22(5) will have the effect that the offence and civil penalty provision will not apply if the representation is not false or misleading in a material particular. The note after subclause 22(5) will explain that the defendant bears an evidential burden in relation to showing that the representation is not false or misleading in a material particular. This is because section 13.3 of Schedule 1 to the Criminal Code Act 1995 and section 96 of the 21

Regulatory Powers (Standard Provisions) Act 2014 provide that if a defendant wishes to rely on an exception to, respectively, an offence or a civil penalty provision, the defendant bears an evidential burden of proof in relation to that matter. This is appropriate on the basis that knowledge of that matter would be peculiar to that person. Clause 23 Knowingly making false or misleading representation in relation to an export declaration Clause 23 will create an offence and civil penalty provision that will apply to a person who enters regulated waste material for export and knowingly makes a representation (either expressly or by necessary implication) in an export declaration that is false or misleading. It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 23 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. The maximum penalty is five years imprisonment or 300 penalty units (or both) for the offence, and 600 penalty units for the civil penalty provision. A body corporate will be liable for five times this amount as a maximum penalty (see subsection 4B(3) of the Crimes Act 1914 and subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014). The size of the maximum penalty for both the offence and the civil penalty provision is considered appropriate as a deterrent to reflect the seriousness of knowingly making a false or misleading representation in an export declaration. Such conduct may undermine the integrity of the regulatory framework provided for by the Bill, which could in turn result in harm to human and environmental health. This conduct may also erode the confidence of trading partners in the Government's regulation of exported waste material and may therefore adversely impact market access. The consequence of non-compliant behaviour by one person may therefore impact the ability of others to export from Australia in the future. The maximum civil penalty of 600 penalty units is higher than the maximum penalty available for the criminal offence. This is intended to ensure that it will act as a deterrent, particularly for body corporates, and also recognises that being found liable to pay a civil penalty does not attract imprisonment or a criminal conviction. Subclause 23(3) will provide that strict liability will apply to the element of the offence in paragraph 23(1)(b) (that the waste material is regulated waste material). This means the prosecution will only be required to prove the physical element in paragraph 23(1)(b) beyond reasonable doubt and will not be required to prove fault for this element. The defence of honest and reasonable mistake of fact is available to the defendant (see section 9.2 of Schedule 1 to the Criminal Code Act 1995). 22

The element of the offence in paragraph 23(1)(b) concerns the legal status of the waste material in question. It is appropriate for this element to be strict liability because it does not involve any conduct by the exporter. The use of strict liability in paragraph 23(1)(b) will not affect the need for the prosecution to prove fault elements for other parts of the offence, including that the person knew the representation in the export declaration was false or misleading. Subclause 23(5) will have the effect that the offence and civil penalty provision will not apply if the representation is not false or misleading in a material particular. The note after subclause 23(5) will explain that the defendant bears an evidential burden in relation to showing that the representation is not false or misleading in a material particular. This is because section 13.3 of Schedule 1 to the Criminal Code Act 1995 and section 96 of the Regulatory Powers (Standard Provisions) Act 2014 provide that if a defendant wishes to rely on an exception to, respectively, an offence or a civil penalty provision, the defendant bears an evidential burden of proof in relation to that matter. This is appropriate on the basis that knowledge of that matter would be peculiar to that person. Clause 24 Recklessly making false or misleading representation in relation to an export declaration Clause 24 will create an offence and civil penalty provision that will apply to a person who enters regulated waste material for export, makes a representation (either expressly or by necessary implication) in an export declaration that is false or misleading, and is reckless as to whether that representation is false or misleading. It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 24 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. The maximum penalty is 3 years imprisonment or 180 penalty units (or both) for the offence, and 360 penalty units for the civil penalty provision. A body corporate will be liable for five times this amount as a maximum penalty (see subsection 4B(3) of the Crimes Act 1914 and subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014). The size of the maximum penalty for both the offence and the civil penalty provision is considered appropriate as a deterrent to reflect the seriousness of recklessly making a false or misleading representation in an export declaration. Such conduct may undermine the integrity of the regulatory framework provided for by the Bill, which could in turn result in harm to human and environmental health. This conduct may also erode the confidence of trading partners in the Government's regulation of exported waste material and may therefore adversely impact market access. The consequence of non-compliant behaviour by one person may therefore impact the ability of others to export from Australia in the future. 23

The maximum civil penalty of 360 penalty units is higher than the maximum penalty available for the criminal offence. This is intended to ensure it will act as a deterrent, particularly for body corporates, and also recognises that being found liable to pay a civil penalty does not attract imprisonment or a criminal conviction. Subclause 24(3) will provide that strict liability will apply to the element of the offence in paragraph 24(1)(b) (that the waste material is regulated waste material). This means the prosecution will only be required to prove the physical element in paragraph 24(1)(b) beyond reasonable doubt and will not be required to prove fault for this element. The defence of honest and reasonable mistake of fact is available to the defendant (see section 9.2 of Schedule 1 to the Criminal Code Act 1995). The element of the offence in paragraph 24(1)(b) is a matter of law as it concerns the legal status of the waste material in question. It is appropriate for this element to be strict liability because it does not involve any conduct by the exporter. The use of strict liability in paragraph 24(1)(b) will not affect the need for the prosecution to prove fault elements for other parts of the offence, including that the person was reckless as to whether the representation in the export declaration was false or misleading. Subclause 24(5) will have the effect that the offence and civil penalty provision will not apply if the representation is not false or misleading in a material particular. The note after subclause 24(5) will explain that the defendant bears an evidential burden in relation to showing that the representation is not false or misleading in a material particular. This is because section 13.3 of Schedule 1 to the Criminal Code Act 1995 and section 96 of the Regulatory Powers (Standard Provisions) Act 2014 provide that if a defendant wishes to rely on an exception to, respectively, an offence or a civil penalty provision, the defendant bears an evidential burden of proof in relation to that matter. This is appropriate on the basis that knowledge of that matter would be peculiar to that person. PART 3--EXEMPTIONS Overview of Part Part 3 will provide for exemptions from specified provisions of Chapter 2. A person will need to apply to the Minister for an exemption. An exemption may be granted (for a maximum of 12 months) subject to conditions and revoked. Only the conditions of an exemption may be varied. Clause 25 Application for exemption Clause 25 will provide that an application for an exemption to one or more provisions of Chapter 2 of the Bill may be made by:  a person who wishes to export regulated waste material; or  a person prescribed by the rules. 24

Clause 25 will include a limitation that an application for an exemption may only be applied for in relation to the provisions set out in Chapter 2 of the Bill (concerning the regulation of waste exports). Part 3 will not allow for an exemption from provisions contained elsewhere in the Bill (including compliance and enforcement-related provisions, or product stewardship provisions). For example, a person may apply for an exemption to a condition of an export licence that the holder of the export licence has a commercial relationship with the importer of the regulated waste material. Alternatively, a person may apply for an exemption to a particular prescribed export condition (such as a requirement to hold an export licence). Allowing the rules to prescribe other persons that may apply for an exemption provides the Minister with flexibility to determine the types of persons that should be able to apply for an exemption depending on the circumstances involved (in addition to those persons proposing to export regulated waste material). An exemption will only apply to a particular person following an individual application, rather than being granted to all exporters of regulated waste material of that type. The purpose of an exemption is to allow a reduced level of regulatory oversight in circumstances where it is appropriate to grant the exemption, and where the risk posed to human and environmental health by exporting the waste material is minimal. The note after clause 25 will explain that the general application requirements set out at clauses 172, 173 and 174 of the Bill will apply in relation to an application for an exemption. Clause 26 Minister must decide whether to grant exemption Subclause 26(1) will require the Minister, on receiving an application for an exemption under clause 25, to decide whether to grant or refuse to grant the exemption. The note following this subclause advises that a decision to refuse an exemption under clause 26 will be a reviewable decision and will refer the reader to clauses 151 and 152 of the Bill. Subclause 26(2) will set out the circumstances in which the Minister may decide to grant the exemption. The Minister may grant the exemption if satisfied that the requirements prescribed by the rules are met and it is appropriate to grant the exemption. In making this decision, the Minister must have regard to any matter prescribed by the rules and any other matter the Minister considers relevant. It is anticipated that there may be additional guidance published on the Department's website regarding the types of circumstances where the Minister may grant an exemption. Allowing the rules to prescribe the requirements that must be met before an exemption is granted will provide the Minister with the flexibility to determine in what circumstances it is appropriate to allow exemptions in relation to the specific regulated waste material. It may be appropriate for these requirements to differ for different kinds of regulated waste material. 25

This will not limit the requirement to also take into account any other matters the Minister considers relevant. A note after subclause 26(2) will explain that an exemption generally must not be varied. Clause 30 will, however, allow any conditions attached to the exemption to be varied. Subclause 26(3) will clarify that when considering whether it is appropriate to grant an exemption, the Minister must have regard to the objects of the Bill and may have regard to any other matter. This will ensure that, among other things, human and environmental health- related factors are taken into account. It will also enable the Minister to have regard to matters such as the history of environmental compliance by the exporter or the importer, or if the exported waste material will be further processed or reused in the destination country (if relevant). Subclause 26(4) will set out requirements relating to the period an exemption is in effect. There will be two types of exemptions:  exemptions that are in effect until a specified event occurs. This event cannot be more than 12 months after the exemption takes effect. It is intended that this type of exemption will be used for one-off exports of regulated waste material, and that the specified event will generally be the export of the regulated waste material. Such exemptions will remain in force until the specified event occurs, unless revoked earlier under the Bill.  exemptions that are in effect for a specified period. It is intended that this type of exemption will be used for persons who intend to make multiple or regular exports of regulated waste materials, for a particular purpose. Such exemptions will be in force until their expiry date, unless revoked under the Bill. The expiry date may be set by the rules (for a category of exemptions, or all exemptions) or by the Minister (for the particular exemptions). However, the expiry date cannot be more than 12 months from the date the exemption takes effect. Subclause 26(5) will clarify that the Minister may set an expiry date for an exemption under subclause 26(4) even if there is an expiry date prescribed in the rules that would otherwise apply to the exemption. Clause 27 Exemption may be granted subject to conditions Subclause 27(1) will allow an exemption to be granted subject to any conditions the Minister considers necessary. A note following subclause 27(1) will explain that any conditions attached to an exemption may be varied under clause 30. Conditions will be attached on a case-by-case basis and will be specific to a particular circumstance or kind of waste material. For example, an exemption from a prescribed export 26

condition to have an export licence for the export of a trade sample of regulated waste material may be granted subject to the condition that the trade sample is processed in accordance with a relevant industry standard. Allowing the Minister to set conditions on an exemption will assist in achieving the objects of the Bill. Subclause 27(2) will require the Minister, when considering whether to impose conditions on an exemption, to have regard to the objects of the Bill and any matters prescribed by the rules. Setting additional mandatory considerations in the rules will provide the Minister with the flexibility to determine different factors that are relevant to exemptions relating to the export of different kinds of regulated waste materials. Subclauses 27(3), 27(4) and 27(5) will have the combined effect that a person who holds an exemption and engages in conduct that contravenes a condition of their exemption will be both committing an offence and contravening a civil penalty provision. The maximum penalty is five years imprisonment or 300 penalty units (or both) for the offence, and 600 penalty units for the civil penalty. It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 27 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. The size of the penalty is considered appropriate to act as a deterrent and to reflect the seriousness of the conduct involved, which may result in the export of waste material that does not comply with requirements or objects of the Bill, which could in turn result in harm to human and environmental health. Such conduct may also impact Australia's trading reputation through eroding the confidence of trading partners in the Government's regulation of exported waste material, and so adversely impact market access. The consequence of non- compliant behaviour by one person may therefore impact on the ability of others to export from Australia in the future. The maximum civil penalty of 600 penalty units is higher than the penalty available for the criminal offence. This will ensure the penalty will be set at a high enough level to act as a deterrent, particularly for corporations, and recognises that being found liable to pay a civil penalty does not attract imprisonment or a criminal conviction. Clause 28 Notice of decision Subclause 28(1) will provide that if the Minister grants an exemption in relation to regulated waste material, the Minister must give the applicant an instrument of exemption. The instrument must state the following:  the kind of regulated waste material covered by the exemption; 27

 if applicable, each place to which the regulated waste material is to be exported under the exemption;  the reasons why the Minister is satisfied that it is appropriate to grant the exemption;  the provisions of the Bill covered by the exemption;  the day (which must not be before the grant) when the exemption takes effect;  whether the exemption remains in force until a specified event occurs or for a specified period (and the specified event or period, as the case may be)  any conditions of the exemption;  any other information prescribed by the rules. Allowing the rules to prescribe additional information that must be included in the instrument of exemption will provide the Minister with the flexibility to determine what information is appropriate for the particular exemption and applicant. The note after subclause 28(1) refers to the fact that an exemption cannot be in force for more than 12 months (see subclause 26(4)). Subclause 28(2) will provide that the instrument of exemption is not a legislative instrument for the purposes of the Legislation Act 2003. This is declaratory of the law and is included to assist readers. It is not intended to be an exemption to the Legislation Act 2003. Subclause 28(3) will provide that if the Minister refuses to grant an exemption, they must notify the applicant, in writing, of the decision. The notice must include the reasons for the decision. Clause 29 Period of effect of exemption Subclause 29(1) will provide that an exemption takes effect on the day stated in the instrument of exemption and remains in force until the earliest of:  if the exemption remains in force until a specified event occurs - when the event occurs;  if the exemption remains in force for a specified period - the end of the period;  if applicable - the end of the period prescribed by the rules;  the exemption is revoked under clause 31 of the Bill. Subclause 29(2) will allow the rules to prescribe the period during which an exemption remains in force. The rules may apply to exemptions generally, exemptions for a kind of 28

regulated waste material or exemptions in relation to a place where regulated waste material may be exported. However, the rules may not prescribe a period longer than 12 months. Enabling the rules to prescribe the period that an exemption remains in force will provide the Minister with discretion to determine the appropriate period (that is 12 months of less) for exemptions to remain in force in relation to a particular kind of waste material or a particular a place to which regulated waste material may be exported. Clause 30 Variation of conditions of exemption Subclause 30(1) will set a general rule that an exemption cannot be varied. A note to subclause 30(1) will explain that if changes to an exemption are required, a new application must be made. Subclause 30(2) will provide an exception to this general rule for the conditions of an exemption. The Minister may vary the conditions of an exemption if they consider it is necessary to do so. The variation may include imposing new conditions on the exemption. Subclause 30(3) will require the Minister to have regard to the objects of the Bill and the matters prescribed by the rules when considering whether it is necessary to vary the conditions of an exemption. Setting additional mandatory considerations in the rules will provide the Minister with the flexibility to determine different factors that are relevant to exemptions relating to the export of particular kinds of regulated waste materials. Subclause 30(4) will provide that if the Minister varies the conditions of an exemption, the Minister will be required to give the holder of the exemption a written notice stating the varied conditions and any new conditions, the reason for varying the conditions, the date the varied conditions take effect, and any other information prescribed by the rules. Clause 31 Revocation of exemption Subclause 31(1) will enable the Minister to revoke an exemption that is in force. Subclause 31(2) will require the Minister, in deciding whether to revoke an exemption, to have regard to the objects of the Bill and any matters prescribed by the rules. Setting additional mandatory considerations in the rules will provide the Minister with the flexibility to determine different factors that are relevant to exemptions relating to the export of particular kinds of regulated waste materials. Subclause 31(3) will provide that if the Minister decides to revoke an exemption, they must give the holder of the exemption a written notice stating that the exemption is revoked, the reasons for the revocation, and the day the revocation takes effect. Clause 32 Effect of exemption Clause 32 of the Bill will clarify that if an exemption from one or more provisions of the Bill (the exempted provisions) is in force for a person in relation to particular regulated waste 29

material, the exempted provisions do not apply in relation to the export of that waste material by that person. Any provision that is not an exempted provision will continue to apply. For example, a person who is exempt from requiring an export licence for the export of particular regulated waste material will still be required to comply with all any other export controls that relate to the relevant waste material. This would include other prescribed export conditions, such as requirements to give the Minister an export declaration in respect of each proposed export. PART 4--GRANT OF EXPORT LICENCE Overview of Part Part 4 will deal with the granting of export licences. It is intended that a prescribed export condition will be that the exporter must hold an export licence. An export licence may be granted subject to conditions. An export licence may be in effect until a specified event occurs or for a specified period but cannot be in effect for more than three years unless it is renewed. Clause 33 Application for export licence Subclause 33(1) will provide that a person may apply to the Minister for an export licence to carry out a kind of export operations in relation to a kind of regulated waste material. Export operations will be defined in clause 13. It is intended that holding an export licence covering the relevant export operations will be a prescribed export condition (under clause 18) to export regulated waste material. This is reflected in the note following clause 33. A note following subclause 33(1) will explain that there are additional requirements relating to applications at clauses 172, 173 and 174 of the Bill. These requirements will apply to applications for export licences. Subclause 33(2) will clarify that an application may relate to more than one kind of regulated waste material, export operation or place that the regulated waste material is to be exported. This will, for example, allow an exporter of multiple kinds of regulated waste materials to hold one export licence covering all relevant kinds of waste material, rather than having to obtain multiple licences. Clause 34 Minister must decide whether to grant export licence Subclause 34(1) will require the Minister, on receiving an application for an export licence, to decide whether to grant, or refuse to grant, the licence. Four notes will be included following subclause 34(1). Note 1 will direct readers to clauses 172, 173 and 174 of the Bill for additional matters relating to applications. Notes 2 and 3 will explain that where an application concerns multiple kinds of regulated waste material, export 30

operations, or places to which the waste material is to be exported, the Minister may grant a licence for only some of those waste materials, places or export operations. Note 4 will explain that a decision to refuse to grant an export licence is a reviewable decision (see clause 151) and the Minister must give the applicant written notice of the decision (see clause 152). Subclause 34(2) will set out the mandatory considerations for the Minister when deciding whether to grant an export licence. These are:  the objects of the Bill;  whether the applicant is a fit and proper person;  whether all relevant Commonwealth liabilities of the applicant have been paid, and if not, whether unpaid liabilities are due to exceptional circumstances;  whether the applicant is, and is likely to continue to be, able to comply with the conditions to which the export licence will be subject if granted; and  any other requirements prescribed by the rules. Note 1 at the end of subclause 34(2) will explain that the Minister must have regard to the matters in section 175 in considering whether the applicant is a fit and proper person. Note 2 will direct readers to clause 181 which will provide that a relevant Commonwealth liability of a person is taken to have been paid in certain circumstances. Subclause 34(3) will provide that, in addition to the mandatory considerations specified in subclause 34(2), the Minister may also have regard to any other matter that the Minister considers relevant. Subclause 34(4) will require the Minister to decide that the export licence is in effect until a specified event occurs or to set an expiry date for the licence. Neither the specified event nor the expiry date can be more than three years after the date the export licence takes effect (see clause 37). Subclause 34(5) will clarify that the Minister may set an expiry date for the export licence under subclause 34(4) even if there is an expiry date prescribed in the rules that will otherwise apply to the licence. Clause 35 Conditions of export licence Subclause 35(1) will provide that an export licence is subject to conditions. An export licence will be subject to:  conditions specified in the Bill. These conditions will apply to all export licences;  conditions prescribed by the rules. It is intended that the rules will prescribe conditions that will apply to all export licences for a particular kind of regulated waste 31

material (for example, waste glass export licences). The Minister may also decide that certain conditions prescribed by the rules do not apply to a particular export licence.  conditions specified in the export licence. The Minister may specify additional conditions in an export licence if they consider it appropriate. Such conditions will apply only to that export licence. The first note after subclause 35(1) will give subclause 64(4) as an example of an export licence condition that is specified in the Bill. Notes 2 and 3 will alert the reader to the fact that if the holder of an export licence contravenes a condition of their licence, they may be committing an offence or liable to a civil penalty, and their export licence may be suspended or revoked, under the relevant provisions of the Bill. Note 4 after subclause 35(1) will explain that the decision to attach additional conditions to an export licence is a reviewable decision under clause 151 and the Minister must give the holder written notice of the decision under clause 152. Subclauses 35(2) and (3) will clarify that export licence conditions prescribed by the rules:  may relate to the holder of the export licence, a kind of regulated waste material or a kind of export operations (or all of these); and  may be required to be complied with before or after the relevant export; and  may relate to the objects of the Bill. Subclause 35(4) will clarify that, for the purposes of the Bill, conditions to which an export licence is subject under subclause 35(1) or clause 40 are conditions of the licence. Clause 36 Matters to be stated in export licence Subclause 36(1) will require an export licence to be in writing and given to the applicant to whom it was granted. Subclause 36(2) will set out the requirements of an export licence. An export licence must state:  the number allocated to the licence;  each kinds of regulated waste material covered by the licence;  each kind of export operations covered by the licence;  each place to which a kind of regulated waste material covered by the licence may be exported (if applicable);  the day the licence takes effect; 32

 whether the licence remains in force for a specified period or until a specified event occurs;  if the licence is in force until a specified event occurs - that event;  if the licence is in force for a specified period - the expiry date;  any conditions prescribed by the rules that the Minister has decided should not be conditions of the licence;  any additional conditions of the licence;  any other information prescribed by the rules. Allowing the rules to prescribe additional information that must be included in an export licence will provide the Minister with the flexibility to determine what information is appropriate for the particular kind of licence. The note after clause 36 will explain that the expiry date for an export licence cannot be more than three years after the licence comes into force (see subclause 34(4)). Clause 37 Period of effect of export licence Clause 37 will set out requirements relating to the period an export licence is in effect. There will be two types of export licences:  Export licences that are in effect until a specified event occurs. It is intended that this type of licence will be used for one-off exports of regulated waste material, and that the specified event will generally be the export of the regulated waste material. Such licences will remain in force until the specified event occurs, unless revoked earlier under the Bill (subclause 37(1)).  Export licences that are in effect for a specified period. It is intended that this type of licence will be used for persons who intend to make multiple or regular exports of regulated waste materials. Such export licences will be in force until their expiry date, unless revoked or renewed under the Bill (subclause 37(2)). The expiry date may be set by the rules (for a category of export licences, or all licences) or by the Minister (for the particular licence). However, the expiry date cannot be more than 3 years from the date the licence takes effect (subclauses 37(3)-(5)). PART 5--RENEWAL OF EXPORT LICENCE Overview of Part Part 5 will deal with the renewal of export licences. Only export licences that are in effect for a specified period (rather than until a specified event occurs) will be able to be renewed. While the intention is that an export licence renewal will involve a more streamlined 33

application form, the Minister must make a new decision having regard to all mandatory considerations. Clause 38 Application to renew export licence Clause 38 will allow the holder of an export licence with an expiry date (a licence that is in effect for a specified period, rather than until a specified event occurs) to apply to the Minister to renew that licence. The intention is that an export licence renewal will involve a more streamlined application form, which will take account of information previously provided. This will reduce the regulatory burden on regular exporters. An export licence that is in force until a specified event occurs (for example, a one-off export) will not be able to be renewed. An export licence that is suspended will not be able to be renewed while it is suspended. Subclause 38(3) will clarify that an application to renew an export licence can relate to more than one kind of waste material, more than one kind of export operations, and specify one or more destinations to export waste material. Subclause 38(4) will provide that an application for renewal must be made within the period prescribed by the rules, or a longer period if the Minister allows. Subclause 38(5) will have the effect that an application for renewal made outside of this timeframe will be taken to be an application for a new export licence and will be assessed as such. The note after subclause 38(1) will refer the reader to clause 37, which deals with expiry of export licences. The note after subclause 38(2) will refer the reader to clauses 172, 173 and 174, which deal with general matters relating to applications. Clause 39 Minister must decide whether to renew export licence Subclause 39(1) will require the Minister, on receiving an application to renew an export licence, to decide whether to renew, or refuse to renew, the licence. Four notes will be included following subclause 39(1). Note 1 will direct readers to clauses 172, 173 and 174 of the Bill for additional matters relating to applications. Notes 2 and 3 will explain that where an application for renewal concerns multiple kinds of regulated waste material, export operations, or places to which the waste material is to be exported, the Minister may renew the export licence for only some of those materials or places or export operations. Note 4 will explain that a decision to refuse to renew an export licence is a reviewable decision (see clause 151) and the Minister must give the applicant written notice of the decision (see clause 152). Subclause 39(2) will provide that an export licence for which an application for renewal has been made will continue in force until a decision has been made on the renewal application. This is to ensure the licence does not expire before the application for renewal has been dealt with. 34

Subclause 39(3) will set out the mandatory considerations for the Minister when deciding whether to renew an export licence. These are:  the objects of the Bill;  whether the holder of the export licence is a fit and proper person;  whether all relevant Commonwealth liabilities of the holder have been paid, and if not, whether any unpaid liabilities are due to exceptional circumstances;  whether the holder of the export licence is, and is likely to continue to be, able to comply with the conditions to which the renewed export licence will be subject;  any other matters prescribed by the rules. Note 1 at the end of subclause 39(3) will explain that the Minister must have regard to the matters in section 175 in considering whether the applicant is a fit and proper person. Note 2 will direct readers to clause 181 which will provide that a relevant Commonwealth liability of a person is taken to have been paid in certain circumstances. Subclause 39(4) will also allow the Minister, when deciding whether to renew an export licence, to also have regard to any other matter they consider relevant. Subclause 39(5) will require the Minister to decide that a renewed export licence remains in force until a specified event occurs or to set an expiry date for the renewed licence. Neither the specified event nor the expiry date can be more than three years after the date the renewed export licence takes effect. A note after this subclause will provide that a decision by the Minister to set an expiry date for a renewed export licence is a reviewable decision (see clause 151) and that the Minister must give the person written notice of the decision (see clause 152). Subclause 39(6) will clarify that the Minister may set an expiry date for the renewed export licence under subclause 39(5) even if there is an expiry date prescribed in the rules that would otherwise apply to the licence. Clause 40 Conditions of renewed export licence Clause 40 will have the effect that a renewed export licence will be subject to any or all of:  the conditions that will be specified in the Bill; and  the conditions in the rules that are relevant to the export licence (other than those conditions which the Minister decides do not apply to the export licence); and  any additional conditions the Minister considers are appropriate and that are specified in the export licence. This is the same as for export licences granted under clause 33. 35

The first note after subclause 40(1) will give subclause 64(4) as an example of an export licence condition that is specified in the Bill. Notes 2 and 3 will alert the reader to the fact that if a licence holder contravenes a condition of their export licence, they may be committing an offence or be liable to a civil penalty, and their export licence may be suspended or revoked, under the relevant provisions of the Bill. Note 4 after subclause 40(1) will explain that the decision to impose additional conditions on a renewed export licence is a reviewable decision under clause 151 and the Minister must give the holder written notice of the decision under clause 152. Subclause 40(2) will clarify that the additional conditions specified by the Minister:  may be required to be complied with before or after the relevant export; and  may relate to the objects of the Bill. Clause 41 Matters to be stated in renewed export licence Clause 41 will make it clear that if an export licence is renewed, the Minister must give the applicant a new export licence stating the information set out in subclause 36(2). This means a renewed export licence will contain the same information as required for a new export licence and will ensure that the holder of the licence is aware of all relevant matters regarding the renewed licence, including any additional conditions the licence is subject to. PART 6--VARIATION OF EXPORT LICENCE Overview of Part Part 6 will deal with the variation of export licences. An export licence may be varied on application from the holder of the licence or, in certain circumstances, on the initiative of the Minister. Division 1--Application by holder Clause 42 Application by holder to vary export licence Clause 42 will allow the holder of an export licence to apply to the Minister to vary the export licence. This will enable the Minister to respond to the changing needs and requirements of the holder and, where appropriate, allow a flexible approach to the regulation of export licences. Subclause 42(1) will provide that the holder of an export licence may apply to the Minister to:  vary the conditions of the licence (including by imposing new conditions); 36

 vary the kinds of export operations or waste material covered by the licence or, if applicable, the places to which the waste material may be exported (including by adding or removing any of these matters);  if the licence is expressed to be in force until a specified event - vary the specified event (which must not occur more than three years after the day the licence took effect);  if there is an expiry date for the licence - vary the licence by setting a different expiry date for the licence (which must not be more than three years after the day the licence took effect);  make minor changes to a matter stated in the licence (including to correct a minor or technical error); or  vary any other aspect of the licence. The note following subclause 42(1) will direct readers to clauses 172, 173 and 174 of the Bill for additional requirements relating to applications. These requirements will apply to applications to vary an export licence. Subclause 42(2) will make it clear that an application cannot be made for a variation that will extend the period in which the licence is in force beyond three years from the day the licence took effect. This will ensure that licences will only be able to extend beyond three years where the licence is renewed. Subclause 42(3) will require the Minister, on receiving an application, to decide either to make the variation or to refuse to make the variation. Two notes will be included at the end of subclause 42(3). Note 1 will refer the reader to clause 174 of the Bill, which sets out matters relating to dealing with applications. Note 2 will advise that a decision to vary an export licence will be a reviewable decision under clause 151, and that the Minister must give the person written notice of the decision under clause 152. Subclause 42(4) will set out the mandatory considerations for the Minister when deciding whether to make the variation. These are:  the objects of the Bill;  whether all relevant Commonwealth liabilities of the applicant have been paid, or if they have not been paid, whether the non-payment is due to exceptional circumstances;  whether the applicant is, and is likely to continue to be, able to comply with the conditions to which the export licence, if varied, will be subject; 37

 any other matters prescribed by the rules. Allowing the rules to prescribe any other mandatory consideration will provide the Minister with the flexibility to tailor such factors to the particular types of variations requested and the kinds of regulated waste material covered by the export licence. The note following subclause 42(4) will refer the reader to clause 181 of the Bill, which will provide that a relevant Commonwealth liability of a person will be taken to have been paid in certain circumstances. Subclause 42(5) will be an exception to subclause 42(4). Its effect will be that the Minister will not be required to have regard to the mandatory considerations listed in subclause 42(4) when making certain minor variations to an export licence on the request of the export licence holder. This is considered appropriate because of the nature of the variation. Subclause 42(6) will permit the Minister, when deciding whether to vary an export licence, to also have regard to any other matters they consider relevant. Clause 43 Notice of variation Subclause 43(1) will provide that if the Minister varies an export licence on the request of the holder of the licence, the Minister must give the holder written notice of the variation. Subclause 43(2) will set out the requirements of the notice. The notice must include:  details of the variation;  the varied conditions of the export licence (if any);  the date the variation takes effect; and  any other information prescribed by the rules. The purpose of the notice is to inform the holder of the export licence of the Minister's decision to make the variation, as well as the terms under which the variation is given. Allowing the rules to prescribe other information that must be included in the notice will provide the Minister with the flexibility to ensure that the holder of the export licence receives all relevant information in relation to the variation. Subclause 43(3) will provide that if the export licence needs to be changed because there has been a variation, the Minister must give the holder a new export licence that includes the variation. The note following subclause 43(3) will explain that an export licence, as varied, remains in force as provided by clause 37 of the Bill. 38

Division 2--Variation by Minister Clause 44 Minister may vary export licence Clause 44 will allow the Minister to vary an export licence on the Minister's own initiative, (without having received an application from the holder of the licence). This will be an important safeguard if, for example, a matter is brought to the attention of the Minister that is considered relevant to the licence. It is also intended to be available as a compliance-related tool. Subclause 44(1) will set out the types of variations the Minister can make under clause 44. These will be:  to vary the conditions of the licence (including by imposing new conditions);  to vary the kinds of export operations or waste material covered by the licence or, if applicable, the places to which the waste material may be exported (including by adding or removing any of these matters);  if the licence is expressed to be in force until a specified event - to vary the specified event (which must not occur more than three years after the day the licence took effect);  if there is an expiry date for the licence - to vary the licence by setting a different expiry date for the licence (which must not be more than three years after the day the licence took effect);  to make minor changes to a matter stated in the licence (including to correct a minor or technical error); or  to vary any other aspect of the licence. The note following subclause 44(1) will explain that certain decisions to vary an export licence on the Minister's own initiative will be reviewable decisions under clause 151. Subclause 44(2) will provide that the Minister may vary the licence under subclause 44(1) only if the Minister reasonably believes that any of the following grounds exist:  it is necessary to do so to ensure compliance with the requirements of this Act in relation to the regulated waste material and the export operations covered by the licence;  it is necessary to do so to prevent or lessen a threat to human or environmental health;  the holder is not a fit and proper person;  a condition of the licence has been, or is being, contravened; 39

 it is necessary to do so: o to take account of an event notified under clause 61; or o to correct a minor or technical error;  the licence needs to be varied for any other reason prescribed by the rules. A note following subclause 44(2) will explain that the Minister must have regard to the matters in clause 175 in considering whether the holder is a fit and proper person. Subclauses 44(3) and 44(4) will prevent the Minister from varying an export licence on their own initiative unless:  the Minister has given a notice of the proposed variation to the holder of the licence; and  the notice: o contains the information required by subclause 44(4), including the grounds for the proposed variation and a request that the holder provide a written statement within 14 days showing cause why their licence should not be varied; and o include a statement setting out the person's review rights; and  either the Minister has received the requested written statement from the holder of the licence, or the 14-day period has ended. These subclauses will specify a natural justice requirement, which is consistent with both administrative law principles and Commonwealth policy. Natural justice (also known as procedural fairness) applies whenever an administrative decision might adversely affect the rights, interests or legitimate expectations of a person. It requires the decision maker to give persons whose interests may be adversely affected by the decision an opportunity to see the evidence on which the decision-maker proposes to rely and have their views on that evidence taken into account by the decision maker. Subclause 44(5) will provide that the notice in subclause 44(4) will not be required to include the request for the licence holder to provide a written statement if the Minister reasonably believes the proposed variation is necessary to prevent or lessen a serious and imminent threat to human or environmental health. While this provision is intended to have the effect of excluding natural justice in such circumstances, it is considered appropriate as it will only apply in exceptional circumstances where there is credible and relevant evidence of a threat to human or environmental health that is both serious and imminent. Subclause 44(6) will have the effect that the reasonable belief in subclause 44(2) and the notice in subclause 44(3) will not apply to variations to an export licence to extend the expiry 40

date of the licence, or to correct a minor or technical error. This is appropriate as such variations will not adversely affect the interests of the licence holder. Clause 45 Notice of variation Subclause 45(1) will provide that if the Minister varies an export licence under subclause 44(1) (a variation on the Minister's initiative), the Minister must give the holder of the licence written notice of the variation. Subclause 45(2) will set out the requirements of the notice. The notice must include:  the details of the variation;  if the variation is of the licence conditions - the varied conditions;  if the variation is of the period of effect - the new expiry date or new specified event;  the date the variation takes effect;  any other information prescribed by the rules. Allowing the rules to prescribe any other information that must be set out in a variation notice will provide the Minister with the flexibility to tailor notices to the particular type of variations and the kinds of regulated waste material covered by the export licence. Subclause 45(3) will provide that, unless subclause 44(5) applies, the variation must not take effect until the earlier of:  the day after any response by the holder of the export licence to the notice given under subclause 44(3) (requesting the licence holder give a written statement within 14 days showing cause why the licence should not be varied as proposed) is received; or  the end of the 14-day period after the show cause notice was given. The effect is that the Minister will be prevented from taking any action to vary the export licence during the 14-day period. If the licence holder responds within the 14-day period, natural justice requirements will mean the Minister must consider the licence holder's response when deciding whether to vary the licence. In circumstances where the export licence needs to be changed to take account of the variation, subclause 45(4) will require the Minister to provide the licence holder with a new licence that includes the variation. A note following subclause 45(4) will explain that the export licence, as varied, remains in force as provided by clause 37 of the Bill. 41

PART 7--SUSPENSION OF EXPORT LICENCE Overview of Part Part 7 will deal with the circumstances in which an export licence can be suspended and the process for doing so. Clause 46 Grounds for suspension - general Clause 46 will set out the grounds on which the Minister may suspend an export licence, and the process for doing so. The suspension of an export licence may relate to the whole or part of the licence. Subclause 46(1) will provide that the Minister may revoke an export licence if the Minister reasonably believes:  a condition of the licence has been, or is being, contravened;  the holder of the licence has contravened a requirement of this Bill in relation to the licence;  it is necessary to do so to prevent or lessen a threat to human or environmental health;  the holder of the licence is no longer a fit and proper person;  the holder of the licence: o failed to comply with a direction given to the holder by an authorised officer or the Minister; or o failed to comply with a request by an authorised officer to provide information or a document; or o failed to provide facilities and assistance to an auditor as required by clause 115; or o failed to comply with a request made by an auditor under clause 113;  the holder of the licence: o intimidated a person performing functions or exercising powers under this Bill. Intimidation in this context is not merely making the person's task difficult but it is conduct that deters another person from performing their functions or exercising their powers under the Bill by inducing fear in the person. Engaging in such conduct is a serious act. It may compromise export operations covered by the export licence and on this basis will require an appropriate regulatory response; or o hindered a person, or prevented a person from, performing functions or exercising powers under this Bill; 42

 the holder of the licence or any other person who participates in the management or control of the licence holder's export business (as provided by clause 62): o made a false, misleading or incomplete statement in an application under this Bill; or o gave false, misleading or incomplete information or documents to the Minister or to another person performing functions or exercising powers under this Bill; or o gave false, misleading or incomplete information or documents to the Minister or the Department under a prescribed law;  the holder of the licence is or was an associate of a person referred to in paragraph 63(1)(a), (b), (c) or (d);  a ground prescribed by the rules exists. These are the same grounds as for revocation in subclause 54(1) of the Bill. The Minister's discretion to suspend an export licence will only be enlivened whether the Minister reasonably believes that one or more grounds set out in subclause 46(1) exists. The Minister's belief must be based on reasonable evidence and more than a mere suspicion. Allowing the rules to prescribe any additional grounds on which the export licence may be suspended will provide the Minister with the flexibility to both address the wide range of matters that relate to an export licence and prescribe different grounds for different kinds of export licences as appropriate. Note 1 following subclause 46(1) explains that the Minister must have regard to the matters in clause 175 when applying the fit and proper person test. Note 2 refers to clause 49, which limits a suspension of an export licence to no more than 12 months. Note 3 at the end of subclause 46(1) advises that a decision to suspend an export licence under clause 46 will be a reviewable decision and will refer the reader to clauses 151 and 152 of the Bill. Subclauses 46(2) and (3) will prevent the Minister from suspending an export licence under clause 46 unless:  the Minister has given a notice of the proposed suspension to the holder of the licence; and  the notice: 43

o contains the information required by subclause 46(3), including the grounds for suspension and a request that the licence holder provide a written statement within 14 days showing cause why their licence should not be suspended; and o include a statement setting out the person's review rights; and  either the Minister has received the requested written statement from the holder of the licence, or the 14-day period has ended. These subclauses will specify a natural justice requirement, which is consistent with both administrative law principles and Commonwealth policy. Subclause 46(4) will provide that the notice in subclause 46(3) will not be required to include the request for the licence holder to provide a written statement if the Minister reasonably believes the suspension of the export licence is necessary to prevent or lessen a serious and imminent threat to human or environmental health. While this provision is intended to have the effect of excluding natural justice in such circumstances, it is considered appropriate as it will only apply in exceptional circumstances where there is credible and relevant evidence of a threat to human or environmental health that is both serious and imminent. Clause 47 Grounds for suspension - overdue relevant Commonwealth liability Clause 47 will provide an additional ground to suspend an export licence. Subclause 47(1) will allow the Minister to suspend an export licence if:  a relevant Commonwealth liability of the holder of the licence is more than 30 days overdue; and  the Minister has given a written notice to the licence holder; and  within eight days after the notice is given: o the relevant Commonwealth liability has not been paid; or o the licence holder has not entered into an arrangement with the Minister to pay the relevant Commonwealth liability. A relevant Commonwealth liability will be defined in clause 10 of the Bill. Subclause 47(2) will set out the requirements for the written notice given under subclause 47(1). Three notes will be included at the end of subclause 47(1). Note 1 will refer the reader to clause 49 of the Bill, which will limit a suspension to a maximum of 12 months. Note 2 will explain that a decision to suspend an export licence will be a reviewable decision and will refer the reader to clauses 151 and 152 of the Bill. Note 3 will explain that if the Minister 44

suspends an export licence under clause 47, the Minister may revoke the export licence in certain circumstances, including in relation to an overdue Commonwealth liability. Subclause 47(3) will permit the Minister, in the event of a suspension of an export licence on the grounds of an overdue relevant Commonwealth liability, to refuse to carry out, or direct a person (for example, an authorised officer) not to carry out, specified activities or kinds of activities under the Bill in relation to the licence holder until the relevant Commonwealth liability has been paid. As an example, the Minister might refuse to assess another application the licence holder has made under the Bill until the relevant Commonwealth liability is paid. This will have the effect of encouraging the licence holder to pay the relevant Commonwealth liability at the earliest possible opportunity. A note will be included at the end of subclause 47(3) that will refer to clause 107 of the Bill, which will deal with general provisions relating to directions. Subclause 47(4) will provide that any action taken by the Minister under clause 47 will not remove the liability of the licence holder to pay the relevant Commonwealth liability. This will mean that, for example, if the Minister suspends an export licence under clause 47(1) because the licence holder has an overdue relevant Commonwealth liability, the holder will still be liable to pay the overdue amount to the Commonwealth. Clause 48 Notice of suspension Subclause 48(1) will provide that, if the Minister decides to suspend an export licence (or part of an export licence) under the Bill, they must give the holder of the licence a written notice of the suspension. The notice must include:  a statement that the licence is to be suspended in relation to all, or specified kinds of, export operations, regulated waste material or places to which regulated waste material may be exported;  the reasons for the suspension;  the date the suspension is to start;  the period of the suspension (if the suspension is time-based) or the specified event or action (if the suspension is until a specified event or action). The note after subclause 48(1) will explain that the notice must also state the matters referred to in clause 152 of the Bill (regarding review rights). Subclause 48(2) will provide that, unless subclause 46(4) applies, the suspension must not start until the earlier of:  the date after any response by the licence holder to the notice given under subclause 46(2) (requesting the holder give a written statement within 14 days showing cause why the licence should not be suspended) is received; or 45

 the end of the 14-day period after the show cause notice was given. The effect is that the Minister will be prevented from taking any action to suspend the export licence during the 14-day period. If the licence holder responds within the 14-day period, natural justice requirements will mean the Minister must consider the licence holder's response when deciding whether to suspend the licence. Clause 49 Period of suspension Subclause 49(1) will limit the period of suspension of an export licence to no more than 12 months. Subclause 49(2) will allow the Minister to vary the period of a suspension by written notice to the holder of the export licence. However, the total period of suspension must not be more than 12 months. The purpose of this provision is to provide certainty to the holder of the export licence about the period of the suspension and prevent an export licence from being suspended indefinitely. If the reason for the suspension is not resolved in 12 months to the Minister's satisfaction, then the intention is that the Minister will consider whether there are sufficient grounds to revoke the export licence. The note after subclause 49(2) will advise the reader that a decision to extend the period of suspension will be a reviewable decision under clause 151 and that the Minister must give the person written notice of the decision under clause 152. Clause 50 Revocation of suspension Clause 50 will allow the Minister to revoke a suspension of an export licence by written notice to the holder of the licence. It is intended that revocation of a suspension may occur, for example, in circumstances where the Minister is satisfied that the grounds for the suspension no longer exists or has been rectified. If a suspension is not revoked under this provision, it will remain in place for the entire period set out in the suspension notice given to the holder under clause 48. Clause 51 Effect of suspension Clause 51 will make it clear that the effect of a suspension of an export licence is that the licence will remain in force and the requirements of the Bill in relation to that licence will continue to apply (including any licence conditions) unless the rules provide otherwise. This will allow, for example, activities such as an audit to be undertaken while the licence is suspended. It will also mean the licence holder must continue to comply with any relevant reporting and record keeping requirements. 46

However, clause 51 will also make it clear that export operations covered by the licence must not be carried out when the suspension is in effect. Subclause 51(2) will allow the rules to prescribe requirements of the Bill (including conditions of the licence) that will not apply during the period of suspension. This will provide the Minister with the flexibility to reduce the regulatory burden on the holder of a suspended export licence by removing any requirements that are not considered relevant or appropriate while the licence is suspended. The requirements (if any) that it is appropriate to turn off will need to be assessed on a case-by-case basis. Clause 52 Export operations must not be carried out if export licence is suspended Clause 52 will have the effect that a person who carries out export operations while their export licence is suspended will be both committing an offence and contravening a civil penalty provision. The maximum penalty is two years imprisonment or 120 penalty units (or both) for the offence, and 240 penalty units for the civil penalty. A body corporate will be liable for five times this amount as a maximum penalty (see subsection 4B(3) of the Crimes Act 1914 and subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014). It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 52 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. The amount of the penalties for both the offence and the civil penalty provision reflect the seriousness of conducting export operations after an export licence has been suspended and is considered appropriate as a deterrent. This conduct may also adversely impact on the confidence of trading partners in the Government's regulation of waste material and adversely impact on market access. The consequence of non-compliant behaviour by one person may therefore impact the ability of others to export from Australia in the future. The maximum civil penalty of 240 penalty units is twice as high as the maximum penalty available for the criminal offence. This is intended to ensure it will act as a deterrent, particularly for body corporates, and also recognises that being found liable to pay a civil penalty does not attract imprisonment or a criminal conviction. PART 8--REVOCATION OF EXPORT LICENCE Overview of Part Part 8 will deal with the circumstances in which an export licence can be revoked and the process for doing so. 47

Division 1--Revocation requested by holder Clause 53 Holder may request revocation Subclause 53(1) will allow the holder of an export licence to request the Minister revoke the licence. This can include an export licence that is suspended. Subclause 53(2) will require the request to be in writing and include the information (if any) prescribed by the rules. Subclause 53(3) will require the Minister, on receiving an application, to revoke the licence by written notice to the holder. The revocation will take effect on the day specified in the notice. Subclause 53(4) will provide that the Minister does not have to revoke the export licence under this provision if the Minister had given the holder of the export licence a notice under clause 54(2) proposing to revoke the licence and the Minister had not made a decision as to whether to revoke the licence. In these circumstances, it is intended that the Minister will decide under clause 54 whether to revoke the export licence consistently with the requirements in that provision. Division 2--Revocation by Minister Clause 54 Grounds for revocation - general Clause 54 will set out the grounds on which the Minister may revoke an export licence on their own initiative (without receiving an application from the holder of the licence) and the process for doing so. The revocation of an export licence will relate to the whole licence and could not be in relation to only some of the matters covered by the licence. This will reflect the likely seriousness of the circumstances necessitating a revocation by the Minister, which may be of such gravity that it is not considered appropriate to deal with them by other means (such as varying or suspending the export licence). Subclause 54(1) will provide that the Minister may revoke an export licence if the Minister reasonably believes that:  a condition of the licence has been, or is being, contravened;  the holder of the licence has contravened a requirement of this Bill in relation to the licence;  it is necessary to do so to prevent or lessen a threat to human or environmental health;  that holder of the licence is no longer a fit and proper person;  the holder of the licence: 48

o failed to comply with a direction given to the holder by an authorised officer or the Minister; or o failed to comply with a request by an authorised officer to provide information or a document; or o failed to provide facilities and assistance to an auditor as required by clause 115; or o failed to comply with a request made by an auditor under clause 113;  the holder of the licence: o intimidated a person performing functions or exercising powers under this Bill. Intimidation in this context is not merely making the person's task difficult but it is conduct that deters another person from performing their functions or exercising their powers under the Bill by inducing fear in the person. Engaging in such conduct is a serious act. It may compromise export operations covered by the export licence and on this basis will require an appropriate regulatory response; or o hindered a person, or prevented a person from, performing functions or exercising powers under this Bill;  the holder of the licence or any other person who participates in the management or control of the licence holder's export business (as provided by clause 62): o made a false, misleading or incomplete statement in an application under this Bill; or o gave false, misleading or incomplete information or documents to the Minister or to another person performing functions or exercising powers under this Bill; or o gave false, misleading or incomplete information or documents to the Minister or the Department under a prescribed law;  the holder of the licence is or was an associate of a person referred to in paragraph 63(1)(a), (b), (c) or (d);  the holder of the licence has contravened a requirement of this Bill in relation to the licence;  a ground prescribed by the rules exists. These are the same grounds as for suspension in subclause 46(1) of the Bill. The Minister's discretion to revoke an export licence will only be enlivened whether the Minister reasonably believes that one or more grounds set out in subclause 54(1) exists. The Minister's belief must be based on reasonable evidence and more than a mere suspicion. 49

Allowing the rules to prescribe any additional grounds on which the export licence may be revoked will provide the Minister with the flexibility to both address the wide range of matters that relate to an export licence and prescribe different grounds for different kinds of export licences as appropriate. The first note following subclause 54(1) will reference clause 175, which sets out the matters the Minister must have regard to when applying the fit and proper person test. The second note at the end of subclause 54(1) will advise the reader that a decision to revoke an export licence under clause 54 will be a reviewable decision and will refer the reader to clauses 151 and 152 of the Bill. Subclauses 54(2) and (3) will prevent the Minister from revoking an export licence under clause 54 unless:  the Minister has given a notice of the proposed revocation to the holder of the licence; and  the notice: o requested the licence holder provide a written statement within 14 days showing cause why their licence should not be revoked; and o include a statement setting out the person's review rights; and  either the Minister has received the requested written statement from the holder of the licence, or the 14-day period has ended. These subclauses will specify a natural justice requirement, which is consistent with both administrative law principles and Commonwealth policy. Subclause 54(4) will provide that the notice in subclause 54(2) will not be required to include the request for the licence holder to provide a written statement if the Minister reasonably believes revoking the export licence is necessary to prevent or lessen a serious and imminent threat to human or environmental health. While this provision is intended to have the effect of excluding natural justice in such circumstances, it is considered appropriate as it will only apply in exceptional circumstances where there is credible and relevant evidence of a threat to human or environmental health that is both serious and imminent. Clause 55 Grounds for revocation - overdue relevant Commonwealth liability Clause 55 will provide an additional ground to revoke an export licence. Subclause 55(1) will allow the Minister to revoke an export licence if:  the licence is suspended for non-payment of a relevant Commonwealth liability; and  within 90 days after the start of the suspension: 50

o the relevant Commonwealth liability has not been paid; or o the licence holder has not entered into an arrangement with the Minister to pay the relevant Commonwealth liability. A relevant Commonwealth liability will be defined in clause 10 of the Bill. The note after subclause 55(1) will explain that the decision to revoke an export licence is a reviewable decision under clause 151 and the Minister must give the person a notice under clause 152. Subclause 55(2) will permit the Minister, in the event of a revocation of an export licence on the grounds of an overdue relevant Commonwealth liability, to refuse to carry out, or direct a person (for example, an authorised officer) not to carry out, specified activities or kinds of activities under the Bill in relation to the licence holder until the relevant Commonwealth liability has been paid. As an example, the Minister might refuse to assess another application the licence holder has made under the Bill until the relevant Commonwealth liability is paid. This will have the effect of encouraging the licence holder to pay the relevant Commonwealth liability at the earliest possible opportunity. A note will be included at the end of subclause 55(2) that will refer the reader to clause 107 of the Bill, which will deal with general provisions relating to directions. Subclause 55(3) will provide that any action taken by the Minister under clause 55 will not remove the liability of the licence holder to pay the relevant Commonwealth liability. This will mean that, for example, if the Minister revokes the export licence under subclause 55(1) because the licence holder has an overdue relevant Commonwealth liability, the licence holder will still be liable to pay the overdue amount to the Commonwealth. Clause 56 Notice of revocation Clause 56 will provide that if the Minister decides to revoke an export licence, the Minister must give the holder of the licence a written notice stating:  that the licence is to be revoked;  the reasons for the revocation;  the day the revocation is to take effect. Subclause 56(2) will provide that, unless subclause 54(4) applies, the revocation must not start until the earlier of:  the date after any response by the holder to the notice given under subclause 54(2) (requesting the licence holder give a written statement within 14 days showing cause why the licence should not be revoked) is received; or  the end of the 14-day period after the show cause notice was given. 51

The effect is that the Minister will be prevented from taking any action to revoke the export licence during the 14-day period. If the holder responds within the 14-day period, natural justice requirements will mean the Minister must consider the licence holder's response when deciding whether to revoke the licence. A note following clause 56(1) will advise readers that the notice must also state the matters referred to in clause 151 (concerning review rights). Division 3--Other provisions Clause 57 Export operations must not be carried out after export licence revoked Clause 57 will have the effect that a person who carries out export operations that were covered by an export licence that has been revoked will be both committing an offence and contravening a civil penalty provision. The maximum penalty is two years imprisonment or 120 penalty units (or both) for the offence, and 240 penalty units for the civil penalty. A body corporate will be liable for five times this amount as a maximum penalty (see subsection 4B(3) of the Crimes Act 1914 and subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014). It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 57 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. The amount of the penalties for both the offence and the civil penalty provision reflect the seriousness of conducting export operations after an export licence has been suspended and is considered appropriate as a deterrent. This conduct may also adversely impact on the confidence of trading partners in the Government's regulation of waste material and adversely impact on market access. The consequence of non-compliant behaviour by one person may therefore impact the ability of others to export from Australia in the future. The maximum civil penalty of 240 penalty units is higher than the maximum penalty available for the criminal offence. This is intended to ensure it will act as a deterrent, particularly for body corporates, and also recognises that being found liable to pay a civil penalty does not attract imprisonment or a criminal conviction. Clause 58 Minister may require action to be taken after export licence revoked Clause 58 will allow the Minister to direct a person to take specified actions after their export licence has been revoked. The directions may be in relation to export operations or regulated waste material that was covered by the revoked licence and may require the person to take the specified action within 52

a specified period of time. The specified action must be an action that is necessary for the purpose of achieving one or more objects of the Bill. Subclause 58(3) will require the direction to state that the person could commit an offence or be liable to a civil penalty if the person fails to comply with the direction. The note following subclause 58(3) will direct readers to clause 107, which will contain general provisions relating the directions. Subclauses 58(4), (5) and (6) will have the combined effect that a person who engages in conduct that contravenes a direction the person has been given under clause 59 will be both committing an offence and contravening a civil penalty provision. The maximum penalty is two years imprisonment or 120 penalty units (or both) for the offence, and 240 penalty units for the civil penalty. A body corporate will be liable for five times this amount as a maximum penalty (see subsection 4B(3) of the Crimes Act 1914 and subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014). It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 58 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. The amount of the penalties for both the offence and the civil penalty provision reflect the seriousness of the conduct and are considered appropriate as a deterrent. This conduct may adversely impact on the confidence of trading partners in the Government's regulation of waste material and adversely impact on market access. The consequence of non-compliant behaviour by one person may therefore impact the ability of others to export from Australia in the future. The maximum civil penalty of 240 penalty units is twice as high as the maximum penalty available for the criminal offence. This is intended to ensure it will act as a deterrent, particularly for body corporates, and also recognises that being found liable to pay a civil penalty does not attract imprisonment or a criminal conviction. PART 9--OBLIGATIONS OF HOLDERS OF EXPORT LICENCES Overview of Part Part 9 will set out a number of obligations that are imposed on the holder of the export licence, including disclosing relevant changes to their business and correcting inaccurate information provided in applications under the Bill. 53

Clause 59 Condition of export licence must not be contravened Clause 59 will create two offences and mirror civil penalty provisions relating to contravening conditions of an export licence. It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 59 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. Subclauses 59(1), 59(2) and 59(3) will have the combined effect of making it an offence and a contravention of a civil penalty provision for a person who is the holder of an export licence that is not suspended to contravene a condition of that licence. The maximum penalty is five years imprisonment or 300 penalty units (or both) for the offence, and 600 penalty units for the civil penalty. A body corporate will be liable for five times this amount as a maximum penalty (see subsection 4B(3) of the Crimes Act 1914 and subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014). Subclauses 59(4), 59(5), 59(6) and 59(7) will have the combined effect of making it an offence and a contravention of a civil penalty provision for a person who is the holder of an export licence that is suspended to contravene a condition of that licence that is required to be complied with during the suspension. The maximum penalty is five years imprisonment or 300 penalty units (or both) for the offence, and 600 penalty units for the civil penalty. A body corporate will be liable for five times this amount as a maximum penalty (see subsection 4B(3) of the Crimes Act 1914 and subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014). Subclause 59(6) will provide that strict liability will apply to the element of the offence in paragraphs 59(4)(d) (that the condition is required to be complied with during the period of the suspension). The effect of this is that the prosecution will only be required to prove the physical element in paragraph 59(4)(d) beyond reasonable doubt and will not be required to prove fault for this element. The defence of honest and reasonable mistake of fact is available to the defendant (see section 9.2 of the Criminal Code). The element of the offence in paragraph 59(4)(d) is a matter of law. It concerns whether a particular condition is required to be complied with during a period of suspension. It is appropriate for this element to be strict liability because the element does not involve any conduct by the holder of the export licence. The use of strict liability in paragraph 59(4)(d) will not affect the need for the prosecution to prove fault elements for other parts of the offence, including that the person contravened the relevant licence condition. The maximum penalties for both the offences and the civil penalty provisions are high, particularly for body corporates. However, the large amounts are considered appropriate as a 54

deterrent to reflect the seriousness of failing to comply with the conditions of an export licence, irrespective of whether the export licence is, or is not, suspended. Such conduct may undermine the integrity of the regulatory framework provided for by the Bill. This conduct may also erode the confidence of trading partners in the Government's regulation of exported waste material and may therefore adversely impact market access. The consequence of non- compliant behaviour by one person may therefore impact the ability of others to export from Australia in the future. The maximum civil penalty of 600 penalty units is higher as the maximum penalty available for the criminal offence. This is intended to ensure it will act as a deterrent, particularly for body corporates, and also recognises that being found liable to pay a civil penalty does not attract imprisonment or a criminal conviction. Clause 60 Additional or corrected information in relation to application for licence etc. Clause 60 will require a person who is the holder of an export licence to correct any information or document that was provided in any application they made under Chapter 2 of the Bill, once they become aware is incomplete or incorrect, or to provide any additional information prescribed by the rules. The additional or corrected information must be provided as soon as practicable. Failure to comply with the obligation in clause 60 will be a contravention of a civil penalty provision, with a penalty of 60 penalty units. The purpose of this provision is to ensure the Minister has all the relevant, correct information before them to assess any relevant applications made under the Bill and to facilitate compliance with the person's export licence and other requirements of the Bill. The note after clause 60 will alert the reader that a person may commit an offence or be liable to a civil penalty if they provides false or misleading information or documents (clauses 145, 146 and 147 of the Bill, and sections 136.1, 137.1 and 137.2 of Schedule 1 to the Criminal Code Act 1995). Clause 61 Holder of export licence must notify the Minister of certain events Subclause 61(1) will require the holder of an export licence to notify the Minister in writing as soon as practicable after any of the following events occurs:  there is a change in the holder's business structure;  if the holder is an individual--the individual enters into a personal insolvency agreement under Part X of the Bankruptcy Act;  if the holder is a corporation--the corporation enters into administration (within the meaning of section 435C of the Corporations Act 2001) or is to be wound up;  there is a change in the trading name, business address or contact details of the holder; 55

 any other event prescribed by the rules. It is necessary for the Minister to be notified of such changes to the licence holder's operations so the Minister can determine whether it is appropriate for the export licence to remain in force or whether it should be varied. Allowing the rules to prescribe other events for which the holder will be required to notify the Minister will provide flexibility to respond to changes that may impact on the suitability of the export licence holder to carry out export operations, which are not otherwise covered by subclause 61(1). The ability to prescribe these changes also reflects the likelihood that they may be specific to a kind of regulated waste material, export operations, or place of export. Subclause 61(3) will have the effect that the failure of a person to comply with the requirement in subclause 61(2) is an offence of strict liability of 60 penalty units for individuals or 300 penalty units for a body corporate (using the body corporate multiplier rule at subsection 4B(3) of the Crimes Act 1914). Strict liability is proposed for this offence having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation. Consistent with these documents, the strict liability is considered appropriate as:  the offence is not punishable by imprisonment;  the offence is subject to a maximum penalty unit of 60 penalty units for an individual;  the actions which trigger the offence are simple, readily understood and easily defended. The offence is triggered if the holder of an export licence fails to notify the Minister of an event specified in subclause 61(1) or rules made for the purpose of clause 61;  offences relating to the provision of information to the Minister need to be dealt with efficiently to ensure industry confidence in the regulatory regime;  the offence will be subject to an infringement notice (see clause 102);  the absence of strict liability may adversely affect the capacity to prosecute offenders. Whether or not a defendant intentionally or negligently did not disclosure the required information to the Minister is a matter that is peculiarly within the knowledge of the defendant alone. Proving the contrary beyond reasonable doubt will require significant and difficult to obtain indirect and circumstantial evidence. The defence of honest and reasonable mistake of fact is available for strict liability offences (see sections 6.1 and 9.2 of Schedule 1 to the Criminal Code Act 1995) and the existence of 56

strict liability does not make any other defence unavailable (see subsection 6.1(3) of Schedule 1 to the Criminal Code Act 1995). Subclause 61(4) will establish a mirror civil penalty provision which is contravened in circumstances where the holder of an export licence fails to notify the Minister of an event specified in subclause 61(1) or rules made for the purpose of clause 61. The maximum penalty is 250 penalty units. The combination of a strict liability offence and civil penalty provision will ensure that there is an adequate deterrent for administrators seeking to avoid their obligations to notify the Minister. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 61 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. PART 10--OTHER MATTERS Overview of Part Part 10 will deal with a number of miscellaneous matters concerning exporting regulated waste material, including powers in relation to associates of licence holders, ministerial directions and publishing information about export licences. Clause 62 Persons who participate in the management or control of another person's export business Clause 62 will provide that, for the purposes of Chapter 2 of the Bill, a person (the first person) is taken to be a person who participates or will participate in the management or control of an export business or proposed export business of another person if:  the first person has authority to direct the export operations, or an important or substantial part of the export operations, carried out or to be carried out, by or in connection with, the other person's export business; or  the first person has authority to direct another person who has authority of the kind referred to in paragraph 62 (a) in the exercise of that authority. This concept is relevant to the suspension or revocation of an export licence (under clauses 46 and 54 respectively). This is because a false, misleading or incomplete statement made, or false, misleading or incomplete information or documents provided, by a person who participates in the management or control of the licence holder's business will be a ground for suspension or revocation. 57

Clause 63 Minister's powers in relation to associates of holder of export licence Clause 63 will set out the Minister's powers in relation to persons who are associates of the holder of an export licence. The term associate will be defined in clause 10 of the Bill. Under subclause 63(1), clause 63 will apply if the Minister:  varies an export licence  refuses to grant an export licence to a person; or  decides not to renew a person's export licence; or  suspends a person's export licence (wholly or in part); or  revokes a person's export licence. Subclause 63(2) will provide the Minister may do either or both of the following, on one or more occasions:  refuse to grant an export licence to an associate of a person referred to in subclause 63(1);  if an associate of a person referred to in subclause 63(1) of the Bill is or becomes the holder of an export licence--give the associate a written notice in accordance with subclause 63(3). Subclause 63(3) will provide that a notice under paragraph 63(2)(b) must:  specify the grounds on which the notice is given; and  request the associate to give the Minister, within 14 days after the day the notice is given, a written statement showing cause why an export licence held by the associate: o should not be suspended, or further suspended, under Part 7 of Chapter 2 the Bill; or o should not be revoked under Division 2 of Part 8 of Chapter 2 of the Bill; and  include a statement setting out the associate's right to seek review of a decision: o to suspend, or further suspend, under Part 7 of Chapter 2 of the Bill an export licence held by the associate; or o to revoke under Division 2 of Part 8 of Chapter 2 of the Bill an export licence held by the associate. 58

This will mean that the associate may be required to show cause as to why their export licence should not be suspended or revoked because they are an associate of a person referred to in subclause 63(1). Clause 63 is intended to ensure that the integrity of the regulatory regime is maintained by subjecting a person who is associated with a person referred to in subclause 63(1) to additional control and oversight. Clause 64 Minister may give directions to holder of export licence Subclause 64(1) will allow the Minister to give written directions to the holder of an export licence. Two notes will be included at the end of subclause 64(1). Note 1 will advise that an authorised officer may also give a direction to the holder of an export licence in certain circumstances (see clause 106). Note 2 will refer the reader to clause 107 of the Bill which will set out the general provisions relating to directions. Subclause 64(2) will set out a non-exhaustive list of examples of directions that may be given under subclause 64(1). These are:  a direction to require the holder of an export licence to give the Minister specified information or documents relating to a kind of export operations carried out in relation to a kind of regulated waste material; and  a direction to require the holder of an export licence to allow the Minister, or a person with appropriate qualifications or expertise, to enter premises where a kind of export operations is being carried out in relation to a kind of regulated waste material covered by the licence. Subclause 64(3) will require the Minister, in considering whether to give a direction under subclause 64(1), to have regard to the objects of the Bill and any matters prescribed by the rules. Subclause 64(4) of the Bill will make it clear that a condition of an export licence is that the holder of the licence must comply with any directions given to the holder under clause 65. A note following subclause 64(4) will refer the reader to clause 59 of the Bill, which will provide that the holder of an export licence may commit an offence or be liable to a civil penalty if a condition of the licence is contravened. Subclause 64(5) will clarify that if a direction given to the holder of an export licence under subclause 64(1) is inconsistent with the rules or a condition of the licence, the direction prevails and the rules or condition, to the extent of the inconsistency, do not have any effect. 59

Clause 65 Publishing information about export licences Clause 65 deals with the publication of certain information about export licences. Subclause 65(1) will require the Minister to publish on the Department's website the following information in relation to each export licence granted:  the name of the holder of the export licence;  each kind of regulated waste material covered by the licence;  the day the licence takes effect;  whether the licence remains in force for a specified period or until a specified event occurs. However, subclause 65(2) will prevent the Minister from publishing any information under subclause 65(1) if the Minister is satisfied that:  there is a risk that publishing the information might substantially prejudice the commercial interests of a person; and  publishing the information is not in the public interest. The publishing of this information is intended to provide transparency and assist the waste export industry in understanding who holds an export licence and the regulated waste materials covered by the licences. It is acknowledged that, to the extent that any licence holders are individuals rather than body corporates, this clause will require the Minister to publish personal information within the meaning of the Privacy Act 1988. However, it is anticipated that most holders of export licences will be body corporates, for which the protections in the Privacy Act 1988 will not apply. In addition, the fact that publishing the names of holders of export licences can assist entities to find a licensed exporter, as well as provide assurance that they are dealing with a licensed exporter, is considered to outweigh the potential adverse consequences to the individuals concerned. Chapter 3--Product stewardship GENERAL OUTLINE Chapter 3 of the Bill will deal with product stewardship. It will establish a framework providing the basis for those who design, import, manufacture and distribute products to take greater responsibility for their impacts on the environment. Product stewardship involves shared responsibility for reducing the environmental, health and safety footprint of manufactured goods and materials (and other things) across the life cycle of a product. 60

Chapter 3 will provide a framework for voluntary, co-regulatory and mandatory product stewardship. NOTES ON INDIVIDUAL CLAUSES PART 1--INTRODUCTION Clause 66 Simplified outline of this Chapter Clause 66 will provide an outline to Chapter 3 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Chapter 3, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of Chapter 3. PART 2--MINISTER'S PRIORITY LIST Overview of Part Part 2 will provide for the Minister's priority list. The list will be a mechanism by which the Minister can communicate to industry which products they are considering regulating under the co-regulatory or mandatory product stewardship provisions in this Bill. The published list will also detail recommended actions the relevant industries can take to reduce the possibility of future government regulation of such products. Clause 67 Minister's priority list Clause 67 will provide for the Minister's priority list. This list will allow the Minister to set out the products (which is defined broadly in clause 10 and can include a broad range of materials) which they have identified as a priority for product stewardship. It is intended to provide clarity to the community and industry about the products being considered for product stewardship approaches under the Bill. The mechanism for the Minister to make recommendations in relation to a product and set timeframes is intended to allow industry to act on those recommendations voluntarily (including by setting up voluntary product stewardship schemes), which may result in the product no longer being considered a priority for more stringent regulation under the Bill. Publication of products on the Minister's priority list will also constitute notification for the purposes of making rules for co-regulatory or mandatory product stewardship. A product must have been included in a Minister's priority list for at least 12 months before rules for co- regulatory or mandatory product stewardship can be made, unless special circumstances justify the making of rules without the 12 month notification period being satisfied (see paragraphs 77(3)(c) and 93(1)(d)). Subclause 67(1) will require the Minister to publish on the Department's website, before the end of each financial year, a Minister's priority list setting out the following: 61

 a list of products for which the Minister is proposing to consider, during the next financial year, whether some form of regulation under the Bill might be appropriate;  reasons why the Minister is proposing to give that consideration;  the actions that the Minister recommends be taken in relation to each listed product;  the times within which the Minister recommends the actions be taken. The note to this subclause will alert the reader to the fact that 'some form of regulation' could include whether to make rules requiring specified persons to be a liable party of an approved co-regulatory arrangement (under clause 77) or whether to make rules setting up mandatory product stewardship for a product (under clause 92). In preparing a Minister's priority list, the Minister may consult with a number of different persons including persons or organisations involved in product stewardship best practice (for instance, any relevant Centres of Excellence that are established), industry and consumer groups, environmental groups, State, Territory and local government authorities and any other person or organisation the Minister considers should be consulted. Subclause 67(3) will provide that, in deciding what products should be included on the Minister's priority list, the Minister may have regard to any matter the Minister considers relevant. Subclause 67(3) will also provide a non-exhaustive list of relevant matters, being:  whether a product was previously included in a Minister's priority list and if so, whether the recommended actions were taken;  whether the product stewardship criteria are satisfied;  any information obtained from consultation;  whether there will be a significant cost to the Commonwealth, State, Territory or local governments to reuse, recycle, recover, treat or dispose of the products;  whether consumers are willing to pay for action that reduces potential human or environmental health impacts of the product; and  whether taking action will offer business opportunities to make a contribution to the economy. It is intended that the Minister will have regard to a broad range of matters and consult with a broad range of persons so that listings reflect community and industry concerns. Subclause 67(4) will require the Minister to review, for each listed product, whether the recommended action has been taken after the recommended timeframe has expired. While there is no legal requirement for any person to take the recommended action in relation to the listed product, if no or inadequate action has been taken to implement the Minister's 62

recommendations, the result of the review may be that the Minister makes further recommendations or decides that some form of regulation under the Bill (such as co- regulatory or mandatory product stewardship) is appropriate for the product. Clause 68 Tabling of Minister's priority list and statement relating to product stewardship arrangement Subclause 68(1) will require the Minister to cause the Minister's priority list to be tabled in both Houses of Parliament within 15 sitting days after the publication of the list. Subclause 68(2) will make it clear that the Minister may, at any time, to cause a statement to be tabled in each House of Parliament regarding the operation, performance and coverage of accredited voluntary arrangements. The statement made under subclause 68(2) may include the names of persons who are authorised to use the Commonwealth's product stewardship logo; the names of persons who the Minister considers could be, but are not currently, authorised to use the Commonwealth's product stewardship logo; and the Minister's views in relation to the performance of an accredited voluntary arrangement. This subclause is not intended to limit the Minister's general ability to make statements in Parliament or the Minister's immunities under parliamentary privilege. PART 3--VOLUNTARY PRODUCT STEWARDSHIP Overview of Part Part 3 will set out the framework for accreditation of voluntary product stewardship arrangements. The purpose of voluntary accreditation is to encourage and recognise product stewardship without the need to regulate and to provide assurance to the community that a voluntary product stewardship arrangement is operating to achieve the outcomes it has committed to achieve. Accredited voluntary product stewardship arrangements are arrangements designed to further the objects of the Bill by achieving one or more measurable outcomes in relation to a product or class of products, including material streams. Under these provisions it will be possible, for example, for an industry association or non-government organisation to put forward a proposal for the ongoing collection and recycling of a product: for instance, the collection and recycling of mobile phones. Much of the detail concerning voluntary product stewardship will be set out in rules made by the Minister. The rules will deal with matters such as who may apply for accreditation, the circumstances in which an application may be made, and who makes accreditation decisions (as the accrediting authority). It is intended that accreditation of a voluntary arrangement will be for a period of five years. 63

The Part provides for the use of a government product stewardship logo in connection with accredited voluntary product stewardship arrangements. Use of the logo will allow schemes to promote the recognition and credibility that comes from government accreditation. This will provide an incentive for industry to seek accreditation of their schemes and will provide a basis for consumers to identify accredited voluntary schemes. The Part does not provide special protection to a product stewardship logo. The relevant sanctions for misuse of the logo and misleading or deceptive conduct will be the normal sanctions in the Copyright Act 1968, Trade Marks Act 1995 and Competition and Consumer Act 2010. The Minister is required to publish information on each accredited voluntary product stewardship arrangement on the Department's website, including reports on the operation of the arrangement. Audits of accredited voluntary arrangements will be covered in Chapter 4 of the Bill. Clause 69 Exercising rights in product stewardship logo in accordance with accredited voluntary arrangement Clause 69 will provide that a person is authorised to exercise the Commonwealth's intellectual property rights in a product stewardship logo if the exercise of those rights is in accordance with an accredited voluntary arrangement. Use of a Commonwealth product stewardship logo is intended to be an incentive for voluntary product stewardship arrangements to become accredited. What constitutes a product stewardship logo is set out in clause 73, which includes that the logo is required to be published on the Department's website for the purpose of this clause. The Commonwealth's intellectual property rights in a product stewardship logo are defined in clause 74 by reference to its rights under the Copyright Act 1968 and the Trade Marks Act 1995. Clause 70 Accreditation of voluntary arrangements Subclause 70(1) will define the term accredited voluntary arrangement as a voluntary arrangement that is accredited in relation to a product in accordance with rules made for the purposes of clause 70. The term product will be defined in clause 10. The first note following subclause 70(1) will explain that obligations under the Bill only apply to voluntary arrangements that are accredited. The second note following subclause 70(1) will explain that only a voluntary arrangement that meets the conditions in clause 71 can be accredited, and the Minister must refuse to accredit a voluntary arrangement in certain circumstances. Subclause 70(2) will enable the rules to provide for or in relation to matters concerning the accreditation of voluntary arrangements in relation to a product. 64

Subclause 70(3) will set out a non-exhaustive list of matters for which the rules can provide under subclause 70(2), including:  who may apply for accreditation of a voluntary arrangement in relation to a product;  the circumstances in which a person may apply for such an accreditation;  who may make a decision on such an application (the accrediting authority);  matters in relation to which the accrediting authority must be satisfied before accrediting a voluntary arrangement in relation to a product;  grounds on which the accrediting authority may or must refuse to accredit a voluntary arrangement in relation to a product;  the imposition of conditions by the accrediting authority on a voluntary arrangement's accreditation in relation to a product;  the cancellation by an accrediting authority of a voluntary arrangement's accreditation in relation to a product;  the giving of information in relation to an accredited voluntary arrangement. Note 1 to subclause 70(3) will refer the reader to clauses 172, 173 and 174 of the Bill for general matters relating to applications. These requirements will apply to applications for accreditation of a voluntary arrangement. Note 2 to subclause 70(3) will provide examples of conditions the accrediting authority may impose on a voluntary arrangement's accreditation in relation to a product. Note 3 to subclause 70(3) will explain that the rules may also provide for the making and retention of records in accordance with clause 142. If a person is required to make or retain records under the rules and the person fails to comply with the requirement, the person may be liable to a strict liability offence or a civil penalty (see notes for clause 142). Subclause 70(4) will provide that the rules must require the accrediting authority to refuse to accredit a voluntary arrangement in certain circumstances. These circumstances are where the accrediting authority is satisfied that:  an outcome of the arrangement in relation to the product will not further the objects of the Bill; or  the arrangement is unlikely to achieve one or more of those outcomes; or  the product stewardship criteria are not satisfied in relation to the product; or  the persons authorised by the arrangement to exercise the Commonwealth's intellectual property rights in a product stewardship logo in connection with the 65

product, or the circumstances in which those persons are authorised, are not appropriate; or  it is not in the public interest to accredit the arrangement. The purpose of this provision is to ensure that the rules do not allow for voluntary product stewardship arrangements that are not appropriate to meet the policy objectives of the Bill to be accredited. Subclause 70(5) will provide that the accrediting authority must have regard to the objects of the Bill (and may also have regard to any other matter) when determining whether it is satisfied that:  the exercise of the Commonwealth's intellectual property rights in a product stewardship logo are not appropriate, or  it is not in the public interest to accredit the arrangement. Clause 71 Only certain kinds of voluntary arrangements can be accredited Clause 71 will have the effect that a voluntary arrangement cannot be accredited unless it meets the conditions in this clause. Paragraph 71(a) will require the arrangement to be designed to further the objects of the Bill by achieving one or more measurable outcomes in relation to a product. This means a voluntary arrangement may be directed, for example, towards reducing human health and environmental impacts that fall within subclause 3(1) of the Bill. This could include environmental impacts associated with the design, manufacture or distribution of a product, as well as the human and environmental health impacts associated with the disposal of a product. Paragraph 71(b) will require the arrangement to have a written document setting out the persons who would be (if the arrangement is accredited) authorised to exercise the Commonwealth's intellectual property rights in a product stewardship logo in connection with the product and the circumstances in which those persons would be authorised by the arrangement to exercise those rights. This written document may be varied over time as the arrangement evolves to include other parties who may be authorised to use a logo. Paragraph 71(c) will require the arrangement to provide for there to be a person (the administrator) who is responsible for ensuring the outcomes referred to in paragraph 71(a) are achieved. Paragraph 71(d) requires the administrator to be a body corporate. This requirement is intended to promote continuity and good governance. 66

Clause 72 Administrator of accredited voluntary arrangement must notify Minister of certain events Subclause 72(1) will require the administrator of an accredited voluntary arrangement to notify the Minister of any of the following:  there is a change to who the administrator of the arrangement is;  an event that may affect whether the administrator is a fit and proper person;  an event that hinders the ability of the arrangement to achieve its outcomes;  an event prescribed by the rules. The notification must be in writing and provided as soon as practicable after the relevant event occurs. Subclauses 72(2) and 72(3) will have the combined effect that the failure of person to comply with the requirement in subclause 72(1) is also an offence of strict liability of 60 penalty units for individuals or 300 penalty units for a body corporate (using the body corporate multiplier rule at subsection 4B(3) of the Crimes Act 1914). Strict liability is proposed for this offence having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation. Consistent with these documents, strict liability is considered appropriate as:  the offence is not punishable by imprisonment;  the offence is subject to a maximum penalty unit of 60 penalty units for an individual;  the actions which trigger the offence are simple, readily understood and easily defended. The offence is triggered if the administrator of an accredited voluntary arrangement does not notify the Minister of a relevant event;  offences relating to the provision of information to the Minister need to be dealt with efficiently to ensure industry confidence in the regulatory regime;  the offence will be subject to an infringement notice (see clause 102);  the absence of strict liability may adversely affect the capacity to prosecute offenders. Requiring administrators of accredited voluntary arrangements notify the Minister of the events specified in subclause 72(1) is integral to the operation of the overarching product stewardship framework set out in this Bill. Whether or not a defendant intentionally or negligently did not notify the Minister of the relevant event is a matter that is peculiarly within the knowledge of the defendant alone. Proving the contrary 67

beyond reasonable doubt will require significant and difficult to obtain indirect and circumstantial evidence. The defence of honest and reasonable mistake of fact is available for strict liability offences (see sections 6.1 and 9.2 of Schedule 1 to the Criminal Code Act 1995) and the existence of strict liability does not make any other defence unavailable (see subsection 6.1(3) of Schedule 1 to the Criminal Code Act 1995). Subclause 72(4) will establish a mirror civil penalty provision which is contravened in circumstances where the administrator of an accredited voluntary arrangement does not notify the Minister of an event specified in subclause 72(1). The maximum penalty is 250 penalty units. It is considered that the combination of a strict liability offence and civil penalty provision will provide an adequate deterrent from undertaking conduct which has the potential to cause such harm. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes subclause 72(1) and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. Clause 73 What is a product stewardship logo Clause 73 will set out what is a product stewardship logo. As set out above, one of the benefits of being an accredited voluntary arrangement is that members of that arrangement are authorised to use the product stewardship logo in accordance with the arrangement. Subclauses 73(2) and (3) will clarify that both artistic works and trademarks can be a product stewardship logo, provided that both the Commonwealth owns the relevant intellectual property and it has been reproduced (in the case of an artistic work) or represented (in the case of a trademark) on the Department's website. Clause 74 What are the Commonwealth's intellectual property rights in a product stewardship logo Clause 74 will define the Commonwealth's intellectual property rights in a product stewardship logo as the rights it holds under the Copyright Act 1968 (for artistic works) and the Trade Marks Act 1995 (for trade marks). Generally, the Commonwealth's right under the Copyright Act 1968, as an owner of copyright in an artistic work, is the exclusive right to, or to authorise other persons to, reproduce the work in a material form, publish the work, or communicate the work to the public. 68

Generally, the Commonwealth's right under the Trade Marks Act 1995, as a registered owner of a trade mark, is the right to use, or to authorise other persons to use, the trade mark in relation to goods and/or services dealt with or provided in the course of trade, and in respect of which the trade mark is registered. Clause 75 Commonwealth's intellectual property rights not limited For the avoidance of doubt, clause 75 provides that Part 2 of this Chapter 3 of the Bill does not limit the Commonwealth's intellectual property rights in a product stewardship logo or the operation of the Copyright Act 1968 or the Trade Marks Act 1995. PART 4--CO-REGULATORY PRODUCT STEWARDSHIP Overview of Part Part 4 will deal with co-regulatory arrangements. The co-regulatory provisions of the Bill use a combination of industry action and supporting Government regulation to achieve outcomes specified in rules, such as recycling outcomes for products. The co-regulatory provisions will only apply where rules have been made with respect to a product. Before rules may be made the Minister will have to be satisfied that the rules will further the objects of the Bill and that the product meets the product stewardship criteria specified in the Bill (clause 14). As a matter of government policy, the usual regulatory impact assessment requirements will also apply. Liable parties in relation to a product (as defined in rules) will be required to be members of an approved product stewardship arrangement. This is intended to ensure a level playing field for the relevant industry, and that there are no 'free riders' (persons who take benefit from a scheme without contributing to that scheme). Both criminal and civil penalties, including daily penalties, may apply for liable parties who do not join an approved co-regulatory arrangement. Co-regulatory product stewardship arrangements are operated by administrators. Proposed administrators apply to the Minister to approve an arrangement. The administrator of an approved co-regulatory arrangement will be required to take all reasonable steps to ensure that outcomes specified in rules are achieved. A failure to do so may be an offence or contravention of a civil penalty provision or may result in the Minister issuing an improvement notice or cancelling the arrangement's approval. The rules may also establish reporting obligations for administrators. The outcomes that are specified in the rules for a co-regulatory arrangement must relate to one or more of the objects of the Bill. This means that, without limiting the objectives of a co-regulatory arrangement, the outcomes may be directed at things like:  avoiding generating waste from products;  designing products to be more easily repaired; 69

 reducing or eliminating hazardous substances in products and in waste from products;  managing waste from products as a resource;  ensuring that products and waste from products are designed, reused, recycled, recovered, treated and disposed of in a safe and environmentally sound way. In considering possible product stewardship arrangements, parties will be required to comply with any other laws which may be applicable. For example, an arrangement could be prohibited under the competition provisions in Part IV of the Competition and Consumer Act 2010. It is intended that rules will be made requiring certain importers or manufacturers of televisions, computers or computer parts to join a co-regulatory arrangement. This will continue in effect the existing arrangements in relation to the National Television and Computer Recycling Scheme. Division 1--Requirements for liable parties and administrators of co-regulatory arrangements Subdivision A--Requirement for liable party to be member of approved co-regulatory arrangement Clause 76 Liable party to be member of approved co-regulatory arrangement Clause 76 will require a liable party to be a member of an approved co-regulatory arrangement. This requirement is central to the operation of co-regulatory arrangements as it seeks to ensure that non-participants in an industry arrangement do not gain an advantage over participants by not adhering to requirements of the co-regulatory arrangement. This is intended to ensure fairness between members of a relevant industry. A liable party in relation to a product is defined at clause 77. Subclause 76(2) will have the effect that the failure of a liable party to be a member of an approved co-regulatory arrangement is an offence of strict liability of 60 penalty units for individuals or 300 penalty units for a body corporate (using the body corporate multiplier rule at subsection 4B(3) of the Crimes Act 1914). Strict liability is proposed for this offence having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation. Consistent with these documents, strict liability is considered appropriate as:  the offence is not punishable by imprisonment;  the offence is subject to a maximum penalty of 60 penalty units for an individual; 70

 the actions which trigger the offence are simple, readily understood and easily defended. The offence is triggered if a liable party in relation to a product is not a member of an approved co-regulatory arrangement;  offences relating to non-membership of co-regulatory schemes need to be dealt with efficiently to ensure industry confidence in the regulatory regime;  the offence will be subject to an infringement notice (see clause 102);  the absence of strict liability may adversely affect the capacity to prosecute offenders. Requiring liable parties to be members of a co-regulatory product stewardship arrangement is integral to the operation of co-regulatory product stewardship and the overarching product stewardship framework set out in this Bill. Whether or not a defendant intentionally or negligently did not become a member is a matter that is peculiarly within the knowledge of the defendant alone. Proving the contrary beyond reasonable doubt will require significant and difficult to obtain indirect and circumstantial evidence. The defence of honest and reasonable mistake of fact is available for strict liability offences (see sections 6.1 and 9.2 of the Schedule 1 to the Criminal Code Act 1995) and the existence of strict liability does not make any other defence unavailable (see subsection 6.1(3) of the Schedule 1 to the Criminal Code Act 1995). Subclause 76(3) will establish a mirror civil penalty provision which is contravened in circumstances where a liable party in relation to a product is not a member of an approved co-regulatory arrangement in relation to that product. The maximum penalty is 250 penalty units. In some cases, there will be a substantial incentive for a liable party to contravene the requirement to join an approved co-regulatory arrangement. For example, where the rules require the administrators of those arrangements to meet collection and recycling targets, in order to achieve these targets, it is likely that administrators will charge fees to members. This could provide a significant incentive for avoidance of the requirement in subclause 76(1). However, the combination of a strict liability offence and civil penalty provision, along with the daily penalty for ongoing contraventions in subclause 76(11), will ensure that there is an adequate deterrent for liable parties seeking to avoid their product stewardship obligations and obtaining an unfair competitive advantage. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes subclause 76(1) and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. 71

Subclauses 76(4) and (5) will provide that the Minister cannot apply for a civil penalty order under clause 101 unless the Minister first issues a written notice to the liable party which provides the liable party with at least 14 days to become a member of an approved co- regulatory arrangement and the person fails to comply with the notice. This gives the liable party an opportunity to become a member of an approved co-regulatory arrangement before civil penalty proceedings are instituted. Subclause 76(6) will allow a person who was given a notice by the Minister to apply to the Minister to vary the notice to specify a later day or to revoke the notice. The application must be in writing and must be made before the day specified in the notice (see subclause 76(7)). Subclause 76(8) will provide for the Minister, by written notice, to vary the notice to specify a later day or to revoke the notice. The note to this subclause will explain that the Minister's decision is a reviewable decision under clause 151 and the Minister must give the person written notice of the decision in accordance with clause 152. Subclauses 76(6) and 76(8) will not affect the operation of subsection 33(3) of the Acts Interpretation Act 1901, which relates to the power to make, vary or revoke etc. instruments (see subclause 76(10)). This makes it clear that the Minister has the power to revoke or vary (among other powers) a notice on their own initiative rather than only on the application of the person who was given the notice. Subclause 76(11) will clarify that section 4K of the Crimes Act 1914 and section 93 of the Regulatory Powers (Standard Provisions) Act 2014 apply in relation to a contravention of subclause 76(1) as if the liable party were required to be a member of an approved co- regulatory arrangement before the day specified in the notice issued by the Minister. The effect of this subclause will be that liable parties who do not join a co-regulatory arrangement may be liable for a daily penalty for a continuing contravention of subclause 76(1), including in relation to the time period prior to the notice under subclause 76(4) being given to the person. Clause 77 Who is a liable party in relation to a product Clause 77 will deal with who is a liable party in relation to a product. This is a key concept in co-regulatory product stewardship as it is only liable parties that can be, and are indeed required to be, members of an approved co-regulatory arrangement. Subclause 77(1) will define a liable party, in relation to a product, as a person specified in the rules as a liable party in relation to that product. Subclause 77(2) will clarify that the rules can only specify a person to be a liable party in relation to a product if the person is a constitutional corporation and has, at any time, manufactured, distributed or used the product in Australia, or imported the product into Australia. As an example, the rules may define a liable party by reference to a particular threshold. For example, a liable party may be a constitutional corporation that imported over a certain 72

number of products in a specified period. It will also be possible for the rules to provide that such a threshold is exceeded where imports of a corporation, together with related parties, exceed the threshold. The rules could also set a threshold based on the turnover of a company. This is intended to allow for sufficient flexibility to cater for different products and approaches to product stewardship. Reference to a person 'who has at any time' been in any of these categories is preferable to limiting the subclause to persons who are currently in those categories, as it may be appropriate to impose a continuing obligation to be a member of an approved co-regulatory arrangement on a person depending on the product, the approach to product stewardship or other factors. As a liable party will be defined in relation to a product, it will be possible to have different liable parties for different products. A particular person may also be a liable party in relation to more than one product. Subclause 77(3) will provide that the Minister cannot make rules specifying liable parties in relation to a product unless the Minister is satisfied that both making the rules in relation to the product will further the objects of the Bill and that the product stewardship criteria (see clause 14) are satisfied in relation to the product. Furthermore, if rules specifying liable parties are not already in force in relation to the product, the product must have been included in a Minister's priority list (see clause 67) at least 12 months beforehand, unless there are special circumstances justifying the making of the rules without that requirement being satisfied. This is to ensure that industry have been given adequate time to adjust their business practices to accommodate the regulation of the product. If there are special circumstances justifying the making of the rules without 12 months notification on the Minister's priority list, then subclause 77(4) will require the explanatory statement for the rules to include a statement setting out the special circumstances. Subclause 77(5) will allow the rules to provide for the Minister to effectively exempt persons from being a liable party by determining that the Bill has effect as if a particular person, who will otherwise have been a liable party, were not a liable party in relation to a product. This may be for a specified period or indefinitely. Clause 78 What is an approved co-regulatory arrangement Clause 78 will define the term approved co-regulatory arrangement for the purposes of the Bill as a co-regulatory arrangement that is approved by the Minister under clause 85 in relation to a product. The first note following clause 78 will explain that obligations under this Bill in relation to co-regulatory arrangements and their administrators will only apply to approved co- regulatory arrangements. 73

The second note following clause 78 will refer to clause 85, which deals with the circumstances in which the Minister is required or permitted to refuse to approve a co- regulatory arrangement. Clause 79 Outcomes for approved co-regulatory arrangements Clause 79 will deal with outcomes of co-regulatory arrangements. This is a key concept in the co-regulatory context, because the achievement of outcomes that reflect the objects of the Bill and the product stewardship criteria are critical to success of the co-regulatory regime. For that reason, the approval (both initial and ongoing) of the co-regulatory arrangement is dependent on the arrangement's ability to achieve the specified outcomes for the relevant product. Subclause 79(1) will require the rules to specify one or more outcomes which must be achieved by approved co-regulatory arrangements and which must relate to the objects of the Bill. Subclause 79(2) will provide that the rules may also do one or more of the following:  specify a method or formula by reference to which an outcome may be determined, or for working out whether such an outcome has been achieved;  require different outcomes to be achieved by the end of different periods;  specify requirements for achieving those outcomes with which the administrator must comply. For example, a formula could allocate a national recycling target to different co-regulatory arrangements based on the market share of their members. Outcomes could also be expressed by a reference to a published figure or document. Different recycling targets could also be set for different periods, such as for each financial year. Clause 80 Matters to be dealt with by co-regulatory arrangements Clause 80 will provide for the rules to specify matters to be dealt with by a co-regulatory arrangement that relates to a specified product. Matters must relate to one or more of the following:  the governance of the arrangement (including resolving disputes and replacing the administrator);  the membership of the arrangement (including requirements for becoming or ceasing to be a member of the arrangement);  communicating information to the public about the arrangement; 74

 any other matter relevant to the operation of the arrangement or the achievement of the outcomes. The note to subclause 80(2) explains that approval of a co-regulatory arrangement may be refused or may be cancelled if the Minister is not satisfied the arrangement adequately deals with these matters (see paragraphs 85(2)(c) and 87(1)(c)). While these matters are likely to be common across different products, it is intended that the rules could specify different matters for different products. Subdivision B--Requirements for administrators of approved co-regulatory arrangements Clause 81 Administrator to achieve outcomes for co-regulatory arrangement Subclause 81(1) will require the administrator of an approved co-regulatory arrangement to take all reasonable steps to ensure that the arrangement achieves the outcomes specified in rules made for the purposes of clause 79. This requirement is placed on the administrator, as the administrator is responsible for the operation of the approved co-regulatory arrangement. The requirement to 'take all reasonable steps' recognises that in some circumstances outcomes may not be entirely within the control of the administrator. For example, the ability to achieve collection and recycling targets for a product may depend in part upon how many of those products are delivered by members of the public to collection points. Subclause 81(1) will also require the administrator to comply with any requirements prescribed by the rules for achieving those outcomes. The notes to this clause explain that if the administrator does not comply, the Minister may give an improvement notice (clause 88), require an audit to be carried out (clause 109) or cancel the arrangement's approval (clause 87). Subclause 81(2) will have the effect that the failure of a person to comply with the requirement in subclause 81(1) is also an offence of strict liability of 60 penalty units for individuals or 300 penalty units for a body corporate (using the body corporate multiplier rule at subsection 4B(3) of the Crimes Act 1914). Strict liability is proposed for this offence having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation. Consistent with these documents, strict liability is considered appropriate as:  the offence is not punishable by imprisonment;  the offence is subject to a maximum penalty of 60 penalty units for an individual; 75

 the actions which trigger the offence are simple, readily understood and easily defended. The offence is triggered if the administrator of an approved co-regulatory arrangement does not take all reasonable steps to ensure the arrangement achieves the specified outcomes, or does not comply with requirements specified in the rules;  offences relating to achieving the outcomes of co-regulatory schemes need to be dealt with efficiently to ensure industry confidence in the regulatory regime;  the offence will be subject to an infringement notice (see clause 102);  the absence of strict liability may adversely affect the capacity to prosecute offenders. Requiring administrators of approved co-regulatory arrangements to take all reasonable steps to ensuring the specified outcomes for that arrangement is integral to the operation of co-regulatory product stewardship and the overarching product stewardship framework set out in this Bill. Whether or not a defendant intentionally or negligently did not take all reasonable steps is a matter that is peculiarly within the knowledge of the defendant alone. Proving the contrary beyond reasonable doubt will require significant and difficult to obtain indirect and circumstantial evidence. The defence of honest and reasonable mistake of fact is available for strict liability offences (see sections 6.1 and 9.2 of Schedule 1 to the Criminal Code Act 1995) and the existence of strict liability does not make any other defence unavailable (see subsection 6.1(3) of Schedule 1 to the Criminal Code Act 1995). Subclause 81(3) will establish a mirror civil penalty provision which is contravened in circumstances where the administrator of an approved co-regulatory arrangement does not take all reasonable steps to ensure the arrangements achieves the specified outcomes in relation to that product. The maximum penalty is 250 penalty units. The combination of a strict liability offence and civil penalty provision will ensure that there is an adequate deterrent for administrators seeking to avoid their product stewardship obligations. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes subclause 81(1) and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. Clause 82 Administrator must notify the Minister of certain events Subclause 82(1) will require the administrator of an approved co-regulatory arrangement to notify the Minister of any of the following:  an event that hinders the ability of the arrangement to achieve its outcomes;  when a liable party becomes, or ceases to be, a member of the arrangement; 76

 an event prescribed by the rules. The notification must be in writing and provided as soon as practicable after the relevant event occurs. Subclauses 82(2) and (3) will have the effect that the failure of person to comply with the requirement in subclause 82(1) is also an offence of strict liability of 60 penalty units for individuals or 300 penalty units for a body corporate (using the body corporate multiplier rule at subsection 4B(3) of the Crimes Act 1914). Strict liability is proposed for this offence having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation. Consistent with these documents, strict liability is considered appropriate as:  the offence is not punishable by imprisonment;  the offence is subject to a maximum penalty unit of 60 penalty units for an individual;  the actions which trigger the offence are simple, readily understood and easily defended. The offence is triggered if the administrator of an approved co-regulatory arrangement does not notify the Minister of a relevant event;  offences relating to the provision of information to the Minister need to be dealt with efficiently to ensure industry confidence in the regulatory regime;  the offence will be subject to an infringement notice (see clause 102);  the absence of strict liability may adversely affect the capacity to prosecute offenders. Requiring administrators of approved co-regulatory arrangements notify the Minister of the events specified in subclause 82(1) is integral to the operation of co-regulatory product stewardship and the overarching product stewardship framework set out in this Bill. Whether or not a defendant intentionally or negligently did not notify the Minister of the relevant event is a matter that is peculiarly within the knowledge of the defendant alone. Proving the contrary beyond reasonable doubt will require significant and difficult to obtain indirect and circumstantial evidence. The defence of honest and reasonable mistake of fact is available for strict liability offences (see sections 6.1 and 9.2 of Schedule 1 to the Criminal Code Act 1995) and the existence of strict liability does not make any other defence unavailable (see subsection 6.1(3) of Schedule 1 to the Criminal Code Act 1995). Subclause 82(4) will establish a mirror civil penalty provision which is contravened in circumstances where the administrator of an approved co-regulatory arrangement does not 77

notify the Minister of an event specified in subclause 82(1). The maximum penalty is 250 penalty units. It is considered that the combination of a strict liability offence and civil penalty provision will provide an adequate deterrent from undertaking conduct which has the potential to cause such harm. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes subclause 82(1) and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. Subdivision C--Requirements for liable parties and administrators Clause 83 Requirement to give reports to the Minister Subclause 83(1) will allow the rules to require a person who is a liable party, or the administrator of an approved co-regulatory arrangement, to give the Minister specified reports. The note to subclause 83(1) also references that rules may provide for the making and retention of records in accordance with clause 142. Subclause 83(2) will provide some examples of matters which rules made under subclause 83(1) may cover. These are:  the matter to which a report relates (which may be determined by the Minister);  the manner in which a report must be given (which may be determined by the Minister);  the timing of giving of reports (which may be determined by the Minister);  the circumstances in which a report must be given (which may depend on a request by the Minister). It is not intended that the list of examples in subclause 83(2) should be exhaustive. A person who is subject to a requirement under the rules and fails to comply with the requirement, commits an offence of strict liability (see subclauses 83(3) and 83(4)). The penalty is 60 penalty units for individuals or 300 penalty units for a body corporate (using the body corporate multiplier rule at subsection 4B(3) of the Crimes Act 1914). Strict liability is proposed for this offence having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation. Consistent with these documents, strict liability is considered appropriate as: 78

 the offence is not punishable by imprisonment;  the offence is subject to a maximum penalty unit of 60 penalty units for an individual;  the actions which trigger the offence are simple, readily understood and easily defended. The offence is triggered if a person who is required to give the Minister specified reports does not comply. Any requirements will be specified in the rules which will be legislative instruments for the purposes of the Legislation Act 2003 and therefore available on the Federal Register of Legislation. The rules will also be subject to Parliamentary scrutiny and disallowance processes through the ordinary operation of the Legislation Act 2003;  offences relating to the provision of information to the Minister need to be dealt with efficiently to ensure the integrity of, and industry confidence in the regulatory regime;  the offence will be subject to an infringement notice (see clause 102); and  the absence of strict liability may adversely affect the capacity to prosecute offenders. Requiring liable parties and administrators to provide information to the Minister is integral to the operation of co-regulatory product stewardship and the overarching product stewardship framework set out in this Bill. Whether or not a defendant intentionally or negligently did not provide the Minister with the required reports is a matter peculiarly within the knowledge of the defendant alone. Proving the contrary beyond reasonable doubt will require significant and difficult to obtain indirect and circumstantial evidence. The defence of honest and reasonable mistake of fact is available for strict liability offences (see sections 6.1 and 9.2 of Schedule 1 to the Criminal Code Act 1995) and the existence of strict liability does not make any other defences unavailable (see subsection 6.1(3) of Schedule 1 to the Criminal Code Act 1995). Subclause 83(5) will establish a mirror civil penalty provision which is contravened in circumstances where a liable party or administrator of an approved co-regulatory arrangement fails to provide the Minister with the specified reports. The maximum penalty is 250 penalty units. It is considered that the combination of a strict liability offence and civil penalty provision will provide an adequate deterrent from undertaking conduct which has the potential to cause such harm. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes subclause 83(1) and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. 79

Division 2--Approving co-regulatory arrangements Clause 84 Approving co-regulatory arrangements--application Clause 84 will set out who can apply for approval of a co-regulatory arrangement and the requirements for such an application. Subclause 84(1) will provide that the administrator of a co-regulatory arrangement may apply for the Minister to approve the arrangement in relation to a product. Subclause 84(2) will provide that the application must be accompanied by a written description of the arrangement that sets out how the arrangement proposes to achieve the outcomes for the co-regulatory arrangement (specified by rules made for the purpose of clause 79), matters dealt with by the arrangement and any other matter prescribed by the rules. Note 1 to this clause refers the reader to clauses 172, 173 and 174 for general requirements for relating to applications made under the Bill. These requirements will also apply to applications for the approval of a co-regulatory arrangement, in addition to the requirements at clause 84. Clause 85 Approving co-regulatory arrangements - decision Subclause 85(1) will require the Minister, on receiving an application under clause 84, to decide whether to approve or refuse to approve the co-regulatory arrangement. The note to this subclause explains that a decision to refuse to approve the co-regulatory arrangement is a reviewable decision under clause 151 and Minister must give the administrator written notice of the decision in accordance with clause 152. Subclause 85(2) will set out when the Minister must refuse to approve the co-regulatory arrangement. The Minister will be required to refuse to approve the co-regulatory arrangement if satisfied that:  a condition in subclause 85(3) is not satisfied in relation to the arrangement;  the arrangement is unlikely to achieve one or more of the outcomes (as specified by rules made for the purpose of clause 79) for the product;  the arrangement does not adequately deal with any matters specified for the product in rules (see clause 80);  the administrator is not a fit and proper person, having regard to the matters set out in clause 175; or  it is not in the public interest to approve the arrangement. 80

Subclause 85(3) will set a number of conditions for co-regulatory arrangements. If these conditions are not satisfied, paragraph 85(2)(a) will require the Minister to refuse to approve the co-regulatory arrangement. The conditions are:  the arrangement is designed to achieve the outcomes specified by rules made for the purpose of clause 79 in relation to the product;  the arrangement deals with the matters prescribed by rules (if any) made for the purposes of clause 80 in relation to the product;  the arrangement provides for there to be one or more members of the arrangement, but that only a liable party may be a member;  the arrangement provides for there to be a person (the administrator) who is a body corporate and who is responsible for ensuring the outcomes are achieved and may also be a member of the arrangement. This is intended to ensure continuity and good governance. In determining whether it is in the public interest to approve the co-regulatory arrangement, subclause 85(4) will require the Minister to have regard to the objects of the Bill and will also allow the Minister to have regard to any other relevant matter. The mandatory refusal requirements in subclause 85(2) are intended to ensure that approved co-regulatory arrangements will function as intended consistently with the objects of the Bill and will achieve the outcomes for the product that are specified by the rules. Subclause 85(5) will give the Minister a discretionary power to refuse to approve a co- regulatory arrangement in certain circumstances. The Minister may decide to refuse to approve the arrangement if:  the Minister has requested further information or documents from the application under clause 174 and the applicant fails to provide the information; or  information or a document provided in the application, or under clause 174, is false or misleading. Subclause 85(5) will require the Minister to give the applicant written notice of the decision on the application. Division 3--Reviewing co-regulatory arrangements and cancelling approvals Clause 86 Reviewing approved co-regulatory arrangements Clause 86 will require the Minister to review the operation of an approved co-regulatory arrangement before the end of five years from when the arrangement is approved and before the end of each successive five year period. Examples of matters that a review could consider include (but are not limited to) the effectiveness of the arrangement in achieving one or more 81

of the specified outcomes (see clause 79) or whether the administrator remains a fit and proper person. If, following the review, the Minister is satisfied that one of the matters in clause 87 are satisfied, the Minister will have the power to cancel the approval of the arrangement. Subclause 86(2) will make it clear that this review requirement does not limit the Minister's ability to review the operation of an approved co-regulatory arrangement at any other time; nor does it limit the Minister's power under clause 87 to cancel the approval. Clause 87 Cancelling approvals of co-regulatory arrangements Clause 87 will set out the grounds on which the Minister may cancel the approval of a co- regulatory arrangement. Subclause 87(1) will provide the grounds on which the Minister may cancel the approval of a co-regulatory arrangement on the Minister's own initiative. These grounds include where the Minister is satisfied that the arrangement has not achieved, or is unlikely to achieve, one or more of the outcomes specified for the product, that the administrator is no longer a fit and proper person, that false or misleading information has been provided, or that there has been a material change of circumstances since the arrangement was approved. Other grounds for cancellation include non-compliance with any of:  an improvement notice;  a requirement to take reasonable steps to achieve the outcomes specified for the relevant product;  a requirement to provide an auditor with facilities and assistance, or a recording keeping requirement in the rules. Note 1 to this subclause references the fit and proper person test in clause 175. Note 2 to this subclause explains that the Minister's decision to cancel the approval of a co-regulatory arrangement is a reviewable decision under clause 151 and that the Minister must give the administrator written notice of the decision in accordance with clause 152. Subclause 87(2) will allow the Minister to cancel the approval of a co-regulatory arrangement on application by the administrator. Note 1 to this subclause refers the reader to clauses 172, 173 and 174 for additional matters relating to applications. These requirements will apply to applications to the Minister to cancel the approval of a co-regulatory arrangement. Note 2 to this subclause explains that the Minister's decision to cancel the approval of a co-regulatory arrangement is a reviewable decision under clause 151 and that the Minister must give the administrator written notice of the decision in accordance with clause 152. 82

Division 4--Improvement notices Clause 88 Improvement notices Subclause 88(1) will provide for the Minister to give an improvement notice to an administrator of an approved co-regulatory arrangement. The Minister may do so if they believe on reasonable grounds that the administrator has not complied, or is unlikely to comply, with the requirement for the administrator to take reasonable steps to achieve outcomes (see clause 81) and that it is in the public interest to do so. Subclause 88(2) will require the notice to specify the grounds on which the Minister believes that the administrator has not complied, or is unlikely to comply, with the requirement in clause 81, and to specify a reasonable period within which the administrator must take the necessary action to comply. The notice may also specify action that the administrator must take during the stated period. The Minister may extend the period in writing before the end of the period. The improvement notice is intended to be a regulatory tool to ensure both that administrators of approved co-regulatory arrangements comply with the requirements of the Bill and that the approved co-regulatory arrangement's intended outcomes are achieved. The giving of an improvement notice is not intended to limit other compliance action (including requiring an audit in accordance with clause 109). Subclause 88(5) will allow the Minister to vary or revoke an improvement notice if the Minister is satisfied that it is in the public interest to do so. This may be done by giving a written notice to the administrator. If the original notice is varied, the new notice must set out the text of the original notice and the variations to it (see subclause 88(6)). Subclause 88(7) will require an administrator to comply with an improvement notice. Subclause 88(8) will have the effect that failure to comply with an improvement notice is an offence of strict liability of 60 penalty units for individuals or 300 penalty units for a body corporate (using the body corporate multiplier rule at subsection 4B(3) of the Crimes Act 1914). Strict liability is proposed for this offence having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation. Consistent with these documents, strict liability is considered appropriate as:  the offence is not punishable by imprisonment;  the offence is subject to a maximum penalty unit of 60 penalty units for an individual; 83

 the actions which trigger the offence are simple, readily understood and easily defended. The offence is triggered if the administrator does not comply with the improvement notice;  offences relating to non-compliance of an administrator of a co-regulatory scheme need to be dealt with efficiently to ensure the integrity of, and industry confidence in, the regulatory regime. This is because administrators are the persons responsible for the approved co-regulatory arrangement achieving the outcomes specified for the relevant product, which is the primary mechanism for the co-regulatory regime to achieve the objects of the Bill;  the offence will be subject to an infringement notice (see clause 102);  the absence of strict liability may adversely affect the capacity to prosecute offenders. Requiring administrators to comply with the requirements of the regulatory scheme is integral to the operation of co-regulatory product stewardship and the overarching product stewardship framework set out in this Bill. Whether or not a defendant intentionally or negligently did not comply is a matter peculiarly within the knowledge of the defendant alone. Proving the contrary beyond reasonable doubt will require significant and difficult to obtain indirect and circumstantial evidence. The defence of honest and reasonable mistake of fact is available for strict liability offences (see sections 6.1 and 9.2 of Schedule 1 to the Criminal Code Act 1995) and the existence of strict liability does not make any other defence unavailable (see subsection 6.1(3) of Schedule 1 to the Criminal Code Act 1995). Subclause 88(9) will establish a mirror civil penalty provision which is contravened in circumstances where the administrator of an approved co-regulatory arrangement fails to comply with an improvement notice. The maximum penalty is 250 penalty units. It is considered that the combination of a strict liability offence and civil penalty provision will provide an adequate deterrent from undertaking conduct which has the potential to cause such harm. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes subclause 88(1) and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. Division 5--Other matters relating to co-regulatory product stewardship Clause 89 Co-regulatory product stewardship--anti-avoidance Clause 89 is intended to ensure that persons that would otherwise be identified as a liable party do not engage in behaviour specifically designed to avoid the costs of being a liable party. An example of such behaviour could be where an importer of products covered by a 84

co-regulatory arrangement redirects imports through several subsidiaries in order to avoid the liability threshold. Subclause 89(1) will provide that the Minister may make a written determination to identify a person as a prospective liable party. A prospective liable party will be subject to the same obligations as a liable party under clause 77 and the Bill is taken always to have had effect as if the person were a liable party. This is intended to ensure fairness and that the same product stewardship requirements apply between members of a relevant industry. The note to this subclause will explain that a determination by the Minister under subclause 89(1) is a reviewable decision under clause 151 and Minister must give the person written notice of the decision in accordance with clause 152. Subclause 89(2) will impose limits on when the Minister can make a determination under subclause 89(1). The Minister may make the determination only if one or more persons enters into, begins to carry out, or is carrying out, a scheme that the Minister believes, on reasonable grounds, has the purpose of enabling a person to avoid being a liable party. A scheme will be defined in subclause 89(6) as:  any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; or  any scheme, plan, proposal, action, course of action or course of conduct, whether there are two or more parties or only one party involved. This definition is deliberately broad in order to capture the wide range of activities that a person may engage in for the purpose of avoiding being a liable party. Further, subclause 89(2) will make it clear that the prospective liable party must be a constitutional corporation. Subclause 89(4) will provide that the determination takes effect on the day specified in the determination, which must not be before the day the rules specifying the liable parties in relation to the product came into force. The determination remains in effect until the day specified in the determination. If no day is specified, then it will remain in effect indefinitely. Subclause 89(5) will clarify that a determination issued under subclause 89(5) is not a legislative instrument for the purposes of the Legislation Act 2003. This is declaratory of the law and included to assist readers. It is not intended to be an exemption from the operation of the Legislation Act 2003. Clause 90 Additional or corrected information in relation to approved co-regulatory arrangements Clause 90 will require a person who is the administrator of an approved co-regulatory arrangement holder to correct any information or document that was provided in, or in 85

relation to, any application they made under clause 84 of the Bill (applying for the approval of a co-regulatory arrangement). The person must do so once they become aware the information or document is incomplete or incorrect, or to provide any additional information prescribed by the rules. The additional or corrected information must be provided as soon as practicable. Failure to comply with the obligation in clause 90 will be a contravention of a civil penalty provision, with a penalty of 60 penalty units. The purpose of this provision is to ensure the Minister has all the relevant, correct information before them to assess any relevant applications made under the Bill and to facilitate compliance with the requirements of the Bill. The note after clause 90 will alert the reader that a person may commit an offence or be liable to a civil penalty if they provide false or misleading information or documents (clauses 145, 146 and 147 of the Bill, and sections 136.1, 137.1 and 137.2 of Schedule 1 to the Criminal Code Act 1995). Clause 91 Co-regulatory product stewardship - replacing administrator Subclause 91(1) will make it clear that the Minister's approval is required before a person can be appointed to replace an administrator. This ensures that the Minister can assess whether the new person meets the requirements of an administrator. Note 1 to the subclause refers the reader to clauses 172, 173 and 174 for general matters relating to applications, which will apply to applications to replace an administrator. Note 2 to the subclause explains that if an administrator is replaced without first obtaining the Minister's approval, this is a ground for the Minister to cancel the arrangement's approval in accordance with clause 87. Subclause 91(2) requires the Minister, on receiving an application to approve the appointment of a replacement administrator under subclause 91(1), must either approve the appointment or refuse to approve the appointment. The note to this subclause explains that a decision to refuse to approve the appointment of a replacement administrator is a reviewable decision under clause 151 and Minister must give the person written notice of the decision in accordance with clause 152. Subclause 91(3) and 91(4) will have the combined effect that, in deciding whether to approve the appointment of a replacement administrator, the Minister must have regard to:  whether the Minister would have approved the co-regulatory arrangement if the person had been the administrator at the time the application for approval of the co- regulatory arrangement was made;  if a request has been made under clause 174 requesting additional or documents - whether that information or documents were provided in the specified time; 86

 whether any information or documents provided with the application or in response to a request under clause 174 were false or misleading  any other matter prescribed by the rules. Approval requirements specifically relating to administrators include the administrator being a body corporate and the administrator being a fit and proper person (see paragraphs 85(2)(d) and 85(3)(f)). Alternatively, the Minister may not be satisfied that general requirements for an approved co-regulatory arrangement (such as that the arrangement will achieve the outcomes specified in the rules for the product) will be met if the new person was the administrator. Subclause 91(4) will also allow the Minister, when deciding whether to approve the appointment of a replacement administrator, to have regard to any other matters they consider relevant. Subclause 91(5) will require the Minister to give the person written notice of their decision. PART 5--MANDATORY PRODUCT STEWARDSHIP Overview of Part The purpose of Part 5 is to make provision for imposing product stewardship obligations through requiring specified persons to take or not take specified action in relation to a specified product. It is envisaged that mandatory product stewardship will be used where other types of product stewardship have been considered and found unsuitable, or where mandatory arrangements would deliver greater benefit to the community than other options. Rules may require persons or organisations involved in the life of a product to take, or not take, actions that relate to the objects of the Bill. Before rules can be made, the Minister will have to be satisfied that the rules will further the objects of the Bill and that the product stewardship criteria specified in the Bill (clause 14) are satisfied. Further, in order to be regulated under mandatory product stewardship arrangements, a product will need to have been listed on the Minister's priority list for 12 months. As a matter of government policy, the usual regulatory impact assessment requirements would also apply, and consideration would be given to ensuring consistency with Australia's international obligations. Clause 92 Mandatory product stewardship requirements may be prescribed by rules Subclause 92(1) will allow rules to be made requiring one or more specified persons to take, or not to take, specified action in relation to a specified product. Subclause 92(2) will clarify that the specified action must relate to the objects of the Bill. 87

This rule-making power is deliberately broad so that it allows the Minister the flexibility to target appropriate actions to different products and different specified persons in order to achieve the objects of the Bill to the greatest possible extent. However, the note to subclause 92(2) will alert readers to the fact that there are limitations on this rule-making power, including requirements relating to satisfying the product stewardship criteria and furthering objects of the Bill (see clause 93) and having a constitutional connection (see clause 94). Subclause 92(3) will provide a non-exhaustive list of matters in relation to a product that may be addressed in the rules. These matters are:  prohibit (either absolutely or subject to conditions), limit, restrict or otherwise affect the manufacture, import, export, distribution or use of the product;  prohibit (either absolutely or subject to conditions), limit or restrict substances from being contained in the product;  require the product to be labelled or marked in accordance with the rules;  specify requirements in relation to packaging the product;  specify requirements in relation to the durability, reparability and reusability of the product;  specify requirements in relation to communicating information, in accordance with the rules, in connection with distributing, reusing, recycling, recovering, treating or disposing of the product;  require a person to make a product return payment in relation to the product;  specify requirements in relation to product design for the product;  specify other requirements in relation to reusing, recycling, recovering, treating or disposing of the product;  provide for the Minister to exempt a specified person from a requirement in rules made for mandatory product stewardship. For example, rules could be made for the purposes of mandatory product stewardship to prohibit, limit or restrict hazardous substances in products manufactured in, imported into or sold in Australia. This power could potentially be used where Australia has international obligations to control particular hazardous substances. Another example is that rules could be made requiring producers of identified products to take specified action to deal with those products at end of life or to design the product in a way that maximises the use of recyclable materials. 88

Any such rules will only be made following regulatory impact analysis and consideration of any relevant international obligations. Subclause 92(8) will define product return payment to be a payment, of an amount prescribed by the rules, that a person is required to make to another person if the other person returns that kind of product for reuse, recycling, recovery, treatment or disposal. The note to this subclause explains that clause 93 sets matters the Minister must be satisfied of before rules requiring a person to pay a product return payment are made. Furthermore, rules requiring a person to make a product return payment must not amount to taxation (subclause 92(9)). A product return payment will provide an additional regulatory tool which may be adopted in cases where there is a need for an incentive to be provided for the return of a product in order to more effectively provide for the reuse, recycling or safe disposal of that product. As 'product' is defined broadly, this may include packaging. For example, a product return payment may be used to create incentives for the general public to use a container deposit scheme. A person who is subject to a requirement under the rules made for the purposes of clause 92 (regarding mandatory product stewardship) and fails to comply with the requirement, commits an offence (see subclauses 92(5) and (6)). The penalty is 120 penalty units or two years imprisonment, or both, for individuals or 600 penalty units for a body corporate (using the body corporate multiplier rule at subsection 4B(3) of the Crimes Act 1914). Subclause 92(7) will establish a mirror civil penalty provision which is contravened in circumstances where a person is subject to a mandatory product stewardship requirement and fails to comply with that requirement. The maximum penalty is 240 penalty units. It is considered that the combination of an offence and civil penalty provision will provide an adequate deterrent from undertaking conduct which has the potential to cause such harm. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 92 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. Clause 93 Mandatory product stewardship - satisfying product stewardship criteria and furthering objects etc Clause 93 will set out the matters of which the Minister must be satisfied before making rules prescribing mandatory product stewardship. This means that the Minister will not be able to make rules under clause 92 in relation to a product unless the Minister is satisfied that:  making the rules will further the objects of the Bill (at clause 3); and 89

 the product stewardship criteria at clause 14 are satisfied in relation to the product; and  if the rules will require a person to make a product return payment, then making the rules will encourage reusing, recycling, recovering, treating or disposing of that product in a safe, scientific and environmentally sound way; and the person required to make the product return payment are likely to be appropriately compensated; and  if there are not already rules in force for mandatory product stewardship for that product, the product has been notified in a Minister's priority list at least 12 months beforehand or there are special circumstances justifying the making of the rules without the 12-month notification period being satisfied. This criteria will ensure that rules prescribing mandatory product stewardship requirements in relation to a product are appropriately adapted to achieve the policy objectives of the Bill and that the relevant industry is given adequate time to adjust their business practices to accommodate the regulation of the product. Mandatory product stewardship will generally be used as a last resort for products that have been listed on the Minister's priority list for at least 12 months and for which industry has not voluntarily implemented the Minister's recommendations concerning that product (see clause 67) and regulation is considered appropriate to achieve the objects of the Bill. However, the Bill will provide the Minister with flexibility to make rules prescribing mandatory product stewardship in other circumstances should it be considered appropriate for the product, provided that the criteria in clause 93 are met. The note to subclause 93(1) clarifies that persons will be appropriately compensated if they are able to pass the costs of the payments on to consumers or will be reimbursed for the payments by other participants in the supply chain for the product. This is to explain that product return payments are not intended to put a financial burden on the persons required to make the payments, but rather to create incentives for consumers to return used products for reuse, recycling or other end of life management. If there are special circumstances justifying the making of mandatory product stewardship rules for a product that has not been listed on the Minister's priority list for at least 12 months, the explanatory statement for the rules made must include a statement setting out the special circumstances (subclause 93(2)). Clause 94 Mandatory product stewardship - constitutional connection Clause 94 will require rules providing for mandatory product stewardship requirements to be underpinned by at least one specified constitutional head of power, being:  the corporations power (section 51(xx) of the Constitution). If relying on the corporations power, the rules must be expressed to apply in relation to acts and omissions of constitutional corporations. A constitutional corporation is a trading or 90

financial corporation formed within the limits of the Commonwealth, or a foreign corporation; or  the trade and commerce power (section 51(i) of the Constitution). If relying on the trade and commerce power, the rules must be expressed to apply in relation to acts and omissions in the course of constitutional trade or commerce. Constitutional trade and commerce refers to international or interstate trade or commerce; or  the external affairs power (section 51(xxix) of the Constitution). If relying on the external affairs power, the rules must be appropriate and adapted to give effect to Australia's obligations under an agreement with one or more other countries. The rules must specify which of the above constitutional heads of power they are made in accordance with. If that is the external affairs power, then the rules must identify the relevant international agreement. The purpose of this provision is to ensure that any rules providing for mandatory product stewardship requirements are supported by the Constitution. PART 6--OTHER MATTERS Overview of Part Part 6 will deal with the publishing of information concerning voluntary and regulated product stewardship arrangements. Clause 95 Publishing information about arrangements Clause 95 will require the Minister to publish on the Department's website information relating to each accredited voluntary arrangement and each approved co-regulatory arrangement. This information must include:  a summary of the arrangement;  the name of the arrangement's administrator;  the contact details for the arrangement's administrator that are prescribed in the rules;  a copy of any report on the operation of the arrangement given to the Minister;  for an accredited voluntary arrangement, the persons authorised by the arrangement to exercise the Commonwealth's intellectual property rights in a product stewardship logo. However, subclause 95(2) will prevent the Minister from publishing any information if the Minister is satisfied that there is a risk that publishing the information might substantially prejudice the commercial interests of a person and publishing the information is not in the public interest. 91

The publishing of the information mentioned in clause 95 will assist in providing transparency to industry and the public on the operations of each arrangement and whether they are achieving their intended outcomes. Including the administrator's details on the website will also provide a clear avenue for potential members to seek out the relevant arrangements and potentially join. Chapter 4--Administration GENERAL OUTLINE Chapter 4 will deal with the administration of the Bill. This includes compliance and enforcement-related provisions (including the application of the Regulatory Powers (Standard Provisions) Act 2014 to this Bill, which reflects Commonwealth policy for Commonwealth regulators). This Chapter also includes provisions concerning audits, authorised officers, record keeping, information management, review of decisions, fees and charges and other miscellaneous administrative matters. NOTES ON INDIVIDUAL CLAUSES PART 1--INTRODUCTION Clause 96 Simplified outline of this Chapter Clause 96 provides an outline to Chapter 4 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Chapter 4, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of the Chapter 4. PART 2--COMPLIANCE AND ENFORCEMENT Overview of Part Part 2 will deal with compliance and enforcement-related powers. The standard provisions of Parts 2-7 of the Regulatory Powers (Standard Provisions) Act 2014 would be triggered to provide a comprehensive compliance and enforcement regime that is supplemented by directions powers, a framework for audits and other miscellaneous compliance and enforcement-related provisions. Part 2 will also provide for a number of additional monitoring and investigation powers, concerning the use of reasonable force on things, the power to take, test and analyse samples, and the power to secure premises and secure things on premises. Unless otherwise provided, the compliance and enforcement-related provisions in Part 2 will apply to both the waste export and product stewardship components of the Bill. Division 1--Powers of investigation and enforcement Clause 97 General monitoring powers Clause 97 will trigger the standard monitoring powers in Part 2 of the Regulatory Powers (Standard Provisions) Act 2014, which creates a framework for monitoring compliance with 92

the Bill. This will include powers of entry and inspection. Subclause 97(2) will clarify that the monitoring powers in Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 will also apply to information given in compliance or purported compliance with a provision of the Bill. The monitoring powers triggered under Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 will allow an authorised government enforcement officer to enter a premises for the purpose of:  monitoring compliance with provisions in the Bill and offence provisions of the Crimes Act 1914 or Schedule 1 to the Criminal Code Act 1995, and  determining whether information given in compliance, or purported compliance with the Bill, is correct (subsection 18(1) of the Regulatory Powers (Standard Provisions) Act 2014). Unlike the exercise of inspection powers, authorised government enforcement officers will not need to suspect on reasonable grounds that there may be material on the premises related to a contravention of an offence or civil penalty provision before exercising relevant monitoring powers. An authorised government enforcement officer will need to have the consent of the occupier or a monitoring warrant to enter premises to exercise the monitoring powers under Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 (subsection 18(2) of the Regulatory Powers (Standard Provisions) Act 2014). The general monitoring powers set out in Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 will also permit an authorised government enforcement officer to, among other things:  search premises, measure or test anything on the premises;  photograph things or make copies of documents;  take necessary equipment onto the premises;  operate electronic equipment and secure electronic evidence for 24 hours in order to obtain expert assistance. Paragraph 97(3)(a) will provide that, for the purposes of Part 2 of the Regulatory Powers (Standard Provisions) Act 2014, there are no related provisions. Paragraphs 97(3)(b) and 97(3)(c) will provide that a reference to an authorised applicant and a reference to an authorised person in Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 will be a reference to an authorised government enforcement officer under the Bill. An authorised government enforcement officer will be defined in clause 10. 93

Subclause 97(4) will have the effect that an authorised government enforcement officer may be assisted by other persons when exercising powers or performing functions or duties under Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 as it applies to the Bill. Subclause 97(5) will extend the operation of Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 to every external territory. This is necessary because the Regulatory Powers (Standard Provisions) Act 2014 does not apply to external territories of its own accord. Clause 98 Additional monitoring powers etc. Clause 98 will provide for additional monitoring powers beyond those provided for under Part 2 of the Regulatory Powers (Standard Provisions) Act 2014. The clause will also modify some provisions in Part 2 of the Regulatory Powers (Standard Provisions) Act 2014. Subclause 98(2) will provide for the following additional monitoring powers:  the power to take, test and analyse samples of any thing on premises entered in the course of exercising the monitoring powers triggered by clause 97;  the power to secure premises entered in the course of exercising the monitoring powers triggered by clause 97;  the power to secure things on premises entered in the course of exercising the monitoring powers triggered by clause 97. These additional monitoring powers are considered appropriate because it may be necessary to secure things and premises, and to take and test samples of things, in order to facilitate compliance with the Bill. For instance, if regulated waste material proposed for export is required, by the rules or a licence condition, to be processed to a certain standard, testing and analysing a sample of that waste may be necessary to determine whether the required standard has been met. Subclauses 98(3) to (5) will modify powers in Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 for the purposes of their application to the Bill. Subclauses 98(3) and (4) will have the combined effect of turning off the provisions in Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 that provide for identity cards, and providing that other references to identity cards in that Part are taken to refer to an identity card issued under clause 123 of this Bill. This is necessary because clause 123 of the Bill will contain different requirements and processes for issuing identity cards than the Regulatory Powers (Standard Provisions) Act 2014. Subclause 98(5) will have the effect that an authorised government enforcement officer, or a person assisting an authorised government enforcement officer, when executing a monitoring warrant, may use necessary and reasonable force against things. This will ensure that authorised government enforcement officers can take the necessary measures to monitor 94

compliance with the Bill and takes into consideration the special requirements that may be needed for effective monitoring. An example of where use of force may be necessary is opening locked cabinets to access records relating to export of regulated waste materials, or opening locked containers of regulated waste material that is proposed to be exported (in order to ascertain whether the regulated waste material was processed to the standard required by the rules or a licence condition). This clause does not authorise the use of force against a person in executing a monitoring warrant. As is the case for the general monitoring powers in Part 2 of the Regulatory Powers (Standard Provisions) Act 2014, the additional monitoring powers will only be able to be exercised with the consent of the occupier or under an investigation warrant. Clause 99 General investigation powers Clause 99 will trigger the standard investigation powers in Part 3 of the Regulatory Powers (Standard Provisions) Act 2014. Part 3 of that Act creates a framework for investigating compliance with the offence and civil penalty provisions in the Bill or an offence against the Crimes Act 1914 or Schedule 1 to the Criminal Code Act 1995 that relates to the Bill. The investigation powers triggered under Part 3 of the Regulatory Powers (Standard Provisions) Act 2014 will allow an authorised government enforcement officer to enter a premise to exercise investigation powers if they suspect on reasonable grounds that there is evidential material on the premises (subsection 48(1) of the Regulatory Powers (Standard Provisions) Act 2014). However, they can only do so with the consent of the occupier or under an investigation warrant (subsection 48(2) of the Regulatory Powers (Standard Provisions) Act 2014). The investigation powers set out in Part 3 of the Regulatory Powers (Standard Provisions) Act 2014 will also permit an authorised government enforcement officer to, among other things:  search the premises and seize evidential material;  inspect, test and copy evidential material;  take necessary equipment onto the premises;  operate electronic equipment found on the premises and secure electronic evidence for 24 hours in order to obtain expert assistance. These investigation powers will allow non-compliance to be more easily detected and ultimately reduced, leading to greater compliance with the Bill. This will support better management of the risks arising from non-compliant regulated waste material, unlawful exports of regulated waste material and other regulated products overall. Paragraph 99(2)(a) will provide that, for the purposes of Part 3 of the Regulatory Powers (Standard Provisions) Act 2014, there are no related provisions. Paragraphs 99(2)(b) and 95

99(2)(c) will provide that a reference to an authorised applicant and a reference to an authorised person in Part 3 of the Regulatory Powers (Standard Provisions) Act 2014 will be a reference to an authorised government enforcement officer under the Bill. Subclause 99(3) will have the effect that an authorised government enforcement officer under the Bill may be assisted by other persons when exercising powers or performing functions or duties under Part 3 of the Regulatory Powers (Standard Provisions) Act 2014. Subclause 99(4) will extend the operation of Part 3 of the Regulatory Powers (Standard Provisions) Act 2014 to every external territory. This is necessary because the Regulatory Powers (Standard Provisions) Act 2014 does not apply to external territories of its own accord. Clause 100 Additional investigation powers etc. Clause 100 will provide for additional investigation powers beyond those provided for under Part 3 of the Regulatory Powers (Standard Provisions) Act 2014. The clause will also modify some provisions in Part 3 of the Regulatory Powers (Standard Provisions) Act 2014. Subclause 100(2) will provide for the following additional monitoring powers:  the power to take, test and analyse samples of anything on premises entered in the course of exercising the investigation powers triggered by clause 99;  if the authorised person has the power seize a thing under Part 3 of the Regulatory Powers (Standard Provisions) Act 2014, the power to seize a container that contains the seizable thing, and any other thing contained in the container, if the authorised person reasonably believes it is not reasonably practicable to seize the seizable thing without also seizing the container. These additional investigation powers are considered appropriate because it may be necessary to seize containers containing things, and to take and test samples of things, in order to facilitate compliance with the Bill. For instance, if regulated waste materials proposed for export are required, by the rules or a licence condition, to be processed to a certain standard, testing and analysing a sample of that waste may be necessary to determine whether the required standard has been met. It also may not be reasonably practicable to extract the waste material from the container it is in. Subclauses 100(3) to (5) will modify powers in Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 for the purposes of their application to the Bill. Subclauses 100(3) and (4) will have the combined effect of turning off the provisions in Part 3 of the Regulatory Powers (Standard Provisions) Act 2014 that provide for identity cards, and providing that other references to identity cards in that Part are taken to refer to an identity card issued under clause 123 of this Bill. This is necessary because clause 123 of the Bill will contain different requirements and processes for issuing identity cards than the Regulatory Powers (Standard Provisions) Act 2014. 96

Subclause 100(5) will have the effect that an authorised government enforcement officer, or a person assisting an authorised government enforcement officer, when executing an investigation warrant, may use necessary and reasonable force against things. This will ensure that authorised government enforcement officers can take the necessary measures to monitor compliance with the Bill and takes into consideration the special requirements that may be needed for effective monitoring. An example of where use of force may be necessary is opening locked cabinets to access records relating to the export of regulated waste materials, or opening locked containers of regulated waste material that is proposed to be exported (in order to ascertain whether the regulated waste material was processed to the standard required by the rules or a licence condition). This clause does not authorise the use of force against a person in executing a monitoring warrant. As is the case for the general investigation powers in Part 3 of the Regulatory Powers (Standard Provisions) Act 2014, the additional investigation powers will only be able to be exercised with the consent of the occupier or under an investigation warrant. Clause 101 Civil penalty provisions Clause 101 will trigger the standard provisions of Part 4 of the Regulatory Powers (Standard Provisions) Act 2014. Part 4 of the Regulatory Powers (Standard Provisions) Act 2014 creates a framework for allowing the civil penalty provisions of the Bill to be enforced by obtaining an order for a person to pay a pecuniary penalty. Subclause 101(2) will provide that the Secretary is the 'authorised applicant' for the purposes of Part 4 of the Regulatory Powers (Standard Provisions) Act 2014. This means it is the Secretary who will be able to apply to a court for an order for a person to pay a civil penalty in relation to a contravention of this Bill. Subclause 101(4) will extend the operation of Part 4 of the Regulatory Powers (Standard Provisions) Act 2014 to every external territory. This is necessary because the Regulatory Powers (Standard Provisions) Act 2014 does not apply to external territories of its own accord. Clause 102 Infringement notices Clause 102 will trigger the standard provisions of Part 5 of the Regulatory Powers (Standard Provisions) Act 2014. Part 5 of the Regulatory Powers (Standard Provisions) Act 2014 creates a framework under which infringement notices can be issued for specified strict liability offences and civil penalty provisions. Those offences and civil penalty provisions are set out in subclause 102(1). A person who is given an infringement notice may choose to pay an amount as an alternative to having court proceedings brought against them for the contravention. The infringement notice amount is one fifth of the maximum penalty for the contravention. 97

Subclause 102(1) will list the strict liability offences and civil penalty provisions for which infringement notices could be issued. Subclauses 102(2) and (3) will provide that the Secretary is the 'infringement officer' and the 'relevant chief executive' for the purposes of Part 5 of the Regulatory Powers (Standard Provisions) Act 2014. Subclause 102(4) will extend the operation of Part 5 of the Regulatory Powers (Standard Provisions) Act 2014 to every external territory. This is necessary because the Regulatory Powers (Standard Provisions) Act 2014 does not apply to external territories of its own accord. Clause 103 Enforceable undertakings Clause 103 will trigger the standard provisions of Part 6 of the Regulatory Powers (Standard Provisions) Act 2014. Triggering Part 6 of the Regulatory Powers (Standard Provisions) Act 2014 allows an enforceable undertaking to be sought, agreed to, and enforced in relation to provisions of the Bill. An enforceable undertaking is a written undertaking agreed to by a person (for example, to take a specified action) that can be enforced in a relevant court. The clause will provide that the Secretary is the 'authorised person' for the purposes of Part 6 of the Regulatory Powers (Standard Provisions) Act 2014. This means it is the Secretary who can seek an enforceable undertaking under Part 6 in relation to a provision of this Bill. Subclause 103(4) will extend the operation of Part 6 of the Regulatory Powers (Standard Provisions) Act 2014 to every external territory. This is necessary because the Regulatory Powers (Standard Provisions) Act 2014 does not apply to external territories of its own accord. Clause 104 Injunctions Clause 104 will trigger the standard provisions of Part 7 of the Regulatory Powers (Standard Provisions) Act 2014. Triggering Part 7 of the Regulatory Powers (Standard Provisions) Act 2014 enables an injunction to be sought in relation to the provisions of the Bill. An injunction (including an interim injunction) is a court order that may be used to restrain a person from contravening a provision of the Bill or to compel compliance with a provision of the Bill. The clause will provide that the Secretary is the 'authorised person' for the purposes of Part 7 of the Regulatory Powers (Standard Provisions) Act 2014. This means it is the Secretary who will be able to apply to a court for an injunction under Part 7 in relation to a provision of this Bill. Subclause 104(4) will extend Part 7 of the Regulatory Powers (Standard Provisions) Act 2014 to every external territory. This is necessary because the Regulatory Powers (Standard Provisions) Act 2014 does not apply to external territories of its own accord. 98

Division 2--Power to give directions Clause 105 Direction to assist persons performing functions etc. under this Act Clause 105 will allow an authorised officer who is performing functions or exercising powers under this Bill to direct a person to provide reasonable assistance or facilities to either the authorised officer or to any other person who is performing functions or exercising powers under the Bill. The direction can only be given if the authorised officer reasonably believes the person is able to provide reasonable assistance or facilities to the authorised officer or other person. An example of a direction that might be given under clause 105 is to require a person to provide passwords for access to computer files or to provide a key to a locked cabinet. The overriding requirement is that the assistance sought must be reasonable. The note following subclause 105(1) will direct readers to clause 107, which deals with general requirements relating to directions under the Bill. Subclauses 105(2), 105(3) and 105(4) will have the combined effect that a person who contravenes a direction given under clause 105 will be committing both an offence and the contravention of a civil penalty provision. The maximum penalty for the offence is six months imprisonment or 30 penalty units (or both). The maximum civil penalty for a contravention is 60 penalty units. These penalties are considered appropriate to provide a deterrent against non-compliance. It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes a direction given under subclause 105(1) and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. This provision is not intended to override the common law privilege against self- incrimination. Accordingly, it will not be an offence or breach of a civil penalty provision for a person to contravene a direction if the direction will require the person to reveal information that will tend to incriminate that person as having committed an offence. An authorised officer is defined in clause 10 of the Bill. Clause 106 Direction to deal with non-compliance with the requirements of this Act etc. Clause 106 will deal with directions that may be given to deal with non-compliance with the requirements of the Bill. 99

Subclause 106(1) will provide that an authorised officer may give a direction to a relevant person if the authorised officer reasonably believes that a ground for giving a direction exists. The grounds for giving a direction, and the relevant persons to whom the direction may be given, are set out in the table in subclause 106(1). The table covers grounds, and persons, related to both the export of regulated waste material and the product stewardship components of the Bill and generally permit a direction to be given if the relevant person has not complied, or is not likely to comply, with a requirement of the Bill. In the case of the holder of an export licence, a direction can also be given if a licence condition has been, or is likely to be, contravened, or if the particular regulated waste material itself does not comply, or is not likely to comply, with a relevant requirement of the Bill. Subclauses 106(2), 106(3), 106(4) and 106(5) will place limits on the content of a direction given under subclause 106(1). Specifically, subclause 106(2) will limit the directions that can be lawfully given under subclause 106(1) to those that require the relevant person to take specified action within a specified period to deal with the ground for giving the direction. The Bill will not provide power for an authorised officer to give a direction for a purpose other than dealing with the relevant ground listed in the table in subclause 106(1) for the relevant person. The first note after subclause 106(2) will reference subsection 33(1) of the Acts Interpretation Act 1901 and draws the reader's attention to the fact that, relying on that section, an authorised officer may give more than one direction relating to a ground specified in the table in subclause 106(1). The second note will alert readers to clause 107, which deals with general requirements for directions under the Bill. Subclauses 106(3) and 106(4) will have the combined effect that a direction made under subclause 106(1) may require the relevant person to cease carrying out export operations in relation to particular regulated waste material or a kind of regulated waste material. However, a direction to this effect may only be lawfully made if the authorised officer reasonably believes that the regulated waste material does not, or likely does not, comply with a requirement in the Bill (or a ground prescribed by the rules exists) and there is no other way to deal with the ground than by ceasing the relevant export operations. The intention here is that a direction requiring export operations to cease will only be used as a last resort when there is no other option reasonably available. Subclause 106(5) will require a written direction to state that the relevant person may be liable to a civil penalty if the person fails to comply with the direction. Subclauses 106(6), 106(7) and 106(8) will have the combined effect that a person who contravenes a direction given under subclause 106(1) will be committing both an offence and 100

a contravention of a civil penalty provision. The maximum penalty for the offence is six months imprisonment or 30 penalty units (or both). The maximum civil penalty for a contravention is 60 penalty units. These penalties are considered appropriate to provide a deterrent against non-compliance. It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes a direction given under subclause 106(1) and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. Subclause 106(9) will have the effect that a person will not be liable for an offence or civil penalty under this clause if the direction did not include the statement in subclause 106(5) (for written directions) or the authorised officer did not take reasonable steps to inform the person that they may be liable for an offence/civil penalty if they fail to comply with the direction (for oral directions). The note after subclause 106(9) will explain that the defendant bears an evidential burden in relation to showing that the authorised officer did not take reasonable steps to inform the person that they may be liable for an offence/civil penalty. This is because section 13.3 of Schedule 1 to the Criminal Code Act 1995 and section 96 of the Regulatory Powers (Standard Provisions) Act 2014 provide that if a defendant wishes to rely on an exception to, respectively, an offence or a civil penalty provision, the defendant bears an evidential burden of proof in relation to that matter. This is appropriate on the basis that knowledge of that matter would be peculiar to that person. Clause 107 General provisions relating to directions Subclause 107(1) will provide that, unless otherwise provided in the Bill, directions made under the Bill may be given orally or in writing. However, subclause 107(2) will then clarify that a direction given orally must be also given in writing as soon as practicable after the oral direction is given. The purpose of this provision is to ensure that all directions are recorded in writing to provide sufficient clarity as to the direction's content. This will assist both the person who was given the direction, and the Commonwealth for compliance related functions and powers. Subclause 107(3) will provide that unless otherwise provided in the Bill, a direction given under the Bill is not a legislative instrument. This provision is merely declaratory of the law and included to assist readers. It is not intended to be an exemption from the Legislation Act 2003. Subclause 107(4) will make it clear that a later direction overrides an earlier direction to the extent of any inconsistency. This is to allow changing circumstances to be accommodated. 101

Subclause 107(5) will be an exception to the general rule in subclause 107(4) and makes it clear that a direction given by a Commonwealth authorised officer will always override a direction given by a State or Territory authorised officer or a third party authorised officer. This is appropriate, as the Bill will be Commonwealth legislation and the Commonwealth has the responsibility for administering it as a whole. Division 3--Audits Auditors will be able to conduct audits in relation to product stewardship arrangements, export operations and the performance of functions and the exercise of powers under the Bill. Subdivision A--Minister may require audits to be conducted Clause 108 Audit of export operations Clause 108 will deal with audits relating to export operations. Auditing will be an important compliance tool in this context. Among other things, the rules may require exporters to make export declarations for each consignment of regulated waste material exported. An audit will allow the Minister to assess whether the matters declared in an export declaration (including that the regulated waste material being exported meets the conditions of the export licence and other requirements of the Bill and rules) are accurate. In addition, audits will be able to assess a person's compliance with record-keeping requirements under the Bill. Subclause 108(1) will provide that the Minister may require an audit to be conducted of:  regulated waste material covered by an export licence or exemption;  export operations covered by an export licence or exemption;  export operations proposed to be carried out in relation to a kind of regulated waste material by a person who has applied for an export licence or exemption;  export operations carried out in relation to a kind of regulated waste material by a person who has had an export licence suspended or who has had an export licence or exemption revoked.  export operations of a kind prescribed by the rules. Clause 108(2) will set out the matters to which the audit must relate. If the audit is in relation to an export licence, the audit must relate to whether the kind of export operation or kind of regulated waste material has complied, or will comply, with the relevant requirements of the Bill, or whether the conditions of the export licence are being, have been or are likely to be complied with. If the audit is in relation to an exemption, the audit must relate to whether the kind of export operation or kind of regulated waste material has complied, or will comply, with the relevant 102

requirements of the Bill, or whether the conditions of the exemption are being, have been or are likely to be complied with. The rules may prescribe matters to which certain kinds of audits must also relate. Subclause 108(3) will clarify that the audit may include an audit of financial statements conducted in accordance with any standard issued by the Auditing and Assurance Standards Board that applies to the audit, as in force from time to time. It is necessary to incorporate such standards as in force from time to time, as these standards may be updated or changed, and it is appropriate to ensure the most relevant and up to date standard is followed by auditors. The requirement to be aware of the appropriate standard for the audit applies to the person conducting the audit, not the person being audited. Subclause 108(4) will make it clear that the scope of the audit is broad and may deal with anything reasonably necessary to ensure its effective conduct and anything incidental to the matter to which the audit relates. Subclause 108(5) will clarify that an audit may include inspections of regulated waste material. Subclause 108(6) will mandate that an audit be conducted by an authorised officer or an approved auditor. Both the terms authorised officer and approved auditor will be defined in clause 10. Subdivision B deals with matters relating to approved auditors. Clause 109 Audit of product stewardship arrangements Clause 109 will deal with auditing of product stewardship arrangements. Auditing is an important compliance tool in the product stewardship context. It will generally be one of the primary mechanisms by which the Minister will be able to identify potential non-compliance, particularly in the case of voluntary and co-regulatory product stewardship, which are subject to more indirect regulation. Under subclause 109(1), the Minister may require an audit to be conducted in relation to an accredited voluntary arrangement, an approved co-regulatory arrangement or persons required by mandatory product stewardship rules to take specified action in relation to a product. Where the accrediting authority (for the accreditation of voluntary arrangements) is not the Minister, the Minister may also require an audit of that accrediting authority. Subclause 109(2) will set out the matters to which the audit must relate. For accredited voluntary arrangements, the audit must relate to whether the administrator is ensuring the relevant outcomes are, or are likely to be, achieved. For an approved co-regulatory arrangement, the audit must relate to whether the administrator is complying, or is likely to comply with, clause 81 (which requires the administrator to take reasonable steps to ensure the relevant outcomes are achieved and any requirements specified for those outcomes are complied with). For mandatory product stewardship, the audit must relate to whether the person is taking, or is likely to take, the required action in relation to the product. For an audit 103

of an accrediting authority, the audit must relate to whether the accrediting authority is complying with, or is likely to comply with, rules made for the purpose of clause 70. The audit must also relate to any other matter prescribed by the rules that is relevant to the audit. Subclause 109(3) will clarify that the audit may include an audit of financial statements conducted in accordance with any standard issued by the Auditing and Assurance Standards Board that applies to the audit, as in force from time to time. It is necessary to incorporate such standards as in force from time to time, as these standards may be updated or changed, and it is appropriate to ensure the most relevant and up to date standard is followed by auditors. The requirement to be aware of the appropriate standard for the audit applies to the person conducting the audit, not the person being audited. Subclause 109(4) will make it clear that the scope of the audit is broad and may deal with anything reasonably necessary to ensure its effective conduct and anything incidental to the matter to which the audit relates. Subclause 109(5) will clarify that an audit may include inspections of the relevant products. Subclause 109(6) will mandate that an audit be conducted by an authorised officer or an approved auditor. Both the terms authorised officer and approved auditor will be defined in clause 10. Subdivision B deals with matters relating to approved auditors. Clause 110 Audit in relation to persons performing functions or exercising powers under this Act Clause 110 will allow the Minister to require an audit to be conducted into the performance of a person performing or exercising functions and powers under the Bill, including an approved auditor. The audit may include the extent to which the person has complied with conditions on their appointment or authorisation, or any conditions attached to the use of the power or function itself. Clause 111 Single audit or program of audits may be required Clause 111 will clarify that the Minister may require a single audit or a program of audits in relation to a specified matter. This will provide flexibility to assist with ongoing compliance matters. A note following clause 111 will inform readers that, if the Minister has required a program of audits to be conducted in relation to a matter, the Minister may also require additional audits to be conducted in relation to the matter. It will direct readers to subsection 33(1) of the Acts Interpretation Act 1901. 104

Clause 112 Matters relating to audit Clause 112 will deal with matters relating to an audit. Subclause 112(2) will allow the rules to make provision for and in relation to audits. Subclause 112(3) will provide a non-exhaustive list of matters that may be covered by rules made for the purpose of subclause 112(2). These include (but are not limited to):  requirements relating to giving a description of the scope of an audit to the relevant person before the audit starts;  requirements relating to showing identity cards;  processes to be followed after an audit has been completed;  information that must be provided to the relevant person during the audit and after the audit has been completed;  reporting requirements and actions the Minister may require the relevant person to take after the audit is completed. Clause 113 Powers of auditors Clause 113 will make clear that an auditor, for the purposes of conducting an audit under this Division, has a broad power to do anything the auditor considers necessary. Clause 113 will also provide a non-exhaustive list of examples of powers that are included in an auditor's powers, such as requesting a person to provide relevant information or documents or answer relevant questions, taking samples of relevant products or regulated waste material or from equipment used in export operations and taking, testing or analysing samples (or arranging for another person with appropriate qualifications to do so if the auditor is not an authorised officer). The first note after subclause 113(1) will note that an auditor who is an authorised officer may also give a direction under clause 106. The second note after subclause 113(1) will further note for that a person may commit an offence or be liable to a civil penalty under clauses 146 or 147 of the Bill, or under clauses 137.1 and 137.2 of Schedule 1 to the Criminal Code Act 1995, if the person provides false or misleading information or documents to an auditor. Subclause 113(2) will clarify that an auditor may make copies or take extracts from a document or record produced under subclause 113(1) and, for that purpose, may remove the document or record from the place it was produced. 105

Clause 114 Relevant person for an audit Clause 114 will set out who is the relevant person for a particular kind of audit. This will be relevant to clauses 112 and 115 which concern how the audit is conducted, and which impose specific requirements on the relevant person for the audit. In the product stewardship context, the relevant person will be the administrator (for audits of accredited voluntary arrangements and approved co-regulatory arrangements), the person required to take the specified action (for audits of mandatory product stewardship requirements) and the accrediting authority (for audits of accrediting authorities). In the waste export context, the relevant person will be the holder of the export licence or exemption (for audits of export operations covered by an export licence, a suspended export licence or an exemption), the former holder of the export licence or exemption (for audits of export operations that were covered by an export licence or exemption that has been revoked), the applicant (for audits of persons who have applied for a licence or exemption), the person prescribed by the rules (for audits prescribed by the rules) and the person to whom the audit relates (for audits under clause 110). Clause 115 Relevant person for an audit must provide facilities and assistance Clause 115 will require the relevant person for an audit to provide the auditor with the facilities and assistance that are reasonably necessary for the conduct of the audit. This is necessary to ensure that the audit is able to be conducted efficiently and effectively. The relevant person for an audit will be defined in clause 114. Subdivision B--Approved auditors Clause 116 Minister may approve persons to conduct audits Subclause 116(1) will allow the Minister to approve, in writing, a person to conduct audits under this Division. Such a person is defined in clause 10 as an approved auditor. The Minister will not be permitted to approve a person to be an approved auditor unless:  the Minister is satisfied that the person has the knowledge, training or experience necessary to properly exercise the powers of an auditor; or  the person is a registered company auditor (within the meaning of the Corporations Act 2001); or  the person is an authorised audit company (within the meaning of the Corporations Act 2001). Subclause 116(2) will clarify that an instrument of approval under subclause 116(1) is not a legislative instrument. This is declaratory of the law and included to assist readers. It is not intended to be an exemption from the operation of the Legislation Act 2003. 106

Subclauses 116(4) and (5) will have the effect that the Minister has a broad power to make rules providing for matters in relation to the approval of auditors under subclause 116(1). Clause 117 Approved auditors may charge fees Clause 117 will make it clear that an auditor may charge a fee in relation to things done in the course of performing their powers and functions under the Bill. That fee must not amount to taxation. Division 4--Miscellaneous Clause 118 Physical elements of offences Clause 118 will clarify that where a provision in the Bill provides that a person contravening another provision of the Bill (the conduct provision) commits an offence, the physical elements of the offence are set out in the conduct provision. This is for the purposes of applying Chapter 2 of Schedule 1 to the Criminal Code Act 1995. The note after clause 118 explains that Chapter 2 of Schedule 1 to the Criminal Code Act 1995 sets out general principles of criminal responsibility. This includes requiring all criminal offences to have physical elements and fault elements. The purpose of clause 118 is to make clear what constitutes the physical elements of offences under the Bill. Clause 119 Contravening an offence provision or a civil penalty provision Clause 119 will clarify that where a provision in the Bill provides that a person contravening another provision of the Bill commits an offence or civil penalty provision, the reference to the contravention of an offence or civil penalty provision includes a reference to a contravention of the conduct provision. This is because the conduct provision will set out the relevant physical elements of the offence or civil penalty provision that is being referenced. Clause 120 Notification of conviction of offence, order to pay pecuniary penalty etc.-- participants in product stewardship arrangements, export licence holders and applicants for licences Subclauses 120(2), 120(3) and 120(4) will have the combined effect of requiring certain persons in both the waste export and product stewardship contexts to notify the Minister if:  they or an associate are convicted of an offence against, or ordered to pay a civil penalty under, an Australian law for a contravention involving fraud or dishonesty, or an environmental matter; or  they are given a notice under a State or Territory law that relates to an environmental matter, and requires the person to take, or not take, specified remediation action. The notification must be in writing and must be given as soon as practicable after the person is convicted or the order made, or the person is given a relevant notice. 107

Subclause 120(1) will set out who the notification requirements in subclauses 120(2), 120(3) and 120(4) apply to. The notification requirement will apply to persons who are an accrediting authority (other than the Minister) in the context of voluntary product stewardship arrangements, an administrator of an accredited voluntary arrangement or an approved co- regulatory arrangement, an applicant for an export licence or the holder of an export licence. The notification requirement is considered necessary as it will be relevant to the Minister's assessment of whether the person is a fit and proper person under clause 175, which is an ongoing requirement for applicants and holders of export licences, and administrators of product stewardship arrangements. Subclause 120(5) will allow the rules to prescribe additional matters in relation to which the person must notify the Minister, and the period within which the notification must be given. This will allow the Minister flexibility to adapt to changing circumstances, and to potentially prescribe different notification requirements for different persons if they consider it appropriate. Subclause 120(6) will create a civil penalty provision that will apply if a person fails to comply with the notification requirement. The maximum civil penalty is 60 penalty units. The amount of the penalty is considered appropriate to reflect the conduct involved and the need for the penalty to be a deterrent from such conduct, given its potential to undermine the integrity of the regulatory regime. Subclause 120(7) clarifies that nothing in clause 120 affects the operation of Part VIIC of the Crimes Act 1914 (dealing with spent convictions). Clause 121 Notification of conviction of offence or order to pay pecuniary penalty - third party authorised officers etc. Clause 121 will require a third party authorised officer, or another person prescribed by the rules, to notify the Minister in the event that they are convicted of an offence against, or ordered to pay a civil penalty under, an Australian law for a contravention involving fraud or dishonesty. The notification must be in writing and must be given as soon as practicable after the person is convicted or the order made. Subclause 121(3) will create a civil penalty provision that will apply if a person fails to comply with the notification requirement. The maximum civil penalty is 60 penalty units. Subclause 121(4) clarifies that nothing in clause 121 affects the operation of Part VIIC of the Crimes Act 1914 (dealing with spent convictions). 108

Clause 122 Minister may publicise certain offences, contraventions and decisions Subclause 122(1) will allow the Minister to publish a list of certain compliance-related matters, and the name of the affected persons. Specifically, the Minister will be able to publish:  an offence against the Bill of which a person has been convicted, and the person's name;  a contravention of a civil penalty provision of the Bill where a civil penalty order has been made against a person, and the person's name;  the acceptance of an undertaking given under section 114 of the Regulatory Powers (Standard Provisions) Act 2014 (as it applies to this Bill), the terms of the undertaking, and the person's name;  a breach of an undertaking given under section 114 of the Regulatory Powers (Standard Provisions) Act 2014 (as it applies to this Bill) in relation to which an order has been made against a person under subsection 115(2) of the Regulatory Powers (Standard Provisions) Act 2014 (as it applies to this Bill), the terms of the order and the person's name;  the granting or varying of an injunction under Part 7 of the Regulatory Powers (Standard Provisions) Act 2014 (as it applies to this Bill) restraining a person from engaging in conduct, or requiring a person to do an act or thing, the nature of the conduct, act or thing and the person's name;  a decision to: o give the administrator of an approved co-regulatory arrangement an improvement notice, the reasons for it and the name of the administrator; o require an audit of an approved co-regulatory arrangement to be conducted, the reasons for it and the name of the administrator; o cancel the accreditation of a voluntary arrangement or the approval of a co- regulatory arrangement, the reasons for it and the name of the administrator. It is intended that publishing these matters, particularly the relevant person's name, will act as a deterrent to contravention and therefore assist with ensuring the integrity of the regulatory regime. While it is acknowledged that this clause authorises the Minister to publish personal information and also sensitive information within the meaning of the Privacy Act 1988 (namely, part of a person's criminal record):  it is expected that most persons who names will be published will be body corporates, for which the Privacy Act 1988 will not apply (noting that a product stewardship administrator is required to be a body corporate and it is likely to be rare for an 109

individual, rather than a body corporate, to export regulated waste material under the Bill);  to the extent that any information published under clause 122 constitutes personal or sensitive information under the Privacy Act 1988, the deterrence effect of publishing the information, and the need to ensure the integrity of the regulatory regime, is considered to outweigh the potential adverse consequences to the individuals concerned;  the power in clause 122 is discretionary, and as such the Minister retains the ability to decide not to publish any of the information set out above if they consider that, in the particular circumstances, the potential adverse consequences of publishing the information outweigh the intended deterrence effect. Subclause 122(2) will clarify that this clause does not limit the power of any person (including the Minister) to publicise a matter or a person's name. It also does not prevent any person from publicising a matter or a person's name, or otherwise affect any obligation (however imposed) on any person to publicise a matter or a person's name. Clause 123 Identity cards Clause 123(1) will allow the Secretary to issue an identity card to an authorised officer, an approved auditor or any other person prescribed by the rules who performs functions or duties or exercises powers under this Bill. The person must carry the identity card at all times when exercising their powers and functions under the Bill, except in circumstances prescribed by the rules (see subclauses 123(3), 123(4), 123(5) and 123(6)). Clause 123(2) will make it clear that an identity card issued to a person must be in the approved form and contain a recent photo of the person. Clause 124 Offence--failure to return identity card Clause 124 will create a strict liability offence that will apply if a person does not return their identity card to the Secretary within 14 days of ceasing to be an authorised officer, approved auditor or other person prescribed by rules made for the purposes of clause 123. Subclause 124(2) will make it clear that the offence will not apply to an authorised officer whose authorisation has been suspended, or where the identity card has been lost or destroyed. The note after subclause 124(2) will alert the reader to the fact that the defendant bears an evidential burden in relation to the matters in subclause 124(2). This is because section 13.3 of Schedule 1 to the Criminal Code Act 1995 provides that, if a defendant wishes to rely on an exception to an offence, the defendant bears an evidential burden of proof in relation to that matter. This is appropriate on the basis that knowledge of that matter would be peculiar to that person. 110

The maximum penalty for the offence in clause 124(3) is 1 penalty unit. Having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation, the use of strict liability is considered appropriate as:  the offence is not punishable by imprisonment;  the offence is subject to a maximum penalty of one penalty unit for an individual;  the actions which trigger the offence are simple, readily understood and easily defended. The offence is triggered if a person does not return their identity card to the Secretary within 14 days of ceasing to be a person listed in clause 123(1);  the offences need to be dealt with efficiently to ensure industry confidence in the regulatory regime;  the offence will be subject to an infringement notice (see clause 102);  the absence of strict liability may adversely affect the capacity to prosecute offenders. Whether or not a defendant intentionally or negligently did not return their identity card are matters peculiarly within the knowledge of the defendant alone. Proving the contrary beyond reasonable doubt will require significant and difficult to obtain indirect and circumstantial evidence. The defence of honest and reasonable mistake of fact is available for strict liability offences (see sections 6.1 and 9.2 of Schedule 1 to the Criminal Code Act 1995) and the existence of strict liability does not make any other defence unavailable (see subsection 6.1(3) of Schedule 1 to the Criminal Code Act 1995). PART 3--AUTHORISED OFFICERS Division 1--Authorisation Clause 125 Authorisation of persons to be authorised officers Clause 125 will set out who may be authorised to be an authorised officer for the purposes of this Bill, and the process for such authorisations. An authorised officer is able to perform a number of functions and powers under this Bill including, for some authorised officers, compliance and enforcement-related functions and powers. Subclauses 125(1) and (3) will allow the Secretary to, in writing, authorise the following persons to be authorised officers for the purposes of this Bill:  an officer or employee of the Commonwealth or a Commonwealth authority;  an officer or employee of a State or Territory or a State or Territory authority; 111

 a third party (i.e. a person who is not an officer or an employee of the Commonwealth, a Commonwealth authority, a State or Territory, or a State or Territory authority). Subclause 125(2) will clarify that the Secretary may only authorise an officer or employee of a State or Territory, or a State or Territory authority, to be an authorised officer if there is an arrangement in force under clause 128 between the Secretary and that State or Territory. This is to ensure that the relevant State or Territory has agreed to its officers and employees taking on this role. Subclauses 125(3) to (9) will set out the process for authorising a third party to be an authorised officer. A third party may apply to the Secretary to be authorised as a third party authorised officer. On receiving such an application, the Secretary must decide whether to authorise the person to be a third party authorised officer. However, the Secretary may only grant the authorisation if the requirements in subclauses (5) and (6) are met. These requirements include that the Secretary is satisfied that the person has the relevant training and qualification requirements and has given the Secretary a written notice of their potential conflicts of interests (pecuniary or otherwise) or a statement to the effect that the person has no such interests. The rules may also set additional requirements. The relevant training and qualification requirements for third party authorised officers are those the Secretary determines under subclause 125(7). Subclause 125(8) will provide that a determination under subclause 125(7) is not a legislative instrument. This is declaratory of the law and included to assist readers. It is not intended to be an exemption for the purposes of the Legislation Act 2003. Subclause 125(9) will set out what must be included in an authorised officer's instrument of authorisation. The instrument of authorisation must specify the powers and functions the authorised person may perform under this Bill, any additional conditions the authorisation is subject to, and any conditions prescribed by the rules that the Secretary has decided not to be conditions of the authorisation. The instrument of authorisation may also specify the period for which the authorisation has effect. Clause 126 Conditions of authorisation Subclause 126(1) will set out the conditions that an authorisation granted under clause 125 is subject to. These are:  any relevant conditions prescribed by the rules (other than any of those conditions the Secretary decides are not to be conditions of the authorisation);  any additional conditions the Secretary considers appropriate;  for third party authorised officers - the condition that the person comply with the requirements in subclauses 126(2) and (3). 112

Note 1 after subclause 126(1) will alert the reader to clause 127, which will provide that a third party authorised officer who contravenes a condition of their authorisation may commit an offence or be liable for a civil penalty. Note 2 after subclause 126(1) explains that a Commonwealth authorised officer or a State or Territory authorised officer who contravenes a condition of their authorisation may breach a code of conduct that applies to that person. Subclauses 126(2) and 126(3) will require a third party authorised officer to notify the Secretary of any interests (pecuniary or otherwise) that they acquire that conflict or could conflict with the proper performance of the person' powers and functions as an authorised officer. The notice must be in writing and must be given to the Secretary as soon as practicable after the person acquires the interest. The note after subclause 126(2) will explain that a Commonwealth authorised officer or a State and Territory authorised officer may be required under legislation to disclose relevant conflicts of interest. It is therefore not necessary for such authorised officers to be subject to subclauses 126(2) and (3). Clause 127 Third party authorised officers must not contravene conditions of authorisation Clause 127 will create both an offence and a civil penalty provision for a third party authorised officer who engages in conduct that contravenes a condition of the person's authorisation. The maximum penalty is imprisonment for two years or 120 penalty units (or both) (for the offence) and 240 penalty units (for the civil penalty provision). These penalties are considered appropriate to ensure the integrity of the regulatory regime. Clause 128 Arrangements for State or Territory officers or employees to be authorised officers Clause 128 will allow the Secretary to enter into an arrangement with a State or Territory (or a State or Territory authority) for State or Territory employees to be authorised as authorised officers for the purposes of the Bill. An arrangement under this clause is a necessary pre- condition to the Secretary authorising officers or employees from that State or Territory, or an authority of that State or Territory, to be authorised officers (see subclause 125(2)). Subclause 128(2) clarifies that an arrangement made under subclause 128(1) is not a legislative instrument. This is declaratory of the law and included to assist readers. It is not intended to be an exemption for the purposes of the Legislation Act 2003. Clause 129 Training and qualification requirements for authorised government enforcement officers Clause 129 will require the Secretary to determine, in writing, training and qualification requirements for authorised government enforcement officers in relation to the performance 113

of functions and powers under Division 1 of Part 2 of the Bill or under the Regulatory Powers (Standard Provisions) Act 2014 (as it applies to this Bill). An authorised government enforcement officer is a Commonwealth authorised officer or a State or Territory authorised officer who meets the requirements determined under clause 128 (see definition in clause 10). Authorised government enforcement officers are the only category of authorised officers who may perform compliance and enforcement functions and powers (other than audits) under the Bill or under the Regulatory Powers (Standard Provisions) Act 2014 as it applies to this Bill. This is because it is not considered appropriate for third party authorised officers to exercise compliance and enforcement functions, other than audits. Subclause 129(2) clarifies that a determination made under subclause 129(1) is not a legislative instrument. This is declaratory of the law and included to assist readers. It is not intended to be an exemption for the purposes of the Legislation Act 2003. Division 2--Variation, suspension and revocation of authorisation Subdivision A--Variation, suspension and revocation on Secretary's own initiative Clause 130 Variation of authorisation Subclause 130(1) will allow the Secretary to vary any aspect of an authorised officer's authorisation at any time by notice in writing given to the person. This includes:  varying the functions and powers that the person may perform;  varying any conditions that the authorisation is subject to (including by imposing new conditions);  varying the period for which the authorisation has effect (including specifying a period of effect where there is none); Clause 130 is subject to the natural justice requirements in clause 133 in respect of third party authorised officers. Variations of the authorisation of a third party authorised officer must not take effect before the earlier of:  the day after the response to the notice provided under clause 133 was received by the Secretary; or  14 days after the notice provided under clause 133 was provided to the third party authorised officer. The note after subclause 130(1) explains that the decision to vary the authorisation of a third party authorised officer is a reviewable decision under clause 151. 114

Subclause 130(3) will provide that if the Secretary decides to vary the authorisation, they must vary the instrument of authorisation to include the variation and give the varied instrument to the authorised officer. Clause 131 Suspension of authorisation Subclause 131(1) will allow the Secretary to suspend an authorised officer's authorisation at any time by notice in writing given to the person. The suspension must not be for more than 12 months (subclause 131(2)). Clause 131 is subject to the natural justice requirements in clause 133 in respect of third party authorised officers. Suspensions of the authorisation of a third party authorised officer must not take effect before the earlier of:  the day after the response to the notice provided under clause 133 was received by the Secretary; or  14 days after the notice provided under clause 133 was provided to the third party authorised officer. The note after subclause 131(1) explains that the decision to suspend the authorisation of a third party authorised officer is a reviewable decision under clause 151. Subclause 131(4) will allow the Secretary to vary the period of a suspension by written notice to the person, provided that the total suspension is not more than 12 months. The note after subclause 131(4) explains that the decision to vary the period of suspension for the authorisation of a third party authorised officer is a reviewable decision under clause 151. Subclause 131(5) will clarify that while their authorisation is suspended, the person is taken not to be an authorised officer. The note after subclause 131(5) draws the reader's attention to the consequences of suspension in clauses 110 and 137. Subclause 131(6) will allow the Secretary to revoke the suspension of an authorised officer's authorisation by written notice. The note after subclause 131(6) will draw the reader's attention to clause 137, which allows the Secretary to require the person whose authorisation has been suspended to notify them of certain notifiable events for the purposes of the Secretary deciding whether to revoke the suspension. Clause 132 Revocation of authorisation Subclause 132(1) will allow the Secretary to revoke an authorised officer's authorisation at any time by notice in writing given to the person. 115

Clause 132 is subject to the natural justice requirements in clause 133 in respect of third party authorised officers. Where the revocation will revoke the authorisation of a third party authorised officer, it must not take effect before the earlier of:  the day after the response to the notice provided under clause 133 was received by the Secretary; or  14 days after the notice provided under clause 133 was provided to the third party authorised officer. The note after subclause 132(1) explains that the decision to revoke the authorisation of a third party authorised officer is a reviewable decision under clause 151. Clause 133 Notice of proposed action must be given to third party authorised officer Clause 133 is a natural justice provision. It will require the Secretary, before taking action to unilaterally vary, suspend or revoke a third party authorised officer's authorisation, to:  provide a written notice of the proposed action, and the reasons for it, to the third party authorised officer; and  request the person provide a written statement within 14 days setting out why the proposed action should not be taken; and  include a statement in the written notice setting out the person's right to seek a review of the decision to take the proposed action. The purpose of this provision is to allow the affected third party authorised officer to be heard before a decision is made that is adverse to their interests. This reflects the common law requirement to provide natural justice in relation to such decisions. Subclause 133(2) has the effect that the natural justice requirements in this clause do not apply if the Secretary reasonably believes that the proposed action is necessary to prevent or lessen a serious and imminent threat to human or environmental health. While this provision is intended to have the effect of excluding natural justice in such circumstances, it is considered appropriate as it will only apply in exceptional circumstances where there is credible and relevant evidence of a threat to human or environmental health that is both serious and imminent. Subdivision B--Variation, suspension and revocation on application or request by third party authorised officer Clause 134 Application for variation of authorisation Subclause 134(1) will provide for a third party authorised officer to apply to the Secretary to vary an aspect of their authorisation, including the powers and functions the person may 116

perform or any conditions to which the authorisation is subject (including imposing new conditions). Subclause 134(2) will provide that on receiving an application under subclause 134(1), the Secretary must decide whether or not to vary the authorisation. Subclause 134(3) will provide that if the Secretary decides to vary the authorisation, they must vary the instrument of authorisation to include the variation and give the varied instrument to the third party authorised officer. The note after subclause 134(2) will explain that a decision to refuse to vary an authorisation is a reviewable decision under clause 151 and the Secretary must give the applicant notice of the decision (clause 152). Clause 135 Request for suspension of authorisation Subclause 135(1) will allow a third party authorised officer to request the Secretary suspend their authorisation. The request must be in writing. On receiving such a request, the Secretary must suspend the authorisation, by written notice, with effect on the day specified in the notice (see subclause 135(2)). Subclause 135(3) will clarify that while their authorisation is suspended, the person is taken not to be third party authorised officer. The note after subclause 135(3) will draw the reader's attention to the consequences of suspension in clauses 137 and 110. Subclause 135(4) will allow a person whose authorisation has been suspended under subclause 135(2) to request the Secretary to revoke the suspension. The request must be in writing. On receiving a request under subclause 135(4), the Secretary may, under subclause 135(5), revoke the suspension if satisfied there is no reason not to do so. Otherwise, the Secretary must either suspend or revoke the person's authorisation under subclauses 131(1) or 132(1) respectively. The effect is to essentially transfer the suspension from one initiated by the holder of the authorisation to a suspension or revocation initiated by the Secretary. Note 1 after subclause 135(5) will draw the reader's attention to clause 137, which allows the Secretary to require the person whose authorisation has been suspended to notify them of certain notifiable events for the purposes of the Secretary deciding whether to revoke the suspension. Note 2 after clause 135(5) will explain that the decision to suspend or revoke the person's authorisation under subclauses 131(1) or 132(1) (respectively) is a reviewable decision under clause 151. 117

Clause 136 Request for revocation of authorisation Clause 136 will allow a third party authorised officer to request the Secretary revoke their authorisation. The request must be in writing. On receiving such a request, the Secretary must revoke the authorisation, by written notice, with effect on the day specified in the notice. Subdivision C--Other provisions Clause 137 Secretary may request notification of certain events by suspended third party authorised officer Clause 137 will allow the Secretary to request, in writing, certain information from a person whose authorisation as a third party authorised officer has been suspended, for the purpose of deciding whether to revoke the suspension. The third party authorised officer will be required to provide the requested information in writing within 14 days. The information that may be requested by the Secretary under clause 137 pertains to notifiable events. A notifiable event means any of the following events:  the person has been convicted of an offence against, or ordered to pay a penalty under, an Australian law for a contravention involving fraud or dishonesty;  the person has acquired an interest, pecuniary or otherwise, that conflicts or could conflict with the proper performance of the authorised officer's powers and functions;  a pecuniary penalty imposed on the person for a contravention of a provision of a law that is administered by the Minister became due and payable;  a liability of the person for an amount under a Commonwealth law prescribed by the rules became due and payable. If no notifiable event has occurred since their authorisation was suspended, the person must report that fact to the Minister. The purpose of this provision is to enable the Secretary to have all relevant information before them in order to assess whether to revoke the suspension of the person's authorisation. The note following subclause 137(2) explains that a person may commit an offence or be liable to a civil penalty under clauses 146 or 147 of the Bill, or under clauses 137.1 and 137.2 of Schedule 1 to the Criminal Code Act 1995, if the person provides false or misleading information or documents. Division 3--Functions and powers Clause 138 Rules may confer functions or powers on authorised officers Clause 138 will allow the rules to confer functions or powers on authorised officers that are necessary or convenient to be performed or exercised for the purposes of achieving the 118

objects of the Bill. The purpose of this provision is to provide flexibility in how the Bill is administrated and its objects achieved. The power and functions conferred on authorised officers under rules made for the purposes of clause 138 will be in addition to the powers and functions that are conferred on authorised officers by the Bill and set out in clause 139. Clause 139 Functions and powers of authorised officers Clause 139 will set out the powers and functions of an authorised officer under this Bill. Subclause 139(1) will provide that an authorised officer has the powers and functions that are:  conferred on the authorised officer by this Bill; and  set out in the authorised officer's instrument of authorisation. Subclause 139(2) will make it clear that the Secretary may give any authorised officer a direction about the performance of their functions and powers. Subclause 139(3) will allow a Commonwealth authorised officer to give a direction to a third party authorised officer about the performance of their functions and powers. The notes after subclauses 139(2) and (3) will draw the reader's attention to clause 107, which concerns general requirements regarding directions. Subclause 139(4) will require an authorised officer to comply with any directions given to them under subclauses 139(2) or 139(3). Clause 140 Third party authorised officer must not contravene direction Clause 140 will create both an offence and a civil penalty provision for a third party authorised officer who engages in conduct that contravenes a direction given to the person under clause 139. The maximum penalty is imprisonment for two years or 120 penalty units (or both) (for the offence) and 240 penalty units (for the civil penalty provision). These penalties are considered appropriate to ensure the integrity of the regulatory regime. It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes a direction given under clause 139 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. 119

Clause 141 Certain authorised officers may charge fees Clause 141 will make it clear that a State or Territory authorised officer or a third party authorised officer may charge a fee in relation to things done in the course of performing their powers and functions under the Bill. The fee must not amount to taxation. The note following subclause 141(1) alerts the reader to the fact that fees may also be charged in relation to the performance of functions and powers by Commonwealth authorised officers under the rules made for the purposes of clause 155. PART 4--RECORD-KEEPING Clause 142 Requirements to make and retain records Clause 142 will set out requirements relating to record-keeping. The making and retention of records is an important compliance mechanism to ensure that those who are regulated under the Bill, or who perform functions or exercise powers under the Bill, may be held accountable for their actions or omissions. Records kept pursuant to requirements under this Bill will be assessed through other compliance tools such as audits and regulatory investigations. Subclause 142(1) will allow the rules to make provision for and in relation to requiring records to be made and retained by certain persons in both the waste export and product stewardship contexts such as:  holders, or former holders, of export licences;  persons who carry out, or have carried out, export operations in relation to regulated waste material;  accrediting authorities;  administrators of accredited voluntary arrangements;  liable parties in relation to products;  administrators of approved co-regulatory arrangements in relation to products;  persons who are required to take, or not to take, specified action in relation to products under rules made for the purposes of mandatory product stewardship (as provided for at clause 92);  any person who has performed, or is performing, functions or exercising powers under the Bill, or  any person prescribed by the rules. 120

Subclause 142(2) will provide a non-exhaustive list of matters that rules made for the purposes of subclause 142(1) may cover, including:  the kind of records that must be made and retained;  the form in which records must be made and retained;  the period for which records must be retained;  the secure retention of records. As this list is not intended to be exhaustive, the Minister may also make rules for the purposes of subclause 142(1) on other relevant matters concerning the making and retaining of records. Providing the details of record-keeping requirements in rules rather than the Bill will give flexibility to prescribe specific record-keeping requirements for different regulatory regimes. For example, an administrator of a co-regulatory arrangement may need to keep records relating to how its arrangement outcomes are being achieved, while an export licence holder may need to keep records relating to the export of regulated waste materials. It is anticipated that most records required to be kept will be of the type that are likely to be made or retained in the normal course of business for those required to make and retain records, to minimise the imposition of additional regulatory obligations on industry. The rules are also intended to be flexible enough to allow these records to be kept in a variety of forms and specific requirements will be able to be updated with changes in technology. Subclauses 142(3) and (4) will have the combined effect of that a person will commit a strict liability offence if the person is required to make and retain records under rules made for the purposes of subclause 142(1), and the person fails to comply with the requirement. The maximum penalty for the offence is 60 penalty units for individuals or 300 penalty units for a body corporate (using the body corporate multiplier rule at subsection 4B(3) of the Crimes Act 1914). Strict liability is proposed for this offence having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation. Consistent with these documents, strict liability is considered appropriate as:  the offence is not punishable by imprisonment;  the offence is subject to a maximum penalty unit of 60 penalty units for an individual;  the actions which trigger the offence are simple, readily understood and easily defended. The offence is triggered if a person who is required to make or keep a record fails to do so. The rules that will specify the record-keeping requirements will 121

be a legislative instrument for the purposes of the Legislation Act 2003 and therefore available on the Federal Register of Legislation. The rules will also be subject to Parliamentary scrutiny and disallowance processes through the ordinary operation of the Legislation Act 2003;  it is necessary to ensure the integrity of the regulatory regime;  the offence will be subject to an infringement notice (see clause 102);  the absence of strict liability may adversely affect the capacity to prosecute offenders. Whether or not a defendant intentionally or negligently did not comply with record keeping requirements is a matter peculiarly within the knowledge of the defendant alone. Proving the contrary beyond reasonable doubt will require significant and difficult to obtain indirect and circumstantial evidence. The defence of honest and reasonable mistake of fact is available for strict liability offences (see sections 6.1 and 9.2 of Schedule 1 to the Criminal Code Act 1995) and the existence of strict liability does not make any other defence unavailable (see subsection 6.1(3) of Schedule 1 to the Criminal Code Act 1995). Subclause 142(5) establishes a mirror civil penalty provision which will be contravened in circumstances where a person is subject to record keeping requirements under the rules and does not comply with those requirements. The maximum penalty is 250 penalty units. It is considered that the combination of a strict liability offence and civil penalty provision will provide an adequate deterrent from undertaking conduct which has the potential to cause such harm. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 142 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. PART 5--INFORMATION MANAGEMENT Overview of Part Part 5 will deal with how information and documents are managed under the Bill. This will include providing the Minister with the power to require a person to provide information or documents concerning the export of regulated waste material or a product stewardship arrangement regulated by the Bill. The Minister would also have a broader power to make rules requiring certain persons to provide information concerning specified matters related to waste material or products. Part 5 will also provide for offences and civil penalties relating to the provision of false or misleading information or documents under the Bill, and set out how information obtained for the purpose of exercising powers and functions under the Bill can be used or disclosed. 122

Division 1--Information gathering powers Clause 143 Power to require information or documents Clause 143 will allow the Minister to require a person to provide specified information or documents to the Minister. The information or documents must relate to one of the following:  regulated waste material that has been, or is intended to be, exported;  waste material export charge;  an accredited voluntary arrangement;  an approved co-regulatory arrangement;  mandatory product stewardship requirements;  a matter prescribed by the rules. The request must be made by notice in writing and the required information or documents must be specified in the notice. Subclauses 143(2), 143(3) and 143(4) will have the combined effect that a person who fails to comply with a notice given under clause 143 will be committing both an offence and a contravention of a civil penalty provision. The maximum penalty for the offence is two years imprisonment or 120 penalty units (or both). The maximum civil penalty for a contravention is 240 penalty units. Given the critical function that the provision of relevant information plays in ensuring the integrity of the regulatory regime, these penalties are considered appropriate to provide a deterrent against non-compliance. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 143 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. The purpose of this provision is to ensure that the Minister can obtain necessary information to effectively administer the regimes set out in the Bill and monitor whether the objects of the Bill are being achieved. However, this provision is not intended to override the common law privilege against self- incrimination. Accordingly, it will not be an offence or breach of a civil penalty provision for a person to fail to provide information or documents to the Minister if the information or documents would tend to incriminate that person as having committed an offence. 123

Clause 144 Providing and disseminating information Clause 144 will allow the rules to require certain persons to provide specified information to the Minister. Subclause 144(1) will allow the rules to require a person to provide information to the Minister for statistical purposes (including purposes in connection with the collation, analysis and dissemination of statistical information). The information required must relate to the objects of the Act, which focus on the human and environmental health benefits of managing waste material, products and waste from products in an environmentally sound manner. Subclause 144(2) will allow the rules to require a constitutional corporation to provide certain information relating to products and waste from products connected with the corporation, and relevant activities of the corporation (including activities taken to reduce or avoid generating waste and activities relating to reuse, recycling and recovery of materials). Subclause 144(3) will allow the rules to require a person to provide information to the Minister relating to activities conducted by the person in relation to the importing or exporting of waste material, waste from products or products that contain, or are derived from, recycled waste material. Subclause 144(4) will permit the Minister to collate, analyse and disseminate information collected under clause 144, including by publishing reports and papers. Subclause 144(5) clarifies that any dissemination of information collected by the Minister under clause 144 (including by publishing reports and papers) must comply with any requirements prescribed by the rules. Subclauses 144(6), 144(7) and 144(8) will have the combined effect that a person who fails to comply with a requirement under rules made for the purposes of subclauses 144(1), 144(2) or 144(3) that applies to that person will be committing both a strict liability offence and the contravention of a civil penalty provision. The maximum penalty for the offence is 60 penalty units for individuals or 300 penalty units for a body corporate (using the body corporate multiplier rule at subsection 4B(3) of the Crimes Act 1914). Strict liability is proposed for this offence having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation. Consistent with these documents, strict liability is considered appropriate as:  the offence is not punishable by imprisonment;  the offence is subject to a maximum penalty unit of 60 penalty units for an individual; 124

 the actions which trigger the offence are simple, readily understood and easily defended. The offence is triggered if a person who is required to provide information to the Minister under subclauses 144(1), 144(2) or 144(3) fails to do so. The content of the offence, being requirements prescribed in rules made for the purposes of subclauses 144(1), 144(2) or 144(3) will be confined by the parameters in those subclauses and contained in a legislative instrument that is subject to Parliamentary scrutiny and disallowance through the ordinary operation of the Legislation Act 2003;  the offence will be subject to an infringement notice (see clause 102);  the absence of strict liability may adversely affect the capacity to prosecute offenders. Whether or not a defendant intentionally or negligently did not comply with the requirements in rules made for the purposes of clause 144 is a matter peculiarly within the knowledge of the defendant alone. Proving the contrary beyond reasonable doubt will require significant and difficult to obtain indirect and circumstantial evidence;  the information collected under clause 144 will play an important role in informing the Commonwealth in relation to those matters covered by the objects of the Bill, which is a necessary part of ensuring that the Bill remains an effective and efficient mechanism to realise its intended human and environmental benefits; and  the person affected will be placed on notice to guard against the possibility of contravention, which is likely to significantly enhance the effectiveness of the enforcement regime in deterring the conduct in question. The defence of honest and reasonable mistake of fact is available for strict liability offences (see sections 6.1 and 9.2 of Schedule 1 to the Criminal Code Act 1995) and the existence of strict liability does not make any other defence unavailable (see subsection 6.1(3) of Schedule 1 to the Criminal Code Act 1995). Subclause 144(8) establishes a mirror civil penalty provision which will be contravened in circumstances where a person who is required to provide information to the Minister under subclauses 144(1), 144(2) or 144(3) fails to do so. The maximum penalty is 250 penalty units. It is considered that the combination of a strict liability offence and civil penalty provision will provide an adequate deterrent from undertaking conduct which has the potential to cause such harm. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 144 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. This provision is not intended to override the common law privilege against self- incrimination. Accordingly, it will not be an offence or breach of a civil penalty provision for 125

a person to fail to provide information or documents to the Minister if the information or documents would tend to incriminate that person as having committed an offence. Division 2--False or misleading information or documents Clause 145 False or misleading statements in applications Clause 145 will create a civil penalty provision for knowingly providing false or misleading statements (or a statement that omits a thing without which the statement is misleading) in connection with an application made under the Bill. For example, an application for an export licence. A statement may be made orally, in a document or in any other way. The civil penalty will not apply if the statement is not false or misleading in a material particular (or if the statement did not omit a thing without which the statement is misleading in a material particular). The maximum civil penalty that will be able to be imposed under clause 145 is 600 penalty units. This is a high penalty, particularly for a body corporate who will be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014, which applies to this Bill). However, the large amount of the penalty is considered appropriate to reflect the gravity of making a false or misleading statement in an application and the need for the penalty to be a deterrent from such conduct, given the potential to undermine the integrity of the regulatory regime. For example, such conduct could lead to waste material being exported which can lead to environmental harm in the importing country. The notes after subclauses 145(2) and 145(3) will alert the reader to the fact that the defendant bears an evidential burden in relation to showing that the statement is not false or misleading in a material particular (or that the statement did not omit a thing without which the statement is misleading in a material particular). This is because section 96 of the Regulatory Powers (Standard Provisions) Act 2014 provides that if a defendant wishes to rely on an exception to a civil penalty provision, the defendant bears an evidential burden of proof in relation to that matter. This is appropriate on the basis that knowledge of that matter would be peculiar to that person. Clause 146 False or misleading information Clause 146 will create a civil penalty provision for knowingly providing false or misleading information (or information that omits a thing without which the information is misleading) in compliance or purported compliance with the Bill. The civil penalty will not apply if the information is not false or misleading in a material particular (or if the information did not omit a thing without which the information is misleading in a material particular). The civil penalty will also not apply if reasonable steps 126

had not been taken to inform the person that they may be liable for a civil penalty knowingly providing false or misleading information (or information that omits a thing without which the information is misleading). The maximum civil penalty that will be able to be imposed under clause 146 is 600 penalty units. This is a high penalty, particularly for a body corporate who will be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014, which applies to this Bill). However, the large amount of the penalty is considered appropriate to reflect the gravity of the conduct involved and the need for the penalty to be a deterrent from such conduct, given its potential to undermine the integrity of the regulatory regime. For example, such conduct could lead to potential non- compliance not being identified in the context of an audit. The notes after subclauses 146(2), 146(3) and 146(4) will alert the reader to the fact that the defendant bears an evidential burden in relation to showing that the information is not false or misleading in a material particular (or that the information did not omit a thing without which the information is misleading in a material particular), or that reasonable steps were not taken to inform the person that they may be liable for a civil penalty. This is because section 96 of the Regulatory Powers (Standard Provisions) Act 2014 provides that if a defendant wishes to rely on an exception to a civil penalty provision, the defendant bears an evidential burden of proof in relation to that matter. This is appropriate on the basis that knowledge of that matter would be peculiar to that person. Clause 147 False or misleading documents Clause 147 will create a civil penalty provision for knowingly producing a false or misleading document in compliance or purported compliance with the Bill. The civil penalty will not apply if the document is not false or misleading in a material particular. The civil penalty will also not apply if the document is accompanied by a signed written statement stating that the document is false and misleading in a material particular and setting out the false and misleading material particular. The maximum civil penalty that will be able to be imposed under clause 147 is 600 penalty units. This is a high penalty, particularly for a body corporate who will be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014, which applies to this Bill). However, the large amount of the penalty is considered appropriate to reflect the gravity of the conduct involved and the need for the penalty to be a deterrent from such conduct, given its potential to undermine the integrity of the regulatory regime. The notes after subclauses 147(2) and (3) will alert the reader to the fact that the defendant bears an evidential burden in relation to showing that the document is not false or misleading in a material particular. This is because section 96 of the Regulatory Powers (Standard Provisions) Act 2014 provides that if a defendant wishes to rely on an exception to a civil 127

penalty provision, the defendant bears an evidential burden of proof in relation to that matter. This is appropriate on the basis that knowledge of that matter would be peculiar to that person. Division 3 Protecting information Clause 148 Offence - using or disclosing commercially sensitive information Subclause 148(1) will make it an offence for a person to use or disclose protected information obtained in the course of, or for the purposes of, performing functions or duties or exercising powers under the Bill where there is a risk that the use or disclosure might substantially prejudice the commercial interests of another person. Subclause 148(3) will define protected information to mean information that was disclosed or obtained under or for the purposes of the Bill. This means that, while all information disclosed or obtained under or for the purposes of the Bill is protected information, it is only an offence to use or disclose the subset of that information that is commercially sensitive (i.e. where there is a risk the use or disclosure might substantially prejudice the commercial interests of another person). This will need to be assessed on a case-by-case basis in the context of each proposed use or disclosure. The maximum penalty for the offence in clause 148 will be imprisonment for two years or 120 penalty units or both for an individual; or 600 penalty units for a body corporate (using the body corporate multiplier rules at subsection 4B(3) of the Crimes Act 1914). This level of penalty is consistent with other similar Commonwealth offences such as the Export Control Act 2020 and is intended to deter the use or disclosure of commercially sensitive protected information in circumstances that are not reasonable, necessary or proportionate. Subclause 148(2) will have the effect that the offence at subclause 148(1) does not apply if the use or disclosure is authorised by clause 149. It is intended that the authorisations in clause 149 make clear what are considered to be reasonable, necessary and proportionate uses and disclosures. Clause 149 Authorised uses and disclosures Clause 149 will set out the exceptions to the offence at clause 148. If protected information is used or disclosed in accordance with one of the authorisations set out in this clause, the offence at clause 148 will not apply even if there is a risk that the disclosure will substantially prejudice the commercial interests of another person. Examples of authorised uses and disclosures include, but are not limited to:  for the purposes of performing a duty or function, or exercising a power, under this Bill; 128

 for the purposes of enabling another person to perform a duty or function, or exercise a power, under this Bill;  for the purposes of assisting in the administration or enforcement of another Australian law;  where the disclosure is authorised or required under a Commonwealth law or a prescribed State or Territory law;  where the information is already publicly available, or where the person has consented to the use or disclosure;  where the use or disclosure is, or is a kind of use or disclosure that is, certified in writing by the Minister to be in the public interest and the use or disclosure is made in accordance with any requirements prescribed by the rules;  where the person believes on reasonable grounds that the use or disclosure is necessary to prevent or lessen a serious threat to human or environmental health and the use or disclosure is for the purposes of preventing or lessening that threat;  the information used or disclosed is a summary of, or statistics derived from, protected information and the information is not likely to enable the identification of a person. It is not expected that information covered by the authorised uses and disclosures set out in clause 149 will generally include personal information within the meaning of the Privacy Act 1988. However, should that be the case, the circumstances set out in this clause are intended to constitute an authorisation for the purposes of Australian Privacy Principle 6.1 (see Schedule 1 to the Privacy Act 1988) and other relevant laws including common law and equitable protections for confidentiality (because the clause will authorise the use or disclosure by or under an Australian law). It is considered that the authorised uses and disclosures in clause 149 are reasonable, necessary and proportionate. This is because they are generally directed at the performance of functions and powers under legislation (including this Bill) or the enforcement of Australian laws, or are matters of public interest with a high bar to satisfaction (such as being necessary to prevent or lessen a serious threat to human or environmental health, or being certified as in the public interest by the Minister). Subclause 149(2) will provide that an instrument made by the Minister certifying that a particular use or disclosure is in the public interest is not a legislative instrument for the purposes of the Legislation Act 2003. This is declaratory of the law and is included to assist readers. It is not intended to be an exemption from the operation of the Legislation Act 2003. Subclause 149(3) will provide that an instrument made by the Minister certifying that a kind of use or disclosure is in the public interest is a legislative instrument. This is appropriate 129

because the instrument will have legislative character, as it is of general application and not confined to a particular use or disclosure. This will ensure that if particular kinds of use or disclosure of protected information are authorised in the public interest, then it will be subject to Parliamentary scrutiny and disallowance processes in accordance with the Legislation Act 2003. Clause 150 Disclosing commercially sensitive information to courts and tribunals etc Clause 150 will apply if information is disclosed to, or obtained by a person (the public official) in the course of the person exercising a power or function under or in relation to the Bill and there is a risk that disclosure of the information or document might substantially prejudice the commercial interests of a person other than the public official. Subclause 150(2) will provide that the public official must not, except for the purposes of this Bill, be required to disclose the information, or produce the document, to a court, tribunal, authority or other person having power to require the production of documents or the answering of questions. This clause will only apply to commercially sensitive information and will not preclude a person from being required to disclose other protected information to a court, tribunal, authority or other person. PART 6--REVIEW OF DECISIONS Part 6 will set out which decisions under the Bill are merits reviewable, and who may apply for an internal and external review of the decision. It will also provide for the process for internal review of decisions. Clause 151 Persons affected by reviewable decisions Clause 151 will specify the decisions made under the Act which will be merits reviewable and who is the affected person in relation to each reviewable decision. The table at subclause 151(1) will list the reviewable decisions and set out each person affected by each decision. The person affected will generally be the primary person whose interests are affected by the decision, or the person who applied for, or requested, an approval or permission under a provision in the Bill. Subclause 151(2) will have the effect that the rules may also add to the list of reviewable decisions and may also specify who is a person affected by the additional reviewable decisions. This will ensure that decisions made under rules or other instruments under the Bill may be made merits reviewable. Internal review and external merits review will be available in relation to reviewable decisions detailed in the table or in rules (see clauses 153 and 154). However, this will not limit the right of a person who is affected by a decision under the Bill from seeking judicial review of a decision under the Administrative Decisions (Judicial Review) Act 1977. 130

Clause 152 Notice of decision and review rights Clause 152 will require a person who made a reviewable decision to give a written notice to each person affected by the decision as soon as practicable. The notice must contain the terms of the decision, the reasons for the decision and a statement setting out particulars of the person's review rights. The requirement to give a written notice will ensure that an affected person has an opportunity to understand the reasons for the decision and is aware of their review rights. Clause 153 Internal review Clause 153 will provide for the internal review process for reviewable decisions. This is a review of the merits of the decision. Providing merits review of administrative decisions is consistent with Commonwealth policy. A person affected by a reviewable decision will be able to apply in writing to the Minister for review of the decision, unless the decision was personally made by the Minister. The application must be made within 30 days after the day on which the decision first came to the notice of the applicant, or a further period if allowed by the Minister. Clause 151 will set out who is a person affected by a reviewable decision. On receiving the application, the Minister must review the reviewable decision. The Minister may decide to affirm, vary or revoke the reviewable decision. If the Minister revokes the decision, they may make such other decision as the Minister thinks appropriate. This means that if the Minister revokes the original decision, the Minister may make a new decision that takes the place of the original decision. Clause 154 Review of decisions by the Administrative Appeals Tribunal Clause 154 will provide that applications may be made to the Administrative Appeals Tribunal for review of a reviewable decision made by the Minister personally or an internal review decision made under clause 153. Subclause 154(2) will provide that an application may only be made by, or on behalf of, a person affected by the reviewable decision. As the persons affected by a reviewable decision are expressly set out in clause 151, this clause has the effect of overriding the operation of subsection 27(1) of the Administrative Appeals Tribunal Act 1975, which allows a broader category of persons to apply to the Administrative Appeals Tribunal for review of a decision. This intention is confirmed in subclause 154(3). PART 7--FEES AND CHARGES Part 7 will set out matters relating to fees and charges in relation to activities performed under the Bill. 131

Division 1--Fees Clause 155 Charging of fees Subclause 155(1) will enable the Minister to make rules for, and in relation to, the charging of fees for services carried out by the Commonwealth in relation to the performance of functions or the exercise of powers under the Bill. Fees charged for services will be in line with the Australian Government Charging Framework. It is necessary to have flexibility to prescribe the detail of the fees in the rules as different fees may be prescribed for different services provided by the Commonwealth under the Bill. Consistent with Australian Government policy, the amount of any fee will be determined on a case-by-case basis through a Cost Recovery Implementation Statement. The amount of the fee will be set at a level that is designed to recover no more than the estimated cost of the service provided by the Commonwealth. It is intended that fees will be charged for services provided in relation to both the waste export and product stewardship components of the Bill. The note following subclause 155(1) will alert readers to the fact that fees for service may also be charged by approved auditors (see clause 117 of the Bill), as well as State or Territory authorised officers and third party authorised officers (see clause 141 of the Bill) in relation to activities these persons are authorised to carry out under the Bill. Subclause 155(2) will provide a non-exhaustive list of examples of matters rules made for the purpose of subclause 155(1) may cover. This includes prescribing who is liable to pay a specified fee, the prescribing of fees to be paid in relation to a specified application, and prescribing a fee by either specifying the amount of the fee or a method for working out the fee. This will allow for flexibility in setting different fees to more accurately and appropriately reflect the service being provided. Other examples listed in subclause 155(2) include that the rules may prescribe fees to be charged that recover the costs the Commonwealth has incurred in arranging and paying for another person to carry out an activity, and may make provision for and in relation to deposits, late payments (including penalties), refunds, waivers and remissions of fees. Subclause 155(3) will clarify that the rules may provide for the Minister to make decisions in relation to paragraphs 155(2)(e) and (g), which concern when a specified fee is due and payable, and the refund, remission or waiver of specified fees or penalties for late payment. This will provide additional flexibility for the Minister to be able to consider cases and requests on their individual merits. Subclause 155(4) will provide that a fee prescribed under subclause 155(1) must not be such as to amount to taxation. 132

Clause 156 Commonwealth not liable to pay a fee Subclause 156(1) will provide that the Commonwealth will not be liable to pay a fee payable under this Bill. However, the Commonwealth will be notionally liable to pay such fees if it is the legal person for whom services are provided. An example will be if the Commonwealth applied for an export licence to export regulated waste materials and a relevant application fee had been prescribed. Subclause 156(2) will enable the Finance Minister administering the Public Governance, Performance and Accountability Act 2013 to give written directions to give effect to this notional liability, including for the notional transfer of money between or within Commonwealth financial accounts. Subclause 156(3) will provide that directions made under subclause 156(2) have effect and must be complied with, despite any other Commonwealth law. Subclause 156(4) will provide that a direction that may be given by the Finance Minister in accordance with subclause 156(2) will not be a legislative instrument for the purposes of the Legislation Act 2003. This is declaratory of the law and included to assist readers. It is not intended to be an exemption from the Legislation Act 2003. Subclause 156(5) will define Commonwealth for the purpose of subclauses (1) and (2). It will provide that the Commonwealth includes a Commonwealth entity within the meaning of the Public Governance, Performance and Accountability Act 2013 that cannot be made liable to taxation by a Commonwealth law. This includes all non-corporate Commonwealth entities (including Departments of State) that do not have a separate legal identity from the Commonwealth. Requiring such entities to be notionally liable for fees and taxes is consistent with Commonwealth policy. Clause 157 Recovery of fees Clause 157 will provide that any fee that is due and payable under the Bill may be recovered as a debt due to the Commonwealth in a relevant court. The term relevant court will be defined in clause 10 to mean the Federal Court, the Federal Circuit Court or a Supreme Court of a State or Territory. The recovery of fees through a relevant court will ensure the Commonwealth can recover costs for services provided from a person who is liable to pay a fee but fails to do so. Clause 158 Minister may direct that activities not be carried out Under clause 158 of the Bill, the Minister will be able to refuse to carry out, and direct a person not to carry out, specified activities or kinds of activities until the fee has been paid. The refusal to carry out activities may be used as a compliance tool to encourage payment of fees on time and ensure that the Commonwealth can recover costs for services already provided. 133

Division 2--Waste material export charge Clause 159 Rules relating to waste material export charge Clause 159 will enable the Minister to make rules for, or in relation to, certain matters concerning the collection and recovery of the waste material export charge. The waste material export charge will be imposed under the Recycling and Waste Reduction Charges (Customs) Bill 2020, the Recycling and Waste Reduction Charges (Excise) Bill 2020 or the Recycling and Waste Reduction Charges (General) Bill 2020 because of the constitutional requirement to impose taxes and levies in separate taxing legislation. Rules will be able to make provision for, and in relation to, any of the following:  when a specified waste material export charge is due and payable;  the issuing of notices setting out the amount of waste material export charges payable by persons who are liable to pay the charges;  the issuing of notices extending the time for payment of waste material export charges;  penalties for late payment of waste material export charges;  who is liable to pay waste material export charges and any penalties for late payment;  the refund, remission or waiver of waste material export charges or penalties for late payments;  the review of decisions made under rules in relation to the collection or recovery of waste material export charges;  the giving of information and keeping of records relating to a person's liability to pay waste material export charges;  any other matters relating to the collection or recovery of waste material export charges. It is necessary to prescribe the requirements for collection and recovery of the waste material export charge and associated matters in the rules, to ensure there is flexibility to prescribe different requirements for the different waste material export charges that may be imposed for different services provided by the Commonwealth under the Bill. Consistent with the Australian Government Charging Framework, the amount of the waste material export charges imposed under the relevant charges Bill will be determined on a case-by-case basis through a Cost Recovery Implementation Statement. The amount will also be required to recover no more than the Commonwealth's likely costs and, as such, will be limited in amount to the approximate cost of services rendered by the Commonwealth. 134

Clause 160 Recovery of waste material export charge and late payment penalty Clause 160 will provide that a waste material export charge, or a penalty for late payment of the waste material export charge, may be recovered as a debt due to the Commonwealth in a relevant court. The term relevant court will be defined in clause 10 to mean the Federal Court, the Federal Circuit Court or a Supreme Court of a State or Territory. The recovery of charges and penalties through a relevant court will ensure the Commonwealth can recover costs for services provided from a person who is liable to pay such amounts but fails to do so. Clause 161 Minister may direct that activities not be carried out Under clause 161 of the Bill, the Minister will be able to refuse to carry out, or direct a person not to carry out, specified activities until the waste material export charge that the person is liable for has been paid. The refusal to carry out activities may be used as a compliance tool to encourage payment of waste material export charges on time and ensure that the Commonwealth can recover costs for services already provided. Clause 162 Commonwealth liable to pay waste material export charge and late payment penalties Subclause 162(1) will provide that the Commonwealth will not be liable to pay the waste material export charge or any penalty for late payment of the waste material charge that is payable under this Bill. However, the Commonwealth will be notionally liable to pay such amounts in the event that it would otherwise have been liable. For example, if the Commonwealth proposed to export waste material under the Bill, the Commonwealth will be notionally liable for any waste material export charge and late penalties that will ordinarily be associated with the proposed export. Subclause 162(2) will enable the Finance Minister to give written directions to give effect to this notional liability, including for the notional transfer of money between or within Commonwealth financial accounts. Subclause 162(3) will provide that directions made under subclause 162(2) have effect and must be complied with, despite any other Commonwealth law. Subclause 162(4) will provide that a direction that may be given by the Finance Minister subclause 162(2) will not be a legislative instrument for the purposes of the Legislation Act 2003. This is declaratory of the law and included to assist readers. It is not intended to be an exemption from the Legislation Act 2003. Subclause 162(5) will define Commonwealth for the purpose of subclauses (1) and (2). It will provide that the Commonwealth includes a Commonwealth entity within the meaning of Public Governance, Performance and Accountability Act 2013 that cannot be made liable to taxation by a Commonwealth law. This includes all non-corporate Commonwealth entities (including Departments of State) that do not have a separate legal identity from the 135

Commonwealth. Requiring such entities to be notionally liable for fees and taxes is consistent with Commonwealth policy. PART 8--OTHER MATTERS Part 8 will set out provisions in relation to a number of miscellaneous administrative matters, including testing and sampling. Clause 163 Methods for taking, testing and analysing certain samples Clause 163 will provide how samples of waste material must be taken, tested or analysed. This clause will apply in relation to a sample of waste material or any other thing that is taken, tested or analysed under the Bill. However, this clause will not apply in the performance of functions or duties or the exercise of powers under Part 2 of Chapter 4 (compliance and enforcement) or the Regulatory Powers (Standard Provisions) Act 2014 (as it applies to this Bill). A sample will be required to be taken, tested or analysed in accordance with:  if a method is prescribed by the rules for that kind of sample, the prescribed method; or  in any other case, an applicable method specified in an Australian Standard published by, or on behalf of, Standards Australia; or any other appropriate, validated and science-based method approved by the Secretary. This recognises that different methods may be required for different types of samples of waste material. For example, the method for taking samples from waste glass may vary from the method for taking samples from waste material that is liquid. Clause 164 Storage of samples Clause 164 will allow the Minister to make rules for and in relation to the storage of samples that may be tested or analysed under this Bill. For example, the rules could require samples be stored in specified containers or at a specific location to ensure that any human or environmental health risks are properly contained. It is appropriate that this detail is in the rules rather than the Bill as it will likely be appropriate to have different requirements for samples of different materials. Clause 165 Test or analysis may result in destruction or reduction in value of sample Clause 165 will provide that a person who is required or permitted to test or analyse a sample of waste material or any other thing under Bill may carry out tests or analyses that results in the destruction, or a reduction in the value, of the sample or a package or waste material associated with the sample. 136

This will provide for circumstances where for example, testing or taking a sample may require cutting open a product's packaging or changing the waste in a way that will make it unsuitable for sale. The purpose is to ensure that testing or analysing samples for the purpose of ensuring investigating compliance related matters under this Bill is not unduly hindered by a need to ensure the waste or product maintains its pre-testing value. Clause 166 Appointment of analyst Clause 166 will allow the Secretary to appoint a person to be an analyst for the purposes of the Bill. The purpose of appointing an analyst is to have an appropriately trained and qualified person to give a written certificate on a number of matters if a person is alleged to have contravened the Bill, including details of testing or analysis conducted, and other details relating to waste material (see clause 167). An analyst's certificate will be admissible in proceedings for contraventions of the Bill as prima facie evidence of the matters in the certificate and the correctness of the result of the analysis to which the certificate relates (see clause 168). Subclause 166(3) will require the Secretary to determine, in writing, training and qualification requirements for analysts. Under subclause 166(2), the Secretary will not be able to appoint a person to be an analyst unless the Secretary is satisfied that the person satisfies these training and qualification requirements, or that the person will satisfy those training and qualification requirements before the person exercises any powers as an analyst. This is to ensure that an analyst appointed under this Bill is appropriately qualified to perform the function. Subclause 166(4) will clarify that a determination in relation to training and qualification requirements for analysts under subclause 166(3) is not a legislative instrument for the purposes of the Legislation Act 2003. This is declaratory of the law and is included to assist readers. It is not intended to be an exemption from the operation of the Legislation Act 2003. Clause 167 Analyst may give certificate Clause 167 will provide that if a person is alleged to have contravened the Bill in relation to waste material or any other thing, an appointed analyst may give a written certificate stating one or more of the following matters:  when and from whom the waste material or other thing was received;  what (if any) labels or other means of identifying the waste material or other thing accompanied the waste material or other thing when it was received;  what covering the waste material or other thing was in when it was received;  a description, and the weight, of the waste material or other thing received; 137

 when the waste material or other thing, or a portion or sample of the waste material or other thing, was tested or analysed;  a description of the method of testing or analysis;  the results of the testing or analysis;  how the waste material or other thing was dealt with after handling by the analyst, including details of the quantity retained, and the name of any person to whom any retained quantity was given, and measures taken to secure any retained quantity. A certificate issued by an analyst must be in a form approved by the Secretary. The note after subclause 167(2) will explain that in certain circumstances, the certificate may be admitted as evidence in proceedings in relation to an alleged contravention of the Bill (see clause 168). It is intended that a certificate given under this clause will be in a format of a technical report, prepared by an analyst who meets the training and qualification requirements and able to be admitted as evidence for court proceedings. As the matters to be dealt with by the certificate are objective and scientific based, they are appropriate to be included in the certificate. Clause 168 Admission of analyst's certificate in proceedings Clause 168 will set out that a certificate given under clause 167 is admissible in any proceedings in relation to a contravention of the Bill as prima facie evidence of the matters in the certificate and the correctness of the result of the analysis to which the certificate related. This means that information contained in the certificate could be used as evidence against a defendant without the requirement to prove each piece of information contained in the certificate, so long as the certificate is given in accordance with clause 161 (including in a form approved by the Secretary). Although admission of an analyst's certificate will constitute prima facie evidence, it may still be tested through cross-examination and rebutted by the defendant. Subclause 168(2) will provide that at least 14 days before the certificate is admitted as evidence in the proceedings, a copy of the certificate and a notice of intention to produce the certificate as evidence in proceedings must be given to the defendant or a legal practitioner appearing for the defendant. If the certificate and notice of intention to produce the certificate as evidence is not given to the defendant or their legal practitioner, then the provisions in this clause will not apply and the matters in the certificate may not be treated as prima facie evidence. However, it is intended that matters in the certificate may still be admitted as evidence. Subclauses 168(3) and 168(4) will provide that the defendant may require the analyst who gave the certificate to be called as a witness for the person who instituted the proceedings and cross-examined as if the analyst had given evidence of the matters stated in the certificate. However, the analyst may only be required to be called as a witness if the person who 138

instituted the proceedings has been given at least four days' notice of the defendant's intention to require the analyst to be called, or the court, by order, allows the defendant to require the analyst to be called. Subclause 168(5) will clarify that a document purporting to be a certificate given under clause 167 is taken to be a certificate that has been given in accordance with that clause, unless the contrary is established. Clause 169 Hindering compliance with this Act etc. Clause 169 will make it an offence and the contravention of a civil penalty provision for a person to engage in conduct that hinders or prevents another person from performing functions or exercising powers under the Bill, or from complying with the Bill or a direction given under the Bill. While section 149.1 of Schedule 1 to the Criminal Code Act 1995 already provides an offence for obstruction of Commonwealth public officials performing their functions, this subclause is necessarily broader. This is because persons who are not Commonwealth public officials may exercise powers and functions under the Bill, for example state, territory or third party authorised officers (see Part 3 of Chapter 4 of the Bill). It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes clause 169 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. The maximum penalty for the offence in subclause 169(2) will be imprisonment for five years or 300 penalty units. The maximum penalty which could be imposed is for contravention of the civil penalty provision in subclause 169(3) is 600 penalty units. The size of the penalty is considered appropriate to reflect the gravity of the conduct involved and the need for the penalty to be a deterrent from such conduct, given its potential to undermine to integrity of the regulatory regime and result in harm to human and environmental health. Clause 170 Influencing a person performing functions or duties or exercising powers Clause 170 will make it an offence and a contravention of a civil penalty provision for a person to engage in conduct with the intention of dishonestly influencing another person in the performance of the other person's functions or duties, or in the exercise of the other person's powers, under the Bill. It is considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal 139

proceedings will be brought for conduct that contravenes clause 170 and is at the more serious end of the spectrum or that involves a higher degree of malfeasance. The maximum penalty for the offence in subclause 170(2) will be imprisonment for five years or 300 penalty units. The maximum penalty which could be imposed for contravention of the civil penalty provision in subclause 170(3) is 600 penalty units. The size of the penalty is considered appropriate to reflect the gravity of the conduct involved and the need for the penalty to be a deterrent from such conduct, given its potential to undermine to integrity of the regulatory regime and result in harm to human and environmental health. Chapter 5--Other matters GENERAL OUTLINE Chapter 5 of the Bill will deal with miscellaneous matters including requirements for applications, the fit and proper person test, automated decision-making, the circumstances where a relevant Commonwealth liability is taken to be paid and how partnerships, trusts and unincorporated associations will be treated under the Bill. Chapter 5 will also provide for the delegation of powers, require annual reports on the operation of the Bill and a ten-year review of the operation of the Bill, and enable the Minister to make the rules. NOTES ON INDIVIDUAL CLAUSES Clause 171 Simplified outline of this Chapter Clause 171 will provide an outline to Chapter 5. This outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions in Chapter 5, rather than to replace these provisions. It is intended that readers will rely on the substantive provisions of the Chapter 5. Clause 172 General requirements for making applications Clause 172 will set out the general requirements for making applications under the Bill. Subclause 172(1) will have the effect that if the Minister has approved a form or manner in which the application should be made, the application must be made in that form or manner. This includes providing any information or documents that are required by the approved form. Subclause 172(1) will also require an application made under the Bill to include any information or documents prescribed by the rules, and to be accompanied by any fee prescribed by the rules. The note after subclause 172(1) will draw attention to the fact that a person may be liable for a civil penalty if they make a false or misleading statement in an application made under this Bill. A note is sufficient in these circumstances, as the relevant civil penalty provisions are located elsewhere in the Bill and in Schedule 1 to the Criminal Code Act 1995. 140

Subclause 172(2) will clarify that information, or a document, previously given to the Minister in an application under the Bill may satisfy a requirement of subclause 172(1). An example of this may be where a person applies to renew an export licence and some of the required information has not changed since their original application. Rather than requiring the person to resubmit the same information, the Minister may rely on the information previously submitted to the extent that it is relevant. Subclause 172(3) will provide that an application is taken not to be made if it does not comply with the requirements of subclause 172(1). This means that if a person has not made the application in the approved form or manner, or has not provided the required information, documents or fee, then it is taken not to be made and will not be assessed or otherwise dealt with until the issue with the application is rectified. Subclause 172(4) will clarify that the Minister may approve different forms for applications relating to different matters and may also approve one form for multiple kinds of applications. Clause 173 Additional or corrected information in relation to applications Clause 173 will require a person who has made an application under the Bill to correct any relevant information or documents in their application that they become aware is incomplete or incorrect, or to provide any additional information prescribed by the rules. The additional or corrected information must be provided as soon as practicable. Failure to comply with the obligation in clause 173 will be a contravention of a civil penalty provision, with a penalty of 60 penalty units. The purpose of this provision is to ensure that the decision-maker has all the relevant, correct information before them when assessing the application and making a decision. Clause 174 Dealing with applications Clause 174 will allow the person to whom an application is made (for instance, the Minister) to request additional specified information or documents relevant to the application or applicant. In practice, the request will generally be made to the applicant. However, if the person to whom the application is made considers that another person may have the information needed to properly assess the application, then they may direct the request to that other person. This will ensure that the decision-maker has all relevant information before them when making a decision on the application. A request under clause 174 must be in writing and must specify the period within which the person must comply with the request. The period must not be longer than the period prescribed by the rules, if any. 141

Clause 175 Fit and proper persons Clause 175 will set out the relevant considerations for determining whether a person is a fit and proper person for the purposes of both the waste export and product stewardship components of the Bill. In the waste export context, the fit and proper person test is relevant to granting, varying, suspending and revoking an export licence. For example, the Minister must have regard to whether the applicant for a licence or a licence renewal is a fit and proper person before deciding whether to grant the licence or renewal. Additionally, if the Minister is satisfied that the holder of an export licence is no longer a fit and proper person, this is a ground to vary, suspend or revoke the person's licence. In the product stewardship context, the fit and proper person test is relevant to both the accreditation of a voluntary arrangement and the approval of a co-regulatory arrangement. The Bill allows the Minister to refuse to approve a co- regulatory arrangement if satisfied that the administrator is not a fit and proper person. It is also intended that rules will be made to allow the accrediting authority to refuse to accredit a voluntary arrangement if satisfied that the administrator of that arrangement is not a fit and proper person. Subclause 175(2) will set out the matters to which the Minister is required to have regard when deciding whether a person is a fit and proper person. These matters include whether the person has been convicted of an offence or ordered to pay a pecuniary penalty under several specified Commonwealth Acts. However, they will also include other compliance-related concerns relating to the person, such as their compliance history with this Bill, their history in relation to environmental matters more generally and whether they have previously provided false or misleading statements, information or documents under the Bill. It is intended that these factors will enable the Minister to gain a broader understanding of the compliance history of the person without being restricted to only considering those matters that resulted in a conviction or pecuniary penalty order. This will enable the Minister to make an informed decision as to whether the person is a fit and proper person. While criminal record information is sensitive information under the Privacy Act 1988, it is considered appropriate that the Minister have regard to relevant convictions of the person when determining whether the person is a fit and proper person for the purposes of the Bill. This is because knowledge of a person's history of compliance with relevant Australian laws will assist in the Minister's assessment of whether the person is likely to comply, or be able to comply, with the requirements of the Bill, the rules or a licence granted to the person. This is particularly the case where the convictions stem from offences against Australian legislation that covers similar subject matter (such as environmental legislation) or provides for a similar regime (such as other export legislation). The criminal record information obtained by the Minister for the purposes of undertaking the fit and proper person test will be protected information under clause 148 and will be subject to the prohibition on use and disclosure in that clause. 142

Subclause 175(3) will set out further matters that the Minister is permitted, but not required, to have regard to when deciding whether a person is a fit and proper person. These matters include whether the person has been convicted of an offence or ordered to pay a pecuniary penalty under another Australian law. This will allow the Minister to consider any convictions or pecuniary penalties the person has under State or Territory laws, or Commonwealth laws not expressly referred to in subclause 175(2). Subclause 175(3) will also permit the Minister to have regard to the matters listed in subclause 175(2) in relation to an associate of the person. The term associate is defined in clause 10 of the Bill. Subclause 175(4) clarifies that Part VIIC of the Crimes Act 1914, dealing with spent convictions, remains unaffected by this section. Clause 176 Treatment of partnerships Clause 176 deals with how conduct by a partnership will be treated under the Bill. Generally, the Bill will apply to a partnership as if the partnership were a person. This means a partnership may (for example) apply for an export licence or for an exemption. However, as a partnership is not a legal entity, specific provisions have been included to deal with this. Under subclause 176(2), an obligation that the Bill imposes on a person will be imposed on each partner instead; the partners being the relevant legal entities. This is consistent with how State and Territory partnership laws operate. The obligation, however, can be discharged by any of the partners. The purpose of this provision is to make it clear that all partners are not required to take joint action to discharge an obligation under the Bill. Subclause 176(3) will limit liability for an offence against the Bill to those partners in the partnership who were involved (both directly and indirectly) in the relevant act or omission constituting the offence, including those who aided, abetted, counselled or procured the act or omission. The purpose of this provision is to ensure that partners who had no knowledge of the offence are not punished for it. Subclause 176(4) will make it clear that the clause 176 applies to contraventions of civil penalty provisions in the same way it applies to offences. Subclause 176(5) clarifies that a change in the composition of the partnership does not affect the continuity of the partnership for the purposes of the Bill. Clause 177 Treatment of unincorporated associations Clause 177 deals with how conduct by an unincorporated association will be treated under the Bill. Generally, the Bill will apply to an unincorporated association as if the unincorporated association were a person. However, as an unincorporated association is not a legal entity, specific provisions have been included to deal with this. Under subclause 177(2), an obligation that the Bill imposes on a person will be imposed on each member of the unincorporated association's committee of membership instead; these 143

persons being the relevant legal entities. The obligation, however, can be discharged by any of the members. The purpose of this provision is to make it clear that all committee members are not required to take joint action to discharge an obligation under the Bill. Subclause 177(3) will limit liability for an offence against the Bill to those members of the unincorporated association's committee of management who were involved (both directly and indirectly) in the relevant act or omission constituting the offence, including those who aided, abetted, counselled or procured the act or omission. The purpose of this provision is to ensure that members who had no knowledge of the offence are not punished for it. Subclause 177(4) will make it clear that clause 177 applies to contraventions of civil penalty provisions in the same way it applies to offences. Clause 178 Treatment of trusts Clause 178 deals with how conduct by a trust will be treated under the Bill. Generally, the Bill will apply to a trust as if the trust were a person. However, specific provisions have been included to deal with the fact that trust may have one or more trustees (the relevant legal entity). Under subclause 178(2), if the trust has a single trustee, an obligation that the Bill imposes on a person will be imposed on the trustee instead. The trustee will also be taken to have committed an offence that will otherwise have been committed by the trust. This is appropriate as the trustee is the relevant legal entity and has legal responsibility for the operation of the trust. Subclause 178(3) deals with trusts that have two or more trustees. In that circumstance, paragraph (a) will provide that an obligation that the Bill imposes on a person is instead imposed on each trustee. The obligation, however, can be discharged by any of the trustees. The purpose of this provision is to make it clear that all trustees are not required to take joint action to discharge an obligation under the Bill. Paragraph 178(3)(b) will limit liability for an offence against the Bill to those trustees who were involved (both directly and indirectly) in the relevant act or omission constituting the offence, including those who aided, abetted, counselled or procured the act or omission. The purpose of this provision is to ensure that trustees who had no knowledge of the offence are not punished for it. Subclause 178(4) will make it clear that clause 178 applies to contraventions of civil penalty provisions in the same way it applies to offences. Clause 179 Arrangements with States and Territories to help give effect to this Act Clause 179 will allow the Minister to enter into arrangements with a State or Territory Minister concerning either the use of a place in the relevant State or Territory for the purposes of the Bill, or matters necessary or convenient to enable the Commonwealth and the relevant State or Territory to assist each other for the purposes of achieving the Bill's objects. Potential arrangements entered under this clause could, for example, involve the use of State or Territory officers or employees as authorised officers under the Bill (including in relation 144

to compliance and enforcement matters) or concern the sharing of information held by States and Territories relating to products or waste. Clause 180 Protection from civil proceedings Subclause 180(1) will prevent civil proceedings from being instituted against the Commonwealth or a protected person in relation to any act or omission done in good faith in the performance or purported performance of a duty, function or power under the Bill, or in the assistance or purported assistance of a person performing a duty, function or power under the Bill. A protected person will be defined in subclause 180(3) as the Minister, Secretary, an authorised officer or a Departmental officer or employee. Subclause 180(2) will offer equivalent protection against civil proceedings for persons assisting a protected person as a result of a request, direction or other requirement imposed by the protected person in the performance (or purported performance) of a duty, function or power under the Bill, so long as the assistance was provided by the person in good faith. These protections are considered necessary and appropriate to ensure efficient and effective administration of the Bill. Acts or omissions that are not performed in good faith will still be subject to potential civil proceedings, which is considered appropriate as powers, duties and functions under legislation must be exercised in good faith for a proper purpose. Subclause 180(4) is intended to make it clear that, despite subclauses (1) to (3), civil proceedings can still be brought against the Commonwealth for the purpose of determining the amount of compensation that is reasonable in the event of an acquisition of property (within the meaning of section 51(xxxi) of the Constitution) otherwise than on just terms. This is because just terms for an acquisition of property is a constitutional guarantee and must be preserved. Clause 181 Circumstances in which the relevant Commonwealth liability of a person is taken to have been paid This clause will allow the rules to prescribe circumstances where a relevant Commonwealth liability is taken to have been paid. Clause 10 of the Bill defines relevant Commonwealth liability as including a fee or charge payable under this Bill or a related charging Bill, a penalty for a late payment of such a fee or charge, or a pecuniary penalty or other liability imposed under a prescribed law. Whether all relevant Commonwealth liabilities have been paid is a mandatory consideration for the Minister when deciding, among other things, whether to grant or vary an export licence. This is considered appropriate as a person should not be able to obtain or continue to enjoy the benefits of the Bill, without meeting their liabilities. However, it is recognised that there may be some circumstances where it may be considered appropriate for the relevant Commonwealth liability to be taken to have been paid, such as where payment of the relevant Commonwealth liability is no longer within the applicant's control. Clause 181 will provide the Minister with flexibility to make rules to address specific circumstances as appropriate. 145

Clause 182 Power to arrange for certain decisions to be made by computer programs Clause 182 will allow the Minister to make rules prescribing decisions under this Bill that may be made by a computer program, rather than a person. The power to make the relevant decision may be ordinarily vested in the Minister or the Secretary. Subclause 182(1) will have the effect that, if a decision is prescribed in rules made for the purpose of clause 182(2), the Secretary may arrange for the use, under the Secretary's control, of computer programs for the purpose of making that decision. Any rules made prescribing decisions that can be automated will be a legislative instrument and subject to parliamentary scrutiny and disallowance processes through the ordinary operation of the Legislation Act 2003. Consistent with the Administrative Review Council's Best-practice principles of automated assistance in administrative decision making, it is intended that the Minister will only prescribe decisions that are suitable for automated decision-making, such as decisions that involve non-discretionary elements. Decisions made by computer programs under arrangements made under subclause 182(1) will still be required to comply with general administrative law principles and will be subject to judicial review under the Administrative Decisions (Judicial Review) Act 1977. As additional safeguards, subclause 182(3) will impose an obligation on the Secretary to take all reasonable steps to ensure that decisions made by a computer system are correct, while subclause 182(5) would allow the Secretary or Minister (as the case requires) to override the computer system and substitute a new decision if satisfied that the decision made by the computer system was incorrect. It is intended that, for any decisions that are automated, the Department will have a robust system-testing process in operation to ensure the initial and continued accuracy and effectiveness of the relevant computer program. Subclause 182(4) will provide that a decision made by the operation of a computer program under an arrangement made under subclause 182(1) will be taken to be a decision made by the Secretary or Minister (as the case requires). Clause 183 Compensation for acquisition of property Clause 183 will provide for reasonable compensation to be paid to a person if the operation of the Bill will result in an acquisition of property by the Commonwealth on otherwise than just terms. The purpose is to ensure that the relevant provisions of the Bill are consistent with the requirements of section 51(xxxi) of the Constitution. The person affected may institute court proceedings to determine the amount of compensation they are entitled to if they cannot come to an agreement with the Commonwealth on what is reasonable in the circumstances. See also clause 10 for definitions of acquisition of property and just terms. 146

Clause 184 Annual report Clause 184 will require the Minister to prepare a report on the operation of the Bill during each financial year. The Minister is required to prepare this annual report as soon as possible after the end of the financial year and must table a copy of the report in each House of Parliament within 15 sitting days after the report is completed. Clause 185 Review of operation of this Act Clause 185 will ensure that the Act continues to achieve its objective by requiring a review of the operation of the Act and the extent to which the objects of the Act have been achieved. The review must be undertaken no later than 10 years after the Bill (once enacted) commences. The persons undertaking the review must provide the Minister with a written report (subclause 185(3)). The Minister is required to table a copy of the review report in each House of Parliament within 15 sitting days after the Minister receives the report. Clauses 186 and 187 Delegations by the Minister and Secretary Clauses 186 and 187 will enable the Minister and the Secretary to delegate any or all their functions and powers under the Bill. As the definition of this Act includes both rules made under the Bill and the Regulatory Powers (Standard Provisions) Act 2014 as it applies to the Bill, the ability to delegate will extend to any functions and powers of the Minister and Secretary set out in the rules or the Regulatory Powers (Standard Provisions) Act 2014 (as it applies to this Bill). Clause 186 will enable the Minister to delegate their functions or powers to the Secretary or a Senior Executive employee, or acting Senior Executive employee, in the Department. The ability for the Minister to delegate their functions and powers does not extend to the power of the Minister to make rules under clause 188 or to prepare and publish a Minister's priority list under clause 67. Clause 187 will enable the Secretary to delegate their functions or powers to a Senior Executive employee, or acting Senior Executive employee, in the Department. In performing functions or exercising powers, delegates must comply with any directions of the Minister or the Secretary (as the case may be), to ensure that powers exercised by delegates are exercised appropriately and consistently (subclause 186(3) and 187(2)). As an additional safeguard to ensure the appropriate and reasonable use of delegations, the giving of delegations and the exercise of delegated powers are also subject to fraud control procedures, risk management processes and other protocols. These are designed to ensure delegated decision-making is made at the appropriate level and in a transparent and accountable manner. 147

Clause 188 Rules Subclause 188(1) will enable the Minister to make rules prescribing matters required or permitted by the Bill to be prescribed by the rules or matters that are necessary or convenient to be prescribed for carrying out or giving effect to this Bill. Rules made under clause 188 are legislative instruments for the purposes of the Legislation Act 2003 and will be available on the Federal Register of Legislation. The Bill establishes a framework which enables different classes of waste to be prescribed, and product-specific product stewardship arrangements to be made, at different times. Given that what is an appropriate regulatory requirement will vary for different classes of waste and different product stewardship arrangements (based on the properties of the particular waste or product) it is necessary and appropriate for that detail to be included in the rules rather than the Bill. For example, the prescribed export conditions that will be appropriate for different classes of waste exports will differ depending on the kind of waste material being exported. Similarly, importing or manufacturing thresholds for a person to be required to join a co-regulatory product stewardship arrangement may differ depending on the product involved. However, where there is no need for the content of a requirement to differ between products or waste materials, that requirement is set out in the Bill itself, including all offences and civil penalty provisions. For example, most requirements for granting, varying, suspending or revoking an export licence are set out in the Bill, and will apply to all exports of regulated waste materials. Similarly, the regimes relating to compliance and enforcement, authorised officers and audits are set out in the Bill rather than the rules, as it is not necessary to distinguish between kinds of products or waste materials in these contexts. The rules will be a legislative instrument that is subject to Parliamentary scrutiny and disallowance through the ordinary operation of the Legislation Act 2003. Subclause 188(2) will clarify that the rules may prescribe a matter or thing differently for different kinds of persons, things or circumstances. Subclause 188(3) will override subsection 14(2) of the Legislation Act 2003 by allowing the Minister to make rules applying, adopting or incorporating any written material (with or without modification) as in force or existing from time to time. This is considered appropriate because the types of materials that are likely to be incorporated by reference in the rules will generally be reference materials that are regularly updated. For example, to ensure appropriate processing standards are used in relation to regulated waste materials, the rules will incorporate references to written industry standards that relate to the waste material and are listed on the Department's website. Compliance with a specific standard is not intended to be mandatory, but as one way in which an exporter will be able to demonstrate the requirements of the Bill have been met. An alternative mechanism for an exporter to meet the processing requirements will be to provide 148

the Department with contracts of sale that detail the processing specifications, and the equipment that will be used to meet those specifications. This approach provides flexibility to regulated entities to choose a waste processing standard which meets their specific situation and contractual agreements without compromising environmental standards. Similarly, in the product stewardship context, clause 188 will allow the rules to incorporate the Australian census data as existing from time to time, which will ensure that requirements for television and computer collection services accurately reflect the Australian population demographics. In referencing or adopting non-legislative instruments as existing from time to time consideration has been given to the fundamental principle of the Legislation Act 2003, and of access to justice, that people are easily able to understand their rights and obligations at law. This is reflected in the waste export context as an exporter will be able to either use a processing standard that is accessible on the Department's website, or they will be able to nominate a different processing standard which meets their contractual agreements. Accordingly, the intention is that an exporter will not be required to comply with a processing standard that will be uncertain in its content, or that will not be accessible to the exporter free of charge. While it is possible that the content of some standards listed on the Department's website will only be available to exporters for a fee, exporters have a choice as to whether they use one of those standards, another more freely available standard, or their own nominated standard if it better suits their export operation. Additionally, in order to comply with paragraph 15J(2)(c) of the Legislation Act 2003, the explanatory statements for the rules will contain a description of the relevant incorporated material and indicate how it may be obtained. Subclause 188(4) will provide that the rules may not create an offence or civil penalty, provide powers of arrest or detention or powers of entry, search or seizure. Further, the rules will not impose a tax, set an amount to be appropriated from the Consolidated Revenue Fund or directly amend the text of the Bill. Subclause 188(5) will provide that in clause 188, a reference to this Act does not include the rules. This is necessary because the general definition of this Act in section 10 includes the rules, to pick up any powers and functions that are vested in persons by the rules. However, that extended definition is not appropriate for the rule-making power in clause 188 as, in this context, the Act and the rules must be able to be distinguished. 149

ATTACHMENT A Statement of Compatibility with Human Rights Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 Recycling and Waste Reduction Bill 2020 The Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 Overview of the Bills The Recycling and Waste Reduction Bill 2020 (the Bill) will establish a framework to:  regulate the export of waste materials, in line with the agreement to ban the export of waste plastic, paper, glass and tyres by the Council of Australian Governments in 2020, and  improve the management of environmental, health and safety impacts of products, in particular those impacts associated with the disposal of products. The Bill will facilitate this by:  permitting rules to prescribe waste material that will be regulated under the Bill (regulated waste material);  permitting rules to prohibit the export of regulated waste material unless prescribed export conditions are complied with (such as the issuing of an export licence);  providing for the granting of export licences to carry out export operations in relation to a kind of regulated waste material;  providing a mechanism for the Minister to exempt persons from the provisions of the Bill relating to the export of regulated waste material;  providing for the accreditation of voluntary product stewardship arrangements for a product that further the objects of the Bill, for example, by making arrangements for the recovery and recycling of particular products;  permitting the rules to specify liable parties in relation to a product, requiring liable parties to be a member of an approved co-regulatory arrangement in relation to that product, providing for the approval of co-regulatory product stewardship arrangements and imposing obligations on the administrators of such arrangements; 1

 enabling mandatory product stewardship requirements to be prescribed by the rules, which relate to the objects of the Bill and require specified persons to take, or not take, specified actions in relation to a specified product;  establishing offences and civil penalty provisions relating to the export of regulated waste material and product stewardship schemes;  triggering the compliance and enforcement provisions of the Regulatory Powers (Standard Provisions) Act 2014 and providing for additional powers to support the objectives of the Bill;  enabling the delegation of the Minister's and the Secretary's functions and powers under the Bill; and  requiring a review of the operation of the Bill and the achievement of its objectives, at regular intervals. Human Rights Implications The Bill engages the following human rights:  the right to health in Article 12(1) of the International Covenant on Economic, Social and Cultural Rights (the ICESCR);  the right to a fair trial and fair hearing in Article 14(1) of the International Covenant on Civil and Political Rights (the ICCPR);  the right to the presumption of innocence in Article 14(2) of the ICCPR; and  the right to privacy in Article 17 of the ICCPR. Right to health Article 12(1) of the ICESCR makes provision in relation to the right to health, specifically the right to the enjoyment of the highest attainable standard of physical and mental health. Article 12(2)(b) includes the improvement of all aspects of environmental hygiene as a step to be taken to achieve the full realisation of the right to health. In its General Comment No 14 (August 2000), the United Nations Committee on Economic Social and Cultural Rights states that this encompasses the prevention and reduction of the population's exposure to harmful substances such as harmful chemicals or other detrimental environmental conditions that directly or indirectly impact upon human health (at [15]). A key objective of the Bill will be to promote the right to health (including by promoting a healthy environment) by reducing the impact on human and environmental health of products, waste from products and waste material, including by reducing the amount of greenhouse gases emitted, energy and resources used, water consumed and contamination in 2

connection with products, waste from products and waste material. The Bill will achieve this objective by:  regulating the export of waste material to promote its management in an environmentally sound way (see Chapter 2 of the Bill);  encouraging the reuse, recycling and recovery of products, waste from products and waste material in an environmentally sound way (see Chapter 3 of the Bill);  encouraging those responsible for using, designing, manufacturing and distributing products to take responsibility for those products (see Chapter 3 of the Bill). In particular, in relation to the regulation of waste exports in Chapter 2 of the Bill:  Clause 18 will enable the rules to prohibit the export of regulated waste material subject to prescribed export conditions, such as the issue of an export licence.  In deciding whether to grant or renew an export licence, the Minister must have regard to the objects of the Bill, which include human and environmental health objectives (see clauses 34 and 39).  Clause 35 will allow conditions to be imposed on an export licence which may relate, amongst other things, to the manner in which regulated waste material is processed prior to export. This includes conditions requiring that regulated waste material meet contamination thresholds and processing standards prior to being exported from Australia.  Export licences may be varied, suspended or revoked if the Minister reasonably believes that it is necessary to do so to prevent or lessen a threat to human or environmental health (see clauses 44, 46 and 54). By allowing for the regulation of these matters, the Bill will ensure that the export of regulated waste material does not adversely impact on human and environmental health. 3

Chapter 3 of the Bill will enable the Minister to set measurable outcomes that further the objects of the Bill through voluntary, co-regulatory and mandatory product stewardship schemes. By providing for the regulation of a range of product stewardship schemes, the Bill will encourage manufactures, importers, distributors and users of products to reuse, recycle or recover products in an environmentally responsible manner, leading to improved human and environmental health outcomes. Also, clause 4 will require the Minister to take a precautionary approach in relation to protecting human and environmental health when performing functions and exercising powers under the Bill. This promotes the right to health as it ensures the Minister performs their functions and exercises their powers under the Bill in a manner that minimises any potential harm to human and environmental health. In summary, the Bill is compatible with the right to health under Article 12 of the ICESCR because it positively engages and promotes that right. Right to a fair trial and fair hearing Article 14(1) of the ICCPR guarantees the right to a fair trial and fair hearing in relation to both criminal and civil proceedings. Right to a fair trial - civil penalty provisions The Bill will provide for a number of civil penalty provisions, relating to, for example:  the export of regulated waste material without a licence (Chapter 2, Part 2 of the Bill);  contraventions of a condition of an exemption in relation to the export of regulated waste material (Chapter 2, Part 3);  carrying out export operations after suspension or revocation of an export licence (Chapter 2, Parts 7 and 8);  contravention of conditions of an export licence and other obligations of holders of an export licence (Chapter 2, Part 9);  requirements in relation to approved co-regulatory arrangements (Chapter 3, Part 4);  compliance and enforcement such as the contravention of directions and the provision of false or misleading information or documents (Chapter 4, Parts 2, 3 and 8);  record-keeping (Chapter 4, Part 4); and  other matters such as requirements that enable the Minister to collect and disseminate statistical information (Chapter 5). 4

Civil penalty provisions may engage criminal process rights under Articles 14 and 15 of the ICCPR, regardless of the distinction between criminal and civil penalties in domestic law. When a provision imposes a civil penalty, an assessment is required as to whether it amounts to a criminal penalty for the purposes of the ICCPR, so that an assessment can be made as to whether the provision is consistent with the requirements of the ICCPR. Determining whether penalties could be considered to be criminal under international human rights law requires consideration of the classification of the penalty provisions under Australian domestic law, the nature and purpose of the penalties, and the severity of the penalties. The civil penalty provisions of the Bill will expressly classify the penalties as civil penalties. Those provisions create solely pecuniary penalties in the form of a debt payable to the Commonwealth. The purpose of these penalties will be to encourage compliance with the requirements for the export of regulated waste materials, approved co-regulatory arrangements, effective administration of the Bill, record-keeping and other matters such as the collection of statistical information. The civil penalty provisions will not impose criminal liability and a finding by a court that they have been contravened does not lead to the creation of a criminal record. The civil penalties will only apply to the participants of the relevant regulatory regimes established by the Bill, rather than the public in general. These factors all suggest that the civil penalties imposed by the Bill are civil rather than criminal in nature. The maximum penalties that may be imposed in civil penalty orders are between 60 and 600 penalty units. Where the penalties are higher, this reflects the more serious implications or results of the contravention. Under subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014, as applied to the Bill by clause 101, the maximum penalties that apply to individuals will be those specified in the civil penalty provision of the Bill. Due to the proposed application of the standard provisions in Part 4 of the Regulatory Powers (Standard Provisions) Act 2014 by clause 101 of the Bill, the corporate multiplier provision in subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014 will apply to the proposed civil penalty provisions in the Bill. Consequently, for bodies corporate, the penalties will be no more than five times the penalty specified in the civil penalty provision, i.e., the maximum penalties will be between 300 and 3000 penalty units. These civil pecuniary penalties for the proposed civil penalty provisions in the Bill have been set by reference to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide). They seek to reflect the seriousness of the contravening conduct and the risk that the conduct may pose to human or environmental health. In light of the matters discussed above, the civil penalties provided for by the Bill will not amount to a criminal penalty for the purposes of the ICCPR, so criminal process rights provided for by Articles 14 and 15 of the ICCPR are not engaged by the provisions of the Bill (and the Regulatory Powers (Standard Provisions) Act 2014) relating to civil penalty orders. Right to a fair trial - infringement notices 5

Clause 102 of the Bill will trigger the infringement notice provisions in Part 5 of the Regulatory Powers (Standard Provisions) Act 2014. These provisions will enable the Secretary to issue an infringement notice under Part 5 of the Regulatory Powers (Standard Provisions) Act 2014 where the Secretary believes, on reasonable grounds, that a listed provision of the Bill has been contravened. An infringement notice issued under Part 5 of the Regulatory Powers (Standard Provisions) Act 2014 will be a notice of a pecuniary penalty imposed on a person. It will set out the particulars of an alleged contravention of a law. An infringement notice gives the person to whom the notice is issued the option of paying the penalty set out in the notice or electing to have the matter dealt by a court. If the person does not pay the amount in the notice, they may be prosecuted if the notice relates to an offence provision, or proceedings for a civil penalty order may be brought against them if the notice relates to a civil penalty provision. This engages the right to a fair and public hearing and the other criminal process rights and minimum guarantees in Article 14 of the ICCPR. As the person may elect to have the matter heard by a court, rather than pay the penalty, the rights to a fair and public hearing, in both civil and criminal matters, are not limited. Clause 102 does not limit the minimum guarantees in criminal proceedings or other process rights provided for by Article 14 of the ICCPR. Accordingly, the infringement notice provisions under clause 102 of the Bill are compatible with the right to a fair and public trial. Right to a fair trial - enforceable undertakings Clause 103 of the Bill will trigger the enforceable undertakings provisions in Part 6 of the Regulatory Powers (Standard Provisions) Act 2014. This will enable the Secretary to accept and enforce undertakings relating to compliance with a provision of the Bill. If the Secretary is satisfied that the person has breached the undertaking, the Secretary may apply to a relevant court for an order relating to the undertaking under section 115 of the Regulatory Powers (Standard Provisions) Act 2014. Triggering the enforceable undertakings provisions of the Regulatory Powers (Standard Provisions) Act 2014 in relation to a provision under the Bill engages the right to a fair and public hearing and other criminal process rights and minimum guarantees in Article 14 of the ICCPR. Article 14(1) of the ICCPR ensures that everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law. Under Part 6 of the Regulatory Powers (Standard Provisions) Act 2014, an order enforcing an undertaking can only be made by a court. Accordingly, the right to a fair and public hearing is not limited. Article 14(1) of the ICCPR also provides a right to a fair and public hearing in civil matters. As orders to enforce an undertaking can only be made by a relevant court under section 115 of the Regulatory Powers (Standard Provisions) Act 2014, the right to a fair hearing in civil matters provided for by Article 14(1) of the ICCPR is not limited. 6

Accordingly, clause 103, which triggers the enforceable undertakings provisions of the Regulatory Powers (Standard Provisions) Act 2014, is compatible with human rights. Right to a fair trial - injunctions Clause 104 of the Bill will trigger the injunctions provisions in Part 7 of the Regulatory Powers (Standard Provisions) Act 2014. This will enable the Secretary to apply to a relevant court for an injunction to restrain a person from engaging in conduct or requiring a person to do a thing. The Secretary may apply to a relevant court for an interim injunction. The injunction provisions are triggered in relation to a provision of the Bill. Triggering the injunction provisions of the Regulatory Powers (Standard Provisions) Act 2014 in relation to a provision of the Bill engages the right to a fair trial and public hearing in both civil and criminal proceedings. Article 14(1) of the ICCPR ensures that everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law. Under Part 7 of the Regulatory Powers (Standard Provisions) Act 2014, an injunction can only be granted by a court. Thus, the right to a fair and public hearing by a competent, independent and impartial tribunal is not limited. Clause 104 does not limit any of the other criminal process rights or minimum guarantees in Article 14 of the ICCPR. Overlap of criminal and civil penalties Sections 90 and 91 of the Regulatory Powers (Standard Provisions) Act 2014 will apply in relation to civil penalty proceedings brought under the Bill as a result of clause 101. These clauses concern the relationship between criminal and civil penalty proceedings. Section 90 of the Regulatory Powers (Standard Provisions) Act 2014 clarifies that criminal proceedings may be commenced against a person for conduct that is the same, or substantially the same, as conduct that would constitute a contravention of a civil penalty provision, regardless of whether a civil penalty order has been made against the person in relation to the contravention. This section recognises the importance of criminal proceedings and criminal penalties in sanctioning contraventions of a triggering Act (i.e. an Act that seeks to apply the standard provisions of the Regulatory Powers (Standard Provisions) Act 2014) and ensures that criminal remedies are not precluded by earlier civil action. Section 90 of the Regulatory Powers (Standard Provisions) Act 2014 engages the criminal process rights in Article 14 of the ICCPR, but does not limit those rights. Article 14(7) of the ICCPR provides that "no one shall be liable to be tried or punished again for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of each country". This prohibition on double jeopardy is a fundamental safeguard in the common law of Australia. It means that a person who has been convicted or acquitted of a criminal charge is not to be re-tried for the same or substantially the same offence. As section 90 of the Regulatory Powers (Standard Provisions) Act 2014 permits both civil and criminal proceedings, but not multiple criminal proceedings for the same conduct, 7

Article 14(7) of the ICCPR is not infringed. Further, section 88 of the Regulatory Powers (Standard Provisions) Act 2014 provides a safeguard against potential double jeopardy by stating that a court cannot make a civil penalty order against a person for a contravention of a civil penalty provision if the person has been convicted of an offence constituted by conduct that is the same, or substantially the same, as the conduct constituting the contravention. Section 91 of the Regulatory Powers (Standard Provisions) Act 2014 provides that evidence of information given, or evidence of production of documents, by an individual is not admissible in criminal proceedings against the individual if:  the individual previously gave the information or produced the documents in proceedings for a civil penalty order against the individual for an alleged contravention of a civil penalty provision (whether or not the order was made); and  the conduct alleged to constitute the offence is the same, or substantially the same, as the conduct alleged to constitute the contravention. Section 91 of the Regulatory Powers (Standard Provisions) Act 2014 ensures that information or documents produced during civil proceedings are not relied upon to support subsequent criminal proceedings, unless those proceedings are criminal proceedings relating to falsifying evidence in civil proceedings. Accordingly, that section engages, but does not limit, the criminal process rights in Article 14 of the ICCPR. In summary, clause 101 of the Bill, which triggers Part 4 of the Regulatory Powers (Standard Provisions) Act 2014, engages, but does not limit, the right to a fair and public hearing and the other criminal process rights and minimum guarantees in Article 14 of the ICCPR. Right to a fair hearing - serious and imminent threat to human or environmental health Chapter 2 of the Bill will allow the Minister to vary, suspend and revoke an export licence for waste materials granted under the Bill without an application from the licence holder. Division 2, Part 3 of Chapter 4 will allow the Minister to vary, suspend and revoke the authorisation of third party authorised officers. In these circumstances, the Minister must give the licence holder notice specifying particular matters, including a request to give the Minister, within 14 days after the day the notice is given, a written statement showing cause why the proposed decision should not be made. However, the notice will not be required if the Minister reasonably believes that the proposed decision is necessary to prevent or lessen a serious and imminent threat to human or environmental health. This engages with the fair hearing right under Article 14 because an affected person will not have the opportunity to be heard prior to the Minister's decision to vary, suspend or revoke the export licence or the authorisation of a third party authorised officer. This will be necessary where there is evidence of a serious and imminent threat to human or environmental health, as the threat may have materialised within 14 days and caused serious harm to human or environmental health. However, the requirement that the threat be both serious and imminent, and the Minister having to reasonably believe that 8

varying, suspending or revoking the export licence is necessary to prevent or lessen the threat, mean this will be a high bar that will likely only be able to be satisfied in rare circumstances. In addition, in these circumstances, the Minister's decision will still be a reviewable decision as provided for by clause 151. The person will still be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law. Therefore, the right to a fair hearing outlined by Article 14 of the ICCPR is not unduly limited. Right to the presumption of innocence Article 14(2) of the ICCPR states that everyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty accordingly to law. Right to the presumption of innocence - evidentiary certificate Clause 168(1) of the Bill provides that a certificate given under clause 167 (Analyst may give certificate) is admissible (if the procedure in subclause (2) is complied with) in any proceedings in relation to a contravention of the Bill as prima facie evidence of the matters in the certificate and the correctness of the result of the analysis to which the certificate relates. This engages Article 14 because the prosecution is not required to prove each piece of information contained in the certificate, unless the defendant challenges the certificate. The objective of this clause is to ensure that all appropriate evidence is before the court. The certificate is intended to be in the format of a technical report, prepared by an analyst who meets the training and qualification requirements. The certificate will provide information on the waste material relevant to establishing a contravention of the Bill, such as the method and results of testing or analysing the waste material and other matters which are objective and scientific based. Allowing the certificate as prima facie evidence of limited matters is reasonable to free up the court's time to consider the more pressing issues related to the offence. The use of an evidentiary certificate will likely mitigate the delays that may be faced in obtaining evidence in other ways. In this way, the use of evidentiary certificates will promote the right of the defendant to be tried without undue delay in Article 14(3)(c) of the ICCPR. Further, there are a number of safeguards built into clause 168 of the Bill that will protect the rights of the defendant. First, evidentiary certificates establish prima facie evidence, rather than conclusive evidence, of the matters contained within it. As such, the certificates create a rebuttable presumption as to the facts which the defendant may challenge during the court proceedings. Second, subclause 168(2) of the Bill will provide that the defendant (or a legal practitioner who is appearing for the defendant) must be given a copy of the certificate, and notice of the intention to produce the certificate as evidence in the proceedings, at least 14 days before the 9

certificate is admitted as evidence. This will allow time for the defendant and their legal counsel to view the certificate and prepare their case in relation to it. Third, subclause 168(3) of the Bill will allow the defendant to require the analyst who gave the certificate to be called as a witness and cross-examined. This will give the defendant an opportunity to challenge the credibility of the analyst as well as the evidence in the certificate. This is consistent with Article 14(3)(e) of the ICCPR, which includes as a minimum guarantee in the determination of any criminal charge against a person the right to examine, or have examined, the witnesses against the person. Right to the presumption of innocence - strict liability Strict liability offences engage and limit the presumption of innocence as they allow for the imposition of criminal liability without the need to prove fault. However, strict liability offences will not necessarily be inconsistent with the presumption of innocence, provided that the removal of the presumption of innocence pursues a legitimate objective and is reasonable, necessary and proportionate to achieving that objective. It is also important to note that, for each of the strict liability elements and offences, the defence of honest and reasonable mistake of fact is still available to the defendant and the existence of strict liability does not make any other defence unavailable. Elements of fault-based offences subject to strict liability There are some offences in Chapter 2 of the Bill (Regulating the export of waste material) where strict liability is applied to one or more physical elements of the offence in circumstances where strict liability is appropriate as set out in the Guide. The offence elements subject to strict liability through the operation of subclauses 20(3), 21(3), 22(3), 23(3), 24(3) and 59(6) set out matters of law. It is appropriate for these elements to be subject to strict liability because they do not involve any conduct by the export licence holder. It is appropriate to expect persons who are voluntarily engaged in the regulatory regime to know their legal obligations before commencing relevant conduct. If the prosecution was required to prove fault in relation to these elements, it would undermine deterrence by requiring proof that persons engaged in the regulatory regime had a particular state of mind (e.g. knowledge) in relation to the relevant legal requirements. Strict liability offences Chapter 2 of the Bill (Regulating the export of waste material), Chapter 3 of the Bill (Product stewardship), Chapter 4 of the Bill (Administration) and Chapter 5 of the Bill (Other matters) contain offences of strict liability relating to notifying the Minister of certain events, participation in, and requirements relating to, co-regulatory product stewardship schemes, the return of identity cards by authorised officers and others, record-keeping requirements, and the provision to the Minister of statistical and other information. 10

The Guide states that applying strict liability to all physical elements is generally only considered appropriate where all of the following apply:  the offence is not punishable by imprisonment;  the offence is punishable by a fine of up to 60 penalty units for an individual and 300 penalty units for a body corporate;  the punishment of offences not involving fault is likely to significantly enhance the effectiveness of the enforcement regime in deterring certain conduct;  there are legitimate grounds for penalising persons lacking fault (for example, because they will be placed on notice to guard against the possibility of any contravention). None of the strict liability offences proposed to be created by the Bill are punishable by imprisonment, and each is punishable by a fine of 60 penalty units or less for an individual. Subclause 61(3) will establish a strict liability offence for export licence holders in relation to the failure to notify the Minister of certain events concerning their business operations. These events include changes to the licence holder's name and contact details, and if the person becomes insolvent or for corporations, enters administration or wound up. Requiring export licence holders to provide notification of these events to the Minister is necessary so the Minister can determine whether it is appropriate for the export licence to remain in force or whether it should be varied. Strict liability will ensure that the failure to notify the Minister can be dealt with efficiently to ensure industry and public confidence in the regulatory regime. Subclauses 72(3) and 82(3) will establish strict liability offences for administrators of an accredited voluntary arrangement or co-regulatory arrangement in relation to the failure to notify the Minister of certain events concerning the operation of the arrangement. These events include an event which affects whether the administrator is a fit and proper person, or an event which hinders the ability of the arrangement to achieve its outcomes. Requiring administrators to provide notification on the operation of their product stewardship arrangements to the Minister is necessary to ensure that the arrangements operate in a transparent and accountable way. Strict liability will ensure that the failure to notify the Minister can be dealt with efficiently to ensure industry and public confidence in the regulatory regime. Under subclause 76(2) it is a strict liability offence for a liable party in relation to a product not to be a member of an approved co-regulatory arrangement in relation to that product. Requiring liable parties to be members of a co-regulatory product stewardship arrangement is central to the operation of co-regulatory arrangements as it seeks to ensure that non- participants in an industry arrangement do not gain an advantage over participants by not adhering to requirements of the co-regulatory arrangements. Offences relating to non- 11

membership of co-regulatory schemes need to be dealt with efficiently to ensure industry confidence in the regulatory regime. Subclause 81(2) will establish a strict liability offence if the administrator of a co-regulatory arrangement fails to take reasonable steps to ensure that the arrangement achieves its specified outcomes. The imposition of strict liability is justified because it is important that non-compliance of an administrator of a co-regulatory scheme is dealt with efficiently. This is to ensure the integrity of, and industry confidence in, the regulatory regime. This is because administrators are the persons responsible for the co-regulatory arrangement achieving the outcomes specified for the relevant product, which is the primary mechanism for the co- regulatory regime to achieve the objects of the Bill. Under subclause 83(4) it is a strict liability offence for a liable party or administrator of an approved co-regulatory arrangement that fails to comply with a rule requiring that liable party or administrator to provide specified reports to the Minister. Requiring liable parties to provide information to the Minister is integral to the operation of co-regulatory product stewardship and the overarching product stewardship framework set out in the Bill. Offences relating to the provision of information to the Minister need to be dealt with efficiently to ensure the integrity of, and industry confidence in, an informed regulatory regime. Subclause 88(8) will make it a strict liability offence for an administrator to fail to comply with an improvement notice, which is a notice that may be issued when that the Minister believes on reasonable grounds that the administrator has not complied, or is unlikely to comply, with clause 81. Clause 81 will require the administrator of an approved co-regulatory arrangement to take all reasonable steps to ensure that the arrangement achieves the relevant outcomes for the product, and to comply with any requirements prescribed by rules made in relation to the achievement of those outcomes. The imposition of strict liability is justified in relation to subclause 88(8) because it is important as non-compliance of an administrator of a co-regulatory scheme need to be dealt with efficiently to ensure the integrity of, and industry confidence in, the regulatory regime. This is because administrators are the persons responsible for the co-regulatory arrangement achieving the outcomes specified for the relevant product, which is the primary mechanism for the co-regulatory regime to achieve the objects of the Bill. Under subclause 124(3) a person commits an offence of strict liability if they have been issued with an identity card under subclause 123(1), they no longer belong to a category of persons eligible to be granted an identity card, and they fail to return their identity card to the Secretary within 14 days of this occurring. However, no offence is committed if the person's authorisation has been suspended (if they are an authorised officer) or their identity card was lost or destroyed. This offence is necessary to achieve the legitimate objective of preventing the fraudulent or unauthorised use of identity cards. Under Division 4 of Part 2 of Chapter 4 a person holding an identity card will (other than in circumstances prescribed by the rules) be required to carry 12

that card at all times when performing relevant functions or duties, or exercising powers, under the Bill. Further, an authorised officer entering a premise to exercise monitoring and investigation powers will be required to produce an identity card before entering the premises except for circumstances prescribed in the rules. The rules may also specify when approved auditors are required to show identity cards. Removing the requirement to prove fault will ensure that offences relating to identity cards are dealt with efficiently to ensure industry confidence in the regulatory and enforcement regime provided for by the Bill. The proposed strict liability offence in subclause 142(4) of the Bill will relate to the requirements for certain persons to make and retain records relating to their operations or activities. The Minister is permitted to make rules relating to the making or retention of records, and it is a strict liability offence for a person to fail to comply with a requirement imposed by these rules. Strict liability will be necessary to ensure the integrity of the regulatory regime. The making and retention of records is an important compliance mechanism to ensure that those who are regulated under the Bill, or perform functions or exercise powers under the Bill, may be held accountable for their actions or omissions. Removing the requirement to prove fault will provide a strong incentive for such to keep records. The existence of the offence is likely to place relevant persons on notice to guard against the possibility of any contravention of the Bill. Subclause 144(8) makes the failure to comply with rules requiring information to be provided a strict liability offence. The information collected under clause 144 will play an important role in informing the Commonwealth in relation to those matters covered by the objects of the Bill, which is a necessary part of ensuring that the Bill remains an effective and efficient mechanism to realise its intended human and environmental health benefits. Strict liability is appropriate because the person affected will be placed on notice to guard against the possibility of contravention, which is likely to significantly enhance the effectiveness of the enforcement regime in deterring the conduct in question. Right to the presumption of innocence - reversal of the burden of proof Laws that shift the burden of proof to a defendant, commonly known as 'reverse burden provisions', can be considered a limitation of the presumption of innocence. When a defendant bears an evidential burden in relation to an exception it means that the defendant bears the burden of adducing or pointing to evidence that suggests a reasonable possibility that the exception has been met. It is then up to the prosecution to establish that this exception does not apply. Reverse burden offences will not necessarily be inconsistent with the presumption of innocence, provided that the reverse burden pursues a legitimate objective and is reasonable, necessary and proportionate to achieving that objective. Whether a reverse burden provision impermissibly limits the right to the presumption of innocence will depend on the circumstances and justification for the reverse burden. 13

The Guide notes that placing the burden of proof on the defendant should be limited to where the matter is peculiarly within the knowledge of the defendant and where it is significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter. The Guide also notes that a reverse burden provision is more readily justified if:  the matter in question is not central to the question of culpability for the offence;  the penalties are at the lower end of the scale; and  the conduct proscribed by the offence poses a grave danger to public health or safety. Clause 124 of the Bill will create a strict liability offence, subject to a penalty of one penalty unit, if a person who was an authorised officer, approved auditor or other prescribed person fails to return their identity card within 14 days of ceasing to be such a person. The defendant will bear the evidential burden in relation to demonstrating that their authorisation has been suspended (if they are an authorised officer) or that their identity card was lost or destroyed. This clause is necessary to achieve the legitimate objective of preventing the fraudulent or unauthorised use of identity cards. The rules may specify when a person will be required to produce an identity card before entering premises to conduct an audit, and a person holding an identity card will (other than in circumstances prescribed by the rules) be required to carry that card at all times when performing relevant functions or duties, or exercising powers, under the Bill. Reversing the burden in these circumstances is reasonable because whether the defendant's identity card has been lost or destroyed is something peculiarly within the knowledge of the defendant alone and proving the contrary beyond reasonable doubt will require significant and difficult to obtain indirect and circumstantial evidence. It is also relevant to note that the penalty of 1 penalty unit is low. Clauses 145, 146 and 147 will establish civil penalty provisions in relation to providing false or misleading statements in connection with an application made under the Bill, information given as required by the Bill or a document produced as required by the Bill. These civil penalty provisions are included as a deterrent from such conduct given its potential to undermine the integrity of the regulatory scheme. For example, such conduct could lead to waste material being exported to a place considered inappropriate for human or environmental health reasons. The civil penalty provisions in clauses 145, 146 and 147 will not apply if the statement is not false or misleading in a material particular (or that the statement did not omit a thing without which the statement is misleading in a material particular). Section 96 of the Regulatory Powers (Standard Provisions) Act 2014 provides that if a defendant wishes to rely on this exception to the civil penalty provision, the defendant bears an evidential burden of proof in relation to the matter. 14

The reversal of the burden of proof in these circumstances is reasonable because whether a statement is false or misleading in a material particular is something peculiarly within the knowledge of the defendant alone, being the person who provides the statement, information or document. Proving the contrary beyond reasonable doubt will require significant and difficult to obtain indirect and circumstantial evidence. Under subclause 148(1) of the Bill it will be an offence for a person to use or disclose protected information that they obtained in the course of, or for the purposes of, performing functions or duties or exercising powers under the Bill, where there is a risk that the use or disclosure might substantially prejudice the commercial interests of another person. This offence has been included to deter the use or disclosure of commercially sensitive protected information in circumstances that are not reasonable, necessary or proportionate. Clause 149 provides for exceptions to this prohibition in defined circumstances, including where the use or disclosure is for the purposes of performing a duty or function, or exercising a power, under or in relation to the Bill, is authorised by or under a Commonwealth law or a prescribed law of a State or Territory, is consented to by the relevant person, or occurs after the relevant information has been lawfully made public. The evidential burden is placed on a defendant who seeks to show that a disclosure was authorised or required within the terms of clause 149. It is appropriate that the evidential burden in relation to these matters is placed on the defendant as whether the defendant used or disclosed protected information in reliance on one or more of the exemptions in subclause 149(1) is peculiarly within the knowledge of the person. Further, there are a number of authorised uses and disclosures set out in subclause 149(1). In the event of a prosecution, it will be significantly more difficult and costly for the prosecution to disprove all the circumstances set out in paragraphs 149(1)(a)- (h) than it will be for a defendant to establish the existence of one of those circumstances. Consequently, in order to effectively protect information under clause 148, it is reasonable, necessary and proportionate to require a defendant to adduce or point to evidence that suggests a reasonable possibility that one of the exceptions listed in clause 149 applies, and for clause 149 to limit the right to the presumption of innocence. Right to privacy Article 17 of the ICCPR prohibits arbitrary or unlawful interference with an individual's privacy, family, home or correspondence. The United Nations Human Rights Committee has given a liberal interpretation to the term 'home', which includes a person's workplace. The right to privacy can be limited to achieve a legitimate objective where the limitations are lawful and not arbitrary. In order for an interference with the right to privacy to be permissible, the interference must be authorised by law, be for a reason consistent with the ICCPR and be reasonable in the circumstances. Right to privacy - monitoring, investigation and audit powers 15

The Bill will trigger various monitoring and investigation powers that are provided for in the Regulatory Powers (Standard Provisions) Act 2014, including powers relating to entry, inspection, search and seizure. The monitoring and investigation powers are necessary for the legitimate purpose of enabling the monitoring of compliance with the Bill and the collection of evidential material relating to contraventions of the Bill. The use of these powers is constrained, ensuring that their use is not arbitrary, as follows:  The powers cannot be exercised without consent being given to the entry to the premises, or under warrant granted by an issuing officer. Where entry is by the consent of the occupier, consent must be informed and voluntary, and can be withdrawn at any time.  Monitoring and investigation warrants can only be issued where the issuing officer is satisfied of certain matters, by information on oath or affirmation, of an authorised government enforcement officer.  An authorised government enforcement officer cannot enter premises under warrant unless their identify card is shown to the occupier of the premises, and they provide the occupier with a copy of the warrant. Also, under Division 4 of Part 2 of Chapter 4 of the Bill, the Minister may require that an audit be carried out of a product stewardship arrangement, certain export operations or the performance of functions or exercise of powers under the Bill. In particular, under clause 113 an auditor may ask a person for information, and under clause 115 a relevant person (including the administrator of a co-regulatory arrangement, a holder, or former holder of an export licence or exemption) is required to provide facilities and assistance to an auditor. If a relevant person fails to comply with such a request, or to provide assistance, this is a ground for suspension or revocation of an export licence, or for the cancellation of the approval of a co-regulatory arrangement. However, there is no criminal or civil penalty associated with failure to comply. In summary, the monitoring, investigation and audit powers are necessary, proportionate and reasonable in the pursuance of the legitimate objectives of the Bill. Right to privacy - collection of information Various provisions of the Bill will, or will permit rules to be made that: 16

 require a person to provide information in an application (e.g. clause 172);  require a person to provide additional or corrected information in relation to their application (e.g. clauses 60, 173 and 174); and  give a person (e.g. the Minister) the power to require information or documents (e.g. clauses 64, 83, 143 and 144). By requiring persons to provide information or documents the Bill may, in some cases, require the provision of personal information. The collection of information under these clauses (and any subsequent storage, use or disclosure of this information) may therefore operate to limit the right to privacy. However, it is likely that only a limited amount of personal information will be collected under the Bill and most information will be relating to a person's business. Any personal information collected under the Bill will be managed in an open and transparent way, consistent with the Department's Privacy Policy and the Australian Privacy Principles contained in Schedule 1 of the Privacy Act 1988. Under the Department's Privacy Policy, appropriate controls exist in relation to the use and storage of personal information. For example, only personal information necessary to effectively carry out the scheme will be collected. Clauses requiring information in relation to persons who wish to export, or have exported, regulated waste material are necessary for the legitimate objective of assessing the suitability of a person to participate in export operations in relation to regulated waste materials and to ensure those persons are continuing to comply with the Bill. A person who provides information in an application or as a participant in the regulatory scheme will do so as someone who has 'opted in' to the regulatory system, and should expect that some personal information may need to be provided in order to gain the benefits of that system. Further, some information will be able to be gathered under the Bill from participants in product stewardship schemes. However, it is expected that only a very limited amount of such information will be personal information. A person who provides information as a participant, or prospective participant, in a voluntary product stewardship scheme will 'opt in' to the scheme and should expect that some personal information may need to be provided in order to gain the benefits of that system. Clause 144 will enable the Minister to collect information in relation to the objects of the Bill for statistical purposes. This data will be used to support the national approach to waste data collection within product stewardship schemes and to monitor the export of regulated waste material to inform the public and enable effective enforcement of the Bill. Right to privacy - use and publication of information Subclause 65(1) of the Bill will require the Minister to publish on the Department's website certain information in relation to each export licence granted by the Minister, including the 17

name of the export licence holder and details about the licence including the kinds of regulated waste materials covered by it. Subclause 95(1) will require the Minister to publish on the Department's website certain information about accredited voluntary arrangements and approved co-regulatory arrangements. The Minister must not publish any information under subclause 65(1) or subclause 95(1) if the Minister is satisfied that there is a risk that publishing the information might substantially prejudice the commercial interests of a person, and publishing the information is not in the public interest. The purpose of such publication is to provide transparency to industry and the public on the regulated waste export operations and product stewardship arrangements. Publishing the names of holders of export licences can assist entities to find a licensed exporter, as well as provide assurance that they are dealing with a licensed exporter to outweigh the potential adverse consequences to the individuals concerned. Furthermore, by including accredited voluntary and co-regulatory arrangement administrator's details online will provide a clear avenue for potential members to seek out the relevant arrangements and potentially join. Clauses 65 and 95 may, in practice, require the Minister to publish information about individuals. However, it is anticipated that most export licence holders and administrators of product stewardship arrangements will be body corporates, for which the protections in the Privacy Act 1988 do not apply. The types of information that are required to be published under clauses 65 and 95 are set out with specificity in the Bill, so the Minister will not have any scope to exercise discretion. The disclosures authorised by these provisions are reasonable, necessary and proportionate. Under clause 122 of the Bill, the Minister may publicise certain matters, including the name of a person who has been convicted of an offence against the Act, had a civil penalty order made against them, or entered into an enforceable undertaking. The purpose of permitting such publication is to act as a deterrent to contravention and therefore assist with ensuring the integrity of the regulatory regime. Again, the matters that may be disclosed under clause 122 are set out with precision in the Bill. It is expected that most persons whose names would be published will be body corporates, for which the Privacy Act 1988 does not apply and that many of the matters will already be publicly available. Also, this publishing power is discretionary and as such the Minister retains the ability to decide not to publish any of the information set out above if they consider that, in the particular circumstances the potential adverse consequences of publishing the information outweigh the intended deterrence effect. Clause 149 will provide for the authorised use and disclosure of protected information, that was disclosed or obtained under or for the purposes of the Bill, in defined circumstances. Examples of such circumstances include for the purposes of performing a duty or function, or exercising a power, under or in relation to the Bill, is authorised by or under a Commonwealth law or a prescribed law of a State or Territory, is consented to by the relevant person, or occurs after the relevant information has been lawfully made public. These circumstances are clearly defined and are generally aimed at assisting with compliance and enforcement with the Bill. Therefore, they are reasonable, necessary and proportionate to 18

achieving the objects of the Bill. Also, it is expected that most protected information covered by any of the authorised uses and disclosures are in relation to body corporates, for which the Privacy Act 1988 does not apply, and will not include personal information. Clause 144 will enable the Minister to disseminate collected information in relation to the objects of the Bill for statistical purposes. This data will be used to support the national approach to waste data collection within product stewardship schemes and to monitor the export of regulated waste material, to inform the public and enable effective enforcement of the Bill. In summary, the clauses discussed above, which limit the right to privacy, are reasonable, necessary and proportionate to achieve relevant legitimate objectives. Accordingly, these aspects of the Bill are consistent with the right to privacy in Article 17 of the ICCPR. Conclusion The Bill is compatible with human rights because it promotes the right to health under Article 12(1) of the ICESCR. To the extent that it engages and limits other human rights (including those under Articles 14(1), 14(2) and 17 of the ICCPR), those limitations are reasonable, necessary and proportionate to achieve the legitimate aims of the Bill. (Circulated by authority of the Minister for the Environment, the Hon. Sussan Ley MP) 19

ATTACHMENT B Decision Regulation Impact Statement: Phasing out exports of waste plastic, paper, glass and tyres Prepared for COAG consideration 13 March 2020 0

ISBN XXX-X-XXXXXX-XX-X Copyright notice This document - Decision Regulation Impact Statement: Phasing out certain waste exports - is licensed under the Creative Commons Attribution 4.0 International Licence. Licence URL: https://creativecommons.org/licenses/by/4.0/legalcode Please attribute: © Commonwealth of Australia (Department of Agriculture, Water and the Environment) 2020 Notice: 1. If you create a derivative of this document, the Department of Agriculture, Water and the Environment requests the following notice be placed on your derivative: Based on Commonwealth of Australia (Department of Agriculture, Water and the Environment) data. 2. Inquiries regarding this licence or any other use of this document are welcome. Please contact: National Waste and Recycling Taskforce, Department of Agriculture, Water and the Environment. Please direct any questions to 1800 803 772 or COAGwasteexportban@awe.gov.au. Notice identifying other material or rights in this publication: 1. Australian Commonwealth Coat of Arms - not licensed under Creative Commons, see https://www.itsanhonour.gov.au/coat-arms/index.cfm. 2. Certain images and photographs (as marked) - not licensed under Creative Commons. 1

ABOUT THIS DECISION REGULATION IMPACT STATEMENT The Commonwealth National Waste and Recycling Taskforce within the Department of Agriculture, Water and the Environment (the Department) has prepared this Decision Regulation Impact Statement (RIS) in consultation with state and territory government officials and representatives from the Australian Local Government Association. The Centre for International Economics (The CIE) undertook a cost-benefit analysis that was built on to provide the final analysis in this Decision RIS. The development of this Decision RIS has been guided by the Council of Australian Governments' (COAG) Best Practice Regulation guidance, to ensure that regulatory processes at the national level are consistent with best practice principles. The Decision RIS follows the August 2019 meeting of COAG, where Australia's First Ministers considered waste and recycling issues and agreed Australia should establish a timetable to ban the export of waste plastic, paper, glass and tyres, while building Australia's capacity to generate high value recycled commodities and associated demand. As required by COAG Regulation Impact Guidelines, a Consultation RIS and Decision RIS have been prepared ahead of First Ministers' consideration. The purpose of this Decision RIS is to recommend a preferred policy option for the phase out of certain waste exports, for a final decision by Ministers, noting Ministers may take a different position to the options outlined. The Decision RIS is a point in time document, providing analysis for the different implementation options and the impacts for each measure, as presented in the Consultation RIS publicly released in December 2019. This process included written submissions and face-to-face discussions through to February 2020. The Decision RIS identifies the nature of the problem to be addressed, outlines the alternative policy options considered for each measure, and provides an impact analysis of each of the options based on feedback and indicative costs for implementation. The Commonwealth, state and territory government officials and representatives from the Australian Local Government Association appreciate the significant time and effort of all stakeholders across the community sector, academia, industry, and individuals to progress this important reform agenda. 2

CONTENTS About this Decision Regulation Impact Statement 2 Contents 3 Acronyms and abbreviations 6 Executive summary 8 Background ....................................................................................................................... 8 Statement of the problem .................................................................................................. 8 Objective and options ........................................................................................................ 8 Approach to the impact and cost-benefit analyses ............................................................. 9 Estimated impacts ........................................................................................................... 10 Conclusions ..................................................................................................................... 11 1. Statement of the problem 12 Global waste generation .................................................................................................. 12 Recent international commitments on waste.................................................................... 12 Australia's waste and recycling industry .......................................................................... 15 Market competition .......................................................................................................... 20 Disruption to export markets ............................................................................................ 21 Barriers to increased domestic recycling ......................................................................... 24 Market failure................................................................................................................... 26 The value of waste .......................................................................................................... 28 Summary and focus of the RIS ........................................................................................ 28 2. Objectives of government action 30 3. Reform options considered 31 Option 1 - Status quo, with consumer education and work on standards ........................ 31 Options 2(a) and 2(b) - Prohibit or restrict exports of waste plastic, paper, tyres and glass ........................................................................................................................................ 32 Other options ................................................................................................................... 33 4. Impact analysis approach 35 Cost-benefit analysis approach ....................................................................................... 35 General approach to the CBA .......................................................................................... 36 Establishing the baseline ................................................................................................. 37 Current waste plastic, paper, glass and tyre exports........................................................ 40 Domestic recycling of waste plastic, paper, glass and tyre exports .................................. 43 5. Identification and valuation of costs arising from reform 50 3

Industry costs .................................................................................................................. 50 Waste paper and cardboard ............................................................................................ 50 Plastic.............................................................................................................................. 54 Cost of additional sorting ................................................................................................. 55 Tyres ............................................................................................................................... 58 Glass ............................................................................................................................... 59 Costs to government ....................................................................................................... 60 6. Identification and valuation of benefits arising from reform 64 The value of waste .......................................................................................................... 64 Environmental benefits .................................................................................................... 65 Mismanagement of waste in importing countries ............................................................. 66 Ocean Conservancy ........................................................................................................ 67 Environmental, health and social impacts of mismanaged waste..................................... 72 Economic costs of mismanaged waste ............................................................................ 77 Waste management in Australia ...................................................................................... 80 Environmental externalities from changes in recycling ..................................................... 84 Environmental and social costs of waste transport .......................................................... 86 Benefits from government intervention ............................................................................ 87 7. Other impacts 90 Competition effects .......................................................................................................... 90 Risk analysis ................................................................................................................... 91 Risks by material ............................................................................................................. 94 8. Impact analysis 103 Net benefits across commodities ................................................................................... 106 Net benefits across jurisdictions .................................................................................... 112 Distributional impacts .................................................................................................... 119 Sensitivity analysis ........................................................................................................ 122 9. Consultation on proposed reform 125 Problem definition and policy objectives ........................................................................ 126 Impacts of changes in international markets .................................................................. 126 Impacts to be further explored in the Decision RIS ........................................................ 127 Design considerations for the proposed export ban (definitions and legislation) ............ 127 Preferred options and other interventions ...................................................................... 128 Previous consultation .................................................................................................... 131 10. Evaluation and conclusions 132 Summary of the cost and benefits analysis .................................................................... 132 4

Costs and benefits across materials .............................................................................. 132 Costs and benefits across jurisdictions .......................................................................... 133 Distribution of costs and benefits ................................................................................... 133 Preferred option............................................................................................................. 134 11. Implementation and Review 136 Implementation .............................................................................................................. 136 Review of new export restrictions .................................................................................. 137 Appendix A: Ninth Meeting of Environment Ministers 139 Agreed Statement - 8 November 2019, Adelaide .......................................................... 139 Appendix B: National Waste Action Plan - 2019 143 National Waste Policy: From waste to resource............................................................. 143 National Action Plan ...................................................................................................... 143 Appendix C: Detailed cost benefit analysis assumptions 146 Appendix D: Envisage Works estimates of costs of further processing 152 Appendix E: Exports under the base case 154 Appendix F: Environmental and social costs of waste transport 156 Estimating environmental costs ..................................................................................... 156 Appendix F: Environmental externalities from changes in recycling 163 Appendix G: Summary of jurisdiction policy settings 168 Appendix H: Details of recycling capacity 173 Appendix I: Input-Output Econometric Modelling 178 Methodology .................................................................................................................. 178 Key findings ................................................................................................................... 179 Future study .................................................................................................................. 180 Appendix J: Consultation RIS Stakeholder questions 181 Problem ......................................................................................................................... 181 Policy objectives ............................................................................................................ 181 Policy options and impact analysis ................................................................................ 181 Options 2(a) and 2(b) - Prohibit or restrict exports of waste plastic, paper, tyres and glass ...................................................................................................................................... 182 5

ACRONYMS AND ABBREVIATIONS ABS Australian Bureau of Statistics ABF Australian Border Force ACCC Australian Competition and Consumer Commission APCO Australian Packaging Covenant Organisation APEC Asia-Pacific Economic Cooperation regional economic forum C&D Construction and demolition. This refers to waste that comes from the construction and demolition sector. C&I Commercial and industrial. This refers to waste that comes from businesses, outside of construction and demolition. CBA Cost-benefit analysis CDS/CDR Container Deposit Scheme / Container Return Scheme COAG Council of Australian Governments EOLT End-of-Life Tyre G20 Group of Twenty international forum for global economic cooperation GDP Gross Domestic Product GHG Greenhouse gas HDPE High density polyethylene LDPE Low density polyethylene LGAs Local government authorities MRF Material recovery facility. This is a facility that takes a mixed stream of waste and sorts it into different commodities. Sorting can be done at different levels. MSW Municipal solid waste. This refers to waste that comes from households. NPV Net Present Value 6

OECD Organisation for Economic Cooperation and Development PET Polyethylene terephthalate PP Polypropylene RIS Regulation Impact Statement The Act Hazardous Waste (Regulation of Exports and Imports) Act 1989 (Cth) The CIE The Centre for International Economics The Department The Commonwealth Department of Agriculture, Water and the Environment TSA Tyre Stewardship Australia 7

EXECUTIVE SUMMARY Background On 9 August 2019, the Council of Australian Governments (COAG) agreed Australia should establish a timetable to ban the export of waste plastic, paper, glass and tyres, while building Australia's capacity to generate high value recycled commodities and associated demand. Changes in waste import standards in countries around the world have highlighted the need for Australia to manage its own waste better. COAG's agreement reflects increasing concern in Australia and around the world about plastic pollution of our oceans and the need to ensure that exports of waste do not cause harm to human health and the environment. Australia's Environment Ministers were tasked with advising COAG on a proposed timetable and response strategy following consultation with industry and other stakeholders to support implementation of the bans. As required by COAG Best Practice Regulation guidelines, a Consultation Regulation Impact Statement (RIS) and Decision RIS have been prepared ahead of First Ministers' consideration of the final design of the proposed ban. Statement of the problem Waste exports have made Australia's waste and recycling system more vulnerable to policy changes in international markets. Since 2017, several countries to which Australia exported recyclable material have introduced or tightened restrictions on certain imports including China, Indonesia, India, Malaysia and the Philippines. For example, China was Australia's largest export market for recycled waste, receiving approximately four per cent (1.3 million tonnes) of Australia's recyclable waste and around one-third of Australia's recyclable plastics, paper and cardboard. Existing recycling collection methods and infrastructure mean it is generally not cost- effective to meet the new standards. Current trends suggest exports of certain recyclable materials may no longer be cost-effective or permissible in future. The timing for this outcome is uncertain. Recent international agreements relating to marine plastic debris and the movement of hazardous waste will also have further implications for waste exports. There is increasing concern in Australia and around the world about plastic pollution of our oceans and the need to ensure that exports of waste do not cause harm to human health and the environment. Exports of waste plastic to countries can overwhelm waste management infrastructure and result in waste leakage into marine environments. This has consequences for human health and marine and coastal ecosystems, as well as an economic impact. This RIS considers whether a more cost-effective adjustment to global restrictions on waste exports can be facilitated by increasing domestic handling of waste material that is currently exported. Objective and options COAG Best Practice Regulation guidelines require that a RIS identify a range of viable options to address the problem, including, as appropriate, non-regulatory, self-regulatory and 8

co-regulatory options1. In the context of a RIS examining proposed changes to ban certain waste exports, it is important to consider alternative options, to not only establish that the proposed changes deliver a net benefit to the community, but also that the preferred option is the best approach to achieving the government's objectives. The objectives of government action are to:  achieve better protection of the environment and human health through improved management of Australia's waste plastic, paper, glass and tyres domestically and internationally  ensure Australia actively manages the risk of countries imposing waste import restrictions so Australia's waste and recycling sector is well placed to manage any future disruption or closure of global waste markets without resulting in adverse environmental or human health impacts  complement and leverage the agreed actions under the National Waste Policy Action Plan that provides a framework for collective, national action on waste management, recycling and resource recovery to 2030. To address the objectives of the waste export ban, this RIS explores one non-regulatory option and two related regulatory options:  Option 1: The status quo, with consumer education, work on standards and implementation of the National Waste Policy Action Plan 2019.  Option 2(a): Consumer education and restriction of exports of waste plastic, paper, tyres and glass without additional supporting government interventions.  Option 2(b): Consumer education and restriction of exports of waste plastic, paper, tyres and glass with additional supporting government interventions to build markets and associated demand. Approach to the impact and cost-benefit analyses The analyses are conducted through a multi-step approach including:  Early consultations with stakeholders to gather views on the proposed reform and information necessary to inform the cost-benefit analyses (CBA);  Reviewing survey, primary and official data sources to identify key issues affecting the results;  Gathering and reviewing of information from other sources to better understand the status quo of waste recycling and exporting, to establish a baseline for the CBA;  Reviewing responses to the Consultation RIS; and  Analysing the impact and benefit analyses, by: 1 Council of Australian Governments 2007, Best Practice Regulation, A Guide for Ministerial Councils and National Standard Setting Bodies, October 2007, p. 10. 9

- establishing the base case against which to assess the potential economic impacts of changes; - quantifying the changes from the base case resulting from the possible scenarios being considered; and - placing values on the changes and aggregating these values in a consistent manner to assess the outcomes. Estimated impacts Costs and benefits are estimated in Net Present Value (NPV) terms over a 20-year period, using a discount rate of 7 per cent. The CBA results under each of the options described above are shown in Table 1. Table 1: Summary of cost benefit analysis, $m, present value Option 1 Option 2(a) Option 2(b) Net benefit waste industry 100 -207 488 Net benefit governments -84 -42 -476 Net benefit communities 57 0 34 Overall net benefit 72 -249 46 Note: Using an evaluation period of 20 years and a social discount rate of 7 per cent. Source: The CIE and the Department of Agriculture, Water and the Environment. Other options The Consultation RIS suggested an alternative regulatory option where export restrictions could be introduced through a permit system, accreditation or supply chain assurance, which would provide that exports meeting specified standards could continue. Based on stakeholder feedback, this has been incorporated into options 2(a) and 2(b). Other options that focussed on Product Stewardship and design standards may be considered by governments at a later stage to complement the proposed restriction on exports. Other impacts The assessment also considered the direct and indirect (or flow-on net benefits) to the economy from the three proposed options using Input-Output Econometric modelling, these impacts are shown in Table 2 and Table 3. Table 2: Direct economic impacts Option 1 Option 2(a) Option 2(b) Gross output, $m, PV $107 $722 $1,268 GDP, $m, PV $32 $217 $459 Income (wages), $m, PV $19 $121 $303 Employment, jobs 34 367 602 Source: ABS National Accounts and Input-Output Tables Table 3: Indirect economic impacts Option 1 Option 2(a) Option 2(b) 10

Gross output, $m, PV $199 $1,316 $2,307 GDP, $m, PV $84 $551 $992 Income (wages), $m, PV $49 $306 $564 Employment, jobs 78 922 1,313 Source: ABS National Accounts and Input-Output Tables A restriction on certain waste exports with government support (Option 2(b)) is expected to see the Australian economy grow by $3.6 billion in turnover and $1.5 billion in value-added (or GDP) in present value terms2 over a 20-year period. This is expected to be delivered through the addition of an average of 1,900 jobs3 and the result of higher value-added activity occurring onshore in Australia. Conclusions Based on the analysis presented in this Decision RIS, including the results of the cost benefit analysis and the economic analysis, the preferred option in accordance with the COAG Best Practice Guidelines is Option 2(b), which has the greatest benefit to the community. Option 1 showed a net benefit but did not fully address the objectives of government action, with Australia's waste not actively managed. Option 2(a) improves the domestic management of Australia's waste, but fails to actively manage risk to Australia's waste and recycling sector. Options 1 and 2(a) also have lower macroeconomic impacts compared with Option 2(b) in terms of output, value added, wages and employment. This is because a greater amount of economic activity occurs domestically when all waste material that was previously exported is now processed domestically and returns a higher value in the market. The impact analysis suggests that Option 2(b) would best assist in transitioning industry to a circular economy and deliver on Australia's commitments to better manage its own waste. The CBA results suggest that Option 2(b) would deliver the best results across all jurisdictions in meeting the objectives of the National Waste Policy which was adopted by Environment Ministers. Consultation also showed overall support for this option. 2 Consistent with the cost benefit analysis, a discount rate of 7 per cent is applied to the economic impact analysis. 3 The employment impact is calculated as an average of the peak employment periods through the 20-year analysis period. 11

1. STATEMENT OF THE PROBLEM Global waste generation Research from the World Bank has estimated that the world is on a trajectory where waste generation will drastically outpace population growth by more than double by 2050. Although we are seeing improvements and innovations in solid waste management globally, it is a complex issue and one that nations are taking urgent action on. Solid waste management affects all nations and where waste is poorly managed it can have negative impacts, particularly on society's most vulnerable, with profound health repercussions. Too often the environment also pays a high price. In 2016, the world generated 242 million tonnes of plastic waste--12 per cent of all municipal solid waste4. Waste generation is rising globally. An estimated 2.01 billion tonnes of municipal solid waste were generated in 2016, and the World Bank expects this number to grow to 3.40 billion tonnes by 2050 under a business-as-usual scenario. Figure 1 shows the kilograms of solid waste each person creates per year across the countries in our region for 2016, 2030 and 2050. Figure 1: Solid waste generation per capita per year kg/capita/year 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2016 2030 2050 Source: World Bank, What a Waste 2.0: A global snapshot of solid waste management to 2050. Recent international commitments on waste Waste is a commodity, which is also exported around the world for further processing. There is increasing concern in Australia and around the world about plastic pollution of our oceans and the need to ensure that exports of waste do not cause harm to human health and the environment. Exports of waste plastic to countries can overwhelm waste management infrastructure and result in waste leakage into marine environments. This has consequences for human health and marine and coastal ecosystems, as well as an economic impact. 4 World Bank, What a Waste 2.0: A global snapshot of solid waste management to 2050 12

About 8 million metric tons of plastic are thrown into the ocean annually5 and by 2050 there will be more plastic in the oceans than there are fish (by weight)6. Around 80 per cent of marine plastic pollution comes from land-based sources7. Marine plastics kill and maim marine life directly through entanglement and ingestion, and by entering the food chain which has potential impacts to reproduction and exposure of life to toxic chemicals. More than 800 species have had some form of encounter with marine litter, of which the majority is plastic. For example, every species of sea turtle has been documented to have been impacted, as well as 66 per cent of marine mammals and 50 per cent of seabirds8. Marine plastic litter negatively impacts upon major marine industries, including shipping (for example fouling propellers, navigational hazards), fishing (reducing target species populations through ghost fishing, catch contamination) and tourism (unsightly and extensive pollution of reefs and beaches leading to reduced visitation and loss of sectoral jobs). A recent study commissioned by the Asia-Pacific Economic Cooperation (APEC) regional economic forum estimated the damage costs to the marine industries attributed to marine debris was US$10.8 billion per annum9. This is an increase from the estimate in the previous APEC 2009 report of $1.26 billion10, increasing due to improved data, growth in the marine economy and growth in the amount of plastic waste in the oceans over the last decade. This direct cost comprises costs associated with damage to fisheries and aquaculture, marine transport, shipbuilding and marine tourism industries from marine debris. The APEC study did not quantify remedial costs and indirect damage costs. Australia is a member of a number of international organisations that are actively engaged on marine plastic waste issues, principally the Group of Twenty (G20) international forum for global economic cooperation, APEC, the International Maritime Organisation, the United Nations Environment Assembly and the High Level Panel for a Sustainable Ocean Economy. Australia participates in international marine debris initiatives including the Commonwealth Clean Ocean Alliance, the United Nations Environment Programme Clean Seas Campaign, the G20 Marine Litter Action Plan and Implementation Framework, the APEC Roadmap on Marine Debris and the International Coalition to Reduce Plastic Bags Pollution. Recent international agreements on waste reflect this concern. 5 Jambeck, J. R., et al. "Plastic Waste Inputs from Land into the Ocean." Science, vol. 347, no. 6223, 13 Feb. 2015, pp. 768-771., doi:10.1126/science.1260352. 6 https://www.ellenmacarthurfoundation.org/publications/the-new-plastics-economy-rethinking-the- future-of-plastics-catalysing-action 7 Ocean Conservancy Stemming the Tide: Land-based strategies for a plastic-free ocean 8 United Nations Environment Programme 2019 Plastics and shallow water coral reefs - Synthesis of the science for policy-makers 9 APEC, 2020, Update of 2009 APEC Report on Economic Costs of Marine Debris to APEC Economics. 10 McIlgorm, A., Campbell H. F. and Rule M. J. (2008). Understanding the economic benefits and costs of controlling marine debris in the APEC region (MRC 02/2007). 13

G20 Action Plan on Marine Litter At the Hamburg Summit in 2017, the G20 adopted an action plan on marine litter. The action plan recognises 'the urgent need for action to prevent and reduce marine litter in order to preserve human health and marine and coastal ecosystems and mitigate marine litter's economic costs and impacts'11. Among other areas of concern and potential policy measures, the action plan identifies:  Promoting the socio-economic benefits of establishing policies to prevent marine litter;  Promoting waste prevention and resource efficiency; and  Promoting sustainable waste management. At the Osaka Summit in 2019, the G20 released an implementation framework for actions on marine plastic litter. Among other actions, the implementation framework encourages actions that 'promote a comprehensive life-cycle approach to urgently and effectively prevent and reduce plastic litter discharge to the oceans, in particular from land-based sources'. The framework recognises these actions could include 'promotion of sustainable consumption and production, including but not limited to promoting resource efficiency, circular economy, sustainable materials management, waste to value approach, and measures to address sea-based sources'12. Changes to the Basel Convention Australia is a party to the Basel Convention, which is an international treaty to control transboundary movements of hazardous and certain other wastes. Australia implements its obligations under the Basel Convention through the Hazardous Waste (Regulation of Exports and Imports) Act 1989 (the Act). Any transboundary movement of hazardous waste requires the prior informed consent of all countries involved in the movement before the movement can proceed. Under the Act, for recyclable materials such as plastic and paper/cardboard to be exported without a permit, they must be well-sorted and not contaminated with other wastes, including mixed household wastes. The "ban amendment" is a recently ratified provision under the Basel Convention that prohibits member states of the Organisation for Economic Cooperation and Development (OECD), the European Community and Liechtenstein from exporting hazardous wastes to developing and transitioning economies. The ban amendment came into force on 5 December 2019. Although not ratified by Australia, the amendment will prevent Australian exporters from exporting hazardous waste to developing and transitioning economies that have ratified the amendment. The ban amendment should not affect the export of plastics, scrap metal or paper waste, unless it is contaminated with hazardous waste including household waste. However, other countries may take a broader view of the waste types covered by the amendment and the level of contamination that is acceptable. 11 G20 Action Plan on Marine Litter, 8 July 2017, Hamburg, University of Toronto G20 Information Centre, www.g20.utoronto.ca/2017/2017-g20-marine-litter.html (accessed 2 December 2019). 12 G20 Implementation Framework for Actions on Marine Plastic Litter, June 2019, Osaka, www.g20karuizawa.go.jp/assets/pdf/G20%20Implementation%20Framework%20for%20Actions%20o n%20Marine%20Plastic%20Litter.pdf (accessed 2 December 2019). 14

In May 2019, agreement was reached to amend the Basel Convention to create new classifications for waste plastics:  Mixed, non-hazardous plastic wastes not sorted to a high standard will be subject to prior informed consent before they can be exported.  Hazardous plastics, or plastics that contain hazardous substances will be subject to prior informed consent before they can be exported.  Certain plastic waste of a single polymer or resin type provided it is destined for recycling in an environmentally sound manner and almost free from contamination and other types of wastes will not require prior informed consent. Australia's waste and recycling industry Australians create around 67 million tonnes of waste each year13. In 2018-19, 4.4 million tonnes of this waste were exported. This included 1.4 million tonnes of waste plastic, paper, glass and tyres, representing 32 per cent of total waste export tonnage. The total declared value of these exports was around $290 million14. Recent import bans on waste-derived exports by some of Australia's key importing destinations has impacted on export flows and trade values. This has placed pressure on Australia's domestic waste and recycling industry. Demand for waste and recycling services has grown over the past decade, as solid waste volumes have increased. Changes in construction activity and greater demand from population growth and rising urbanisation have all contributed to increased solid waste volumes. Figure 2 presents the volume of waste generated by jurisdiction. The volume of waste generated across Australia is influenced by a range of factors. These factors include population distribution, general waste volumes, industrial and manufacturing activity, construction activity and government involvement in waste management activities. Over the past decade, the volume of waste generated has grown at an average annual rate of 2.8 per cent. 13 Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database. 14 Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database. 15

Figure 2: Total waste by jurisdiction '000 tonnes '000 tonnes 70,000 70,000 60,000 60,000 50,000 50,000 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 - - 2007 2009 2010 2011 2014 2015 2016 2017 2018* 2019* NSW VIC QLD WA SA TAS NT ACT Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste-reports/national- waste-report-2018. Excludes ash. The volume of waste generated nationally tends to increase with population growth. An increase in the number of households also increases the amount of waste produced and demand for waste collection services. Household discretionary income also influences demand for waste recovery, as higher income households produce more rubbish due to higher expenditure on consumables. Upstream construction and manufacturing activity also affects demand for industry services. An increase in activity in these sectors often results in growth in the volume of waste generated, boosting demand for recovery and remediation services. Figure 3 shows the volume of waste generated by the main streams. Figure 3: National waste volumes, by stream '000 tonnes '000 tonnes 70,000 70,000 60,000 60,000 50,000 50,000 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 - - 2007 2009 2010 2011 2014 2015 2016 2017 2018* 2019* Construction & Demolition Commercial & Industrial Municipal Solid Waste Total Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste-reports/national- waste-report-2018. ABS National Accounts Steady population growth has increased household waste volumes, as solid waste generation usually increases alongside household consumption expenditure and 16

urbanisation, both of which have risen over the past five years. However, growth in solid waste generation has been constrained somewhat by falling construction activity over the past five years. Despite some types of construction growing over the period, such as multi- unit and apartment construction, overall activity in the sector has fallen and reduced the quantity waste generated. Overall, growth in waste volumes on a per capita basis has started to increase on aggregate (Figure 4). Figure 4: National waste volumes, by stream, tonnes per capita '000 tonnes '000 tonnes 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 2007 2009 2010 2011 2014 2015 2016 2017 2018* 2019* Construction & Demolition Commercial & Industrial Municipal Solid Waste Total Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste-reports/national- waste-report-2018. ABS National Accounts Changes in the key driving factors of waste generation at a state the territory level have resulted in differing waste volumes across each jurisdiction. Figure 5 highlights the impacts that changes in demographics and economic activity can have at the state and territory level. Overall, all jurisdictions have shown an increase in waste volumes per capita in recent years. Figure 5: Total waste per capita by jurisdiction '000 tonnes '000 tonnes 4.00 4.00 3.50 3.50 3.00 3.00 2.50 2.50 2.00 2.00 1.50 1.50 1.00 1.00 0.50 0.50 0.00 0.00 2007 2009 2010 2011 2014 2015 2016 2017 2018* 2019* NSW VIC QLD WA SA TAS NT ACT Australia Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste-reports/national- waste-report-2018. ABS National Accounts. 17

Industry performance Total revenue in the waste and recovery industry in Australia for 2018-19 was $16 billion, comprising: $6.8 billion for Solid Waste Collection Services (collection); $6.0 billion for Waste Remediation and Materials Recovery Services (MRFs); and $3.3bn for Waste Treatment and Disposal Services in Australia (landfill). The waste and recycling industry generates an additional $33.8 billion in turnover across the rest of the economy from supply-chain and consumption-induced transactions. The industry directly employs 33,517 people across Australia and around 70,500 indirectly across Australia. The waste and recycling industry contributes $4.8 billion to Gross Domestic (GDP), growing at an average rate of 6 per cent per annum for the past decade. Its Gross Operating Surplus (GOS) or profitability is $1.7 billion, growing at 3 per cent per annum on average over the same period. Figure 6 presents the key components that underpin the performance of the waste and recycling industry. Figure 6: Economic performance of waste and recycling industry $m $m $16,000 $16,000 $14,000 $14,000 $12,000 $12,000 $10,000 $10,000 $8,000 $8,000 $6,000 $6,000 $4,000 $4,000 $2,000 $2,000 $0 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* 2019* Primary Inputs from other industries Gross operating surplus Compensation of employees Gross Value Added Taxes less subsidies on products Source 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste-reports/national- waste-report-2018. ABS National Accounts. The y axis values represent annual turnover. The * on the x axis are projections by CIE. Solid Waste Collection Services employ 45 per cent of the industry workforce; Waste Remediation and Materials Recovery Services (MRFs) employ 33 per cent; and Waste Treatment and Disposal Services employ 22 per cent. Total employment growth has averaged around 3.0 per cent over the last decade compared with the total labour market of 1.5 per cent over the same period. 18

Figure 7: Employment in waste and recycling industry by classification, no of jobs 40,000 40,000 35,000 35,000 30,000 30,000 25,000 25,000 20,000 20,000 15,000 15,000 10,000 10,000 5,000 5,000 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Waste Collection Treatment and Disposal Remediation and Recovery Industry Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste-reports/national- waste-report-2018. ABS National Accounts Strong demand over the past five years has encouraged operators to enter the industry. Industry enterprise numbers have increased over the period, intensifying competition. As a result, industry prices have been under pressure, contributing to a decline in profit margins. Rising demand for specialised services over the period has led industry firms to hire more highly qualified and skilled staff. However, wage costs have fallen slightly as a share of industry revenue over the past five years, as labour productivity has improved due to increasing automation of waste separating and sorting. Figure 8 shows that the industry is running at much higher capital intensity ratios (defined as capital to revenue) than for all Australian industries and the impact of recent investments. Figure 8: Capital intensity ratio 60% 50% 40% 30% 20% 10% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 All Industries Remediation and Recovery Source: ABS Australian Industry 2017-18, IBISWorld While profitability in the industry is lower than for the Australian industry average, profitability levels have been consistently maintained for the Solid Waste Collection Services and Waste Treatment and Disposal Services (Figure 9). MRFs earn most of their revenue through the sale of recyclable paper (50 per cent of input tonnage) and plastic product (7 per cent) as well as metals (3 per cent). These are the three most valuable commodities produced by 19

MRFs. The fall in commodity prices has impacted their profitability. Levy increases on landfill waste have boosted demand for plastic recovery. As a result, industry operators focused on plastic materials recovery have generated stronger profit margins over the past five years. Figure 9: Waste and recycling industry, profits 14% 12% 10% 8% 6% 4% 2% 0% 2012 2013 2014 2015 2016 2017 2018 All Industries Waste Collection Treatment and Disposal Remediation and Recovery Source: IBISWorld Market competition Generally, the direct cost of collecting and sorting recyclables is significantly higher than rubbish collection and disposal to landfill, although the cost difference is smaller for construction and demolition waste. Recycling also requires greater capital expenditure on recycling facilities compared with sending rubbish to landfill. Significant economies of scale can be gained from operating large material separating, sorting and recycling facilities that receive high and steady waste flows. However, market share consolidation can in some circumstances be difficult to achieve in the industry. Long distances between population centres limit industry companies' ability to use existing facilities to expand into new regions. Transporting waste over long distances is not cost-effective. Therefore, industry operators have to either establish new facilities or acquire existing materials recovery operations to compete in a new region. The long-term nature of municipal waste contracts further limits industry consolidation, with companies unable to gain access to new contracts until a tender expires. As a result, the industry has remained fragmented. Domestic policy settings Most state governments have introduced targets to reduce waste sent to landfill over the past five years and have created policies for increasing waste recovery and recycling rates. These policies have included increasing landfill levies, providing paper and organic municipal recycling collection services, and implementing more stringent regulations governing waste disposal methods. Local government plays a key role in either providing recycling services to industry and households or contracting out waste management services. 20

Landfill levies, which are set by the government, have increased nationwide. These higher levies have promoted waste avoidance and resource recovery, remediation and recycling. Various governments have also provided incentives for waste generators to reassess their environmental practices, reduce the waste they generate and invest in on-site treatment. These levies have also made recovery operations more competitive by making landfill disposal services more expensive. This trend has increased demand for materials recovery services and allowed some industry operators to increase profit margins, as external price competition has eased. However, diminishing manufacturing activity and weakening prices for waste exports overseas have constrained industry revenue growth. Following the 2009 National Waste Policy agreement between all Australian Environment Ministers, state governments have been implementing various strategies to increase waste remediation and recycling. Figure 10 shows the cumulative growth across the waste and recycling industry and compares this to cumulative growth for all industry across Australia. Further detail on government policies is provided in Section 4. Figure 10: Revenue in waste and recycling industry by classification, indexed growth, 100=2007 180 180 160 160 140 140 120 120 100 100 80 80 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 All Industries Waste Collection Treatment and Disposal Remediation and Recovery Source: IBISWorld Disruption to export markets Waste import restrictions imposed overseas have highlighted vulnerabilities in Australia's waste and recycling sector. Historically, with export markets being able to process material more cheaply than it could be done within Australia, the gap for increased sorting and processing was fairly small. This meant that it was not a good business decision for Australian businesses to sort materials more. This gap is now widening and provides Australian businesses with greater incentives to improve the quality of their material. Waste exports also reflect the absence of domestic markets and re-manufacturing facilities for these materials. This can be attributed to immature demand for recycled material, the absence of standards and approaches for product recyclability, and strong competition from virgin material that can be sourced reliably and at a lower cost. Recyclable material reprocessed in Australia is also subject to competition from imports of recycled material. 21

In 2018, China, the world's largest importer of recyclable materials, introduced new restrictions on the recyclable materials it imports through its National Sword Policy. This policy established an acceptable contamination rate of 0.5 per cent for the import of certain recyclable materials. Australia is one of over 100 countries affected by China's restrictions. China was Australia's largest export market for recycled waste, receiving approximately four per cent (1.3 million tonnes) of Australia's recyclable waste and around one-third of Australia's recyclable plastics, paper and cardboard. China's decision has caused significant disruption to the global market for exports of recyclable material, reducing prices for recycled plastics, paper and cardboard15. Export volumes of scrap plastics and paper and cardboard peaked in 2015-16. By 2018-19, exports of scrap paper and cardboard were 27 per cent lower than in 2015-16, and exports of scrap plastics 7 per cent lower than its 2015-16 peak. Australia's waste metals exports have not been greatly affected16. In analysis commissioned by the Commonwealth Department of the Treasury, the CIE found that industry response to date to the China National Sword Policy has been:  To redirect exports to other South East Asian countries, such as Malaysia, Indonesia and India, in particular for plastic;  A reduction in paper and cardboard exports, although no change for plastic;  A reduction in prices received, for the low value end of the recycled commodity market in particular, such as mixed plastic and mixed paper from kerbside recycling;  Exporting higher quality material, such as commercial paper, and using lower quality material domestically, and  Investment in additional sorting of material within Australia so that it is less contaminated. Following China's decision, exports of paper and plastics, the material types most affected by the Chinese restrictions, increased to Indonesia, Vietnam, India, Malaysia and Thailand17. This may be a temporary solution, as other countries reach capacity or introduce similar import restrictions. The six countries receiving the most waste exports from Australia in January 2019 accounted for 78 per cent of all that was exported. These countries were, in order, China (including Hong Kong and Macau), Indonesia, India, Vietnam, Bangladesh and Malaysia. Other than Bangladesh, these countries were also in the top six receivers of waste in December 2018. APCO released a Market Impact Assessment Report defining the impact of China's National Sword Policy. The policy is part of an inspection program targeting (for Australia's purposes) 15 J Pickin and J Trinh, Data on exports of Australian wastes - annual summary 2018-19, p. 1. 16 J Pickin and J Trinh, Data on exports of Australian wastes - annual summary 2018-19, p. 1. 17 National Waste Report 2018, Department of the Environment and Energy; Blue Environment Pty Ltd, November 2018, www.environment.gov.au/system/files/resources/7381c1de-31d0-429b-912c- 91a6dbc83af7/files/national-waste-report-2018.pdf, p. 18. 22

recyclable materials (such as paper and various grades of post-consumer plastics) that are being imported into China, with the goal to reduce the amount of contaminated materials entering the country. Findings from the report revealed that the volume of Australian export of scrap paper and plastics remained largely stable over the past 12 months; however, their value has dropped significantly due to global oversupply. Mixed paper scrap once valued at $124 per tonne (EXW) has dropped approximately 100 per cent and is now close to worthless; scrap mixed plastic has fallen 76 per cent, from $325 per tonne to $75 per tonne; and cardboard is now valued at $125 per tonne, falling 40 per cent from $210 per tonne. There have also been reports of increased stockpiling following the implementation of China's new restrictions, and recycling service providers and local government came under pressure. For example, China's import restrictions have been attributed as a cause of SKM Recycling's collapse18. The pot CASE STUDY: IMPACT OF CLOSING INTERNATIONAL MARKETS enti al In July 2019, SKM Recycling closed, leaving more than 30 councils without a imp recycling provider, which meant initially that most of its contracted councils have no act other options but to send recyclable material to landfill. of furt SKM Recycling owned five sites across Victoria, featuring three materials recovery her facilities, a glass processing plant, a plastics sorting facility and a transfer station. disr Prior to the 2017 announcement that China would stop accepting recyclable upti material imports over a certain contamination grade, SKM exported a number of its ons products internationally. In the aftermath of these policies, key markets were closed to to processors and exporters. This had a significant impact on SKM's operations. inte In August 2019, SKM was put into receivership and was subsequently sold to rnat Cleanaway in October 2019. SKM had been involved in a number of industrial fires ion and other incidents during recent years, which largely related to the over- al stockpiling of materials at its facilities. mar ket SKM was by far the largest provider of recycling services in Victoria and its s is collapse has highlighted the vulnerability of the system where there was a reliance des on a single major service provider. crib ed in Section 4. 18 SKM Recycling was placed in receivership in August 2019. Prior to its collapse, SKM was the major recycling processor for over 30 local governments in Victoria and was responsible for processing approximately 50 per cent of Victoria's recycling. Legislative Council Environment and Planning Committee, Inquiry into recycling and waste management: Final report, Parliament of Victoria, November 2019, pp. 50-51. 23

Barriers to increased domestic recycling The Australian recycling system, and particularly the kerbside system, has been facing significant issues due to a lack of demand for what it produces. Plastic and paper Plastic and paper from kerbside recycling have faced reduced demand because of restrictions on imported waste material under China's National Sword Policy. A substantial share of recycled plastic and paper material is sent to overseas markets. China and Hong Kong were the major destinations for this material. The China National Sword Policy led to a significant decrease in the amount of material sent to China, due to changes in the quality specifications for materials which Australian MRFs could not achieve. Glass Glass from kerbside recycling is struggling to find buyers. Glass is nearly all sold domestically (rather than exported). The main markets are for use in glass bottle manufacturing by Owens-Illinois and Orora, as well as for use as a construction material in glass sand, often blended with quarried materials by groups such as Alex Fraser in Melbourne and formerly Benedict's in Sydney. A reduction in market pull and demand from established end markets has meant that some glass is being stockpiled or landfilled. Tyres Rising vehicle registrations and the subsequent increase in new tyre sales is underpinning the forecast increase in End-of-Life Tyre (EOLT) generation, estimated to exceed 506 000 tonnes by 24

2024-25. Historically, domestic recycling of EOLTs has been limited due to a lack of markets for tyre-derived products and strong international demand for tyre-derived fuel (TDF). REC et. al., 2017 estimate that 63 per cent of end-of-life tyres end up in landfill and 27 per cent are exported to serve as a cheap fuel alternative19. The use of tyres in higher market applications is constrained by high competition from lower cost readily available substitutes and immature demand. The potential closure of export markets will therefore require dramatic increases in processing to create value-added materials and/or use of recycled materials within Australia to sustain existing recovery rates. The domestic and overseas markets for recycled material are set out in Table 4. Table 4: Key domestic and overseas markets Recycled item Potential end markets Glass Reused by bottle manufacturers domestically Glass sand for use in construction/drainage Glass used in road base Paper and cardboard Reused in paper manufacturing domestically Reused in paper manufacturing overseas HDPE, PP and PET Plastic manufacturing domestically Plastic manufacturing overseas Rigid plastics (outside of above) Minimal markets currently, but potential to be used in chemical recovery and waste to energy facilities Soft plastics Recycling to make outdoor furniture, gardening stakes, bin liners, etc. Virgin-like quality polypropylene resin Blending with asphalt for roads and concrete footpaths Chemical degrading to make new plastics As an energy source (waste to energy) Tyres Tyre derived fuels Combined with crushed rock to make retaining walls Crumbed rubber asphalt for roads, pavements, synthetic sporting tracks/fields and soft fall children's play spaces Crumbed rubber combined with polyolefin plastic to manufacture commercial pipes Removed steel reinforced layer melted and reformed into steel billet for use as rods, bars and wires Source: APCO Working Group 2018 reports for Soft Plastics, Expanded Polystyrene, Polymer Coated Paperboard, and Glass; Tyre Stewardship Australia, Tyre-Derived Products Case Studies, REC, et. al., 2017, National market development strategy for used tyres 2017-2022, Melbourne: Report prepared by Randell Environmental Consulting, Reincarnate and Envisage Works on behalf of Sustainability Victoria; the CIE. 19 REC, et. al., 2017, National market development strategy for used tyres 2017-2022, p. ivvv, Melbourne: Report prepared by Randell Environmental Consulting, Reincarnate and Envisage Works on behalf of Sustainability Victoria 25

Market failure The waste and recycling system is characterised by numerous market failures that can be identified throughout the waste industry supply chain. These include:  Upstream activities are those relating to extraction and use of materials, such as manufacturing and consumption of manufactured products. It includes recycling and reuse of materials. - Major impacts include: depletion of finite resources, degradation of renewable resources, greenhouse gas emissions, air and water pollution, incident risk and occupational, health and safety risk.  Downstream activities are those relating to disposal of waste, such as at landfill. The term 'post-consumer waste' is used to refer to waste that is remaining after consumption of manufactured products and is not recycled/reused. It also covers the significant impacts that are associated with the mismanagement of wastes, which may include its blending (and disposal to inappropriate landfills), stockpiling or dumping. - Major impacts include: greenhouse gas emissions, air and water pollution, amenity impacts (visual, odour, noise etc), use of landfill airspace, alienation of land, biological impacts, human health and injury risks, and marine life health risks. Community benefits from increased reuse and recycling may include:  Reduced air and water pollution and greenhouse gas emissions than that which occur during the processing of virgin materials -- these may not occur within Australia if extraction and processing of materials occurs elsewhere;  Increased employment opportunities relative to the processing of virgin materials. This would generally only be considered if there was evidence that employment was additional, rather than displacing employment elsewhere. There may also be negative employment impacts on other industries if recycling has a higher cost, and  More sustainable resource use from displacing manufacturing based on virgin materials. These reuse / recycling benefits arise in the material extraction and conversion sectors - that is, in upstream activities. Safe management in the downstream post-consumer handling and disposal of waste materials, seeks to minimise a range of health and environmental impacts associated with the landfilling of waste or its mismanagement. Landfills are subject to a range of regulations that require their appropriate siting and engineering to reduce health and environmental risks. They operate under regulatory requirements and oversight that significantly internalise operational risks and costs to landfill operators and the gate fees they charge. Nevertheless, residual health and environmental externalities at landfills may include:  Greenhouse gas emissions;  Non-greenhouse gas air emissions;  Leachate escaping from landfills; and  Disamenity caused when houses or recreational areas are located near landfills. 26

By far and away the most pernicious of the externalities associated with waste management arise from not managing waste. For example, littering or illegal dumping of material, or stockpiling (often illegally) of recyclable materials. Meta-analysis by the CIE, highlighted that the externalities associated with well managed landfills are relatively small and likely to be less than the current landfill levies. Aside from the issues noted above, the waste and recycling system is also characterised by a limited ability to directly price waste disposal through the supply chain. For example:  Households are not charged more for generating more waste through municipal systems or for directing waste to more or less efficient outcomes -- instead councils use bin sizes and collection frequencies to try to influence household incentives, and  Package producers do not face any price signal related to the disposal costs of their packaging choices --they do face signals if consumers are informed and make choices taking into account environmental impacts. This means that there is no obvious way that disposal costs are incorporated into market behaviour, unlike for other costs that become factored into product prices and consumer choices.  There is a lack of price signals across the system - from manufacturers onwards through to consumers, there are limited price signals about the disposal costs of different choices. This means that choices about the type of packaging by manufacturers and the choice of product by consumers do not take disposal costs into account. - It is noted that bringing in price signals could have counterintuitive impacts, such as increasing illegal disposal, where externalities are far more severe. Further, additional funding may be required to address remediation, compliance and associated issues, resulting in a net cost to address these types of unintended outcomes.  Externalities from virgin material extraction and production - these are generally managed through specific conditions of obtaining approval (such as for a quarry or factory). In many cases, these impacts are outside of Australia and are the responsibility of foreign governments. Waste recovery targets have encouraged waste diversion away from landfill towards industry-operated MRFs. Meanwhile, landfill levies have reduced the processing costs gap between landfill disposal and recovery. However, diminishing manufacturing activity and weakening prices for waste exports overseas have the consequence of reducing the number of potential buyers of recycling materials. Domestically, there may be only one or two buyers for some materials and in many jurisdictions. Consideration of how market power issues will be managed alongside an export ban will be required to ensure that the price for recyclable materials does not fall to a parity level with landfilling. 27

The value of waste A fundamental part of the analysis in this Decision RIS is recognising that waste has value and this value can increase if it is processed. However, it also recognises that processing also incurs costs and is not without risk. As such, simply landfilling previously exported waste incurs a loss of export value and a cost from landfilling as well as imposing additional environmental externalities. Importantly, it also misses a revenue opportunity available from processing that waste and selling it as a higher value commodity, and forgoes the additional economic activity for the processing industry. If the difference between the additional cost and increase in value is greater than the landfilling costs, it is economically optimal for the waste to be processed. Similarly, stockpiling avoids the landfilling costs, but it also suffers from the loss in the value of material from processing waste to a higher value commodity. Stockpiling also incurs warehousing costs and is not sustainable in the long term as a viable solution. It may, however act as a temporary buffer to allow the processing industry to establish and reach economies of scale in production. Exporting unprocessed waste derives an export value, which is lower than the value of processed waste (as this can then be used as an input for remanufacturing). However, processing that waste domestically incurs an added cost not faced by unprocessed waste. In the absence of an export ban and where the difference in the value per tonne between processed waste and unprocessed waste is less than the additional cost of processing and/or perceived risk, it is likely that waste would be exported unprocessed. However, there exists an economic opportunity to Australia: if waste is processed domestically that exceeds the value of exporting unprocessed waste, it may be used domestically or sold in foreign markets as an intermediate good at higher prices. This activity results in Australian businesses capturing profits in the local economy and employing local labour in carrying out these production activities. Summary and focus of the RIS There is a sound in-principle case for the COAG ban of waste exports based on the negative externalities associated with poor waste management. There is potential for a regulatory approach banning the export of waste plastic, paper, glass and tyres to:  provide certainty to the community that recycling will be managed in Australia in a way that adds value to our economy and provide education to reduce contamination rates;  drive investment in waste and recycling technology, infrastructure and jobs; and  ensure that exported material is a high value resource, not a waste product, which is safe for human health and the environment in receiving countries. The purpose of a RIS is to determine whether proposed regulatory changes are likely to be beneficial for society overall (and whether the proposed regulatory change is the best available option for achieving the objectives). This involves providing rigorous scrutiny of the modelling findings and the assumptions that underpin them. 28

2. OBJECTIVES OF GOVERNMENT ACTION All levels of government have an established role in seeking to minimise the environmental and social externalities associated with waste management. Consistent with this, the policy objectives are to:  Achieve better protection of the environment and human health through improved management of Australia's waste plastic, paper, glass and tyres domestically and internationally;  Ensure Australia actively manages the risk of countries imposing waste import restrictions so Australia's waste and recycling sector is well placed to manage any future disruption or closure of global waste markets without resulting in adverse environmental or human health impacts; and  Complement and leverage the agreed actions under the National Waste Policy Action Plan 2019 that provides a framework for collective, national action on waste management, recycling and resource recovery to 2030. 30

3. REFORM OPTIONS CONSIDERED To address the problem defined above, this RIS explores one non-regulatory option and two related regulatory options:  Option 1 - Status quo, with consumer education and work on standards.  Option 2(a) - Consumer education and restrict exports of waste plastic, paper, tyres and glass without additional supporting government interventions.  Option 2(b) - Consumer education and restrict exports of waste plastic, paper, tyres and glass with additional supporting government interventions to build markets and associated demand. These options are expected to affect households, governments and businesses, including those that make packaging, retail products, collect or process waste, and export waste. Option 1 - Status quo, with consumer education and work on standards Under this option, current laws and policies would continue to operate. Government, together with industry, will encourage improved outcomes through non-regulatory initiatives, such as:  household education campaigns;  targets under the National Waste Action Plan 2019 including increased use of recyclable material in government procurement; and  work with industry to review technical engineering standards to ensure the use of recyclable materials is not discouraged. Current law and policy framework Under this option, waste exports would continue to be permitted with the export of hazardous waste between countries that are parties to the Basel Convention regulated by the Hazardous Waste (Regulation of Exports and Imports) Act 1989 (Cth). Existing product stewardship regulatory requirements would continue under the Product Stewardship Act 2011 (Cth). For example, the National Television and Computer Recycling Scheme and voluntary accredited schemes such as MobileMuster. The management and regulation of domestic waste is primarily the responsibility of state, territory and local governments. State and territory governments would continue to regulate waste and recycling matters in their jurisdiction. Some of these laws and regulatory activities would be relevant to any future restrictions on export markets, such as regulatory restrictions on stockpiling, imposition of landfill levies and restrictions on material that can be landfilled. State and territory governments have also pursued initiatives to reduce the generation of problematic waste materials or increase resource recovery rates. Most states and territories have container deposit schemes. Various governments have banned single-use plastic shopping bags and some state and territory governments are extending these bans to other single-use plastics. A summary of initiatives is detailed in Section 4. 31

Commonwealth, state and territory governments have agreed to a National Waste Policy and related Action Plan. The National Waste Policy is based on 'circular economy' principles, recognising the economic and job opportunities in re-circulating valuable resources within the Australian economy. The Action Plan includes targets and actions to reduce plastic pollution, support industry development and increase demand for recycled materials through procurement. Governments would continue to examine other opportunities to encourage the use of recycled materials. For example, in November 2019 the COAG Transport and Infrastructure Council announced it would seek to:  Identify any significant procurement opportunities over coming months such as major road projects that could use recycled material; and  Prioritise the development of standards to support the use of recycled materials in road construction. Governments could also develop education initiatives to encourage informed household recycling behaviour. Industry-led initiatives There is a range of industry-led product stewardship schemes that would continue, for example on paint, tyres, vinyls, and mattresses. Stakeholders in the tyre supply chain would continue to manage end-of-life tyres through the voluntary, industry-led National Tyre Product Stewardship Scheme administered by Tyre Stewardship Australia. In April 2018, the Commonwealth, state and territory governments agreed to a target of 100 per cent of Australian packaging being recyclable, compostable or reusable by 2025 or earlier to cut down the amount of waste Australia produces. The 100 per cent target will be delivered by APCO, working with its 1400 members. Industry will continue to innovate and conduct research and development activities supported by government programs. Options 2(a) and 2(b) - Prohibit or restrict exports of waste plastic, paper, tyres and glass The problem outlined above can be overcome by a regulatory mechanism preventing the export of waste plastic, paper, tyres and glass in addition to the education campaign and standards proposed under Option 1. Under this option the affected waste would need to be processed domestically into materials that are ready for further use and should not harm human health or the environment in the importing country. Materials that have not been processed domestically could apply for a permit, exemption or accreditation if it can be demonstrated that the export of materials will not cause harm to human health or the environment in the importing country, through mechanisms such as supply chain assurance. 32

The export of affected waste material outside the regulatory mechanism would be an offence, with penalties applying. Exporters may be subject to levies or fees as part of cost recovery arrangements for the regulatory framework. The regulatory option would be phased in to reflect different challenges facing each waste stream, including differences in infrastructure across the states and territories.  For the purposes of the impact analysis for Options 2(a) and 2(b), it has been assumed that the maximum volume of waste materials has been restricted. This does not take into account exports that may be allowed to continue under a permitting scheme as this level of detail is not available. Option 2 has two variants - Options 2(a) and (2b) that differentiate the government interventions needed to support successful implementation of a regulatory option:  Under Option 2(a), governments would not undertake targeted interventions or provide financial assistance to support implementation.  Under Option 2(b), implementation of the regulatory option would be supported by targeted government interventions to help improve the recyclability of the material streams, and build markets and associated demand. These are considered to be additional to the strategies agreed under the National Waste Policy Action Plan 2019 and would be specific to the four waste streams under consideration for the proposed reform. Targeted government interventions could include: - Development or review of technical standards to encourage increased use of recyclable material; - Changes to landfill levies and regulatory standards; - Product stewardship schemes and material design standards; - Improved data collection and reporting; and - Measures that are outside the RIS process because they are not regulatory in nature, such as transitional industry assistance and changes to government procurement policies. Implementation of either Option 2(a) or 2(b) could be supported by the policy actions and interventions discussed in Option 1. These actions would take into account differences in the state and maturity of the market for each recyclable material, which could require different non-regulatory measures. Option 2(a) or (b) would be implemented in a manner consistent with Australia's international trade obligations. Other options The Consultation RIS suggested an alternative regulatory option where export restrictions could be introduced through a permit system, accreditation or supply chain assurance, which would provide that exports meeting specified standards could continue. Based on stakeholder feedback, this has been integrated into Options 2(a) and 2(b). 33

Further feedback suggested that the Option 2 could be further expanded to take into account different definitions of restricted materials and consider different timing scenarios to align with the APCO packaging targets and the National Waste Action Plan 2019. The Decision RIS reflects that the existing agreed measures by all governments form part of Option 1 and a sensitivity analysis has been included for the different waste material definitions. Option 2 has been updated to clarify that the measures needed would be specific to the four waste streams under consideration in the proposed reforms. 34

4. IMPACT ANALYSIS APPROACH The impact analysis seeks to identify and, where possible, quantify the additional or incremental costs and benefits of each of the reform options relative to the base case. This section sets out the approach used in the CBA and the regulatory burden measurement, while the following sections set out the full range of identified benefits and costs and the results of each element of the impact analysis. Cost-benefit analysis approach The purpose of the CBA is to give stakeholders an indication of the likely impacts that could arise from implementing each of the options and to give decision-makers an indication of the option that is likely to deliver the greatest benefit to the community. The CBA considered the expected cost impacts on, and benefits to, business, government and the wider community that would arise from each reform option. It identified the NPV of the costs and benefits over 20 years, as well as the distribution of costs and benefits, and included a sensitivity analysis. The CIE was commissioned by the Department to undertake an assessment of three alternative scenarios, relative to a base case.  The base case includes the existing domestic policy settings such as the national/state targets described below in the base case, and as well, the assumptions regarding the overseas policy settings. It does not include the introduction of export bans. Several variations to the base case are modelled with different material volumes and values.  Scenarios 1-3 introduce the export ban based on varying coverage of material according to the definitions of the export ban on waste material. These do not include a government response strategy to the export ban. - A fourth scenario was also undertaken by the CIE, which was a hybrid of Scenarios 1-3. That is, Scenario 4 assessed the impact of Scenario 1 with the exemptions that were present in Scenarios 2 and 3. The fourth scenario is the closest in design to the central case for Option 2(b) of the Decision RIS based on the definitions of materials restricted. This RIS uses the analysis from the CIE assessment, but it is not limited to this. Additional analysis from by Department focuses on estimating the impacts of:  consumer education and work on standards; and  additional supporting government interventions to build markets and associated demand. The assessment method is consistent with Australian Government guidance on identifying the costs and benefits of legislative change (Department of Finance 2006; PM&C 2014, 2016). The analysis captured:  The initial set-up and transition costs;  Changes in the level of ongoing costs and benefits; and 35

 The distribution of costs and benefits to different stakeholder groups--industry, government, workers and the broader community. This section sets out the approach to the CBA, including the assessment of alternative reform options under multiple future reform scenarios. The identification and valuation of benefits and costs are explained in Sections 5 and 6, respectively. The results of the CBA are set out in Section 7. General approach to the CBA The analyses are conducted through a multi-step approach including:  Early consultations with stakeholders to gather relevant views on the proposed reform and information necessary to inform the cost-benefit analysis (CBA);  Reviewing survey, primary and official data sources to identify key issues affecting the results;  Gathering and reviewing of information from other sources to better understand the status quo of waste recycling and exporting to establish a baseline for the CBA;  Reviewing responses to the Consultation RIS; and  Analysing the impact and cost-benefit analyses, by: - establishing the base case against which to assess the potential economic impacts of changes; - quantifying the changes from the base case resulting from the possible scenarios being considered; and - placing values on the changes and aggregating these values in a consistent manner to assess the outcomes.  Costs and benefits are estimated in NPV terms over a 20-year regulatory period, using a social discount rate of 7 per cent. - Twenty years is sufficiently long to cover the period over which most processing plants operate. A residual value for any capital at the end of the 20-year period is also included. - Sensitivity analysis was also undertaken using a social discount rate of 3 per cent and 10 per cent. A COAG consultation RIS was released on 20 December 2019 seeking input from stakeholders on the non-regulatory (Option 1) and regulatory options (Options 2(a) and 2(b)) under consideration to implement the waste export ban. Following the consultation process, responses were considered and the Decision RIS has been developed to provide final recommendations to First Ministers on the proposed reforms. 36

Establishing the baseline A central base case established the baseline for assessing the impacts of the proposed options presented in this RIS. The base case represents what would happen to the Australian waste and recycling system in the absence of any of the proposed options. The base case could change substantially from current outcomes, because the recycling system is already in a state of flux.  Prices for lower quality commodities from the recycling system have fallen. This has already led to investment in further sorting and processing within Australia, and more would likely occur over time.  There is constant pressure to increase recycling rates, which would lead to additional supply in the recycling system, adding to impacts from population growth and increased per capita waste generation. Jurisdictional policies are often influence this, such as container deposit schemes and changes to kerbside recycling practices. APCO also has targets for higher levels of recycling.  Overseas governments may impose restrictions on imports in the base case. This will reduce the overseas markets available for Australian exports. Policies of Australian governments The baseline includes a range of policies that have been adopted by all Australian governments over the past few years to improve the management of waste. The actions introduced by the jurisdictions are summarised below. National policies The National Waste Policy agreed by all governments in 2018 embodies a circular economy, shifting away from 'take, make, use and dispose' to a more circular approach where we maintain the value of resources for as long as possible. In 2019 a National Action Plan was agreed to implement the 2018 National Waste Policy. These targets and actions will guide investment and national efforts to 2030 and beyond. Specific actions/targets identified in the National Waste Policy Action Plan 2019 include:  Target 1. Ban the export of waste plastic, paper, glass and tyres, commencing in the second half of 2020. The analysis conducted in this RIS is intended to guide the further development of specific aspects of this target.  Target 2. Reduce total waste generated in Australia by 10 per cent per person by 2030.  Target 3. Increase the average resource recovery rate from all waste streams following the waste hierarchy to 80 per cent by 2030.  Target 4. Increase the purchase of recycled products by government and industry.  Target 5. Phase-out problematic/unnecessary plastics by 2025.  Target 6. Halve the amount of organic waste sent to landfill for disposal by 2030. 37

 Target 7. Make comprehensive, economy-wide and timely data publicly available to support better consumer, investment and policy decisions. The National Waste Policy Action Plan 2019 also provides a range of actions designed to support each of the seven targets. These actions include a range of general actions such as:  Improve waste definitions, data collection and reporting;  Conducting further investigations to understand infrastructure capacity;  Supporting further research to understand consumer behaviour, investigate scope for funding R&D into waste recovery technology; and  Supporting education campaigns. Other actions by the Commonwealth Government include the introduction of product stewardship schemes. The Commonwealth Product Stewardship Act 2011 provided the first national approach to voluntary and regulated product stewardship schemes and involved industry taking greater responsibility for the environmental impacts of their products, particularly where they become waste. The Product Stewardship Act 2011 requires at least 12 months' notification be given that a class of products is being considered for some form of accreditation or regulation under this Act before regulations may be made in relation to that class of products. The National Television and Computer Recycling Scheme was the first co-regulatory scheme under the Product Stewardship Act 2011. The scheme aims to boost recycling of televisions and computers and divert them from landfill disposal. The target is to achieve an 80 per cent recycling rate by 2021. State policies State and territory governments have primary responsibility for managing waste through legislation, policy, regulation, strategy and planning, as well as permitting and licensing of waste transport, storage, treatment and disposal operations. Over the past decade there has been an increasing focus by the state and territory governments on waste management in the respective jurisdictions. Broadly speaking the objectives involve reducing waste generated per person, increasing diversion of resources from landfill and a continued emphasis on recirculating material in the economy. The range of policies and mechanisms to achieve these goals differs between the different jurisdictions. These include:  Waste disposal levy: Most jurisdictions require landfills to pay some amount to the state for each tonne of waste deposited in landfill. The additional fee pushes up the cost of landfill, increasing the attractiveness of recycling. The levy rates differ between the jurisdictions which has also led to incentives for interstate movement of waste to the cheapest destinations.  Waste targets: Many jurisdictions have action plans which specify targets, such as resource recovery rates for different waste streams. The target rates and timing for achieving the targets differ between jurisdictions. 38

 Product bans: Some jurisdictions have implemented a ban on single-use plastics.  Grant funding: The revenue collected from the waste levies is commonly used to fund recycling infrastructure, programs or governance organisations. These actions typically focus on reducing the amount of waste generated, increasing recycling and developing new markets for waste products. The NSW Waste Less Recycle More program, for example, allocates $800 million. It began in 2012 with funding allocated to actions and programs to reduce waste, increase recycling, invest in infrastructure, reduce litter and tackle illegal dumping.  Container deposit schemes: These schemes pay a refund (e.g. ten cents) to consumers who return an eligible drink container, with the payments funded by a levy on suppliers of containers. The aim is to encourage the community to recycle while reducing litter and the number of containers going to landfill.  Licensing arrangements: Waste facilities and waste transporters are required to be licenced. The government may specify the conditions of operation for individual licences. This includes regulating stockpile limits on resource recovery facilities to ensure waste is managed appropriately and efficiently.  Other actions: - Landfill bans. There are bans on a range of waste streams being disposed of in general landfills. Asbestos waste, for example, has more stringent management requirements. - For hazardous waste, there are also different arrangements regarding the management and regulation of hazardous waste. This includes a tracking system that requires producers, transporters and receivers of hazardous waste to inform the environmental regulator of each movement of hazardous waste. There are typically more stringent requirements imposed on licensees that manage hazardous waste. Governments are also investing in improving data collection and sharing of data. There is a data quality and calculation framework established which aims to improve the quality of measuring recycling performance and waste generation. Some jurisdictions have also mandated data collection and the use of weighbridges for waste recovery facilities. Further detail on state initiatives is at Appendix G. Industry-led initiatives There is a range of industry-led product stewardship schemes that would continue, for example on paint, tyres, vinyls, and mattresses. Stakeholders in the tyre supply chain would continue to manage end-of-life tyres through the voluntary, industry-led National Tyre Product Stewardship Scheme administered by Tyre Stewardship Australia. In April 2018, the Commonwealth, state and territory governments agreed to a target of 100 per cent of Australian packaging being recyclable, compostable or reusable by 2025 or earlier to cut down the amount of waste Australia produces. The 100 per cent target will be delivered by APCO, working with its 1400 members. Other targets developed by APCO will see by 2025: 39

 70 per cent of plastic packaging being recycled or composted;  30 per cent of average recycled content included in packaging; and  the phase out of problematic and unnecessary single-use plastics packaging. Industry will continue to innovate and conduct research and development activities supported by government programs. Examples include the Commonwealth Government's:  $100 million Australian Recycling Investment Fund to support the manufacturing of products containing recycled materials such as plastics and paper; and  $20 million Cooperative Research Centres Projects grants program to find new and innovative solutions to plastic recycling and waste. Current waste plastic, paper, glass and tyre exports Most recycling is processed domestically, but exports of recyclable material include significant quantities of metals, paper and cardboard and plastics. Smaller quantities of other waste products such as tyres and glass are also exported. In 2018-19, 4.4 million tonnes of materials recovered from waste were exported, representing 6.5 per cent of total waste generation. Export of waste plastic In 2018-19, plastic accounted for 13 per cent of total waste exports (mostly to Asia). Eighty per cent of waste plastic exports are mixed plastics which usually comprise various unprocessed products made from different polymer types. Comingled / kerbside recycling is a major source of mixed plastics currently exported. Some polymer types, mainly ethylene (PET, HDPE, LDPE and PP) are also exported separately. These may have undergone some processing, for example plastic bottles from container deposit schemes or plastic that has been sorted from other waste or by polymer, or plastic that has been washed and flaked. NSW (37 per cent) and Victoria (31 per cent) are the largest exporters of waste plastic, accounting for over two thirds of exports. Some waste plastics from other jurisdictions are likely to be transported to and exported from these states. Export of waste paper and cardboard In 2018-19 about 5.6 million tonnes (Mt) of paper and cardboard waste was generated in Australia. Of the 3.4 Mt (60 per cent) of paper and cardboard recovered 1.118 Mt was exported, with an estimated total value of $235.1 million. Cardboard from commercial and industrial (C&I) collection (59 per cent) and mixed paper from municipal collections (34 per cent), make up most of the exported paper and cardboard material, with smaller quantities of recovered office paper, newsprint and pulp being exported. C&I recovers the majority (77 per cent) of Australia's recovered paper and cardboard with substantial volume being post-consumer paper recovery due to the business-to-business nature of the use of packaging. Increasing e-commerce and home deliveries will increase 40

co-mingled kerbside collections and the passage through Materials Recovery Facilities (MRFs). In 2018-19, Victoria was the largest exporting jurisdiction of recovered paper and cardboard, representing 44 per cent of all national exports of paper. Victoria was the largest exporter of mixed paper at about 39 per cent of all national exports; with Victoria and WA both exporting about 20 per cent, Queensland 12 per cent, South Australia 8 per cent and the Northern Territory 0.23 per cent. The ACT and Tasmania were nil as their mixed paper is transported to other jurisdictions for exports or managed domestically. Export of waste tyres In 2018-19, 465,000 tonnes of tyres reached end of life in Australia. Around 45 per cent of these tyres were processed locally, disposed of onsite (mainly mining tyres), or sent to landfill or stockpiled. The remainder were exported, as baled whole or shredded tyres as fuel for cement kilns or electricity generation, or pyrolysis for fuels and steel recovery. Whole used tyres were also exported for reuse or re-treading overseas. India is the major receiving country for Australian waste tyres, importing around 39 per cent of all tyres exported; Malaysia and South Korea received 28 per cent and 19 per cent of our end-of-life tyres respectively. Export of waste glass According to the National Waste Report 2018, 1.1 million tonnes of waste glass were generated in Australia. 612,000 tonnes were recovered for recycling and only 16,100 tonnes were exported, with an estimated total value of $716,000. Glass is exported under one customs code, so it is not possible to determine the form of the glass that gas been sent. However, industry consultation indicates that glass is exported as cullet and a small percentage as glass fines (pool filtration media). Recycled glass is primarily used for domestic manufacturing, including in glass packaging. Victoria was the largest exporting jurisdiction of recovered glass, representing 90 per cent of all national exports. Changes in international export markets Overseas governments are enacting measures to better manage the waste streams from overseas entering their countries. Table 5 presents our understanding of waste import restrictions which countries have implemented or are planning to implement. This information has been compiled based on the best publicly available sources, sometimes translated from local languages. Table 5: current status of waste import restrictions Country Scope of ban Announcement & Waste implementation Type China Restricted the import of certain materials covering specific Ann.: Jul & Nov-17, Plastic, commodity codes, mainly by specifying a threshold Apr-18. paper, contamination rate of 0.5 per cent. Imp.: Jan & Mar-18, metals, A ban (issued in April 2018) on the import of 32 varieties of Dec-18, Dec-19 other solid waste codes which were previously restricted. Sixteen 41

of these were banned from 31 December 2018 and the other 16 from 31 December 2019. India Import of scrap plastics banned. Also covers areas that were Ann.: Mar-19 Plastic previously exempt under the 2016 ban such as special Imp.: Mar-19, Aug-19 economic zones and export-oriented units. Excludes for importers currently electrical/electronic assemblies or components that are exempt under SEZs defective which can be imported within a year of export. and EOUs. Malaysia Import permits revoked from 114 factories that process Jul-18 Plastic imported plastic waste. Import of non-recyclable plastic waste to be banned. Taiwan Import of plastic waste is banned. Exceptions are made to Ann.: Aug-18 Plastic, licensed local firms that import plastic waste originating from Imp.: Oct-18 paper their own overseas production processes or are a single material, but not from original production processes. Paper imports restricted to only de-inked paper, kraft paper, corrugated paper or cardboard that is not bleached. Import of waste newspapers and magazines banned. Thailand Revoked a broad plastic scrap import allowance, meaning Both ann. Aug-18, Plastic plastic waste and scrap is banned from import by 2021. plastic imp. Aug-18, e- Looking to ban imports of e-waste within two years. waste within two years. Vietnam Tighter controls over imports of plastic, paper and metals. Ann. in Aug-18, Plastic, Only accepted if importers can prove that their shipment appears to be paper, meets the specified environmental standards and there is implemented. metals capacity in the country to process the material. No new Mixed metal waste licences issued for waste imports. restricted from October Under the new national standard QCVN 32: 2019/BTNMT, 2018. import of e-waste plastics such as cases of TVs, computers, office equipment would be forbidden. From 22 February 2019, all imports through road and railway border gates to be banned. Import of mixed metal waste (containing any plastic, paper, other non-metallic metals) now understood to be restricted. Composition of metal waste needs to be 99 per cent metal to be allowed in. Source: Assessment of waste exports from Australia in January 2019, by Blue Environment and commissioned by the Commonwealth Department of Agriculture, Water and the Environment. Australia's exports compete in both price and volume on the international commodity markets. Export price is dependent on international market price while Australia's export price is dependent on local costs and production activities within the Waste collection, treatment and disposal services industry. In order for Australia's recyclable materials exports to remain competitive on the international markets, they need to have a competitive price with the total cost ($A FOB) lower than the prevailing market price. Further, Australian firms are known to favour long-term export contracts to ensure a secure and long-term demand for their products. These contracts are frequently negotiated at lower than prevailing market prices requiring a highly competitive cost structure in order to remain competitive. Transforming 'waste' materials into intermediate goods will support local industrial activity within the waste collection, treatment and disposal services industry by increasing their value as they need to be processed less at their destination and reducing their logistic costs as 42

intermediate goods are transported in more compact forms with a lower level contamination. This transformation means that these goods are likely to cause less harm to human health and the environment in the receiving country. The following charts outline historical export data for selected recyclable materials at its most basic level rather than intermediate goods into which it will likely be produced under the export restrictions. Nevertheless, it is helpful to consider the historical performance of export markets to understand the global demand for Australia's recyclable materials. Further information on Australia's exports is provided in Appendix C. Domestic recycling of waste plastic, paper, glass and tyre exports Overall, the quantity of waste is estimated to have increased (from 2018 to 2019) within Australia by 5.5 per cent, while exports reduced by 9.2 per cent. Recycling grew by approximately 5 per cent leaving the quantity of waste deposited in landfills increased by 10 per cent. The reduction in the amount of exported materials (149,000 tonnes) is predicted to flow into recycling. In total, of the 10.6 million tonnes of annual paper & cardboard, plastic, glass and tyre waste material generated, 5.9 million tonnes (56 per cent) ends up in landfill and a further 1.5 million tonnes (14 per cent) is exported for recycling overseas. Around 3.2 million tonnes (30 per cent) is recycled domestically. The amount of exports of paper and carboard fell by 200 thousand tonnes and glass by 7 thousand tonnes, while exports of both plastics and tyres increased by approximately 29 thousand tonnes each. Landfilling is estimated to have increased across all selected categories by a total of 550 thousand tonnes or 10 per cent year over year (2018-2019) while recycling overall rose by 149 thousand tonnes (or 5 per cent) over the same period (Figure 11). Figure 11: Annual waste material flows by selected categories '000 tonnes '000 tonnes 7,000 7,000 6,000 6,000 5,000 5,000 4,000 4,000 3,000 3,000 2,000 2,000 1,000 1,000 - - 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* Paper & cardboard Plastics Glass Tyres Recycling Exports Landfill 43

Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste-reports/national- waste-report-2018. The * on the x axis are projections by CIE. Australian states experience their own challenges shown in data for recycling and exports impacted by their varying populations, industrial activities and specialisations guiding the overall growth of waste generation (Figure 12). Less populous and less industrially focused states generate less waste in total requiring less recycling and landfills. Further, five of the most populous states generate the largest amount of waste but also benefit from their supply chain infrastructure of sea ports allowing them to export recyclable materials to overseas markets sourced not only from their own recyclable waste but also from that of other states. Figure 12: Annual waste material flows by state selected categories (Paper & cardboard, Plastics, Glass, Tyres) '000 tonnes '000 tonnes 3,500 3,500 3,000 3,000 2,500 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 - - 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* New South Wales Victoria Queensland Western Australia South Australia Tasmania ACT Northern Territory Recycling Exports Landfill Recycling Exports Landfill Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste-reports/national- waste-report-2018, Projections based on forecasts by the CIE. Further detail is provided in Appendix C. Projected waste generation and recycling We adopt the CIE estimates of projected waste generation and recycling, which have utilised the projections of waste generation and recycling that have been prepared for the upcoming National Waste Report 202020. The projections are based on continuation of the historical trends in the underlying drivers in waste generation and recycling (Figures 13 to 16). These drivers as discussed in Section 1. In the base case, landfill levels are expected to fall over time and recycling rates are expected to increase, within the projected levels for total generated waste, as the various targets discussed above are reached. These targets are achieved over a phase-in period, which aligns with the announced targets. 20 Blue Environment and Randell Environmental Consulting, 2020, Australian National Waste Report 2020, prepared for the Department of the Environment and Energy, forthcoming. 44

The data provided in the upcoming National Waste Report 2020 provide projections for plastics, as well as, at an aggregate waste level (for generation and recycling). The CIE has also separately provided projections of paper and glass using the CIE's waste model21. Projections of generation and recycling were provided by Blue Environment. The CIE waste model was also used to disaggregate the projections by state and jurisdiction. Projections are provided for the period 2017/18 to 2036/37. For the purposes of the analysis, the CIE continued the trend in the later years up to 2040. Figure 13: Historical and projected waste generation and fates '000 tonnes '000 tonnes 80,000 80,000 70,000 70,000 60,000 60,000 50,000 50,000 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 - - 2008 2012 2016 2007 2009 2010 2011 2013 2014 2015 2017 2020* 2024* 2028* 2032* 2036* 2018* 2019* 2021* 2022* 2023* 2025* 2026* 2027* 2029* 2030* 2031* 2033* 2034* 2035* 2037* Generation Recycling Disposal Note: All waste, including ash. Data source: Blue Environment and Randell Environmental Consulting, 2020, Australian National Waste Report 2020, prepared for the Department of the Environment and Energy, forthcoming, Forecasts The CIE. 21 The model was created for a recent study for the Department https://www.environment.gov.au/protection/waste-resource-recovery/national-waste- policy/publications/headline-economic-values-waste-final-report-2017 45

Figure 14: Historical and projected waste generated, by source '000 tonnes '000 tonnes 40,000 40,000 35,000 35,000 30,000 30,000 25,000 25,000 20,000 20,000 15,000 15,000 10,000 10,000 5,000 5,000 - - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 2020* 2021* 2022* 2023* 2024* 2025* 2026* 2027* 2028* 2029* 2030* 2031* 2032* 2033* 2034* 2035* 2036* 2037* C&I C&D MSW Note: All waste, including ash. Data source: Blue Environment and Randell Environmental Consulting, 2020, Australian National Waste Report 2020, prepared for the Department of the Environment and Energy, forthcoming. Forecasts The CIE. Figure 15: Historical and projected waste recycled, by source '000 tonnes '000 tonnes 25,000 25,000 20,000 20,000 15,000 15,000 10,000 10,000 5,000 5,000 - - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 2020* 2021* 2022* 2023* 2024* 2025* 2026* 2027* 2028* 2029* 2030* 2031* 2032* 2033* 2034* 2035* 2036* 2037* C&I C&D MSW Note: All waste, including ash. Data source: Blue Environment and Randell Environmental Consulting, 2020, Australian National Waste Report 2020, prepared for the Department of the Environment and Energy, forthcoming. Forecasts The CIE. 46

Figure 16: Historical and projected waste generation and fates, plastics '000 tonnes '000 tonnes 18,000 18,000 16,000 16,000 14,000 14,000 12,000 12,000 10,000 10,000 8,000 8,000 6,000 6,000 4,000 4,000 2,000 2,000 - - 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2017 2027* 2028* 2029* 2030* 2031* 2018* 2019* 2020* 2021* 2022* 2023* 2024* 2025* 2026* 2032* 2033* 2034* 2035* 2036* 2037* Generation Recycling Disposal Note: All waste, including ash. Data source: Blue Environment and Randell Environmental Consulting, 2020, Australian National Waste Report 2020, prepared for the Department of the Environment and Energy, forthcoming. Forecasts The CIE. The project levels of waste generated across Australia in the base case are maintained at the same levels across all the options modelled. The focus of the analysis in this RIS is the estimated impact of the proposed options on the levels of waste that either goes to landfill or is recycled, and then either exported or used domestically. Export projections As a central case in the baseline, the CIE analysis maintains export volumes and values at 2018/19 levels. This then implies that as recycling rates increase in the base case, the proportion that is used domestically rises, while exports remain flat, in line with Australia's desire to manage more of its waste products within Australia. Further information on the base case for 2019 exports across jurisdictions and sources of material is set out in Appendix C. Definitions and volumes of restricted exports For the purposes of the RIS, updated definitions based on stakeholder feedback on the indicative definitions and timetables released following the Meeting of Environment Ministers in November 2019 have been included in Options 2(a) and 2(b). Changes to the material definitions are summarised as follows:  Paper and cardboard that is sorted to one type with low contamination levels can be exported. This reflects the role that these materials play in supporting kerbside recycling viability and that these do not require further processing to be ready for manufacturing into new products. It also reflects the low risk this material presents to the environment and human health. 47

 The requirement that glass for export must be washed and colour sorted has been removed. This change reflects industry feedback that unwashed and mixed coloured glass does not need to be washed and/or of a single colour to be ready for manufacturing into new products.  Bus, truck, and aviation tyres which are exported for re-treading in a verified facility can continue to be exported as this practice represents a higher-order end use than destruction via crumbing or shredding. The definitions are set out in Table 6 below. Table 6: Definitions for materials in and out of scope of the export ban Banned material definition Materials allowed for export Plastic Mixed plastics that are not of a single resin/polymer Plastics sorted into a single resin/polymer type and type (i.e. further sorting, cleaning and processing is processed for further use (e.g. flakes and pellets) required before use in re-manufacturing). Paper Paper and cardboard that is either: Mixed and unsorted paper and cardboard.  Sorted to a single type, with low contamination levels; or  Processed into pulp. Glass Glass which has been processed into fines or cullet Unprocessed glass, in a whole or broken state. Both with low contamination levels. formed packaging and flat sheet glass. Tyres Tyres that are either: All whole used tyres, including baled tyres.  In the form of crumb rubber powder, buffings, granules, and tyre shred (under 80mm)  Bus, truck and aviation tyres that are exported for re-treading to a verified re-treading facility. The likely volume of materials by jurisdiction for each of the four material streams are set out below. These volumes are based on 2018-19 export data provided by the Australian Bureau of Statistics22. The volumes are based on the best available information, noting there are data limitations inherent with using the export codes as these do not provide clarity on the level of processing or form the exported material is in. There is also some uncertainty on the impact that the permitting scheme will have on volumes of exports (i.e. how many permits will be granted for the restricted exports if conditions can be met). As a conservative approach, the analysis considers the impacts of all material covered by the definitions being restricted from 22 Information is indicative and based on Australian Bureau of Statistics data on export of materials by Australian Harmonized Export Commodity Classification (AHECC) code. Consultation with industry partners indicates likely miscoding of material and that additional tonnage may be being exported. Additional analysis with industry and Australian Border Force is identifying other tonnages that should be considered. There are limitations in the data on the state of material being exported. Totals of all waste plastics may include some value-added material that would not be banned, reducing the overall impact of the ban. 48

export, with no exceptions from a permitting scheme, thereby showing the upper limits of potential impacts (Table 7). 23 Table 7: Exported material volumes affected by the ban 2018/19 Material Type total NSW NT QLD SA TAS VIC WA ACT (tonnes) Mixed plastic 149,695 68,878 20 8,131 2,041 170 58,500 11,897 N/A Total waste plastic (includes 187,354 81,409 20 15,900 3,140 218 74,184 12,404 N/A mixed and single polymer plastics) Mixed paper 377,728 73,625 850 44,814 29,808 0 147,914 80,716 N/A and cardboard All whole used tyres, 61,282 21,215 1 6,386 4,654 3 22,096 6,927 N/A including baled tyres Crushed glass 16,100 1,672 0 40 0 0 14,384 0 N/A 23 Table indicates the jurisdiction of waste export, not the jurisdiction of waste generation. For example, waste generated in the ACT which is destined for export may leave the country via NSW. 49

5. IDENTIFICATION AND VALUATION OF COSTS ARISING FROM REFORM This section identifies and estimates the value of the incremental costs of moving to the proposed options. When considering the cost impacts, they are separated in establishment costs and ongoing costs.  Establishment costs are the costs of transitioning to the new requirements in the proposed options. They comprise capital costs, costs for establishing new systems and processes; and increased costs that arise the first time the new processes are implemented.  Ongoing costs are annual costs, such as operational expenditure, levies and costs that require a continued commitment. Establishment costs are likely to appear as an increase in costs incurred early in the implementation process (often in Year 1 of the cost-benefit analysis) but may also appear later in the study period as certain aspects of the proposed options enter into force after a period of time. The costs attributable to the options are those establishment costs that would not have occurred in the absence of reform or otherwise have been brought forward in time as a result of reform. Ongoing costs usually appear as the annual cost from Year 2 onwards (under the proposed options). The CIE analysis is used to inform the costs used in this analysis, along with consultations, on the likely nature and value of the following cost categories. Industry costs The starting point for identifying and valuing costs from a restriction on exports is to consider the costs on the waste industry itself. It is assumed that in the absence of an export ban, the activities required by industry, which come at a net cost, would not incur in the first place. However, there appear to be opportunities that are a net benefit around further processing within Australia for plastic. The reasons for these opportunities not being pursued may reflect the risks inherent in the activities or these opportunities may be taken up over time even without an export ban. Some level of caution should be applied where estimates of gains to the waste industry from an export ban are positive in this case. This may suggest that the industry is unwilling to bear some of the risks or would require much higher returns for doing so than modelled. Industry costs would only be incurred for Options 2(a) and 2(b), when an export ban is in place. The costs incurred for Option 1 accrue to government and these are discussed further below. Waste paper and cardboard Mixed and unsorted paper and cardboard can contain contaminants such as plastic, which can be released into the environment if not carefully managed, and biohazards (due to its absorbent nature). 50

IndustryEdge has provided a view on the most likely outcomes for processing of paper and cardboard waste in the presence of an export ban. These are consistent with views provided by stakeholders and previous CIE work. The main options and potential scale are:  Manufacture of recovered paper pulp [>100 ktpa - <500 ktpa]: - It should be noted that this is an intermediate level of reprocessing, where in general, recycled corrugating packaging mills will create this product and immediately manufacture recycled corrugated packaging materials; - Creating this product is straight forward, requiring an addition to normal recycling equipment, primarily the addition of pulp driers; and - Drum pulping could be an option where volumes are smaller, as it is more scaleable.  Manufacture of recycled corrugated packaging materials [>120 ktpa - <300 ktpa]: - These are corrugating medium (the middle layer of a corrugated box) and testliner/recycled liner (a recycled outer layer that is used for some box applications where the strength of a virgin liner is not required).  Manufacture of recycled cartonboard/folding box board (e.g. cereal boxes) [>120 ktpa - <300 ktpa]: - Australia imports all the supplies of this material, but two of the three major converters are owned by globally integrated manufacturers; and - Barriers to market entry are significant.  Manufacture of recycled office paper [>25 ktpa - <100 ktpa]: - A significantly smaller volume than other grades, expansion is not particularly likely without a guaranteed end market, including government procurement of recycled office paper.  Anaerobic digestion: - Although a poor option from the perspective of retaining access to a transformed resource, the sheer volume of unexported material in the event of an absolute ban would be approximately 1.5 million tonnes per annum, in addition to existing utilisation for domestic purposes.  Moulded fibre / pet litter / other: - Small volumes, but strong and fast-growing markets. In the event of a total ban, options like these will be required at the margin. In the absence of these processing facilities, paper and cardboard would likely be sent to landfill or where available a waste to energy facility. The costs of the above in terms of gate fees will be relatively similar. In both cases a gate fee will be paid for a landfill or waste to energy facility to take material, as compared to being paid for material. Based on Hitachi Zosen Inova's submission to the NSW parliamentary enquiry into 'Energy from Waste' Technology these fees may be: 51

 $130/t for lower range in large plants at 400,000 t/ yr to 600,000 t/yr;  $198/t for medium range in medium plants at 200,000 t/yr to 300,000 t/yr; and  $264/t for higher range in small plants at 50,000 t/yr to 100,000 t/yr. The higher the cost of putting waste to landfill across jurisdictions, the more it improves the financial viability of waste to energy facilities. Cost of additional processing The costs of processing for paper are very high, because of the large volume of the material. Estimates of capex and opex for different scale facilities (excluding land and disposal costs) are shown in Table 8. To process another million tonnes of paper domestically would have a capital cost of approximately $1 billion depending on the scale of the facilities. Table 8: Capital and operating costs for paper processing facilities Scale Low Moderate High Recovered paper pulp Throughput (input tonnes) 140 000 280 000 420 000 Capex ($m) 190 248 295 Opex ($m/year) 12 22 30 Recycled corrugated packaging Throughput (input tonnes) 210 000 448 000 630 000 Capex ($m) 306 437 661 Opex ($m/year) 22 45 59 Recycled cartonboard/folding box board Throughput (input tonnes) 210 000 336 000 420 000 Capex ($m) 343 437 534 Opex ($m/year) 29 44 48 Note: Costs exclude land and disposal costs to landfill. Source: IndustryEdge, CIE Value of products The prices of the products produced are shown in Table 9. This compares to a current average export price for waste paper of $210 per tonne. Table 9: Prices of products produced Product Material input Stream Central case $/tonne of output Recovered Paper Pulp Paper MSW 515 Recovered Paper Liner Paper C&I/C&D 605 Corrugating Medium Paper C&I/C&D 595 Coated Kraftback [Cartonboard] Paper NA 1025 Uncoated Cartonboard (Grayback) Paper NA 880 Note: All plastic produced is assumed to get the average of HDPE and PET prices. Source: IndustryEdge; Full Circle Advisory; CIE. 52

Comparing costs and material values For the waste industry (and those who pay for it such as households and businesses), the main comparison is between the additional processing costs and the higher value of the material produced relative to what it is sold for in export markets. This varies considerably depending on:  The amount of input material, which determines the scale of the processing facility and unit costs, and whether material would be transported to another state for processing;  Which of the different processing options occur;  Costs specific to each jurisdiction, such as land prices and waste disposal levies;  The amount of material lost as part of processing -- typically it takes 1.4 tonnes of inputs to make each tonne of product. However, this is likely higher for more contaminated streams (such as MSW) and lower for other streams such as C&I; and  How long it takes before a facility is operational. An example for a recovered pulp facility is shown in Table 10, with everything converted to a per tonne basis. This example is at the optimistic end of the paper processing viability, because it uses a high capacity facility.  In this example, capital costs per tonne of input are $98, operating costs are $72, land costs are $29 and disposal to landfill of residual costs $29. Total costs are $229 per input tonne. Material produced sells for $515 per tonne -- in terms of value per tonne of input, this equates to $343 per tonne, because it takes 1.5 tonnes to produce 1 tonne of output. The maximum amount that a paper processor could pay and be commercially viable is $114 per tonne. This is somewhat below the current average export price but would be above the price of MSW paper. This suggests that further paper processing is a marginally commercial proposition. Table 10: Costs for processing of mixed MSW paper to recovered pulp (high capacity facility) Item $/tonne of mixed MSW $/tonne of product paper Capital costs 98 Operating costs 72 Land costs 29 Landfill disposal costs 30 Total costs 229 Material value 343 515 Maximum amount to pay for material 114 1000 kgs of input 1000 667 Note: This uses a landfill cost of $150 per tonne, land cost of $400 per m2. Source: IndustryEdge; CIE. 53

A similar example is presented for C&I paper processed to recycled corrugated packaging in Table 10. In this example, the processor would be able to pay at most $257 per tonne of input material. This would be close to or slightly below the export values received. Table 11: Costs for processing of C&I paper to recycled corrugated packaging (high capacity facility) Item $/tonne of C&I paper $/tonne of product Capital costs 74 Operating costs 94 Land costs 29 Landfill disposal costs 8 Total costs 204 Material value 462 600 Maximum amount to pay for material 257 1000 kgs of input 1000 769 Note: This uses a landfill cost of $150 per tonne, land cost of $400 per m2. Source: IndustryEdge; CIE. The CBA numbers present these estimates systematically accounting for the differences across jurisdictions. Plastic Plastics can contain contaminants and waste materials that are removed in the receiving country when bales are broken down, with a high likelihood of being landfilled or released into marine environments. Full Circle Advisory has provided a view on the most likely options for processing of plastic waste in the presence of an export ban. These are consistent with views provided by stakeholders and previous CIE work. The high scale options are flaking or pelletising plastic, which could then be either used domestically or exported -- this would cover HDPE and PET primarily. For C&I plastic, which, where collected, is much cleaner and homogenous (e.g. baling plastic), processing could be of LDPE into LDPE film and processing of PET and HDPE into pellets or flakes. Plastics could also be used in chemical recovery or waste to energy facilities. These are broadly equivalent in their costs to landfill disposal, although would reduce the amount of material going to landfill. These are possible destinations for residual material -- i.e. recycling undertaken for low value materials. For the purposes of the CBA we model residual material being disposed of to landfill. There are also many smaller potential uses of recycled plastic. It is not possible to estimate the cost and material change for all of these. However, based on our past experience these would generally accommodate smaller volumes of plastics. These could accommodate some additional volume but are not of a scale that they could meet the required processing if there was a ban on exports. 54

Cost of additional sorting For some plastic waste, prior to processing there would be a need for sorting of mixed plastic bales into individual polymer types. This already occurs at some material recovery facilities. Material from container deposit scheme is also likely to be sorted into types (e.g. PET bottles). The estimated cost of sorting mixed plastic bales into its components and into colours is shown in Table 12. This amounts to $37 per tonne, not including landfill disposal costs. Sorting equipment, which largely comprises additional optical sorters, would be added to existing material recovery facilities where there was space. However, many MRFs are space constrained, and in this case, sorting would have to occur at a different site, potentially then directly feeding into the plastics re-processing. Table 12: Sorting costs for mixed plastic Item Note Estimate Unit Capital cost per machine Assumption 2 650 000 $/machine Life of machine Assumption 7 years Amortised machine cost Calc 491 716 $/machine/year Output per machine Assumption 20 000 t/year/machine Ratio of opex to capex Assumption 50% Per cent of capex Capital cost per tonne Result 25 $/t Opex per tonne Result 12 $/t Total cost per tonne Result 37 $/t Note: The tonnes are the tonnes input. It is assumed that these sorting costs apply to 75 per cent of current MSW plastic. Source: The CIE, based on industry consultations. Landfill disposal costs could be very large for a sorting process. For example, a common product designation in recycling of kerbside material is a 4-4-2 bale, which is a mixed plastic bale containing 40 per cent PET, 40 per cent HDPE and 20 per cent other plastics. Where this is sorted, the output is baled HDPE, baled PET and a residual 2-2-6 bale (i.e. 20 per cent PET, 20 per cent HDPE and 60 per cent mixed plastic). These ratios imply that 83 per cent of HDPE and PET is extracted. The remaining 22-6 bale would comprise 32 per cent of the initial material, and it is likely that this would be landfilled domestically if there was an export ban (or sent to another disposal option such as waste to energy). Cost of additional processing The costs for equipment to process PET and HDPE are shown in Table 13. This is for a facility that has a single HDPE and PET processing line that can process 1 tonne per hour each of HDPE or PET -- if operating for 12 hours a day this is approximately 7000 tonnes per year. A facility may have multiple lines, in which case the cost and volumes processed scale up accordingly. Table 13: Capital costs for HDPE and PET pelletising Item Capital cost $m Recycling equipment HDPE recycling line 1.7 55

HDPE pelletising line 2.0 PET recycling line 2.5 PET pelletising line 2.0 Other Ancillary equipment 4.6 Waste water treatment 1.0 Total capex 13.7 Note: Excludes land and buildings. For a HDPE recycling line of 1 tonne per hour and a PET recycling line of 1 tonne per hour. Source: Full Circle Advisory. The operating costs are approximately $100 per tonne -- slightly higher if operating at lower scale and lower if operating at higher scale. These costs do not include landfill disposal costs or land and building costs, which have also been added into the cost-benefit analysis. The above costs are below other available figures, such as those compiled by EnvisageWorks for a PET processing line. These are reported in Appendix D. Change in material value HDPE and PET pellets sell for approximately A$1100 per tonne24. This is based on advice by Full Circle Advisory and is consistent with recycled HDPE and recycled PET selling at a discount to virgin prices. This compares to a current export value of plastic of $232 per tonne. Material losses are important in considering these values -- the losses from mixed plastic to obtain a bale of PET and HDPE can be substantial. A further 20 per cent in weight could be lost in processing. Table 14 shows the end of September 2019 recycled material prices as reported in Envisage Works 201925. Prices received for mixed plastics and mixed paper are at very low levels and have been most impacted by the China National Sword Policy. Table 14: Recycled material commodity values end September 2019 Material category Commodity Price $/tonne Plastic PET 375 Plastic HDPE 550 Plastic Mixed (1-7) a 65 Plastic Mixed (3-7) a -20 a Refers to the plastic polymer type. PET (1), HDPE (2), PVC (3), LDPE (4), PP (5), Polystyrene (6) and other (7). Note: Estimated prices at the out-going MRF gate, and prior to any secondary processing (along with the associated processing costs). Source: Envisage Works 2019, Recovered Resources Market Bulletin: October 2019, Victorian Market Intelligence Pilot Project (edition #07), p. 7 Table 15 shows the end of June 2019 virgin material commodity prices for virgin material commodities that are broadly competing with recycled material, as reported in Envisage 24 Provided by Full Circle Advisory. 25 Envisage Works 2019, Recovered Resources Market Bulletin: October 2019, Victorian Market Intelligence Pilot Project (edition #07), p. 14 56

Works 201926. Note that the prices of virgin material below and the price of recycled material above are not directly comparable, as different processing is required for using the materials in production. As noted above, the virgin and recycled material prices operate in a market where the two are substitutes, so their prices will be somewhat related. 26 Envisage Works 2019, Recovered Resources Market Bulletin: October 2019, Victorian Market Intelligence Pilot Project (edition #07), p. 14 57

Table 15: Virgin material commodity values end June 2019 Material category Value $/tonne Plastic - PET (1) virgin resin 1 300-1 500 Plastic - HDPE (2) virgin resin 1 700-1 800 Plastic - PVC (3) virgin resin 1 100-1 300 Plastic - LDPE (4) virgin resin 1 700-1 800 Plastic - PP (5) virgin resin 1 600-1 700 Plastic - PS (6) virgin resin 1 900-2 000 Note: Estimated prices at the out-going MRF gate, and prior to any secondary processing (along with the associated processing costs). Source: Envisage Works 2019, Recovered Resources Market Bulletin: October 2019, Victorian Market Intelligence Pilot Project (edition #07), p. 14. Comparing costs and material values A comparison of the costs for processing an MSW plastic stream and the material values achieved is shown in Table 16. This suggests that a domestic plastic processor could pay at most $150 per tonne for a mixed plastic stream to achieve commercial viability. That is currently above the market price for a mixed plastic stream. Table 16: Plastic costs at different points of processing $/tonne of mixed $/tonne sorted $/tonne product plastics (e.g. baled PET and (pellets) HDPE) Sorting Sorting cost 37 Disposal cost at sorting 49 Total sorting cost 85 Processing costs Capex 403 Opex 98 Disposal costs at processing 15 Land costs 14 Total costs (excluding input material) 530 Material value 1100 Maximum payable for sorted material 350 Maximum payable for unsorted material 151 Material volumes from 1000 kgs unsorted 1000 677 541 Note: Note all material is disposed of to landfill. Losses during processing can occur in other ways. This uses a landfill fee of $150 per tonne. Not that there are no sorting costs and smaller losses for C&I and C&D plastic. Source: Full Circle Advisory; The CIE. Tyres There are significant human health and environmental impacts from mismanagement of tyres. For example, uncontrolled tyre fires and unregulated pyrolysis plants cause air, water 58

and soil pollution, while tyres stored in the open can store rainwater that creates a breeding ground for disease-carrying mosquitoes and other vermin. The export ban would apply to whole tyres exported, rather than to tyres that are shredded and exported. The most likely outcomes from an export ban are that:  Tyres are shredded and then exported -- this is a relatively low-cost process. However, it does not add to the value of the material, as some buyers prefer whole tyres for use in energy facilities, rather than shredded tyres;  Tyres are used in pyrolysis facilities -- converted back to basic products, such as oils; and  Tyres are landfilled or stockpiled -- landfilling is particularly expensive for tyres, as they are a hazardous waste. Financially, stockpiling would be much more likely, but is also limited by regulations. Cost of additional processing For the central CBA scenario, we model the cost of tyres being shredded relative to being exported whole in bales. Based on analysis undertaken for Tyre Stewardship Australia, this would have a cost of $100 per tonne. Change in material value Analysis of export data by Blue Environment suggests that shredded tyres have a marginally lower reported value than whole waste tyres ($45 per tonne versus $66 per tonne). Analysis undertaken for Tyre Stewardship Australia agrees with this view that shredded tyres are sold for less per tonne than baled tyres. There are also whole tyres exported that may not be for energy but may be for reuse or retreading. The value of these is over $1000 per tonne. If these are subject to the export ban, we assume that they are also shredded, leading to higher processing cost and a large reduction in value. Glass Waste glass that is not recycled can add to growing landfill. Unprocessed glass packaging in stockpiles can emit odour and contain residues such as molasses and alcohol, which can leach into the environment. This leachate is high in nitrogen and can harm aquatic animals if it enters waterways. The export ban would apply to unprocessed glass, in a whole or broken state and would include both formed packaging and flat sheet glass. The most likely outcomes from an export ban are:  Glass is recycled into larger pieces know as 'cullet' and then exported: cullet can be used in remanufacturing of glass packaging after being beneficiated (cleaned and sorted);  Glass is crushed into fines: glass fines, which are below the size required for glass remanufacturing, occurs because sorting crushes the glass. These glass fines are generally used in construction applications (such as road base) or landfilled; and  Glass is landfilled or stockpiled. Financially, stockpiling would be much more likely, but is also limited by regulations. 59

Cost of additional processing For the central CBA scenario, we model the cost of glass being recycled into cullet and then exported. Based on previous CIE research and consultation with industry, this would have processing costs of $75 per tonne. Change in material value CIE analysis shows that where glass is currently exported instead of processed into a glass sand and apply this to 15 000 tonnes per year from both of NSW and Victoria, this leads to a loss of export value of $49 per tonne revenue from the sale of glass sand of $10 per tonne. Costs to government There will be costs to governments under all three proposed options. In identifying and valuing these costs, it is important to consider those costs to government already accounted in the base case and those that would be additional to those government commitments. Governments agree that there are interventions which are required to deliver the export ban and support parts of industry to transition their export practices, and there are longer-term changes required to incorporate international best practice into the system to ensure access to international markets for valuable recycled products into the future. As part of the implementation, COAG will release a response strategy detailing the national system-level challenges, opportunities and actions where the Commonwealth, states, territories and local government will focus attention and resources. This Decision RIS, does not seek to detail the response strategy ahead of its release, but rather identifies key response themes and the likely net benefit from a typical investment made under some of the themes. Our costs below have also been informed by the recent 'ACOR Recycling Grants Analysis'27, which details all funding commitments by government in 2018 and 2019 for waste, recycling and resource recovery grants. This information is summarised in Table 17. Table 17: 2018 and 2019 waste, recycling and resource recovery grant funding Grant initiatives Funding Bioenergy from waste 1,305,000 C&D waste 6,601,780 CDS / Container Refund Scheme 7,500,000 Education 8,209,475 FOGO 42,141,169 Glass 2,936,939 Innovative and industry development 43,833,000 Glass 2,936,939 MRFs 7,223,320 27 https://www.acor.org.au/recycling-grants-analysis.html 60

Paper and cardboard 594,706 Mixed materials 102,194,000 Recycled roads 774,600 Recycling infrastructure 78,389,716 Resource recovery 58,506,000 Transport 7,113,674 Tyres 732,000 All other 75,100,770 Total 446,093,088 Source: Australian Council of Recycling, ACOR Recycling Grants Analysis. Option 1: The status quo, with consumer education and work on standards In the analysis, we have chosen the following government investment to assess: Table 18: Consumer education costs Jurisdiction Establishment costs Ongoing annual costs Per year for 4 years Commonwealth $2 million $0.5 million State and Territories (each) $2 million $0.5 million This assumes a total cost for consumer education of $36 million over four years, comprising:  $18 million in establishment costs to design, prepare and ready the consumer education material; and  $18 million in ongoing consumer education material in total across all jurisdictions in the four years over the forward estimates. Table 19: Work on standards costs Jurisdiction Establishment costs Ongoing annual costs Per year for 4 years Commonwealth $2 million $1 million State and Territories (each) $2 million $0.5 million This assumes a total cost of $31.5 million over four years, comprising:  $13.5 million in establishment costs to design, prepare and ready the work on standards; and  $18 million in ongoing data collection and publication in total across all jurisdictions over the forward estimates. These estimates are not commitments, but rather parameters that are used in the model to estimate the likely benefits from given costs in these areas. Option 2(a): Consumer education and prohibit or restrict exports of waste plastic, paper, tyres and glass without additional supporting government interventions 61

Incremental costs in Option 2(a) that are additional to those above in Option 1, relate to:  Costs to the Commonwealth Government of developing legislation, and for compliance and enforcement activities related to an export ban. These costs below are indicative and would be revised once specific details on implementation are finalised such as definitions and timetables.  For the purposes of analysis, an estimate of $3.0 million has been selected for legislative development and stakeholder transition to the new framework, which would be incurred as an establishment cost and expensed as the export ban is phased in. - This cost would include stakeholder engagement to manage industry transition, communications on interactions with existing legislative frameworks, drafting of any necessary subordinate legislation to support the phased in approach for the ban, legal advice and potential development of a Cost Recovery Implementation Statement.  If permitting was undertaken with associated compliance and enforcement, based on other permitting schemes currently in operation, this is likely to be up to $4 - 5 million per annum in the first three years of the scheme due to the need to establish or expand existing ICT to support the reform. This is likely to decrease to an indicative $2- 3 million per year. - Staff will be required to process applications under the new regulatory framework. This could include a staffing profile similar to other permitting schemes up to seven staff including a Delegate, Director, technical experts, project managers, communications experts and permit assessment officers. - Depending on the final design of the regulatory framework, this could be cost recovered in line with the Australian Government Charging Framework28. Subject to final design, this could include a combination of applications for permits, exemptions or accreditation. - The cost that may be passed on to business is currently unquantifiable. This will be dependent on the numbers of exports captured by the new regulatory scheme, and the conditions attached to a permit, for example whether permits are per consignment, based on export volumes or granted for a set period of time. As a comparison, based on the complexity of the permit application, fees charged under the Hazardous Waste Act 1989 range from $5,000 to $35,000. - There is also likely to be some form of reporting burden on businesses that is captured by the regulatory framework. This is unquantifiable at this time.  There is also likely to be some uncertainty placed on industry from a permitting scheme as to the exports that will be restricted. This is because a permitting scheme may have the effect of reducing the volume of material covered under the export ban. 28 Australian Government Charging Framework is available from: https://www.finance.gov.au/government/managing-commonwealth-resources/managing-money- property/managing-money/australian-government-charging-framework 62

 An export ban would be a regulatory change that would likely trigger variations to kerbside contracts. This represents a potential cost to local councils for renegotiation of contracts for kerbside recycling. Based on past renegotiations in response to the China National Sword Policy, the costs of this could be $50 000 to $100 000 for a larger council. However, there may also be such costs in the base case, if other countries ban exports and such a change falls within the contract variation arrangements. These possible costs have not been included in the cost benefit analysis for Option 1. Option 2(b): Consumer education and prohibit or restrict exports of waste plastic, paper, tyres and glass with additional supporting government interventions to build markets and associated demand. Incremental costs in Option 2(b) that are additional to those above in Option 1 and Option 2(a), relate to possible government interventions across the key themes of the response strategy that are being developed by COAG to support the export ban. For the purpose of this analysis, the following possible interventions are used in the assessment:  $250 million in investments in new technologies and infrastructure - This investment could include support for upgrades to MRFs with the purpose of lifting technology to a consistent minimum standard, for example, through optical sorting technology. Additionally, it could be for co-investment to support commercially viable waste and recycling facilities and support research and development for new technologies and products.  $100 million towards supporting domestic demand for recycled products - This could be achieved by building demand for recycled products through the purchasing of goods and services at scale. The cost is estimated as the price difference between the non-recycled product, not the total cost of the recycled product. The above costs to government are not commitments, but rather parameters that are used in the model to estimate the likely benefits from given costs in these areas. These would also be additional to any costs in the base case that relate to interventions that have already been committed. 63

6. IDENTIFICATION AND VALUATION OF BENEFITS ARISING FROM REFORM This section identifies and estimates the value of the incremental benefits of moving to the proposed options. It examines benefits that arise from:  Processing waste to a higher value commodity;  Achieving better protection of the environment and human health through improved management of Australia's waste plastic, paper, glass and tyres; and  Ensuring Australia actively manages the risk of countries imposing waste import restrictions so Australia's waste and recycling sector is well placed to manage any future disruption or closure of global waste markets without resulting in adverse environmental or human health impacts. The value of waste A fundamental part of the analysis in this Decision RIS is recognising that waste has value and this value can increase if it is processed. However, it also recognises that processing also incurs costs and is not without risk29. As such, simply landfilling previously exported waste, incurs a loss of export value and a cost from landfilling as well as imposing additional environmental externalities. Importantly, it also misses a revenue opportunity available from processing that waste and selling it as a higher value commodity and forgoes the additional economic activity for the processing industry. If the difference between the additional cost and increase in value is greater than the landfilling costs, it is economically optimal for the waste to be processed. Similarly, stockpiling avoids the landfilling costs, but it also suffers from the loss in the value of material from processing waste to a higher value commodity. Stockpiling also incurs warehousing costs and is not sustainable in the long term as a viable solution. It may, however act as a temporary buffer to allow the processing industry to establish and reach economies of scale in production. Exporting unprocessed waste derives an export value, which is lower than the value of processed waste (as this can then be used as an input for remanufacturing). However, processing that waste domestically incurs an added cost not faced by unprocessed waste. In the absence of an export ban and where the difference in the value per tonne between processed waste and unprocessed waste is less than additional cost of processing and/or perceived risk, it is likely that waste would be exported unprocessed. However, there exists an economic opportunity to Australia: if waste is processed domestically that exceeds the value of exporting unprocessed waste, it may be used domestically or sold in foreign markets as an intermediate good at higher prices. This activity results in Australian businesses capturing profits in the local economy and employing local labour in carrying out these production activities. 29 Such risks may be internal, for example operational and technological factors like access to credit, required rates of return on investments, or the emergence of new technologies; or may be external and not controlled by industry, such as economic factors like market risks and pricing pressures. 64

Environmental benefits This chapter firstly examines the environmental impacts from mismanaged waste and subsequently examines environmental impacts throughout the waste supply network. Key findings from the CIE analysis with respect to environmental impacts from mismanaged waste are:  The key focus is mismanaged plastic waste entering the ocean. There is minimal information in the literature on the extent and impacts of other forms of mismanagement (litter, open dumps, uncontrolled burning).  There is incomplete information on the impacts of plastics in the marine environment, including the magnitude. Potential impacts include impacts on food chains, biodiversity and human health from microplastics, chemical pollution, reduced amenity and tourism, and damage to assets.  Examples of direct and indirect costs from plastics in the ocean are available. However, without information on the final outcomes of plastics in the ocean, a damage cost curve can not be established to quantify the economic value of mismanaged plastic entering the ocean. The key inputs into the cost benefit analysis regarding mismanagement of waste are:  100 per cent of exports from Australia classified as high-valued material are assumed to be appropriately managed in the receiving economy. For example, given the high values of HDPE and PET, we assume that all such material is recycled. The shares of material assumed to be residual is set out in Appendix C, and ranges from 20 per cent for mixed plastic and paper to smaller levels for other materials.  Seven per cent of the residual export waste stream (i.e. low value material) is assumed to be mismanaged and leaked into the ocean, or having some other form of impact.  in the absence of sufficient information to quantify the impacts from plastics in the ocean, a cost effectiveness approach is applied using an estimate of $550 per tonne of plastic-waste leakage prevented. That is, we compare the costs to the Australian community per tonne of avoided mismanagement of material to the costs of improving management in the countries themselves to avoid plastics entering the ocean. The environmental and health impacts of waste management within Australia is examined, including the relative benefits of recycling compared to landfill and external costs from waste transportation. Key inputs into the cost benefit analysis include:  Amenity externalities related to landfills.  Benefits of recycling relative to the alternative of landfilling, from a lifecycle perspective. This covers the air pollution, water pollution and greehhouse gas (GHG) emission impacts across the supply chain.  External costs from waste transportation interstate that results from an export ban. This covers air pollution, GHG emissions, noise pollution and water pollution. Social impacts are related to congestion, accidents and road wear and tear. 65

Mismanagement of waste in importing countries Mismanagement of waste includes inadequate disposal, litter, and uncontrolled burning. Inadequate disposal includes disposal in dumps or open, uncontrolled landfills where it is not fully contained30. A key focus in the literature is understanding how much mismanaged waste leaks into the ocean, particularly plastic waste. Leakages into the ocean can occur when waste is littered or placed in dumps of open and uncontrolled landfills which subsequently enter the ocean directly or via inland waterways which act as transport channels to the ocean31.  32 million tonnes of mismanaged waste per year occurs within 50 kilometres of the coastal zone.  76 million tonnes of mismanaged waste per year occurs within the area of the global river catchments32. Available estimates of plastic waste leakage into the ocean vary considerably. Jambeck et al. (2015) estimated the amount of plastic waste entering the ocean from land each year exceeds 4.8 million tonnes and may be as high as 12.7 million tonnes33. Schmidt et. al. (2017) estimated the contribution of plastic waste into oceans that derives from rivers, with an estimate ranging between 0.41 and 4 million metric tonnes of plastic waste per year34. The focus of this study is the mismanagement of waste types present in waste systems of waste importing countries. Available data does not distinguish between mismanagement of domestic waste and imported waste. The data does however, provide an estimate of how well receiving countries manage waste within their borders. Available estimates of plastic waste mismanagement and plastic waste leakage are discussed from two sources:  Ocean Conservancy (2015) for the five countries examined (China, Indonesia, the Philippines, Thailand and Vietnam)35.  Jambeck et al. (2015) which examined mismanaged plastic waste across 192 countries36. Another concern is the mismanagement of tyre waste, either at non-complying pyrolysis plants or open burning. This is discussed in detail below. 30 Jambeck, J., Geyer, R., Wilcox, C., Siegler, T., Perryman, M., Andrady, A., Narayan, R., and Law, KL., 2015, Plastic waste inputs from land into the ocean, Sciencemag, 2015, Vol 347, Issue 6223. 31 APEC, 2020, Update of 2009 APEC Report on Economic Costs of Marine Debris to APEC Economics 32 Schmidt, C., Krauth, T., and Wagner, S., 2017, Export of plastic debris by rivers into the sea, Environmental Science and Technology 2017, 51, 12246-12253. 33 Jambeck, J., Geyer, R., Wilcox, C., Siegler, T., Perryman, M., Andrady, A., Narayan, R., and Law, KL., 2015, Plastic waste inputs from land into the ocean, Sciencemag, 2015, Vol 347, Issue 6223. 34 Schmidt, C., Krauth, T., and Wagner, S., 2017, Export of plastic debris by rivers into the sea, Environmental Science and Technology 2017, 51, 12246-12253. 35 Ocean Conservancy, 2015, Stemming the Tide: Land-based strategies for a plastic-free ocean. 36 Jambeck, J., Geyer, R., Wilcox, C., Siegler, T., Perryman, M., Andrady, A., Narayan, R., and Law, KL., 2015, Plastic waste inputs from land into the ocean, Sciencemag, 2015, Vol 347, Issue 6223. 66

Ocean Conservancy The Ocean Conservancy (2015) investigated the key sources of plastic leakage into the ocean and found:  At least 80 per cent of ocean plastic comes from land-based sources  Over half of the plastic which enters the ocean comes from five countries -- China, Indonesia, the Philippines, Thailand, and Vietnam.  Two drivers of plastic leakage are: - waste that remains uncollected -- 75 per cent of plastic waste leakage from land based sources comes from uncollected waste (e.g. waste piles and dumping of waste into waterways); and - value of plastic waste, with a higher rate of leakage for low residual value plastic waste37.  On average in the five priority countries, seven per cent of collected waste is currently leaked into the ocean. The Ocean Conservancy (2015) conducted case studies in China and the Philippines to identify the key sources of plastic waste leakage. The five key sources are:  Low-waste-density rural areas that do not have collection services.  Medium-waste-density urban areas that lack proper waste-management infrastructure.  High-waste-density urban areas whose services are overstretched or where the cost to citizens of waste management discourages use of the services.  Illegal dumping by trash haulers when waste transport systems are poorly regulated.  Dump sites on waterways. Collection systems in the focus countries still make heavy use of informal or 'open' dump sites. Across the five priority countries examined by Ocean Conservancy (2015), these five leakage points contribute to between 7.0 million and 8.6 million metric tonnes of plastic waste into the ocean per year (Table 20). The leakage points relevant for this study are the two from the collected waste system, illegal dumping by trash haulers and dump sites on waterways. The two sources are estimated to leak between 1.8 million and 2.2 million metric tonnes of plastic in the ocean per year. This is equivalent to between six per cent and seven per cent of the 30 million metric tonnes of collected plastic waste in these five countries38. Table 20: Leakage sources of plastic waste entering ocean in five priority countries Leakage source Collected or uncollected waste Plastic entering ocean per year metric tonnes Low-waste-density rural areas Uncollected 1.7 - 2.1 37 Ocean Conservancy, 2015, Stemming the Tide: Land-based strategies for a plastic-free ocean. 38 Ocean Conservancy, 2015, Stemming the Tide: Land-based strategies for a plastic-free ocean. 67

Medium-waste density urban areas Uncollected 1.9 - 2.4 High-waste-density urban areas Uncollected 1.6 - 1.9 Illegal dumping by trash haulers Collecteda 0.7 - 0.9 Dump sites on waterways Collecteda 1.1 - 1.3 Total 7.0 - 8.6 a Assumed to be from the collected waste stream based on information provided. Note: The five priority countries in the Ocean Conservancy (2015) study area China, Indonesia, Philippines, Thailand and Vietnam. Source: Ocean Conservancy, 2015, Stemming the Tide: Land-based strategies for a plastic-free ocean. The case studies in China and the Philippines highlighted the nature of the problem differs across countries and there is no single solution. Key findings include:  Waste management systems differ substantially across countries with collection rates differing between countries, as well as between urban and rural areas. The Philippines has a nationwide average collection rate of 85 per cent. Conversely the overall collection rate in China is just under 40 per cent, with a collection rate of 65 per cent in urban areas, decreasing substantially to 5 per cent in rural areas.  Countries have different leakage points. Almost three quarters of the plastic waste leakage in the Philippines comes from mismanagement in the collected waste stream. Conversely over 80 per cent of the plastic waste leakage in China comes from mismanagement in the uncollected waste stream (including waste piles and plastic waste in rural communities routinely disposed of into waterways) (Table 21).  Proximity to the ocean and waterways is a key driver of plastic waste leakage to the ocean. The Philippines is surround by water coupled with an extensive network of rivers and tributaries which increases the likelihood of mismanaged waste entering waterways and the ocean. In the Philippines, nearly 100 per cent of the population live near a significant waterway39.  The informal waste collection sector differs across countries depending on waste density and collection coverage.  Treatment options differ, driven largely by government policy. Approximately 80 per cent of China's collected waste is treated at incinerators or sanitary landfills. Conversely, incineration is currently prohibited in the Philippines. Table 21: Leakage points for Philippines and China Waste system Type of mismanagement Proportion of plastic waste leakage into ocean Philippines China per cent per cent Collected � Hauler dumping 74 16 � Poorly located dumps Uncollected � Waste piles 26 84 � Littering Source: Ocean Conservancy, 2015, Stemming the Tide: Land-based strategies for a plastic-free ocean 39 Ocean Conservancy, 2015, Stemming the Tide: Land-based strategies for a plastic-free ocean. 68

Study by Jambeck et al. Jambeck et al. (2015) calculated the amount of mismanaged plastic waste generated annually by populations across 192 coastal countries which potentially could enter the ocean as marine debris. The results were based on waste estimates for 2010 and the authors note the results do not capture some activities such as illegal dumping, informal recycling and waste collection, and international import and export of waste. The results provide an indication of proportions of mismanaged waste, mismanaged plastic waste and plastic marine debris for the top 20 countries (Table 22). Table 22: Top 20 countries ranked by mass of mismanaged plastic waste Country Waste Plastic Mis- Mis- Proportion of mis- Plastic marine debris generated waste managed managed managed plastic waste plastic waste that becomes waste marine debris MMT/yr per cent per cent MMT/yr Per cent Per cent MMT/yr MMT/yr (Low) (High) (Low) (High) China 105.6 11.0 76.0 8.8 15.0 40.0 1.32 3.53 Indonesia 35.5 11.0 83.0 3.2 14.8 39.8 0.48 1.29 Philippines 15.2 15.0 83.0 1.9 14.8 39.6 0.28 0.75 Vietnam 16.1 13.0 88.0 1.8 15.2 39.6 0.28 0.73 Sri Lanka 27.2 7.0 84.0 1.6 15.0 40.0 0.24 0.64 Thailand 11.4 12.0 75.0 1.0 14.6 40.0 0.15 0.41 Egypt 10.9 13.0 69.0 1.0 15.3 39.9 0.15 0.39 Malaysia 12.7 13.0 57.0 0.9 14.9 39.3 0.14 0.37 Nigeria 7.9 13.0 83.0 0.9 15.2 39.7 0.13 0.34 Bangladesh 11.1 8.0 89.0 0.8 15.1 39.1 0.12 0.31 South Africa 9.4 12.0 56.0 0.6 14.2 39.5 0.09 0.25 India 23.3 3.0 87.0 0.6 14.8 39.5 0.09 0.24 Algeria 7.3 12.0 60.0 0.5 15.3 40.1 0.08 0.21 Turkey 22.0 12.0 18.0 0.5 14.8 40.0 0.07 0.19 Pakistan 4.2 13.0 88.0 0.5 14.5 39.5 0.07 0.19 Brazil 28.1 16.0 11.0 0.5 14.2 38.4 0.07 0.19 Burma 3.1 17.0 89.0 0.5 15.2 39.0 0.07 0.18 Morocco 9.2 5.0 68.0 0.3 16.0 38.3 0.05 0.12 North Korea 3.8 9.0 90.0 0.3 16.3 39.1 0.05 0.12 United States 106.3 13.0 2.0 0.3 14.5 39.8 0.04 0.11 Note: Waste estimates are based on 2010 levels. Source: Jambeck, J., Geyer, R., Wilcox, C., Siegler, T., Perryman, M., Andrady, A., Narayan, R., and Law, KL., 2015, Plastic waste inputs from land into the ocean, Sciencemag, 2015, Vol 347, Issue 6223. 69

Mismanagement of tyre waste Mismanagement of tyre waste relates primarily to whole baled tyres. Currently approximately 16 per cent of Australian exported end-of-life (EOL) tyres is baled tyres..40. The key destinations for whole baled tyre waste is India and Malaysia. There are concerns that a large proportion of this tyre waste is mismanaged at non-complying pyrolysis plants or through open burning. The Australian Tyre Recyclers Association (ATRA) used GPS technology in 2017-18 to track bales of whole tyres leaving Australia. The study found that once landed in India, these bales were on-sold and distributed throughout India to be burnt either at non-complying-pyrolysis plants or in the open (heating various drying kilns)41. A recent Indian tyre manufacturers survey estimated that 20 per cent of used tyres in India are burnt in the open to preheat various kilns, and another 31 per cent are consumed in pyrolysis operations (Table 23). The ATRA estimate that 100 per cent of imported bales of tyres into India end up in one of these two outcomes42. Table 23: End of life tyre outcomes in India Description Tyre Tube per cent per cent Clean/polished and sold (tyres with tread left) 15 15 Used for regrooving/retread 22 23 Used by art and craft creator 2 2 Used in pyrolysis 31 33 Used for burning 20 19 Road crumbs for road 6 4 Recycle 3 2 Crumbs for recycle 0 0 Others 2 2 Reclaim rubber 0 0 Pulverizing of rubber 0 0 Source: Australian Tyre Recyclers Association, 2019, Letter to Indian Ministry of Environment and Forests, 17 January 2019. Provided to CIE by the Department. The Central Pollution Control Board (CPCB) has estimated that of the 637 tyre pyrolysis units across India, 251 units are complying, 270 units are not complying, and 116 units are closed.43. Approximately 52 per cent of operating units are not complying. 40 MRA Consulting Group, 2019, Tyre Recycling Capacity and Change: A submission to Australian Tyre Recyclers Association, a division of the Australian Council of Recyclers (ACOR). Provided to CIE by the Department of the Environment and Energy. 41 Australian Tyre Recyclers Association, 2019, Letter to Indian Ministry of Environment and Forests, 17 January 2019. Provided to CIE by the Department 42 Australian Tyre Recyclers Association, 2019, Letter to Indian Ministry of Environment and Forests, 17 January 2019. Provided to CIE by the Department 43 Central Pollution Control Board Dehli, 2019, Status Report on Compliance of Hazardous and Other Waste (Management and Transboundary Movement) Rules, 2016 and Remedial Measures in Tyre Pyrolysis Industries. Provided to CIE by the Department 70

Estimated mismanagement used in this study There is currently limited information on the type and quantity of Australia's exported waste which is mismanaged. Proportions of mismanaged plastic waste entering the ocean and mismanaged whole baled tyres have been estimated based on the limited information available. These estimates are discussed below. Plastic waste entering the ocean As noted above two key determinants in the mismanagement of waste in key countries receiving our waste exports are:  Whether the waste is collected or uncollected. In general, a lower proportion of waste is mismanaged when it is collected in a formal system; and  The value of the material, with higher mismanagement of low valued materials. Australia's exported waste is received into the collection system of the import country and approximately 80 per cent of plastic waste and 95 per cent of other waste types (paper, tyres and glass) is high-valued material44. It is assumed that all high-valued material is managed appropriately. The potential for mismanagement is applicable only to the 20 per cent of Australia's exported plastic waste and 5 per cent of exported paper45, tyres and glass that is low valued materials46. The results from the Jambeck et al. study do not differentiate between waste that is collected versus uncollected, nor the value of the plastic. As noted above, uncollected and low-value plastic waste are key drivers for the quantity leaked to the ocean. For these reasons, the Jambeck et al. study results are not used in this study as Australian exports will enter the collection system of the importing country. Leakage points for collected low-value imported waste include illegal dumping by haulers and disposal in open and uncontrolled landfills. Subsequently, this mismanaged waste can spread resulting in litter on the land or entering waterways and/or the ocean. The current focus is mismanaged waste that is leaked to the ocean, particularly mismanaged plastic waste. Based on available estimates, it is assumed that seven per cent of Australia's exported low-valued waste materials (material that is residual to the recycling process) are mismanaged and subsequently leaked into the ocean. Whole baled tyres The two forms of mismanagement are burning in the open and processing at non-compliant pyrolysis plants. Based on available information, the following proportions of mismanaged whole baled tyre exports are applied (Table 24: Assumed mismanagement of baled tyresTable 24):  39 per cent open burning; and 44 Except in the case of MSW waste for which only 80 per cent of exported paper waste is high valued. 45 20 per cent of MSW paper waste is low valued material. 46 Estimates based on CIE modelling. 71

 32 per cent processed at non-compliant pyrolysis units. The estimated proportion of baled tyres processed at non-compliant pyrolysis units is based on the number of non-compliant pyrolysis units relative to total operating pyrolysis units. It does not account for the volume of Australian exported baled tyres received at each unit, as this is currently unknown. The assumption that 32 per cent is processed at non-compliant pyrolysis units therefore assumes that each of the 521 operating (compliant and non- compliant) tyre pyrolysis units receives the same volume of imported baled tyres. Given the uncertainty regarding volume of tyre waste processed at non-compliant pyrolysis units, only the tyre waste that is managed through open burning is included the analysis and results. The information on mismanagement of whole baled tyres primarily relates to India. There is limited information for Malaysia. Therefore, for this study we apply the same mismanagement proportions for India and Malaysia. Table 24: Assumed mismanagement of baled tyres End of life Baled tyres per cent Compliant pyrolysis (not mismanaged) 29 Non-compliant pyrolysis 32 Open burning 39 Total 100 Source: CIE based on Australian Tyre Recyclers Association, 2019, Letter to Indian Ministry of Environment and Forests, 17 January 2019. Provided to CIE by the Department and Central Pollution Control Board Dehli, 2019, Status Report on Compliance of Hazardous and Other Waste (Management and Transboundary Movement) Rules, 2016 and Remedial Measures in Tyre Pyrolysis Industries. Environmental, health and social impacts of mismanaged waste Waste and recycling systems throughout the world are characterised by numerous market failures, as well as policies and regulations to address these, sometimes with unintended outcomes. The extent of market failures and accompanying regulations differ across countries, resulting in varying degrees of environmental, health and social impacts. In the presence of market failures, environmental, health and social impacts will be greatest in the absence of effective regulations. There are also environmental, health and social impacts from the transportation of waste to disposal points. The impacts from transport of waste within Australian waste management systems is outlined in Appendix D. This discussion does not outline the impacts from shipping export materials abroad, due to an absence of information on shipping externalities, or the transport impacts within importing countries. Impacts arising from mismanagement of plastic waste leaking into oceans The current focus on the impacts of plastics in the marine environment is driven by the persistence of plastics within the ocean with effects on wildlife and potentially humans47. It is considered that plastics break down over time into micro-plastics and do not decompose48. 47 Thompson, R., Moore, C., vom Saal, F., and Swan, S., 2009, Plastics, the environment and human health: current consensus and future trends, Phil. Trans. R. Soc. B (2009) 364, 2153-2166. 48 APEC, 2020, Update of 2009 APEC Report on Economic Costs of Marine Debris to APEC Economics. 72

The lack of decomposition is what distinguishes plastic from other waste types such as paper and cardboard. Although there is incomplete information, some potential impacts of plastics in the marine environment may include:  Plastics which break down into small particles (microplastics) can be ingested by marine invertebrate, injuring marine wildlife49, impact on food chains and biodiversity and potentially human health  the ingestion, suffocation and entanglement of marine wildlife resulting in injury and death.50  Chemical pollution from plastics in the marine environment: - Plastics in the marine environment can absorb chemical pollutants from surrounding waters and transport them great distances as they move around with ocean currents. - When animals eat plastics, these chemical pollutants can leach into their stomachs. - Plastic products also contain chemical additives such as flame retardants, UV stabilisers and colorants which are added to the plastics during manufacturing. In the marine environment, these chemical additives can leach into surrounding waters, posing another chemical threat to marine life. - Seven plastic items contribute more than 87 000 metric tonnes of plastic debris to our oceans and carry with them 190 metric tonnes of 20 different chemical additives. These seven items account for only about 1 per cent of the estimated 8 million metric tonnes of plastic entering the oceans each year51.  Plastic litter along coastlines can reduce tourism due to loss of aesthetic value and increase costs due to the cleaning and maintenance needs of sites.  Plastic debris within the ocean can cause damage to fishing equipment and vessels. It is important to note that plastic debris which causes impediments to the fishing industry include (in order of most concern) -- old fishing gear, plastic bags and utensils, balloons, cigarette butts and bottle caps52. Many of these types of plastic are sourced from Australian exported waste products. Impacts arising from mismanagement of tyre waste Evidence suggests that substantial health and environmental impacts occur from the mismanagement of whole baled tyres in overseas countries, primarily India and Malaysia. 49 Goldstein, M. C. and Goodwin, D. S., 2013 sourced in Jambeck, J., Geyer, R., Wilcox, C., Siegler, T., Perryman, M., Andrady, A., Narayan, R., and Law, KL., 2015, Plastic waste inputs from land into the ocean, Sciencemag, 2015, Vol 347, Issue 6223. 50 IUCN, Issues Brief - Marine Plastics. https://www.iucn.org/resources/issues-briefs/marine-plastics 51 Ocean Conservancy, 2019, Plastic pollution is chemical pollution. https://oceanconservancy.org/blog/2019/04/23/plastic-pollution-chemical-pollution/ 52 APEC, 2020, Update of 2009 APEC Report on Economic Costs of Marine Debris to APEC Economics. 73

Whole baled tyres can retain water during transportation and processing, which can enable the spread of malaria, dengue and yellow fever. The World Health Organisation has identified the international movement of whole, unprocessed tyres as a key factor in the increase in dengue incidences53. Non-compliant pyrolysis plants emit high levels of pollution including sulphur dioxide, particulate matter, nitrogen oxides, dioxins and furans, hydrocarbon gases, volatile organic compounds, heavy metals, carbon dioxide and carbon monoxide54. The Indian Green Tribunal observed the following negative outcomes from non-compliant pyrolysis operations:  Spillage of carbon in the working area.  Exposure of workers to fine carbon particles.  Emissions of pyro gas or uncondensed gases for flaring.  Release of odours in plant and local area.  Fugitive emissions of charcoal/fine carbon particles.  Spillage and floor washing containing charcoal particle and oil. Open burning of tyres creates smoke, pyrolytic oil, ash, black carbon and harmful chemicals and pollutants (Table 25). Groundwater and surface water sources can be contaminated by run-off through exposed scrap tyre fires. Table 25: By-products of open, uncontrolled burning of tyres By-product category Pollutant Chemicals Polycyclic aromatic hydrocarbon, benzenes, naphthalenes, toluene, ethyl benzene, anthracene, thiazoles, dioxins, furans, amines and other different forms of petroleum hydrocarbons Pollutants and heavy metals Cadmium, chromium, nickel and zinc, Volatile Organic Compounds (VOCs), Semi-volatile Organic Compounds (SVOCs), Polynuclear Aromatic Hydrocarbons (PAHs), particulate matter, carbon monoxide, sulphur, nitrogen oxides, acid gasses, sulphates Source: Ziadat, Anf. H, and Sood, E., 2014, An Environment Impact Assessment of the Open Burning of Scrap Tires, Journal of Applied Sciences 14 (21): 2695-2703. Direct health impacts include asthma and respiratory complications, aggravation of existing cardiovascular illnesses, eyes irritation, cough and chest pain, nervous system depression, high blood pressure and subsequent heart disease, adverse effects on kidneys, liver, nervous system, cancer and inflammation of mucous membranes55. The extent of health impacts depends on the length and degree of exposure and the population exposed. The concentration of pollutants is influenced by meteorological conditions and directly influences the degree of exposure. 53 Australian Tyre Recyclers Association (ATRA), 2019, Letter to the Minister for Environment: Used Tyre Exports from Australia, 13 September 2019. Provided to CIE by the Department. 54 Australian Tyre Recyclers Association, 2019, Letter to Indian Ministry of Environment and Forests, 17 January 2019. Provided to CIE by the Department 55 Ziadat, Anf. H, and Sood, E., 2014, An Environment Impact Assessment of the Open Burning of Scrap Tires, Journal of Applied Sciences 14 (21): 2695-2703. 74

Studies have estimated the change in ambient air concentration from the open burning of scrap tyres. Anf and Sood (2014) estimated the change in ambient air concentrations of particulate matter and compared it to US EPA's particulate matter Air Quality Index. The results showed the ambient air concentrations were:  Unhealthy for sensitive groups for 14.3 per cent of the study period.  Unhealthy for 28.5 per cent of the study period.  Very unhealthy for 14.3 per cent of the study period.  Hazardous for 42.9 per cent of the study period56. Jimoda et al. (2017) investigated the emission of gaseous pollutants, carbon monoxide (CO), nitrogen dioxide (NO2) and sulphur dioxide (SO2). The results showed that the levels of each of the three pollutants were categorised as 'unhealthy for sensitive groups' 25 per cent of the study period. Otherwise results were categorised primarily as 'moderate'57. Impacts arising from other forms of waste mismanagement The broad range of environmental, health and social impacts from other waste mismanagement are listed in Table 26 and include visual dis-amenity, emissions of air pollutants and GHGs, increased risk of disease, and potential risk to groundwater sources through leaching toxins. Impacts from waste mismanagement differ by type of waste disposal and type of waste material. For example, mismanagement of tyre waste can result in greater impact, such as:  Increasing the risk of disease when tyres are dumped and create an ecosystem for rodents and insects enabling disease transmission.  Released highly toxic waste into soil and air when burnt without proper controls.  Contamination of soil, water and air due to emission of chemical contaminants formed during the decomposition of the scrap tyres58. There are also health risks to waste pickers in informal collection systems related to working in proximity to toxic materials and potential for waste to combust and catch on fire59 . Ocean Conservancy (2015) notes that open dump sites are responsible for hundreds of deaths of waste pickers60. 56 Ziadat, Anf. H, and Sood, E., 2014, An Environment Impact Assessment of the Open Burning of Scrap Tires, Journal of Applied Sciences 14 (21): 2695-2703. 57 Jimoda, L. A., Sulaymon, I. D., Alade, A. O. and Adebayo, G. A., 2017, Assessment of environmental impact of open burning of scrap tyres on ambient air quality, Int. J. Environ. Sci. Technol. DOI 10.1007/s13762-0.17-1498-5. 58 Neto, G. C. d O., Chaves, L. E. C, Pinto, L. F. R, Santana, J.C.C, Amorim, M.P.C. and Rodrigues, M.J.F, 2019, Economic, Environmental and Social Benefits of Adoption of Pyrolysis Process of Tires: A Feasible and Ecofriendly Mode to Reduce the Impacts of Scrap Tires in Brazil, Sustainability 2019, 11, 2076; doi:10.3390/su11072076 59 Ocean Conservancy, 2015, Stemming the Tide: Land-based strategies for a plastic-free ocean 60 Ocean Conservancy, 2015, Stemming the Tide: Land-based strategies for a plastic-free ocean 75

Incineration conducted with older technology and/or in the absence of appropriate controls emit high levels of air pollutants including dioxins, heavy metals and other contaminants61. Unrecycled plastics imported by Indonesia are often burned to produce heat for tofu factories, which has human health impacts62. A high proportion of collected waste in China is incinerated. There was insufficient information on the proportion of incinerators in China and elsewhere (and other controls using incineration) that meet appropriate controls and standards. Table 26: Economic, environmental and social impacts of waste mismanagement Mismanagement Environmental, health or social impact Litter � Visual disamenity � Potential for disease Illegal dumping � Visual disamenity � Health risks to waste pickers � Increased risk of fire (e.g. tyre waste) � Increased risk of disease Open and � GHG emissions uncontrolled � Visual disamenity landfills � Toxic leachate to soil and groundwater � Health risks to waste pickers � Increased risk of fire (e.g. tyre waste) � Increased risk of disease Leakage to � Visual disamenity waterways and the � Health impacts to marine life ocean � Potential health impacts to human life Incineration � Emissions (dioxin, heavy metals and other contaminants) (unmanaged) � Release of toxic waste in soil and air (burning tyres) � Impacts on human health from use in food preparation (e.g. burning plastic at tofu factories) Source: CIE. Costs that accrue to the Australian economy All external costs arising from waste management systems conducted within Australia are borne by the Australian economy. In contrast external costs from waste management systems abroad are primarily borne by the local communities with only a select few external costs being borne by the global community. The key external costs that are extend beyond nations boundaries are impacts from greenhouse gas emissions and waste leakage to marine environment (Table 27). Table 27: Community bearing environmental, health and social impacts Environmental, health and social impacts Local or global community Air pollution Local Water pollution Local 61 Ocean Conservancy, 2015, Stemming the Tide: Land-based strategies for a plastic-free ocean 62 See https://www.nytimes.com/2019/11/14/world/asia/indonesia-tofu-dioxin-plastic.html 76

Environmental, health and social impacts Local or global community GHG emissions Local /Global Visual disamenity from landfills/open dumps Local Litter on land Local Waste leakage to marine environment Local /Global Health hazards and potential diseases from landfills/open dumps Local Source: CIE. Economic costs of mismanaged waste The economic cost of mismanaged waste comprises direct costs, remedial costs and indirect damage costs (including health, environmental and social costs). There are two key steps to estimate the economic cost of mismanaged waste:  Identify the physical change in environmental condition -- how does mismanaged waste impact on the existing environment (e.g. change water or air quality, impact marine species health), and what is the nature of these impacts (e.g. duration and extent of the impact, whether the change is temporary or permanent, or irreversible)?  Estimate the economic value associated with the physical change -- involves estimating the use and non-use values society holds for the impacted environmental attributes. Not all changes to environmental condition can be valued and some environmental attributes are more amenable to non-market valuation techniques. The environmental and health impacts of mismanaged plastic entering the ocean and open burning of tyre waste have been stated above. However, there is insufficient information on the physical change in environmental condition resulting from these mismanagement types to estimate the economic cost. For example, it is not currently known how water quality changes or the mortality/morbidity rates of marine species for a unit change in quantity of plastic entering the ocean. Similarly, the change in ambient air concentrations for key pollutants resulting from open burning of tyre waste is not known for the open burning sites in India and Malaysia, along with the population exposed. In the absence of information to estimate the economic value of mismanaged waste, alternative indicators of economic cost are discussed below for mismanaged plastic waste. Estimates of direct costs, remedial costs and indirect damage costs for plastic debris A recent study by APEC estimated the damage costs to the marine industries attributed to marine debris was US$10.8 billion per annum.63. This is an increase from the estimate in the previous APEC 2009 report of $1.26 billion, increasing due to improved data, growth in the marine economy and growth in the amount of plastic waste in the oceans over the last decade. This direct cost comprises costs associated with damage to fisheries and aquaculture, marine transport, shipbuilding and marine tourism industries from marine debris64. The APEC study did not quantify remedial costs and indirect damage costs. 63 APEC, 2020, Update of 2009 APEC Report on Economic Costs of Marine Debris to APEC Economics. 64 APEC, 2020, Update of 2009 APEC Report on Economic Costs of Marine Debris to APEC Economics. 77

Table 28 lists estimates of direct damage costs, remedial costs, and indirect damage costs from various studies relating to mismanaged plastic waste in the APEC region. Table 28: Estimates of damage costs in the APEC region from mismanaged plastic waste Sector Type of damage/loss Type of debris Estimated cost Direct damage to marine industry in APEC region Fishing Damage to fishing boats Floating objects 6.6 billion Yen Shipping and transport Damage to commercial General, entanglement of Cost of repairs, lost sales leisure boats propellers and ingestion and downtime of $792 million Loss of fishing product value Plastic pellets spill 30-40% price reduction to from ship container spill of fish farmers in area of plastic pellets plastic nurdle spill Marine tourism/leisure Economic cost of marine Marine debris 25% capita reduction in debris on Californian beaches marine debris for 31 beaches gave aggregated benefits of $29.5 million (2013 dollars) Flood litter impacts in tourism Litter and other waste Visitor count at the area washed down rivers into Island's beaches beaches decreased by 63 percent, with tourism revenue loss of US$29-$37 million to the Island Mass marine litter wash up Plastic and marine debris Tourism expenditure loss reducing tourism revenue of $379 million to $3.6 billion in New Jersey Remedial costs of debris clean-up in the APEC region Shipping and Loss of a container of plastic Plastic pellet and container USD $1.29 million to transportation pellets recovery and clean up clean up 150 tonnes plastic nurdle spill Shoreline and ocean Subsidy to local government Marine litter and shoreline Total cost of US$451 clean up and Shipping for coastal clean-up or debris million to remove and Transportation reducing waste generation 214,711 tonnes of debris 2009-2016 program (8 over 8 years. Average cost years) of US$2,102/tonne Clean up under 2nd National Marine litter - shoreline US$282 million spent Marine Litter plan (2014-18). (63%) and floating (7%) over 5 years. Cost per A total of 348,000 tonnes of and natural disaster (30%) tonne US$810 across 21 debris removed programs. Marine tourism/leisure Annual cost of cleaning Debris $2,719,500 at a per municipal beaches and capita cost of $0.33 waterways for New York City Cost of combatting litter and Litter $520 million spent curtailing marine debris in annually to combat litter Washington, Oregon and and curtail marine debris. California Budget implications of Litter and waste Any council that was marine litter for 30 Local spending more than 8% government coastal councils has an implied net cost to members. Marine Litter leakage Marco plastic - storm No cost provided prevention water drains on Sydney beaches over various local government areas Examined benefits of Reduction of marine Reducing debris by 75%, reducing debris in six plastics from urban visitations to the beaches beaches near the mouth of is estimated to increase 78

Sector Type of damage/loss Type of debris Estimated cost Los Angeles River sources to urban beachers 43%, with a revenue of US$53 million All sectors Estimate of global cost of Marine plastic debris $5 billion per annum, remediation over 10 years to $550 per tonne of 2020 leakage prevented Indirect cost impacts of marine debris in the APEC region Shipping and Container spill of plastic Plastic pellets MV Rena grounding with transportation pellets US$600 million spent on recovery Marine tourism/leisure Loss of amenity to beaches Plastics, fishing and US$1 - US$28 m/yr and reefs general debris Loss of recreational Marine debris For Orange Beach, CA. expenditure and regional reducing MD to zero economic effects would add $137 million, while doubling MD would cost $304 million Wildlife and Marine Plastic damage of coral reefs Plastic debris The likelihood of disease Ecosystem via disease increases from 4% to 89% when corals are in contact with plastic Community Clean Up Australia Day Shore line and waterways, US$26 million per year litter and marine debris (Value of volunteers, local government collection services and management and administration costs Note: Excludes examples of direct damage to the marine industry result from plastic types that are not found in Australia's exported waste materials (e.g. fishing gear). Source: APEC, 2020, Update of 2009 APEC Report on Economic Costs of Marine Debris to APEC Economics. Community value to reduce ocean-based litter It is clear from community views and from willingness to pay work the CIE has undertaken for Victoria that people place a high value on avoiding marine environmental impacts. The specific value, and the extent to which values relevant for an Australian context are also relevant for overseas contexts is not clear. Values related to biodiversity impacts would likely be more indifferent to where impacts occur as compared to values related to pollution of beaches and other undesirable aspects of pollution. Current estimates of the community's willingness to pay to reduce ocean-based litter are hindered by an absence of information on the final outcomes for marine wildlife and human health. The impacts of existing litter in the ocean on final outcomes are unknown, as are the impacts of a change in the quantity of litter entering the ocean. Cost effectiveness -- cost of mitigation measures In the absence of a damage cost curve for mismanaged plastic waste incorporating direct and indirect damage costs, a cost effectiveness measure is considered to assess the benefits of the proposed policy interventions. The Ocean Conservancy (2015) examined 33 potential solutions to the problem of plastic waste leaking into the ocean and identified five options that achieved maximum impact. The five options focusing on collection, mitigation and conversion options are listed below and have different degrees of applicability in the five focus countries depending on the starting point for a particular economy (Table 29): 79

 Close leakage points within the collection system through optimising the hauler system (e.g. transparent tendering, GPS monitoring, performance-based payments) and closing/regulating high-leakage dump sites.  Collection services.  Gasification.  Incineration.  MRF-based recycling. Table 29: Applicability of five selected options across priority countries Selected options China Indonesia Philippines Vietnam Thailand Close leakage points within collection systema Yes Yes Yes Yes Yes Collection services Yes Yes Yes Gasification Yes Yes Incineration Yes Yes Yes MRF-based recycling Yes Yes Yes Yes Yes a Close leakage points within collection system includes optimising hauler system and closing and regulating high-leakage dumpsites. Source: Ocean Conservancy, 2015, Stemming the Tide: Land-based strategies for a plastic-free The average expected cost of the five options selected was $550 per tonne of plastic-waste leakage prevented. This is based on total annualised cost between $4.9 billion and $5.4 million achieving a reduction in plastic waste leakage of 65 per cent (Table 30). Table 30: Selected measures to reduce plastic waste leakage in five priority countries Option Type of measure Annualised cost Plastic waste leakage reduced $m per cent Collection services Collection 4500 to 5000 24 Close leakage points within collection systema Mitigation 600 26 Gasification Treatment -200 to -230 2 Incineration Treatment 5 MRF-based recycling Treatment 10 Total 4900 to 5370 65 a Close leakage points within collection system includes optimising hauler system and closing and regulating high-leakage dumpsites. Source: Ocean Conservancy, 2015, Stemming the Tide: Land-based strategies for a plastic-free Waste management in Australia Health and environmental impacts For the purposes of considering externalities, the stages of the waste industry supply chain can be summarised into upstream and downstream activities (Figure 17).  Upstream activities are those relating to extraction and use of materials, such as manufacturing and consumption of manufactured products. It includes recycling and reuse of materials. 80

 Downstream activities are those relating to disposal of waste, such as at landfill. The term 'post-consumer waste' is used to refer to waste that is remaining after consumption of manufactured products and is not recycled/reused. As shown in Figure 17, a range of health and environmental impacts may arise with the landfilling of waste. Importantly, significant impacts are also associated with the mismanagement of wastes, which may include its blending (and disposal to inappropriate landfills), stockpiling or dumping. Incidents at recycling facilities have led to a range of clean-up costs and impacts to the environment and/or local population health (such as fires in Melbourne from material recovery facilities). Community benefits from increased reuse and recycling may manifest in:  Reduced air and water pollution and greenhouse gas emissions than that which occur during the processing of virgin materials -- these may not occur within Australia to the extent that the extraction and processing of materials occurs elsewhere;  Increased employment opportunities relative to the processing of virgin materials. This would generally only be considered if there was evidence that employment was additional, rather than displacing employment elsewhere. There may also be negative employment impacts on other industries if recycling has a higher cost; and  More sustainable resource use from displacing manufacturing based on virgin materials. These reuse / recycling benefits arise in the material extraction and conversion sectors - that is, in upstream activities. Figure 17: A view of the waste stream and its externalities 81

Stage in supply chain Major impacts Extraction of raw � Resource recovery benefit high in supply materials chain � Depletion of finite resources � Degradation of renewable resources � Greenhouse emissions Transport � Air, water and noise pollution � Biological impacts Material � Greenhouse emissions Upstream activities manufacture � Air and water pollution � Incident risk and OH&S Transport Product Recycling � Greenhouse emissions manufacture � Air and water pollution � Incident risk and OH&S Reuse Transport � Greenhouse emissions Use of products Transport � Air and water pollution � Incident risk and OH&S Downstream activities -- post-consumer waste disposal Transport Mis-management Disposal options Landfill Blending Dumping Stockpiling (incidence of levy) � Greenhouse emissions � Glass injury � Air and water pollution � Visual amenity � Amenity impacts (visual, odour, � Soil and water contamination noise etc) � Biological impact Impacts � Use of landfill airspace � Human health risk � Alienation of land � Biological impact � Human health risk � Elevated incident risk with high level impacts Source: Adapted from BDA Group and Wright Corporate Strategy (2009), CIE Safe management in the downstream post-consumer handling and disposal of waste materials seeks to minimise a range of health and environmental impacts associated with the landfilling of waste or its mismanagement (e.g.: blending, stockpiling or dumping). 82

Landfills are subject to a range of regulations that require their appropriate siting and engineering to reduce health and environmental risks and operate under regulatory requirements and oversight that significantly internalise operational risks and costs to landfill operators, and the gate fees they charge. Nevertheless, residual health and environmental externalities at landfills may include:  Greenhouse gas emissions.  Non-greenhouse gas air emissions.  Leachate escaping from landfills.  Dis-amenity caused when houses or recreational areas are located near landfills. These will differ substantially across materials -- plastic and glass have no GHG emissions from landfilling, while paper and rubber do65. Table 31 lists recent estimates of externality costs of non-hazardous waste landfills in Australia. The cost estimates have been converted to 2019 dollars from the original studies. Table 31: Recent studies estimating the externality cost of non-hazardous waste landfill MSW C&I C&D 2019 dollars per 2019 dollars per 2019 dollars per tonne tonne tonne BDA Group 2009,66 best controls Less than $5 for both rural and urban landfills BDA Group 2009, poorest controls $20-25 for urban, $15-20 for rural ACIL Allen 2014,67 Existing WA landfills: No Gas capture technology $34 $31 $9 ACIL Allen 2014, Existing WA landfills with gas capture technology $12 $11 $5 Schollum (2010)- Existing landfills in Perth. $42 $46 $33 Productivity Commission (2006) - Best practice landfills $5 to $25 $7 to $33 $1 to $10 Productivity Commission (2006) - Best practice landfills with methane $0 to $5 $0 to $5 $0 to $5 capture and electricity generation Note: external costs have been converted to 2019 dollars Source: As noted. By far and away the most pernicious of the externalities associated with waste management arise from not managing waste. For example, littering or illegal dumping of material, or stockpiling (often illegally) of recyclable materials. As shown above, the externalities associated with well managed landfills are relatively small and likely to be less than the current landfill levies. Aside from the issues noted above, the waste and recycling system is also characterised by a limited ability to directly price waste disposal through the supply chain. For example: 65 See National Greenhouse Accounts factors, https://www.environment.gov.au/climate- change/climate-science-data/greenhouse-gas-measurement/publications/national-greenhouse- accounts-factors-august-2019. 66 BDA Group 2009, The full cost of landfill disposal in Australia, report prepared for Department of the Environment, Water, Heritage and the Arts, July, Chapter 6. The study also identified private costs of landfills. 67 ACIL Allen 2014, Economic drivers of waste, prepared for the Department of Environmental Regulation and Waste Authority of Western Australia. 83

 Households are not charged more for generating more waste through municipal systems or for directing waste to more or less efficient outcomes -- instead councils use bin sizes and collection frequencies to try to influence household incentives, and  Packaging producers do not face any price signal related to the disposal costs of their packaging choices --they do face signals if consumers are informed and make choices taking into account environmental impacts. This means that there is no obvious way that disposal costs are incorporated into market behaviour, unlike for other costs that become factored into product prices and consumer choices. In large part, the lack of price signals reflects the combination of technological constraints such as ability to cheaply measure and monitor (which can now be overcome) and the need to avoid encouraging options such as illegal dumping and littering, with much greater externalities. Environmental externalities from changes in recycling It is not a straightforward task to evaluate the overall cost equation for recycling relative to an alternative for many reasons. The most difficult component is the environmental impacts. The best evidence of the overall environmental impacts from different pathways from a Victorian perspective is the RMIT life cycle analysis released in 2016 and undertaken for Sustainability Victoria68. This considered:  Global warming -- climate change effects resulting from the emission of carbon dioxide (CO2), methane or other global warming gases into the atmosphere - this indicator is represented in CO2 equivalents.  Photochemical oxidation -- measurement of the increased potential of photochemical smog events due to the chemical reaction between sunlight and specific gases released into the atmosphere. These gases include nitrogen oxides (NOx), volatile organic compounds (VOCs), peroxyacyl nitrates (PANs), aldehydes and ozone. This indicator is of importance in areas where photochemical smog is likely to be a problem, such as in urban transport environments.  Eutrophication -- the release of nutrients (mainly phosphorous and nitrogen) into land and water systems, altering biotopes, and potentially causing oxygen depletion effects such as increased algal growth.  Mineral resource depletion -- the additional investment required to extract minerals resources due to depletion of reserves, leaving lower quality reserves behind, which will require more effort to harvest.  Fossil fuel depletion -- the additional investment required to extract fossil fuel resources to depletion of reserves, leaving lower quality reserves behind, which will require more effort to harvest. 68 RMIT 2015, LCA of Kerbside Recycling in Victoria, prepared for Sustainability Victoria. 84

The study also measured precursors to environmental impact, such as land use, water use, solid waste and cumulative energy demand. The first three environmental impacts have been valued. We would expect that mineral and fossil fuel resource depletion is adequately reflected in market prices and would not need to be separately valued. Our approach to monetising these environmental externalities from landfill relative to recycling is detailed in Appendix F. There are also specific estimates of externalities from landfilling for Australia, shown below. The cost of disposing of waste to landfill depends on a range of factors, including the type of material, the size of the landfill, how it is managed and the local climate. BDA Group (2009) estimated the full cost of landfill disposal in Australia in various climates, under best practice controls, as well as poor controls. BDA Group's cost estimates included:  Private costs.  The cost of greenhouse gas emissions.  The external cost of other air emissions.  External costs associated with leachate.  The dis-amenity impacts associated with landfills. The private costs and dis-amenity impacts estimated by BDA are inflated to 2012/13 dollars using the national Consumer Price Index (Table 32). These estimates suggest that the total cost of landfill ranges between $45 per tonne up to around $113 per tonne, depending on the size of the landfill and the controls in place. Table 32: Full cost of landfill disposal in Australia (2012/13 dollars) Small Medium Large Small rural Medium Large rural urban urban urban rural $/tonne $/tonne $/tonne $/tonne $/tonne $/tonne Best controls Private costs 110.4 66.2 44.2 110.4 66.2 44.2 GHG emissions -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 Other air emissions 1.1 1.1 1.1 0.1 0.1 0.1 Leachate 0.0 0.0 0.0 0.0 0.0 0.0 Disamenity 1.1 1.1 1.1 1.1 1.1 1.1 Total 112.3 68.1 46.0 111.3 67.1 45.0 Poor controls Private costs 81.7 48.6 33.1 81.7 48.6 33.1 GHG emissions 19.8 19.8 19.8 19.8 19.8 19.8 Other air emissions 0.8 0.8 0.8 0.2 0.2 0.2 Leachate 0.0 0.0 0.0 0.0 0.0 0.0 Disamenity 11.0 11.0 11.0 5.5 5.5 5.5 Total 113.3 80.2 64.8 107.3 74.2 58.7 Note: Estimates reported in the table are for a dry temperate climate and have been converted to 2012/13 dollars using the national CPI. 85

Source: BDA Group Economics and Environment, 2009, The full cost of landfill disposal in Australia, prepared for the Department of the Environment, Water, Heritage and the Arts, pp. 75-77. The private costs of landfill are included in the analysis at $70 per tonne. To ensure that there is no doubling up of costs measured in the lifecycle analysis of RMIT, we only include a $10 additional disamenity impact from landfilling. This will somewhat understate additional landfill costs accruing to the Australian community, as we apply the RMIT values only to changes in material that is recycled (regardless of whether this is overseas or domestic), while some of the costs will accrue to Australia instead of overseas as a result of domestic landfilling of residual material. Environmental and social costs of waste transport The environmental and social externalities from road and rail freight reflect:  The amount of physical pollution -- such as emissions of particulates; and  The impact of these pollutants on people, such as reflecting the density of population impacted by the physical pollution. A summary of the quantifiable environmental externalities is set out in Table 32Table 33. Estimates of the costs of these environmental impacts are outlined in Appendix D. Table 33: Environmental impacts of additional transport Impact Description Air pollution Air pollution reflects the health impacts from additional rail and road vehicle kilometres. Air pollution costs are higher in urban areas, because of the greater population impacted. GHG emissions GHG emissions have global impacts in terms of costs arising from changing temperatures Noise pollution Noise pollution arises in the immediate vicinity of roads and rail lines. Its impacts are larger in urban areas than in rural areas. Water pollution Water pollution includes organic waste or persistent toxicants from run- off from roads and rail lines, generated from vehicle use. It includes engine oil leakage and disposal, road surface, particulate matter and other air pollutants from exhaust and tyre degradation for cars. Nature and landscape Nature & landscape impact is driven by the infrastructure 'footprint', e.g., habitat loss, loss of natural vegetation or reduction in visual amenity as infrastructure is constructed. Key impacts in rural areas are natural impacts, whilst key impacts in urban areas are mostly amenity / visual as the urban environment is already dominated by infrastructure. Urban separation Urban separation is an urban externality only. The unit cost is based on three elements: time loss due to separation for pedestrians, lack of non- motorised transport provision and visual intrusion. Upstream and downstream impacts Upstream and downstream costs refer to the indirect costs of transport including energy generation, vehicle production and maintenance and infrastructure construction and maintenance. Source: TfNSW, Principles and Guidelines for the Economic Appraisal of Transport Investment and Initiatives, March 2015. Appendix F outlines estimates for three forms of social cost, which apply only to road transport:  Costs from accidents.  Costs from congestion imposed on other road users.  Costs from wear and tear on the road. 86

Benefits from government intervention There will be benefits from government intervention under all three proposed options. In identifying and valuing these benefits, the analysis has carefully focused on the point in the value-chain that impacts rest. The example government interventions that are costed in Section 5 of the Decision RIS build across the proposed options and are incrementally assessed. Option 1: The status quo, with consumer education and work on standards There are two key impacts from an education campaign to improve household understanding of recycling and encourage the uptake of circular economy principles. Firstly, it improves the quality of kerbside mixed recycling, which is a key input into the waste recycling industry, and which typically suffers from high contamination rates in municipal solid waste. The improvement in quality has the effect of lower sorting effort at MRFs, lowering contamination rates, improving the value of the end product and lowering the residual amount from MRFs that go landfill. Secondly, it increases the amount of waste that is goes to recycling in place of landfill in the first instance. For the purpose of analysis, it is assumed that the governments education campaign will result in:  A 10 per cent improvement in annual recycling levels and a 10 per cent improvement in contamination rates and landfill rates over the base case: - It is assumed in the modelling that these would be the targeted levels of improvement that government would seek from their investment in an education campaign.  A 5 per cent improvement in MRF productivity rates: - It is assumed that MRFs would also receive a productivity benefit from receiving better quality mixed recycling waste as a result of the better recycling practices from households. That is, the sorting effort at MRFs would likely be lower and processing would be improved. A conservative estimate of a 5 per cent improvement on productivity levels was selected as a modelling assumption. The government will also seek to work with industry to ensure technical engineering standards are updated and allow the usage of recycled content materials where it is safe to do so. This work will complement existing COAG commitments to increase demand for recycled content through government procurement. The key benefits from developing Australian standards or adopting appropriate international standards are that:  It will maximise the value of materials throughout the life of a product, to increase life cycle potential and avoid waste.  It will ensure an increased proportion of recycled material is usable, thereby increasing saleable output and lowering volumes that go to landfill. 87

 It will improve the content that can potentially go into government procurement, for examples materials that go in to road production. For the purpose of analysis, it assumed that work on standards will result in:  A 10 per cent reduction in the rate of content going to landfill, with a corresponding increase in content going to the domestic market. For example, if 20 per cent of material that is residual to a recycling process enters landfill, an improvement in standards would see this residual rate fall to 18 per cent. Option 2(b): Consumer education and prohibit or restrict exports of waste plastic, paper, tyres and glass with additional supporting government interventions to build markets and associated demand. Benefits in Option 2(b) that are additional to those above in Option 1, relate to possible government interventions across the key themes of the response strategy that are being developed by COAG to support the export ban. For the purpose of this analysis, the following possible interventions are used in the assessment:  Investments in new technologies and infrastructure These investments could include support for upgrades to material recovery facilities with the purpose of lifting technology to a consistent minimum standard, for example, through optical sorting technology. Additionally, they could be for co-investment to support commercially viable waste and recycling facilities and support research and development for new technologies and products. These investments lead to productivity improvements at waste and recycling facilities. The benefits have been determined based on the current returns to capital that are deployed in the industry. The industry has seen a significant increase in capital investment in recent years and provides an empirical basis for measuring the impact of additional investments in technology and infrastructure.  Supporting domestic demand for recycled products This could be achieved by building demand for recycled products through the purchasing of goods and services at scale. The cost is estimated as the price difference between the non- recycled product, not the total cost of the recycled product. The above costs to government are not commitments, but rather parameters that are used in the model to estimate the likely benefits from given costs in these areas. These would also be additional to any costs in the base case that relate to interventions that have already been committed. Both investments in new technologies and infrastructure and support for domestic demand are designed to address risk in the industry from underinvestment due to uncertainty. For the purposes of the analysis, we assume that the total value of these interventions, $350 million, is the risk premium or underwriting amount required for industry to commit to processing all the waste that is banned from export rather than sending to landfill.  Landfill levies 88

Additional revenue to government from waste levies applied to landfills, for material that is landfilled as a result of the export ban. This includes material landfilled where domestic processing is not available and residual material landfilled after processing. This is equivalent to the cost to industry for landfill levies. 89

7. OTHER IMPACTS The relevant guidance (COAG 2007) requires that a range of other possible impacts be considered when conducting impact analyses, such as:  Competition effects.  Risk analysis. Competition effects A key consideration about any proposed option is whether the proposed option would have an adverse impact on competition. Competition impacts could arise if the proposed option imposes on one or more markets increased barriers to entry or exit, disproportionate buyer or supplier power, or information asymmetries. There is a potential competition issue in the domestic paper manufacture, due to the limited number of manufacturers. This has implications upstream and downstream on the value chain. This has been brought to the attention of the Australian Competition and Consumer Commission (ACCC)69. The submission from the National Waste and Recycling Industry Council in excerpt below describes the limited capacity in Australia for processing of paper and cardboard and glass. CASE STUDY - PAPER AND CARDBOARD In 2016-17 Australia exported 1.118 million tonnes of paper and cardboard valued at approximately $235 million. This represents approximately one third of the waste paper and cardboard generated in 2016-17. This is a key revenue stream for Australian recyclers. The balance of this material is sold to three local large paper mill operators in Australia (Australian Paper, Orora Fibre and Packaging and Visy Paper). Collectively, they operate seven mills, three in NSW, three in Victoria and one in Queensland. While there are some other minor paper processors, none receive significant volumes. Queensland has only one available buyer of paper and cardboard seconds in its State. There are no domestic mills servicing Tasmania, South Australia, Western Australia or the Northern Territory. Victoria and NSW both have three facilities, however, in these States supply of recycled paper far exceeds demand by domestic mills. More than half the world's paper mills are in Asia, where demand for recycled fibre exceeds domestic supply, as many Asian countries, and particularly China are net exporters of paper and cardboard. By having access to overseas buyers, Australian recyclers can be confident they not only have an option for selling mixed paper and cardboard which is surplus to the very limited demand in Australia, but that competition exists to ensure they are getting the best price for clean recycled paper. Should these exports be closed, the very 69 restricted market will allow existing domestic operators to control prices. NWRIC submission 90

Risk analysis The main risks around an export ban are that there will not be sufficient demand domestically by the time of the export ban, leading to material being landfilled or stockpiled, and leading to financial distress for sellers of recycled commodities. This risk breaks into multiple components that are interrelated across parts of the supply chain (Figure 18). These risks relate to the supply chain, but we focus on them in the context of an export ban. 91

Figure 18: The relationships between risks supply chain Frictions in changing prices Commercial Market for material Considerations Commercial Commercial feasibility risks Development constraints Reliance on export markets for processed Competition material Impacts Market Available processing capacity Outcomes Materials Materials to recycled (additional Materials to stockpile landfill processing) Downstream Impacts Public confidence in recycling Challenge to viability of kerbside recycling Increased contamination Source: CIE. At the top of the risk hierarchy are commercial market considerations. These relate to the risks and barriers which stop recycling operators from developing processing infrastructure or undertaking domestic recycling. This affects the level of investment in infrastructure and capacity. Key elements which affect commercial feasibility are:  Frictions in changing prices of materials. For example, contracts may make it time consuming and costly to respond to a change in the prices a material recovery facility (MRF) receives. These frictions can have dramatic consequences, such as financial distress and closure of facilities. When the China National Sword Policy was introduced the profitability of several MRFs, in particular in Victoria, was compromised by contracts which required MRFs to accept material which had a significantly lower value.  Development constraints. This relates to the availability of suitable development sites, the time to get planning and environmental approvals as well as the time to construct facilities. Development constraints increase the costs of investing in new infrastructure and increases project risk and uncertainty, in particular where market conditions, such as 92

prices, availability of inputs and regulation are variable. They also mean that in the short term facilities may not be developed in time for the export ban. - Long lead times of several years are required for re-processing facilities to achieve development and environmental approval. For example: o The Tyre Recycling Plant in Warren NSW, owned by Green Distillation Technologies required approximately seven years (2011-2019) to achieve operational approval70, 71. o Visy paper mill in Tumut required four years (1998-2002) from development application to first operations of stage 1 (300 000 tonnes per year). A further one year (2006-2007) was required to obtain approval for stage 2 expansion to 700 000 tonnes per year72. o The Orora paper mill in Port Botany received its development approval in 2007 and began operations in 201373.  Reliance on export markets for reprocessed material. This introduces currency risk for operators, as well as exposes operators to the variability in overseas markets. For paper, most of the additional processed recycled material would be expected to be sold overseas; and operators would be exposed to overseas market risks. Operations that are not vertically integrated are also subject to much greater risk.  Competition. Some markets for processing recyclable materials are very thin - for instance paper and cardboard processing in Australia is dominated by Visy for mixed paper inputs. Taken together, these factors all impact on commercial risks. Commercial risks include variability in prices, availability and costs of inputs (including labour, capital, other intermediate inputs and material for processing), costs of substitutes (virgin material) as well as general economic risks. This also includes uncertainty around the definitions of material covered by the export ban and exempted by the export ban. These risks determine the commercial feasibility/viability of recycling. The outcome of the commercial market considerations has a direct market impact on the available processing capacity. Processing capacity is directly related to commercial feasibility; where it is feasible and the risks of development can be managed, investment in processing capacity can be expected to occur without government intervention. Under the estimates of costs and revenues for this study:  It would be commercially feasible to put in place new paper processing relative to landfilling it. However, there are major risks that may deter this from happening.  It would be commercially feasible to put in place new plastic processing. The risks are much lower for plastic, but would mainly address the higher value materials.  For tyres, it would be commercially feasible to put in place new tyre processing relative to landfilling, but potentially less so relative to stockpiling. The availability of capacity directly impacts the outcome of materials collected for recycling. Without exports of unsorted recycling material, the possible outcomes for material are: 70 https://www.aumanufacturing.com.au/green-light-for-new-tyre-recycling-plant 71 https://www.abc.net.au/news/2019-06-02/recycling-australias-tyre-piles/11169386 72 https://www.visy.com.au/env-appv-mgmt-plan 73 https://majorprojects.planningportal.nsw.gov.au/prweb/PRRestService/mp/01/getContent?AttachRef= MP05_0120-MOD-8%2120190507T022815.291%20GMT 93

 Materials being recycled. This involves processing of material till it can either be used by domestic manufacturers or exported as a commodity (e.g. plastic flake or pellets).  Materials going to landfill. Landfills are subject to a range of regulations that require their appropriate siting and engineering to reduce health and environmental risks and operate under regulatory requirements and oversight that significantly internalise operational risks and costs to landfill operators, and the gate fees they charge. Nevertheless, residual health and environmental externalities at landfills may include: - Greenhouse gas emissions. - Non-greenhouse gas air emissions. - Leachate escaping from landfills. - Disamenity caused when houses or recreational areas are located near landfills.  Materials being stockpiled or illegally disposed of. Stockpiling of materials can result in increased risk of fire as well as negative externalities including damage to the environment, amenity impacts, health impacts and clean-up costs. In Victoria, the China National Sword Policy has resulted in stockpiling of comingled recyclables. The outcomes of recyclable materials are likely to have downstream impacts on household recycling. If recyclable material is not being recycled, there a risk the public will lose confidence in the kerbside recycling system. The outcomes of this could include increased contamination rates or reduced volumes. This will affect the viability of the sector, where MRFs are able to extract less value from recycled material, due to increasing contamination as well as a lack of end markets. Risks by material Table 34 reports risk ratings for the paper and cardboard, plastic and tyres sectors. Risks are scored as low, moderate or high. Green cells indicate a score is good/positive (i.e. low risk), red cells indicate a score is bad/negative, and yellow cells are inbetween. We have also considered whether risks are short run or long run risks in accordance with the timing of their impact. We view paper and cardboard involving the greatest risks, primarily relating to the low commercial feasibility of domestic processing of this material and large scale required. Plastic, in particular PET and HDPE, are more likely to be commercially feasible which significantly reduces the downstream risks around material ending up in landfill or being stockpiled in the long run. Table 34: Risk ratings by material Risks Long run or Short Paper and Plastic Tyres run risk cardboard Commercial market consideration Lack of commercial feasibility currently LR High Moderate High Lack of commercial feasibility relative to LR Moderate Low Moderate landfill or stockpiling Commercial risks for operators LR High Moderate Moderate Time to establish facility SR High Moderate Moderate Lack of competition LR High Moderate High 94

Risks Long run or Short Paper and Plastic Tyres run risk cardboard Amount of capital High Moderate Moderate Market capacity and contracts Lack of capacity in existing facilities SR High Moderate ? Rigidities in existing contracts SR High Moderate Low Outcomes Increased material going to land fill SR and LR High Moderate Low Increased material going to stockpiles SR and LR Low Low High Downstream impacts Public confidence in recycling LR High Moderate Na Increase in contamination of kerbside LR Moderate Low Na recycling Challenge to viability of kerbside recycling LR High Moderate Na Overall risk High Moderate Moderate Source: CIE. Paper and cardboard Commercial market considerations The economic analysis shows that domestic paper and cardboard processing facilities are not commercially viable at current prices, as the costs of processing are likely to be greater than the revenue from the higher value added product. However, they would be viable relative to landfilling. The CBA of processing infrastructure for paper and cardboard uses point estimates; in reality there are risks around the parameters used in the analysis. These risks include:  The domestic market processed paper and cardboard is saturated, which means that any additional processing would need to be geared towards export.  Pricing risks in export markets. This comes from: - Fluctuations in demand and prices overseas. The prices of exported paper and cardboard have fallen and remained low at the end of 2019 due to external factors, namely a downturn in Chinese industrial production (reducing demand for paper and cardboard) and low prices for virgin pulp74. Prices and demand are cyclical, however they are affected by unexpected shocks, the effects of which can be persistent (i.e. prices may be low or high of extended periods of time). Demand and pricing risks are likely to have a large impact on investment decisions for paper and cardboard processing, which requires very large fixed capital investment and operates on small margins. 74 Envisage Works, IndustryEdge and Sustainable Resource Use 2020, Recovered Resources Market Bulletin, Edition 10, prepared for Waste Management and Resource Recovery Association of Australia and Sustainability Victoria, January 2020. 95

- Fluctuation in the Australian dollar. Exporting recycled materials exposes operators to currency risks. Financial market instruments can be used to manage this risk to some extent, but this adds to long run uncertainty, against the large initial capital investment required.  Prices for virgin pulp. Virgin pulp is a substitute for recovered material, such that as relative prices change so does demand for pulp75. Prices for virgin pulp have been falling recently which has contributed to weak demand for recovered paper and carboard.  Economic conditions are currently supressing domestic demand for corrugated cardboard boxes, for which most of the recovered paper is used. This is driven by ongoing drought76 and generally weak economic conditions and pose a general risk through the business cycle.  A deep market for pulp does not really exist overseas which increases risks around finding buyers. Most pulp moved internationally is within the same business, rather than traded.  Some collectors of paper are bound by "take or pay" contracts. This obliges collectors to take recovered paper at a specified price or pay a penalty. As demand and prices for these materials fall, this results in losses for businesses, which is a challenge for the ongoing viability of recyclers as prices remain subdued and contracts do not adjust quickly enough77.  Paper and cardboard processing facilities are very large and expensive. Their development requires large fixed capital costs, against small margins from processing recovered material. This amplifies the price and demand risks faced by processors, as small falls in demand or prices can affect the overall viability of an investment.  There is a lack of competition in the market for paper processing. Paper and cardboard processing in Australia is dominated by Visy. This may increase barriers to entry for a new operator as a monopolist may exercise their market power to deter new entrants.  Development constraints on new processing sites. The availability of sites is not an issue, as these would be located on the outskirts of significant industrial centres where there is lots of available land. The main issue is around the time to gain planning and environmental approvals, and then to construct. Approvals would generally take 24 months however, previously it has taken between three and 15 years to plan, gain approval and construct a paper processing facility. The Visy paper mill in Tumut required four years (1998-2002) from development application to first operations of stage 1 (300 000 tonnes per year). A further one year (2006-2007) was required to obtain approval for stage 2 expansion to 700 000 tonnes per year78. The 75 Envisage Works, IndustryEdge and Sustainable Resource Use 2019, Recovered Resources Market Bulletin, Edition 8, prepared for Waste Management and Resource Recovery Association of Australia and Sustainability Victoria, November 2019, p. 16. 76 The drought affects the volume of food production and therefore the number of cardboard boxes required to transport that produce. 77 Envisage Works, IndustryEdge and Sustainable Resource Use 2020, Recovered Resources Market Bulletin, Edition 10, prepared for Waste Management and Resource Recovery Association of Australia and Sustainability Victoria, January 2020, p. 19. 78 https://www.visy.com.au/env-appv-mgmt-plan 96

sensitivity analysis highlights the large increase in the net cost if paper facilities take twice as long to be in operation, as large volumes of material would be landfilled in the interim. Market capacity and constraints Because of the limited commercial feasibility at current prices, there has not been much expansion of capacity to process paper and cardboard domestically. Recent weakness in export markets for paper and cardboard has resulted in increased materials available for domestic processors, however a combination of a lack of capacity and weak demand for end products (corrugated boxes) has resulted in high quality recovered paper from the commercial and industrial stream going to land fill79. Given high quality material is currently going to landfills, the additional material due to an export ban, is also at risk of going to landfill for some period of time. Outcomes As noted above, paper and cardboard is currently going to landfill and being stockpiled given the lack of processing capacity and lack of excess demand for end products. The risks of material going to landfill and being stockpiled is greater for material from kerbside collection than material from commercial and industrial streams which tend to be of much higher quality. Given investment in additional processing facilities are likely to take time and are not feasible at current prices, but are relative to landfilling, government may need to provide some intervention to guarantee capacity prior to a ban being implemented on exporting. Downstream impacts Ongoing limitations in the capacity for paper and cardboard processing pose risks to the viability of kerbside recycling:  In the short run there may be an increase in contamination of paper and cardboard. In Victoria there are reports of contamination rates of 20 per cent in some instances, as soft markets for recovered paper and cardboard are being met by higher contamination80. It is unclear whether this is a causal response of households to collected recycling being diverted to landfill and storage, or this is a response of MRFs to lower material prices (i.e. they treat material as contaminated and send straight to landfill without sorting due to the costs of sorting being greater than the value of sorted material). Regardless, in the long run there is a risk that landfilling of collected material has a negative impact on household recycling behaviours.  In the long run there may be an unwillingness of local government to pay MRFs to collect paper and cardboard. This could be also driven by MRFs requiring additional funds to place recovered material with a processor given capacity constraints. There is a risk that paper and cardboard would no longer be collected by some local government areas, with that material necessarily going to landfill. 79 Envisage Works, IndustryEdge and Sustainable Resource Use 2019, Recovered Resources Market Bulletin, Edition 9, prepared for Waste Management and Resource Recovery Association of Australia and Sustainability Victoria, December 2019, p. 18. 80 Envisage Works, IndustryEdge and Sustainable Resource Use 2020, Recovered Resources Market Bulletin, Edition 10, prepared for Waste Management and Resource Recovery Association of Australia and Sustainability Victoria, January 2020. 97

 Paper is the mainstay of the kerbside recycling system, comprising half of the volume and historically most of the value. Glass is the second largest and has had a negative value for some time. If paper and glass together both become low value recyclables, then this covers 80 per cent of kerbside materials and would likely mean councils could find better financial options that recycled less. Options for mitigation of risks The overarching risk for paper and carboard processing is whether commercial businesses will invest in processing facilities, and whether this happens in a timeframe aligned to that of the export ban. Our analysis indicates that that paper and cardboard processing may be marginal at best, before accounting for the several risks to commercial feasibility (namely demand and price risk) discussed above. Currently, the main approach to mitigate these commercial feasibility risks has been for vertical integration of supply chains by Visy, the main domestic processor. Visy owns and operates packaging manufacturing facilities overseas, which allows them to export domestically processed paper and cardboard to their own facilities overseas, as well as using collected paper and cardboard to produce products in Australia. This helps mitigate risks around finding end markets, prices and diversifies their operations from the economic conditions in any one country. Possible strategies to mitigate the risks noted above include:  Streamlining the planning process to develop a facility.  Investing in some smaller volume activities which create new end markets for processed paper and cardboard. This includes moulded fibre, compressed insulation panels and some waste to energy solutions. Note this option has added risks around producing products for which there is no market (i.e. the costs exceed the willingness to pay of consumers such that an ongoing subsidy is required for it to be feasible) and is unlikely to deal with the volumes required.  Reconsider stockpiling regulations or increase policing of existing regulations. Given the recent issues around stockpiling, we expect that enforcement and restrictions may already have been tightened. Where paper does not have a market, it is preferable to landfill it rather than stockpile it.  Considering options to mitigate the impacts of paper and cardboard going to landfill, such as researching and implementing anaerobic digestion and gas creation. Plastics Commercial market considerations The economic analysis shows that domestic plastics processing is likely to be viable for some materials. PET and HDPE, which fetch relatively higher prices than other recovered plastics, processing is in particular likely to be viable. The main commercial risks include:  Depth of end markets. If end markets do not exist, for example to export plastics pellets, the processing infrastructure is not likely to be commercially viable. The value of 98

recycled product depends on end markets. Current markets for flaked/pelletised polymers 3-7 are emerging but uncertain except for polypropylene.  Lack of end markets for some plastics types. Recovered soft plastics, mixed plastics and PVC do not have economically viable end markets. Even with additional processing, there is a significant risk that these materials will have negative values.  Risks around sorting. Without source separation of all PET and HDPE for recycling, sorting infrastructure is required. The efficacy of sorting, and levels of contamination is a risk to commercial feasibility.  Moderate fixed capital investments are required for increased domestic plastics processing. Although it appears that some investment is currently occurring in plastics processing, uncertainty around the market for flaked and pelletised plastics may act as a barrier to further investment.  Prices for virgin materials. Virgin material is a substitute for recovered material, such that as relative prices change so does demand.  Economic conditions affect demand for end products.  Development constraints on new processing sites. The availability of sites is not an issue, as these would be located on the outskirts of significant industrial centres where there is lots of available land and sites are relatively small. The main issue is around the time to gain planning and environmental approvals. This is likely to be much easier than for paper plants. Market capacity and constraints There is currently limited local manufacturing capacity to process plastics back into new products. This is related to the need for sufficiently deep end markets to allow additional investment, and much plastic packaging is manufactured overseas. There is some capacity to process PET and HDPE domestically, however this is far below the volume of available material. Industry views indicate that there is limited secondary processing for other plastic types. With the apparent commercial feasibility we would expect capacity to increase over time at least for PET and HDPE, while for other materials this is less certain. Outcomes Plastic which is not being processed domestically is being exported, going to landfill and being stockpiled. In the absence of processing capacity expansion and export ban, the main risk will be around increased landfill and stockpiling and their associated risks. For high value plastics, the risk around this going to landfill are low to moderate, as we expect that processing facilities can be set up fairly rapidly and with moderate commercial viability, even without an export ban. Downstream impacts Plastics are less important than paper in kerbside recycling. The types of downstream impacts could include changes to what material is collected in kerbside recycling or C&I recycling. For example, removal of some plastics that are not being recycled. 99

Options for mitigation of risks Like paper and cardboard, the main risks to plastics processing are around commercial feasibility. We expect that processing will be viable for at least some plastic types. Possible strategies to mitigate the risks noted above include:  Providing a subsidy for new processing facilities outside of the highest value plastics. This would resolve issues around commercial feasibility.  Streamlining the planning process to develop a facility.  Supporting end markets for recycled materials. For some plastics types, with poorly developed end markets, changes in procurement guidelines could create additional demand.  Reconsidering stockpiling regulations or increasing policing of existing regulations. Given the recent issues around stockpiling, we expect that enforcement and restrictions may already have been tightened.  Considering alternative end markets, such as chemical recycling or waste to energy for low value materials. Tyres The National Tyre Product Stewardship Scheme launched in 2014 with the aim to increase domestic tyre recycling and expand the market for tyre-derived products. The National Tyre Product Stewardship Scheme is funded by the tyre industry, paid for by end consumers. Tyre Stewardship Australia has been accredited by the ACCC to administer the National Tyre Product Stewardship Scheme and to this end has entered into partnerships with end-use-stakeholders and research organisations. This includes collaborations with universities, local councils and EDI Downer during the 2018-19 financial year to research and develop new tyre derived products, such as:  Crumbed Rubber Concrete for residential construction;  Permeable Pavement; and  Concrete road barriers81. The stewardship scheme is funded by a levy of 25 cents per equivalent passenger unit (EPU, this corresponds to 9.5 kg of tyre) sold by members of the scheme82. In 2018/19 the levy scheme covered 43 per cent of the market83. Commercial market consideration Given the product stewardship scheme in place, recycling of tyres is somewhat insulated from the commercial costs of recycling as it can be funded through a levy on the sale of new tyres. The incomplete coverage of the scheme creates a risk that the costs of recycling will outstrip the capacity of the scheme. 81 Tyre Stewardships Australia, 2018 -19 Annual Report, p. 12, https://www.tyrestewardship.org.au/static/uploads/files/tsa-annual-report-2018-19-web- wffnfpdpvgos.pdf 82 For a definition of EPU, see: https://www.tyrestewardship.org.au/resource/understanding- equivalent-passenger-unit-ratios-epus 83 Tyre Stewardships Australia, 2018 -19 Annual Report, p. 54, https://www.tyrestewardship.org.au/static/uploads/files/tsa-annual-report-2018-19-web- wffnfpdpvgos.pdf 100

Lead times for developing infrastructure is a key risk for tyre processing. Consultation with waste industry operators indicates a highly variable lead time of two to 11 years to establish new or upgraded facilities. A significant contributor to this timeframe is the time required to achieve development planning approval, with anywhere from 18 months to five years suggested84. These timelines are likely to be longer for facilities such as pyrolysis plants, and shorter for simple shredding operations. There is also the risk of disrupting existing supply chains for recycling of tyres. In particular:  TSA has been undertaking verification of the downstream processing of end-of-life tyres at a number of tyre processing facilities identified in India, Malaysia and Korea. Where these supply chains can be verified there are risks around the specification of the export ban as it may be diverting material from being recycled overseas to some less efficient use  used tyres are often exported for rereading (in particular off-the-road tyres used for large machinery in agriculture, construction and mining), before being imported back to Australia. This allows significant cost savings compared to replacing old tyres with new once the treads wears out. Again, there is a risk that the specification of the export ban interrupts this supply chain. As noted above, recycled tyres can be used to produce a number of different products. However, there is a risk that increased processing of material for domestic use may result in these markets becoming oversupplied. This could result in material going to landfill, or more likely stockpiled, or the production of products for which there is no value to society. Market capacity and constraints The TSA recovered 40.3 million used tyres EPUs out of a total of 56 million used tyres (69 per cent of used tyre EPU). As the tyre stewardship scheme does not operate on a commercial basis, we expect that there would be scope to increase capacity to meet additional processing requirement. The main risk to this capacity is likely to be increasing coverage of the levy on new tyres, as this only covers 43 per cent of the market. Outcomes The TSA recovered 40.3 million used tyres EPUs out of a total of 56 million used tyres (69 per cent of used tyre EPU). This consist of:85  10.6 million EPU for reuse, including re-treading or repair.  23.8 million EPU for processing into tyre derived products, including crumbed rubber for construction and tyre derived fuel for use in cement kilns, boilers or furnaces.  5.9 million EPU for use whole in thermal processing, such as cement kilns. Of the material which was not recovered:  16.2 million EPU was disposed to landfill or onsite (i.e. buried at a mine site).  1.6 million EPU were dumped or stockpiled. Historically stockpiling had been a major issue for end-of-life tyres, however recently this been reduced as a result of tighter EPA regulations around the country and increased baling 84 Emails from the Commonwealth Department of Environment 85 https://www.tyrestewardship.org.au/static/uploads/files/tsa-2018-19-australian-tyre-consumption- and-recovery-factsheet-wfqcxknopblh.pdf 101

and export of tyres. Exporting of whole tyres is also lower cost than exporting shredded tyres. Landfilling of tyres is expensive due to landfill levies and because often tyres must be shredded before being disposed of in landfill or may be restricted to some landfills. Taking this together the main risks around the export ban are that there is an increase in stockpiling of used tyres as the reduction overtime has been driven by low cost export options. Given the large costs associated with landfill, it seems unlikely that landfilling of tyres would increase. Downstream impacts We do not anticipate there are any risks around downstream impacts or confidence in the recycling system associated with tyre recycling. Options for mitigation of risks The main risk to providing the required capacity appears to be around funding. The stewardship scheme provides a mechanism by which the cost of disposing of tyres can be passed on to users, which is an economically efficient outcome. Funding risks could be mitigated by increasing participation in the scheme. As with other materials, the time to gain planning and environmental approvals is a significant barrier, which could be mitigated by streamlining these processes. Risks around stockpiling appear to be well managed by existing Environment Protection Authority regulations. These will come under increased pressure if the export options are less attractive. 102

8. IMPACT ANALYSIS The overall net benefits of the options are shown in Table 35.  Option 1 would deliver a net benefit of $72 million in present value terms but would not fully address the objectives of government action. Australia's waste would be allowed to be exported unprocessed and would fail to actively manage risks to Australia's waste and recycling industry.  Option 2(a) would impose a net cost of $249 million in present values terms and would ensure Australia's unprocessed waste is not exported. However, it fails to actively manage risks to Australia's waste and recycling industry and would likely lead to some recycling capacity not going ahead, thereby increasing landfill in Australia.  Option 2(b) would deliver a net benefit of $46 million in present value terms and would meet the policy of objectives of government to better manage Australia's own waste and not causing harm to human health and the environment in the receiving country; assisting in transitioning industry to a circular economy and leveraging the agreed actions under the National Waste Policy Action Plan 2019. - The net benefit of $46 million for Option 2(b) is achieved through government interventions, which would provide support aimed at actively managing risk to ensure capital investment is committed to address potential market failures. Table 35: Summary of cost benefit analysis, $m, present value Option 1 Option 2(a) Option 2(b) Net benefit waste industry 100 -207 488 Net benefit governments -84 -42 -476 Net benefit communities 57 0 34 Overall net benefit 72 -249 46 Change in problem exports (tonnes, PV) 23,971 -40,718 -40,718 Net cost per tonne ($/tonne) 3,019 6,122 -1,127 Note: Using an evaluation period of 20 years and a social discount rate of 7 per cent. Source: The CIE and the Department of Agriculture, Water and the Environment. These results compare with the CIE report on Costs and benefits of banning exports of waste. In that analysis, the cost of risk was not explicitly allocated in the results and it assumed that capital is committed to achieve the next best outcome following an export ban. In a risk-free environment, this would see investment in capital fully committed to domestically process the waste that was previously exported unprocessed. It is noted in the CIE report that the next best options are based on the costs and revenues expected for different options, and knowledge of the markets available and industry interest in different options. If private market participants do not react in this way, particularly in respect of the risks related to these options, then costs and benefits will be different. In this RIS, we have explicitly identified this risk in the analysis. It is assumed that the level of support from government to address this risk to industry investment in the waste and recycling industry is equivalent to intervention costs stated in Section 6. 103

The analysis has been purposely established to take into consideration future negotiations between industry of the level of support that is required. The modelling framework is agnostic to the level of government intervention. That is, the level of government intervention required for industry to fully commit to the capital investment required will not alter the net benefit result in Option 2(b). However, it will shift the costs between industry and government. If, for example, a higher level of intervention is required, costs to government will be higher, which will show up as higher subsidies to industry. The same level of capital is still committed, but more of it is supported via government interventions. The opposite is also true if a smaller amount of intervention is required. Other impacts The proposed options will also have an impact on the wider economy. The assessment in this Decision RIS also considers the direct and indirect (or flow-on net benefits) to the economy using Input-Output Econometric modelling (see Appendix I). These are shown in Table 36 and Table 37. Table 36: Direct economic impacts Option 1a Option 2(a) Option 2(b) Gross output, $m $107 $722 $1,268 GDP, $m $32 $217 $459 Income (wages), $m $19 $121 $303 Employment 34 367 602 Source: ABS National Accounts and the Department of Agriculture, Water and the Environment. Table 37: Indirect economic impacts Option 1a Option 2(a) Option 2(b) Gross output, $m $199 $1,316 $2,307 GDP, $m $84 $551 $992 Income (wages), $m $49 $306 $564 Employment 78 922 1,313 Source: ABS National Accounts and the Department of Agriculture, Water and the Environment. Options 1 and 2(a) also have lower economic impacts compared with Option 2(b) in terms of output, value added, wages and employment. This is because a greater amount of economic activity occurs domestically when all waste material that was previously exported is now processed domestically and returns a higher value in the market. Significant flow-on impacts occur in Option 2(b) relative to the other options because capital investment is fully committed, which benefits the sectors that install and support these investments (Table 37 and Table 38). The impact analysis suggests that Option 2(b) would best assist in transitioning industry to a circular economy and deliver on Australia's commitments to better manage its own waste. Specifically, it would best:  Achieve better protection of the environment and human health through improved management of Australia's waste plastic, paper, glass and tyres domestically and internationally. 104

 Ensure Australia actively manages the risk of countries imposing waste import restrictions so Australia's waste and recycling sector is well placed to manage any future disruption or closure of global waste markets without resulting in adverse environmental or human health impacts.  Complement and leverage the agreed actions under the National Waste Policy Action Plan 2019 that provides a framework for collective, national action on waste management, recycling and resource recovery to 2030. The CBA results suggest that Option 2(b) would deliver the best results across all jurisdictions in meeting the objectives of the National Waste Policy which was adopted by Environment Ministers. Table 38 Direct economic impacts Indirect Economic AUS NSW* VIC QLD SA TAS WA NT Impacts Option 1 Gross output, $m, PV $107 $24 $40 $14 $6 $0.3 $21 $0.4 GDP, $m, PV $32 $7 $12 $4 $2 $0.1 $7 $0.1 Income (wages), $m, PV $19 $4 $7 $2 $1 $0.1 $4 $0.1 Employment, jobs** 34 7 13 5 3 0 7 0 Option 2a Gross output, $m, PV $722 $232 $263 $64 $37 $0.5 $124 $1.2 GDP, $m, PV $217 $67 $76 $19 $12 $0.1 $43 $0.4 Income (wages), $m, PV $121 $37 $42 $10 $7 $0.1 $24 $0.2 Employment, jobs** 367 111 139 34 22 0 57 0 Option 2b Gross output, $m, PV $1,268 $383 $475 $119 $69 $0.7 $212 $1.9 GDP, $m, PV $459 $134 $170 $43 $26 $0.2 $82 $0.8 Income (wages), $m, PV $303 $87 $114 $29 $18 $0.1 $54 $0.5 Employment, jobs** 602 175 234 59 38 0 93 1 Source: ABS National Accounts and Input-Output Tables, using an evaluation period of 20 years and a social discount rate of 7 per cent. Note: * including ACT; ** nearest whole employment number Table 39: Indirect economic impacts Indirect Economic AUS NSW* VIC QLD SA TAS WA NT Impacts Option 1 Gross output, $m, PV $199 $45 $83 $25 $11 $0.5 $34 $0.4 GDP, $m, PV $84 $19 $35 $10 $4 $0.2 $15 $0.2 Income (wages), $m, PV $48 $11 $20 $6 $3 $0.1 $9 $0.1 Employment, jobs** 78 17 33 10 5 0 13 0 Option 2a Gross output, $m, PV $1,316 $414 $525 $111 $59 $0.8 $194 $1.2 GDP, $m, PV $551 $173 $217 $46 $25 $0.3 $85 $0.5 105

Income (wages), $m, PV $306 $97 $120 $25 $14 $0.2 $48 $0.3 Employment, jobs** 922 291 387 83 44 1 115 1 Option 2b Gross output, $m, PV $2,326 $713 $950 $199 $109 $1.1 $344 $2.1 GDP, $m, PV $1,001 $307 $405 $84 $47 $0.5 $152 $0.9 Income (wages), $m, PV $567 $173 $228 $48 $27 $0.3 $88 $0.6 Employment, jobs** 1,314 396 555 119 67 1 170 1 Source: ABS National Accounts and Input-Output Tables, using an evaluation period of 20 years and a social discount rate of 7 per cent. Note: * including ACT; ** nearest whole employment number Net benefits across commodities Option 1 A detailed view of the components of net benefits across the commodities and the different types of costs and benefits is shown in Table 40, for Option 1. Under the status quo approach, current laws would continue to operate. Commonwealth, state, territory and industry-led initiatives to reduce problematic waste will continue to be implemented, including the National Waste Policy Action Plan 2019. A restriction on the export of waste plastic, paper and cardboard, glass and tyres would not be implemented under this option. Better outcomes in the recycling sector would be supported through an education campaign to improve household understanding of recycling and encourage the uptake of circular economy principles. Governments will also work with industry to ensure technical engineering standards are updated and allow the usage of recycled content materials where it is safe to do so. This work will complement existing government commitments to increase demand for recycled content through government procurement. Continuing the export of waste plastic, paper and cardboard, glass and tyres to existing and alternative waste markets is the policy option with the least short-term economic costs. However, this option does not address environmental and social expectations and continues market uncertainty in an industry exposed to changes in international markets. This policy option may fail to provide policy direction and market confidence for private sector investment and industry transition to effectively address existing market failure. As the non-regulatory option, it is not expected to increase compliance costs or regulatory burden for businesses. Businesses will however need to continue to determine how and whether to export waste materials in accordance with the Hazardous Waste (Regulation of Exports and Imports) Act 1989 and the laws of the importing country. Containers have been re-exported from South East Asia because the material has not been correctly identified in import documentation, or the recycling facility is not appropriately licenced. Dealing with re- exports and understanding changing foreign government regulatory requirements imposes costs on business and government. If Australian businesses fail to comply with these local or international laws, they risk causing industry-wide reputational damage and weaken domestic confidence in Australia's waste and recycling industry. 106

Under the status quo approach, Australia would continue the export of its waste and may inadvertently contribute to negative environmental and human health impacts. Countries receiving Australia's waste may have lower regulatory standards or overwhelmed recycling infrastructure and this may lead to instances of burning of waste or leakage of Australian waste into the environment. While Australia is not responsible for the economic costs of cleaning up waste leakage in foreign jurisdictions, these environmental impacts may have flow-on effects to Australia's immediate geographic area (e.g. litter) that then have costs borne by Australian taxpayers. 107

Table 40: Costs and Benefits of Option 1: $m, PV Paper Plastics Tyres Glass Total Waste industry costs and benefits Loss of export value 303 75 18 3 399 Sorting cost 0 2 0 0 2 Processing capital cost -89 -40 0 0 -129 Government infrastructure support 0 0 0 0 0 Processing land cost -34 -2 -1 0 -36 Processing operating cost -46 -8 -4 2 -56 Government procurement support 0 0 0 0 0 Transport cost -23 -2 0 0 -24 Landfill cost -13 -2 -1 0 -16 Value of material 0 0 0 0 0 Residual value of assets -34 -5 0 0 -39 Net waste industry 66 17 13 5 100 Government costs and benefits Education -27 -7 -2 0 -36 Standards -24 -6 -1 0 -32 Infrastructure and procurement 0 0 0 0 0 Additional waste levy revenue -13 -2 -1 0 -17 Net Government -64 -15 -4 -1 -84 Community costs and benefits Domestic landfill externalities 15 3 1 0 19 Externalities from reduction in recycling 26 9 0 2 36 Domestic transport externalities 1 0 0 0 2 Net community 42 12 1 2 57 Net benefit 43 14 9 6 72 Change in exports (Mt over period) 5 1 0 0 6 Avoided tonnes of problem exports (tonnes, pv) 17,128 4,196 2,647 na 23,971 Net cost per avoided problem tonne ($/tonne) 2,531 3,307 3,575 na 3,019 Note: Using an evaluation period of 20 years and a social discount rate of 7 per cent. Option 2(a) A detailed view of the components of net benefits across the commodities and the different types of costs and benefits is shown in Table 41 for Option 2(a), which would see a restriction on waste exports without additional supporting government interventions. The introduction of an export restriction on waste plastic, paper, tyres and glass is a strong intervention by government that will cause disruption to the existing waste management and recycling supply chain in Australia. In the short-term, the export restriction will have significant economic impacts, reducing demand for waste material in Australia and commercially exposing waste management and recycling businesses where domestic substitute markets for diverted exports do not exist. Over the long-term, a legislated and 108

phased approach to implementing the ban mitigates economic shocks that arise from changing international conditions and provides certainty for private sector investment into domestic reprocessing and value-added product development. Providing policy certainty under a COAG framework will enable Commonwealth and State and Territory jurisdictions, alongside industry to take an aligned approach to support the transition of the waste and recycling industry and achieve environmental and social priorities. Under Option 2(a) the implementation of a waste export ban would be supported by consumer education and existing government commitments, but no further additional measures by government.  Option 2(a) works backwards from Option 2(b), that is, in a risk-supported environment the waste and recycling industry would commit the necessary capital to transform unprocessed waste that is currently exported into higher value processed commodities for sale in a different market.  As such, in Option 2(a) we reduce the capital committed by industry by the equivalent amount of the government interventions detailed in Section 5. This has the effect of reducing the amount of banned waste that would be otherwise processed into a higher value commodity. It also increases the amount of material that goes to landfill.  As such, industry capital and operation costs are higher than in Option 1, as some material is processed, but lower than Option 2(b) where all previously exported waste material is processed into higher value commodities. The costs associated with Options 2(a) include that businesses affected by restriction on certain waste exports would need to adjust their operations to respond to a change in demand for their product(s). Additionally, there would be considerable industry commitment required to transform waste from unprocessed to processed material. This may cause some dislocation and adjustment to industry, some businesses may need to downsize or close completely, resulting in lost economic activity and employment than would have been otherwise under a full commitment of capital where certainty in the market is supported through government interventions. This loss of potential benefits can be thought of as the difference in the economy-wide results for Options 2(a) and 2(b) in Table 36 and Table 37.  The largest net cost is from banning paper exports (at $210 million) and then tyres (at $144 million).  Banning plastic exports has an estimated net benefit -- this predominantly reflects that there is a waste industry benefit from plastic processing, because the higher value material more than outweighs the costs. Some caution should be placed on this, as it suggests that plastic processing will occur in the base case, or that there are other risks stopping processing from occurring more than it currently does. It indicates that the costs of the export ban will likely be markedly lower for plastic than for other materials.  The largest costs from an export ban are the loss of the export value, and a range of capital and operating costs to process material domestically. Landfill costs are also higher -- this is mostly from landfilling of residual material but also reflects landfilling of paper and tyres for a year because facilities will not be operational. 109

 The largest benefit is the value of the material produced through further processing. In present value terms, $2.4 billion of material would be produced.  There may be positive government impacts from additional landfill waste levy revenue (which is also part of the cost to the waste industry).  There are also some negative community impacts from additional landfilling impacts and environmental impacts from reduced recycling (most of which are only for the period when facilities are not operational).  Relative to the tonnes of problem exports avoided, plastic is the most effective, paper is second and tyres are third. The measure of mismanagement is different, with plastic and paper mismanagement reflecting residual plastic contamination entering the marine environment, while tyre mismanagement reflects open burning of tyres. We note that the amount of mismanaged waste from our exports is subject to a wide degree of error, as little is known about exactly what happens to material that we export. Table 41: Costs and Benefits of Option 2(a): $m, PV Paper Plastics Tyres Glass Total Waste industry costs and benefits Loss of export value -478 -315 -98 -12 -903 Sorting cost 0 -22 0 0 -22 Processing capital cost -391 -679 0 0 -1,070 Government infrastructure support 0 0 0 0 Processing land cost -127 -21 -7 -4 -159 Processing operating cost 0 0 0 0 0 Government procurement support -221 -147 -58 -22 Transport cost -122 -2 0 0 -124 Landfill cost -10 -31 -1 -1 -43 Value of material 1,076 1,329 25 3 2,432 Residual value of assets 97 29 2 1 129 Net waste industry -175 141 -137 -35 -207 Government costs and benefits Education -19 -13 -4 0 -36 Standards -17 -11 -3 0 -32 Infrastructure and procurement 0 0 0 0 0 Additional waste levy revenue 6 18 1 1 25 Net Government -30 -5 -7 0 -42 Community costs and benefits Domestic landfill externalities -1 -2 0 0 -3 Externalities from reduction in recycling 4 8 0 0 11 Domestic transport externalities -8 -1 0 0 -9 Net community -5 5 0 0 0 Net benefit -210 140 -144 -36 -249 Change in exports (Mt over period) -5 -3 -1 -1 -10 110

Avoided tonnes of problem exports (tonnes, pv) -13,362 -17,832 -9,525 na -40,718 Net cost per avoided problem tonne ($/tonne) 15,743 -7,869 15,091 na 6,122 Note: Using an evaluation period of 20 years and a social discount rate of 7 per cent. Option 2(b) A detailed view of the components of net benefits across the commodities and the different types of costs and benefits is shown in Table 42 for Option 2(b), which would see a restriction on waste exports with supporting government interventions. Targeted government interventions to help build markets and associated demand would have the benefit of addressing existing systemic challenges in Australia's waste and recycling industry that limit domestic resource recovery. They would also serve to minimise the negative short-term impacts of the export ban and provide greater certainty and assistance to industry stakeholders to quicken the transition to an industry model based on domestic reprocessing. This would involve states and territories leading on infrastructure and industry development initiatives that build on their existing infrastructure and market strengths. Whereas the Commonwealth Government will work through COAG to lead on cross-jurisdictional issues such as harmonising policy settings, improving data collection and addressing market barriers e.g. design and engineering standards. These measures would be additional to the consumer education campaigns that are outlined in Option 1 and 2(a), and predominantly focus on boosting domestic reprocessing capacity and enabling reforms that help grow domestic demand for recycled waste material. Additional measures to manage the economic shock from implementing the export ban would provide indirect relief for local councils. Pressures on kerbside recycling schemes, closure or downsizing of contracted waste management and recycling businesses would have flow-on costs to local councils who would also have to manage the expectations concerning responsible environmental management. Waste that could not be collected would either be stockpiled or ultimately end up in landfill at additional cost. Government actions to increase demand for recycled material will also help minimise levels of stockpiling in the short to medium term. Stockpiling is likely to occur in the aftermath of the ban, as waste collectors of low value plastic, paper and cardboard subsectors would be faced with substantially reduced demand without export markets. Increasing levels of government procurement of recycled material and working with industry to update standards or information dissemination for consumers will slowly increase demand for some of these materials and marginally reduce risks of toxic fires and other health hazards that can occur at stockpiling sites. Internationally, the environmental impacts of the additional measures alongside the export ban will be minor. Actions by the governments to require consumer labelling or encourage industry to utilise more sustainable materials could have flow-on effects to international markets where they are exported. This minimises the cost of waste management overseas and reduces the likelihood of waste leakage occurring. The successful implementation of an export ban, where industry disruption and economic costs are properly managed, could form the basis for other countries to adopt similar measures. This contributes to Australia's overall interests of addressing marine pollution and sustainability. 111

Table 42: Costs and Benefits of Option 2(b): $m, PV Paper Plastics Tyres Glass Total Waste industry costs and benefits Loss of export value -478 -315 -98 -12 -903 Sorting cost 0 -27 0 0 -27 Processing capital cost -491 -852 0 0 -1,343 Government infrastructure support 91 159 0 0 350 Processing land cost -159 -26 -9 -5 -200 Processing operating cost -277 -185 -73 -28 -563 Government procurement support 49 33 13 5 100 Transport cost -153 -3 0 0 -156 Landfill cost 68 19 18 9 113 Value of material 1,351 1,668 31 3 3,053 Residual value of assets 122 36 3 1 162 Net waste industry 122 507 -115 -26 488 Government costs and benefits Education -19 -13 -4 0 -36 Standards -17 -11 -3 0 -32 Infrastructure and procurement -185 -122 -38 -5 -350 Additional waste levy revenue -37 -11 -10 0 -58 Net Government -257 -157 -56 -6 -476 Community costs and benefits Domestic landfill externalities 4 1 1 1 7 Externalities from reduction in recycling 14 21 0 2 37 Domestic transport externalities -10 -1 0 0 -11 Net community 8 22 1 3 34 Net benefit -257 371 -169 -29 46 Change in exports (MT over period) -5 -3 -1 -1 -10 Avoided tonnes of problem exports (tonnes, pv) -13,362 -17,832 -9,525 na -40,718 Net cost per avoided problem tonne ($/tonne) 9,491 -20,812 17,789 na -1,127 Note: Using an evaluation period of 20 years and a social discount rate of 7 per cent. Net benefits across jurisdictions The net benefits per person across the jurisdictions are shown in Table 43. The largest per capita impacts are in states that are currently more export dependent and that would send material to other states (mainly for paper) in the event of an export ban with government support (i.e. Option 2(a)), because of scale.  Western Australia has the highest net costs per person, at $43 per person for Option 2(a). Note that this is not an annual cost, but an equivalent once-off cost.  Victoria and South Australia also have substantial negative impacts.  NSW has smaller per person impacts because it is less export reliant than other states. 112

Impacts for some states are less reliable than others, such as Tasmania and potentially South Australia, because it is not possible to identify exports that originate in one state but are exported through a port in another state. This will tend to overstate the costs to Victoria and understate the costs to Tasmania and South Australia. Table 43: Net benefits across jurisdictions, $ per capita NSW/ACT VIC QLD SA WA TAS NT AUST Option (1) -1 11 3 1 -5 1 -1 3 Option 2(a) -4 -9 0.4 -20 -43 0.4 -5 -10 Option 2(b) 9 10 5 -14 -37 0.5 -5 2 Source: The CIE and the Department of Agriculture, Water and the Environment. Further detail on the impacts across jurisdictions for the options is shown in Table 44, Table 45 and Table 46. 113

Table 44: Cost and benefits across jurisdictions, Option 1, m$ NSW/ACT VIC QLD SA WA TAS NT AUST Waste industry costs and benefits Loss of export value 82 190 55 22 49 1 1 399 Sorting cost 1 1 0 0 0 0 0 2 Processing capital cost -32 -54 -18 -7 -18 0 0 -129 Government infrastructure support 0 0 0 0 0 0 0 0 Processing land cost -11 -13 -4 -2 -6 0 0 -36 Processing operating cost -12 -23 -8 -3 -8 0 0 -56 Government procurement support 0 0 0 0 0 0 0 0 Transport cost 0 0 -1 -3 -20 0 0 -24 Landfill cost -5 -5 -2 -1 -2 0 0 -16 Value of material 0 0 0 0 0 0 0 0 Residual value of assets -10 -16 -5 -2 -6 0 0 -39 Net waste industry 13 79 16 4 -11 1 0 100 Government costs and benefits Education -13 -10 -5 -3 -5 0 0 -36 Standards -12 -9 -4 -2 -4 0 0 -32 Infrastructure and procurement 0 0 0 0 0 0 0 0 Additional waste levy revenue -5 -6 -2 -1 -2 0 0 -17 Net Government -30 -25 -11 -6 -11 0 0 -84 Community costs and benefits Domestic landfill externalities 4 7 3 1 3 0 0 19 Externalities from reduction in recycling 9 14 5 2 5 0 0 36 Domestic transport externalities 0 0 0 1 1 0 0 2 Net community 13 22 8 4 9 0 0 57 Net benefit -5 76 13 1 -13 1 0 72 Change in exports (Mt over period) 1 2 1 0 1 0 0 6 Avoided tonnes of problem exports (tonnes, pv) 6,000 8,044 3,882 1,510 4,413 47 74 23,971 114

Net cost per avoided problem tonne ($/tonne) -787 9,426 3,302 773 -2,957 14,181 -4,630 19,307 Table 45: Cost and benefits across jurisdictions, Option 2(a), m$ NSW/ACT VIC QLD SA WA TAS NT AUST Waste industry costs and benefits Loss of export value -259 -398 -84 -49 -112 0 -1 -903 Sorting cost -7 -10 -2 0 -2 0 0 -22 Processing capital cost -380 -429 -96 -43 -121 -1 -1 -1,070 Government infrastructure support 0 0 0 0 0 0 0 0 Processing land cost -59 -54 -11 -9 -26 0 0 -159 Processing operating cost -140 -181 -41 -25 -61 0 0 -448 Government procurement support 0 0 0 0 0 0 0 0 Transport cost 0 0 0 -17 -106 0 -1 -124 Landfill cost -22 -12 -1 -2 -6 0 0 -43 Value of material 814 976 223 110 306 1 2 2,432 Residual value of assets 39 50 11 8 21 0 0 129 Net waste industry -14 -58 -2 -27 -106 0 -1 -207 Government costs and benefits Education -21 -8 -1 -2 -4 0 0 -36 Standards -18 -7 -1 -2 -4 0 0 -32 Infrastructure and procurement 0 0 0 0 0 0 0 0 Additional waste levy revenue 13 7 1 1 3 0 0 25 Net Government -26 -8 -1 -2 -4 0 0 -42 Community costs and benefits Domestic landfill externalities -1 -1 0 0 0 0 0 -3 Externalities from reduction in recycling 4 4 1 0 1 0 0 11 Domestic transport externalities 0 0 0 -5 -3 0 0 -9 Net community 3 3 1 -5 -2 0 0 0 115

Net benefit -37 -63 -2 -34 -112 0 -1 -249 Change in exports (Mt over period) -3 -4 -1 -1 -1 0 0 -10 Avoided tonnes of problem exports (tonnes, pv) -14,220 -14,656 -3,630 -2,211 -5,973 -1 -26 -40,718 Net cost per avoided problem tonne ($/tonne) 2,610 4,266 540 15,506 18,832 -140,330 44,026 -54,551 Table 46: Cost and benefits across jurisdictions, Option 2(b), m$ NSW/ACT VIC QLD SA WA TAS NT AUST Waste industry costs and benefits Loss of export value -259 -398 -84 -49 -112 0 -1 -903 Sorting cost -9 -12 -3 0 -2 0 0 -27 Processing capital cost -477 -538 -121 -53 -152 -1 -1 -1,343 Government infrastructure support 89 100 22 10 28 0 0 250 Processing land cost -74 -68 -13 -12 -33 0 0 -200 Processing operating cost -173 -223 -50 -30 -75 0 0 -552 Government procurement support 31 40 9 5 14 0 0 100 Transport cost 0 0 0 -22 -133 0 -1 -156 Landfill cost 41 40 11 8 13 0 0 113 Value of material 1,022 1,225 279 139 385 1 2 3,053 Residual value of assets 49 63 14 10 26 0 0 162 Net waste industry 237 226 64 4 -42 0 -1 488 Government costs and benefits Education -16 -11 -3 -3 -4 0 0 -36 Standards -14 -9 -3 -2 -3 0 0 -32 Infrastructure and procurement -125 -137 -30 -15 -42 0 0 -350 Additional waste levy revenue -21 -21 -6 -4 -7 0 0 -58 Net Government -175 -178 -42 -24 -55 0 0 -476 Community costs and benefits Domestic landfill externalities 2 3 1 0 1 0 0 7 Externalities from reduction in recycling 13 15 3 1 4 0 0 37 116

Domestic transport externalities 0 0 0 -6 -4 0 0 -11 Net community 15 18 4 -5 1 0 0 34 Net benefit 77 65 26 -24 -96 0 -1 46 Change in exports (Mt over period) -3 -4 -1 -1 -1 0 0 -10 Avoided tonnes of problem exports (tonnes, pv) -14,220 -14,656 -3,630 -2,211 -5,973 -1 -26 -40,718 Net cost per avoided problem tonne ($/tonne) -5,401 -4,456 -7,049 11,032 16,145 -167,125 48,216 -1,127 117

Regional analysis A regional versus metro impact analysis is not quantifiable due to limitations with the available data. Nevertheless, this doesn't change the net impact, as viability is expected to be lower under a restriction of exports with government intervention. However, it does mean there is a higher risk that regional areas dispense with recycling. Most Australians have access to municipal waste management and recycling, but kerbside municipal waste collection and recycling services are not available to most communities in remote and regional Australia. Improvements in access to municipal collection and recycling services across Australia will improve waste management - particularly in regional and remote areas - and increase Australia's recycling rates generally. Improvements to the technical capacity of existing municipal collection and recycling services will better enable dealing with contamination in recycled materials, lifting recovery rates and aiding access to markets for all recycled materials. The majority of Australians have access to waste and recycling collection services. Australia's waste and recycling infrastructure generally follows population, with the majority of facilities located close to Australia's cities and larger towns. About 95 per cent of Australian households have access to a kerbside garbage collection and 91 per cent have access to a kerbside recycling collection. About 98 per cent of the Australia population has access to some kind of kerbside waste or recycling service. The Australian Capital Territory has the leading rate of kerbside recycling service provision to households at 100 per cent, closely followed by South Australia at 98 per cent. Victoria follows at 95 per cent, Tasmania at 93 per cent, Western Australia at 92 per cent, New South Wales at 89 per cent, Queensland at 86 per cent and the Northern Territory at 60 per cent. Despite high rates of access to kerbside collection and recycling nationally, many collection and recycling services have limited capacity to process many types of recyclable materials. For example, 2.4 per cent of Australia's population has no kerbside paper and cardboard recycling collection, 2.4 per cent of the population have no kerbside recycling collection for metals, 3.3 per cent of the population have no kerbside recycling collection for glass, and 5.6 per cent of the population have no kerbside plastics recycling collection. Even some services close to major cities are not currently capable of processing certain types of recyclable materials. A common example is plastic bags and films. In some cases, rigid or semi-rigid forms of certain plastic resin types can be processed but soft forms of the same plastic type are not accepted. In some areas expanded polystyrene is excluded from collection services, but polystyrene in non-expanded (non-foam) forms is accepted. Only 51 per cent of LGAs have a kerbside collection service that accepts all seven types of plastic. Only ten LGAs accept all types of plastic and plastic bags. Less than half of Australia's households have access to kerbside collection and recycling of organic waste. There are also significant geographic disparities. Of a total of 544 LGAs across Australia, 123 (or 23 per cent) offer no collection or recycling service at all. These areas are overwhelmingly in remote and regional parts of Australia. 118

Local governments were already facing significant waste and recycling challenges from growth in waste generation, before the additional impact of China's restrictions on waste imports. These challenges are compounded by growing community expectations for recycling. Distributional impacts Using the CBA model, we can distribute the costs based on the expected price impacts and level of competition. Table 47 and Table 48 show the distribution of financial impacts for Option 1 and 2(a). For Option 2(b), the results show that households and businesses as waste generators face costs, of $2.9 billion and $2.0 billion, respectively, over a 20-year period, as their fees for disposing of material increase (Table 49). Households will face costs of around $115 per person (once-off) for municipal paper waste - see Table 50 - or around $6 per year if amortised over a period of 20 years. The recycling industry, meaning the processors of material rather than collectors and sorters, will see larger turnover from material being processed domestically. Government impacts will see local councils receive higher revenues from waste charges and state governments receive a benefit in the form of additional landfill levies -- this is also a part of the higher cost for households and businesses. This is offset from the cost of government interventions to support reduction in waste exports. Table 47: Distribution of financial impacts, Option 1: $m, PV Paper Plastics Tyres Glass Total Households as waste generators -405 -103 -32 -121 -660 Businesses as waste generators -1,663 0 -29 0 -1,692 Recycling industry 2,143 119 67 123 2,452 Governments -64 -15 -4 -1 -84 Community 42 12 1 2 57 Total 53 12 3 4 72 Source: The CIE and the Department of Agriculture, Water and the Environment. Table 48: Distribution of financial impacts, Option 2(a): $m, PV Paper Plastics Tyres Glass Total Households as waste generators -2,454 -34 -142 -543 -3,173 Businesses as waste generators -4,065 0 -166 0 -4,231 Recycling industry 6,343 175 171 508 7,197 Governments -30 -5 -7 -0.4 -42 Community -5 5 -0.1 0.3 0 Total -210 140 -144 -36 -249 Source: The CIE and the Department of Agriculture, Water and the Environment. 119

Table 49: Distribution of financial impacts, Option 2(b): $m, PV Paper Plastics Tyres Glass Total Households as waste generators -2,450 153 -126 -485 -2,908 Businesses as waste generators -2,001 191 -150 5 -1,955 Recycling industry 4,573 162 162 454 5,351 Governments -257 -157 -56 -6 -476 Community 8 22 1 3 34 Total -127 371 -169 -29 46 Source: The CIE and the Department of Agriculture, Water and the Environment. It is noted that the distributional impacts are also contingent on the type of government interventions that are provided to support the restriction on certain waste exports. In our analysis, we have focused government assistance only on the waste and recycling industry using a generic approach. This has been done intentionally, so as not to signal or pre-empt the response strategy that is being developed, but rather to quantify the impact from government intervention on a given level of commitment. It is anticipated that actual commitments from governments will be different to those modelled in the analysis. Commitments from the various levels of government are likely to be targeted and could also include assistance to other businesses and households. Additionally, there may also be a situation in the future, where the cost of collection takes into account the value of unprocessed waste to MRFs as an input to their production process. As such, tender contracts for collection may consider the additional revenue that could be derived from the collected mixed waste and pass this through as a cost offset to households for collection services. An example of this is the collection of green waste, which is sold as organic material for further use within the economy. State specific results are presented below detailing state impacts on costs and benefits. Table 50: Summary of cost benefit analysis, $m, present value AUS NSW* VIC QLD SA TAS WA NT Option 1 Net benefit waste $100 $13 $79 $16 $4 $0.5 -$11 -$0.5 industry Net benefit governments -$84 -$30 -$25 -$11 -$6 -$0.0 -$11 $0.0 Net benefit communities $57 $13 $22 $8 $4 $0.2 $9 $0.2 Overall net benefit $72 -$5 $76 $13 $1 $0.7 -$13 -$0.3 Option 2a Net benefit waste -$207 -$14 -$58 -$2 -$27 $0.2 -$106 -$1.1 industry Net benefit governments -$42 -$26 -$8 -$1 -$2 $0.0 -$4 $0.0 Net benefit communities $0.4 $3 $3 $1 -$5 $0.0 -$2 $0.0 Overall net benefit -$249 -$37 -$63 -$2 -$34 $0.2 -$112 -$1.1 Option 2b Net benefit waste $488 $237 $226 $64 $4 $0.4 -$42 -$0.9 industry Net benefit governments -$476 -$176 -$178 -$42 -$24 -$0.2 -$55 $0.3 120

Net benefit communities $34 $15 $18 $4 -$5 $0.0 $1 $0.0 Overall net benefit $46 $77 $65 $26 -$24 $0.2 -$96 -$1.2 Source: ABS National Accounts and Input-Output Tables, using an evaluation period of 20 years and a social discount rate of 7 per cent. Note: * including ACT Table 51, Table 52 and Table 53 present the net benefits by stream, jurisdiction and material for each the options. Table 51: Net benefits by stream, jurisdiction and material, Option 1 NSW/ACT VIC QLD SA WA TAS NT AUST Paper MSW -17 -14 -15 -22 -19 -11 -0.2 -16 C&I and C&D -35 -128 -45 -67 -34 -158 -0.3 -66 Total -52 -142 -60 -89 -53 -169 -0.5 -82 Plastic MSW -3 -6 -3 -10 -2 -1 -1 -4 C&I and C&D 0 0 0 0 0 0 0 0 Total -3 -6 -3 -10 -2 -1 -1 -4 Tyres MSW -1 -1 -1 -2 -1 -1 -1 -1 C&I and C&D -1 -1 -1 -2 -1 -1 -1 -1 Total -2 -3 -2 -4 -2 -2 -2 -2 Glass MSW -8 -7 0 0 0 0 0 -5 C&I and C&D 0 0 0 0 0 0 0 0 Total -8 -7 0 0 0 0 0 -5 Total MSW -29 -29 -19 -34 -22 -13 -2 -26 C&I and C&D -36 -129 -46 -69 -35 -159 -1 -67 Total -65 -158 -65 -103 -57 -171 -4 -93 Source: The CIE and the Department of Agriculture, Water and the Environment. Table 52: Net benefits by stream, jurisdiction and material, Option 2(a) NSW/ACT VIC QLD SA WA TAS NT AUST Paper MSW -103 -86 -91 -133 -109 -52 -2 -97 C&I and C&D -84 -279 -90 -207 -166 -487 -2 -160 Total -187 -364 -181 -340 -274 -539 -4 -257 Plastic MSW -1 0 0 -14 -0.1 -0.6 -6 -1.4 C&I and C&D 0 0 0 0 0 0 0 0.0 Total -1 0 0 -14 -0.1 -0.6 -6 -1.4 Tyres MSW -5 -7 -4 -9 -5 -5 -6 -6 C&I and C&D -6 -8 -5 -11 -5 -7 -7 -7 121

Total -11 -14 -10 -20 -10 -12 -13 -12 Glass MSW -34 -38 0 0 0 0 0 -21 C&I and C&D 0 0 0 0 0 0 0 0 Total -34 -38 0 0 0 0 0 -21 Total MSW -144 -130 -96 -155 -113 -58 -14 -125 C&I and C&D -90 -286 -95 -218 -171 -493 -9 -167 Total -233 -417 -191 -373 -284 -552 -24 -292 Source: The CIE and the Department of Agriculture, Water and the Environment. Table 53: Net benefits by stream, jurisdiction and material, Option 2(b) NSW/ACT VIC QLD SA WA TAS NT AUST Paper MSW -103 -86 -91 -133 -107 -52 -3 -97 C&I and C&D -41 -111 -27 -135 -145 -317 -2 -79 Total -144 -196 -119 -268 -252 -369 -4 -176 Plastic MSW 4 13 5 2 3 1 -6 6 C&I and C&D 5 16 6 2 4 1 -7 8 Total 9 29 11 4 7 2 -13 14 Tyres MSW -4 -6 -4 -7 -4 -5 -6 -5 C&I and C&D -5 -7 -5 -10 -5 -6 -7 -6 Total -10 -13 -9 -17 -9 -12 -13 -11 Glass MSW -29 -36 0 0 0 0 0 -19 C&I and C&D 0.3 0.4 0 0 0 0 0 0.2 Total -29 -36 0 0 0 0 0 -19 Total MSW -133 -115 -90 -139 -108 -57 -14 -115 C&I and C&D -41 -101 -26 -142 -146 -322 -16 -77 Total -173 -216 -116 -281 -254 -378 -30 -192 Source: The CIE and the Department of Agriculture, Water and the Environment. Sensitivity analysis There are a wide range of uncertainties that could impact on the results of the cost benefit analysis. In line with COAG Best Practice Regulation guidelines on cost-benefit analysis, the net present value of the costs is estimated over a 20-year period using discount rates of three percent and ten per cent, as well as the central case of seven per cent. 122

Three per cent Discount Rate These results for a three per cent discount rate are set out in Table 54 and Table 55. A lower discount rate than in our central case, has the impact of valuing impacts in the future more, as such this has raised the net benefit results across the options. Table 54: Summary of cost benefit analysis, $m, present value Option 1 Option 2(a) Option 2(b) Net benefit waste industry 142 -295 694 Net benefit governments -120 -60 -677 Net benefit communities 80 0 48 Overall net benefit 103 -355 65 Note: Using an evaluation period of 20 years and a social discount rate of 3 per cent. Table 55: Net benefits of options across commodities Paper Plastics Tyres Glass Total Option 1 62 20 13 8 103 Option 2(a) -299 200 -204 -51 -355 Option 2(b) -180 528 -241 -41 65 Source: The CIE and the Department of Agriculture, Water and the Environment. Using an evaluation period of 20 years and a social discount rate of three per cent. A sensitivity analysis for the economy wide results was also undertaken using a three per cent discount rate. These results are set in Table 56 and Table 57 Table 56: Direct economic impacts Option 1 Option 2(a) Option 2(b) Gross output, $m, PV $247 $1,458 $2,576 GDP, $m, PV $75 $440 $913 Income (wages), $m, PV $43 $245 $595 Employment, jobs 79 741 1,216 Source: ABS National Accounts and Input-Output Tables, Using an evaluation period of 20 years and a social discount rate of three per cent. Table 57: Indirect economic impacts Option 1 Option 2(a) Option 2(b) Gross output, $m, PV $461 $2,651 $4,751 GDP, $m, PV $196 $1,112 $2,041 Income (wages), $m, PV $111 $618 $1,159 Employment, jobs 181 1,858 2,598 Source: ABS National Accounts and Input-Output Tables Using an evaluation period of 20 years and a social discount rate of three per cent. Ten per cent Discount Rate These results for a ten per cent discount rate are set out in Table 58 and Table 59. A higher discount rate than in our central case, has the impact of valuing impacts in the future less, as such this has lowered the net benefit results across the options. 123

Table 58: Summary of cost benefit analysis, $m, present value Option 1 Option 2(a) Option 2(b) Net benefit waste industry 80 -165 389 Net benefit governments -67 -34 -380 Net benefit communities 45 0 27 Overall net benefit 58 -199 37 Note: Using an evaluation period of 20 years and a social discount rate of ten per cent. Table 59: Net benefits of options across commodities Paper Plastics Tyres Glass Total Option 1 35 11 8 5 58 Option 2(a) -168 112 -115 -28 -199 Option 2(b) -101 296 -135 -23 37 Source: The CIE and the Department of Agriculture, Water and the Environment. Using an evaluation period of 20 years and a social discount rate of ten per cent. A sensitivity analysis for the economy wide results was also undertaken using a three per cent discount rate. These results are set in Table 60 and Table 61. Table 60: Direct economic impacts Option 1 Option 2(a) Option 2(b) Gross output, $m, PV $62 $462 $805 GDP, $m, PV $19 $138 $295 Income (wages), $m, PV $11 $77 $197 Employment, jobs 20 235 380 Source: ABS National Accounts and Input-Output Tables, Using an evaluation period of 20 years and a social discount rate of ten per cent. Table 61: Indirect economic impacts Option 1 Option 2(a) Option 2(b) Gross output, $m, PV $115 $842 $1,472 GDP, $m, PV $49 $352 $634 Income (wages), $m, PV $28 $196 $358 Employment, jobs 45 590 805 Source: ABS National Accounts and Input-Output Tables Using an evaluation period of 20 years and a social discount rate of ten per cent. 124

9. CONSULTATION ON PROPOSED REFORM A Consultation Regulation Impact Statement - Phasing out certain waste exports86 was released on 20 December 2019 seeking input from industry and interested stakeholders on the regulatory and non-regulatory options under consideration to implement the waste export ban. Consultation closed on 12 February 2020 and 62 submissions were received. A list of the 44 non-confidential submissions is at Table 62 at the conclusion of this chapter. If a cover sheet was not provided, the submissions have been treated as confidential. A majority of the submissions were from peak bodies or businesses, representing a broad geographic distribution (Figure 19). Figure 19: Overview of submissions by type and location Academia ,1 WA, 2 VIC, 5 Business, TAS, 1 National, Peak 14 16 Body, 18 SA, 4 Local QLD , 5 Governm ent Council, 4 NT, 1 Associatio n, 7 NSW, 10 This section summarises the key points from the 44 non-confidential submissions in the context of issues relevant to this RIS. The Consultation RIS sought feedback on 25 questions (Appendix J). This feedback has been incorporated into the Decision RIS. Feedback is discussed under the following headings:  Problem definition and policy objectives.  Impacts of changes in international markets.  Impacts to be further explored in the Decision RIS.  Design considerations for the proposed export ban (definitions and legislation).  Preferred options and other interventions. 86 Consultation Regulation Impact Statement - Phasing out certain waste exports available at https://www.environment.gov.au/protection/waste-resource-recovery/waste-export-ban/consultation- ris-phasing-out-waste-exports 125

Problem definition and policy objectives There was recognition across the submissions that closing international markets were causing pressure on domestic waste processing capacity. No submissions questioned that the export of some Australian wastes has the potential to cause harm to human health and the environment in other countries and end up in our oceans if not managed correctly. Some submissions sought to expand the problem to more fulsomely explore other drivers behind and impacts of Australia's current waste management challenges. These included: the underdevelopment of kerbside recycling, challenges associated with hard to recycle products and packaging and impacts such as the amount of waste currently going to landfill and associated emissions. In a number of cases, the problems outlined will be considered in the Section 4. There was support for the policy objectives. There were additional objectives proposed including: greater reference to the circular economy and reducing waste, reuse and reducing the need for virgin materials, the need to build domestic demand, ensuring an equitable spread of costs across the waste lifecycle and embedding extended producer responsibility. Submissions sought greater clarity on how the proposed reform fits into the objectives of the National Waste Policy and the targets of the National Waste Policy Action Plan 2019. Many of the broader objectives are captured under the National Waste Policy and the Action Plan and while complementary, are considered to be outside of the scope of this RIS. Impacts of changes in international markets The potential impacts stated in the Consultation RIS were confirmed and included:  Loss in revenue due to the downturn in markets for mixed paper and mixed plastics.  Increases in waste collection contract prices that are passed onto ratepayers.  Service disruption and a decrease in community confidence in the recycling sector.  More stringent contamination rates mean increased operational and capital costs to further process recyclables.  Perception that exports have shifted to international markets that have less transparency and assurance on how the waste is being processed and managed.  International reputational damage. In the longer term, it was expressed that without alternative domestic pathways for reuse and recovery, more material will be stockpiled, landfilled or illegally disposed of, creating significant environmental, social and economic impacts. Some submissions adopted a more positive outlook that the closing of export markets presents an opportunity for waste recycling and reuse sectors to focus on developing innovative and cost-effective solutions to increase the capture and reuse of our waste materials. 126

Impacts to be further explored in the Decision RIS There was some concern expressed over the lack of detailed analysis of the cost and benefits within the Consultation RIS. The following were identified of areas of potential impact for further consideration:  Identification of potential markets/demand for the increased volumes of restricted materials.  Competition impacts, including the potential for the proposed reforms to create monopolies or exclude smaller businesses from the waste and recycling sector.  Loss of income and potential price impacts from the proposed reform.  Cost of unemployment and reduced business activity.  Analysis of infrastructure capacity needed including time taken to bring it online.  Distributional analysis of impacts across industry, community and government (with a particular focus on local government).  Impacts on households.  Costs of compliance with any new regulatory framework. Design considerations for the proposed export ban (definitions and legislation) Many submissions focused on the need to clearly define what would be covered by the proposed waste export ban. In several cases, these positions reflected feedback that had been provided on the Discussion Paper that was released following the Meeting of Environment Ministers in November 2019 that outlined the proposed timetable and definitions. Views were put forward that if the waste material had viable export markets and was able to meet the required international standards then export should continue. Additional views to this included the need to demonstrate that there was no reprocessing option in Australia and that there will be no harm to human health or the environment from the exported materials (i.e. exported to a licensed facility). On specific materials, there were suggestions that the export of the following should be allowed:  Clean, baled homogenous paper and cardboard.  Baled single resin polymers (HDPE and PET) if sorted and decontaminated.  Single-source (or single-stream) recyclable commodities with low contamination, including plastic, paper and glass.  Whole tyres exported for re-treading.  All materials currently under consideration. It was also proposed that additional materials could be covered such as: whitegoods, whole cars, unprocessed e-waste and unprocessed used machine lubricant oils, certain composite 127

metal materials and insulated electrical cable (such as plastic insulated copper and aluminium cables). Views on timeframes included:  Concern about the time needed to build enough capacity to process the potential additional volumes of waste materials, particularly for paper and cardboard.  Bringing forward the phase-in for tyres to 1 July 2020.  Pushing back plastic to 1 July 2022 or 1 July 2025. Further detail was requested on how the prohibition or restriction of waste materials would be implemented. There was support for a regulatory framework that allowed exemptions or permitting based on evidence of high quality exports and sound management practises overseas. A range of suggestions compliance measures were put forward, with most submissions expressing the need for well-resourced national enforcement across all levels of government. Businesses would need to be supported to understand the requirements of any legislative changes to promote compliance. There was a consistent view that implementation of the ban would require penalties greater than the potential profit to be made from non-compliance in order to change behaviour. A compliance framework could include a scaled, proportional approach, such as warnings, the ability to stop a business operating (such as a demerit scheme), licence revocation, or require clean up. Preferred options and other interventions A majority (26) of submissions stated that Option 2(b) was preferred. Some submissions expressed reservations on the limited number of options under consideration and how these were presented. Fourteen submissions did not specify a preferred option. Four submissions preferred Option 1 or stated that the timeframes would need to be extended under Options 2(a) or 2(b). This preference was based on the view that the status quo is the best environment to enable market transition, that a ban is not the most effective way to address systemic problems with waste management and that waste exports should be allowed to continue. No submissions preferred Option 2(a). These results are presented in Figure 20. Figure 20: Submission feedback on options 128

Option 1 - Status quo, 4 Option 2a - Restriction Not stated, only, 0 14 Option 2b - Restriction with support, 26 Two submissions suggested additional options. These focused on being more explicit about the role of the National Waste Policy Action Plan 2019 and how accelerating some of the actions may impact on the ban or exploring using a 'gate-keeper' approach to screen recyclates. Stated areas of government intervention or action needed included:  Mandatory product stewardship or design standards for difficult to recycle products.  Development of regional recycling hubs and government investment in recycling infrastructure.  Mandating the use of recycled content through government procurement.  Reinvestment of a higher proportion of landfill levies into management of investment of recycling.  Incentives for using recycled content and/or penalties for producing hard to recycle goods.  Providing national standards and education on kerbside recycling.  Supporting development of energy from waste policies, including pyrolysis.  Community education.  Expedited approvals for emerging recycling technologies.  Non-regulatory programs and measures could be considered by state and federal governments aimed at identifying and providing incentives to encourage investment in suitable, long-term waste recycling and reuse projects. These suggested interventions will help inform the policies of Australia governments in determining how to implement the proposed reform. Table 62: Non-confidential Consultation RIS submissions 129

Submissions 1 Australian Beverages Council 2 Australian Council of Recycling 3 Australian Food and Grocery Council 4 Australian Industry Group 5 Australian Local Government Association 6 Australian Sustainable Business Group 7 Australian Tyre Recyclers Association 8 Bioelektra 9 Blacktown City Council 10 Boomerang Alliance 11 Cement Industry Foundation 12 Chairay Sustainable Plastic Co 13 Challenge Community Services 14 Chemistry Australia 15 City of Port Adelaide Enfield 16 City of Port Phillip 17 Citywide Service Solutions Pty Ltd 18 Closed Loop Environmental Solutions 19 Container Exchange CoEx 20 Eastern Waste Management Authority 21 Exchange for Change 22 Institute for Sustainable Futures 23 Local Government Association NSW 24 Local Government Association QLD 25 Local Government Association SA 26 Local Government Professionals Australia 27 Logan City Council 28 Midwaste Regional Waste Forum 29 Municipal Association of Victoria (MAV) 30 National Toxics Network (NTN) 31 National Waste and Recycling Industry Council (NWRIC) 32 Select Metal 33 Sell and Parker 34 Spectran Group 35 SUEZ 36 Tyre Stewardship Australia (TSA) 37 Vinyl Council of Australia 38 WA Local Government Association 39 Waste and Recycling Industry Association of South Australia 40 Waste and Recycling Industry Association of WA 41 Waste Management and Resource Recovery Association 42 Waste Recycling Industry Association Northern Territory 43 Waste Recycling Industry Association Queensland 130

44 Weigang Environmental Technology Previous consultation In addition to the Consultation RIS, the Commonwealth, States and Territories have been consulting widely with industry and other impacted stakeholders. To date, the Commonwealth taskforce responsible for overseeing ban implementation has met with and spoken to over 100 individual businesses about the expected impact of the ban on their operations. Industry views have also been sought on current challenges and the types of transition activities needed to secure longer term change in the waste and recycling sector. As a mechanism for formal written feedback, a discussion paper was released by the Commonwealth Government on behalf of all jurisdictions, which was open for submissions between 13 November and 3 December 2019. Of the total 103 submissions, over half of the respondents were supportive or neutral towards the ban. Most submissions were made by businesses and organisations whose primary location is in New South Wales, followed by Victoria and Queensland. There were 55 submissions by businesses whose primary activity includes collecting, sorting, processing, manufacturing, supplying and exporting plastics, paper, glass and tyres. The states and territories also held industry roundtables between 25 November and 18 December 2019 to better understand local or state-based issues. These drew more than 80 attendees. The Commonwealth Government also convened a national roundtable on 10 December 2019 with national peak bodies. 131

10. EVALUATION AND CONCLUSIONS This Decision RIS sets out the evaluation of the proposed options and the resulting recommendation. Summary of the cost and benefits analysis The overall net benefits of the proposed options are shown in Table 63. Relative to the base case:  Option 1 shows that no restrictions on waste exports, with government support for consumer education and work on standards would deliver a net benefit of $72 million in present value terms;  Option 2(a): Consumer education and restrict exports of waste plastic, paper, tyres and glass without additional supporting government interventions would impose a net cost of $249 million in present value terms; and  Option 2(b): Consumer education and restrict exports of waste plastic, paper, tyres and glass with additional supporting government interventions to build markets and associated demand would deliver a net benefit of $46 million in present value terms. Table 63: Summary of cost benefit analysis results Option 1 Option 2(a) Option 2(b) Net benefit waste industry 100 -207 488 Net benefit governments -84 -42 -476 Net benefit communities 57 0 34 Overall net benefit 72 -249 46 Note: Using an evaluation period of 20 years and a social discount rate of 7 per cent. Source: The CIE and the Department of Agriculture, Water and the Environment. Costs and benefits across materials The costs and benefits of the proposed options across the different materials subject to a ban is shown in Table 64.  The largest net costs are from tyres. This result is due to higher processing costs associated with shredding tyres compared to baling tyres and a lower value from the material produced. Only applying the paper ban to MSW material substantially limits these costs - assuming that paper processing sets up and material is not landfilled beyond one year.  Plastics has an estimated net benefit. The commercial proposition for plastic processing is relatively close currently, also evidenced by the flurry of investment in new sorting machinery and new processing facilities. This finding is highly sensitive to costs. Table 64: Net benefits of options across commodities Paper Plastics Tyres Glass Total Option 1 43 14 9 6 72 Option 2(a) -210 140 -144 -36 -249 132

Option 2(b) -257 371 -169 -29 46 Source: The CIE and the Department of Agriculture, Water and the Environment. Costs and benefits across jurisdictions The net benefits per person across the jurisdictions are shown in Table 65. Note these are the present value welfare impacts rather than an impact per year. The largest per capita impacts are in states that are currently more export dependent and that would send material to other states (mainly for paper) in the event of an export ban, because of scale.  Western Australia has the highest net costs per person, at $43 per person. Note that this is not an annual cost, but an equivalent once-off cost.  South Australia and NT also have negative impacts.  NSW has smaller per person impacts because it is less export reliant than other states. Impacts for some states are less reliable than others, such as Tasmania and potentially South Australia, because it is not possible to identify exports that originate in one state but are exported through a port in another state. This will tend to overstate the costs to Victoria and understate the costs to Tasmania and South Australia. Table 65: Net benefits across jurisdictions, $ per capita NSW/ACT VIC QLD SA WA TAS NT AUST Option (1) -1 11 3 1 -5 1 -1 3 Option 2(a) -4 -9 0.4 -20 -43 0.4 -5 -10 Option 2(b) 9 10 5 -14 -37 0.5 -5 2 Source: The CIE and the Department of Agriculture, Water and the Environment. Distribution of costs and benefits The net costs of a waste export ban will be distributed across households, businesses and government. The way that these costs are distributed will reflect the market structure and level of competition. The expected distribution of costs and benefits, for financial impacts, is shown in Table 66. Households and businesses, as generators of waste, will face costs, as their recycling services become more expensive to process waste. For Option 2(b), the results show that households and businesses as waste generators face costs, of $2.9 billion and $2.0 billion, respectively, over a 20-year period, as their fees for disposing of material increase. Households will face costs of around $115 per person (once-off) for municipal solid waste - see Table 53 - or around $6 per year if amortised over a period of 20 years. The recycling industry -- meaning the processors of material rather than collectors and sorters -- will see larger turnover from material being processed domestically. Government impacts will see local councils receive higher revenues from waste charges and state governments receive a benefit in the form of additional landfill levies -- this is also a part of the higher cost for households and businesses. Government gains will be offset by the level of their interventions to support a reduction in waste exports. 133

Table 66: Distribution of financial impacts Option 1a Option 2(a) Option 2(b) Households as waste generators -660 -3,173 -2,908 Businesses as waste generators -1,692 -4,231 -1,955 Recycling industry 2,452 7,197 5,351 Governments -84 -42 -476 Community 57 0 34 Total 72 -249 46 Source: The CIE and the Department of Agriculture, Water and the Environment. Other impacts The proposed options will also have an impact on the wider economy. The assessment in this Decision RIS also considers the direct and indirect (or flow-on net benefits) to the economy using Input-Output Econometric modelling (see Appendix I). These are shown in Table 67 and Table 68. Table 67: Direct economic impacts Option 1a Option 2(a) Option 2(b) Gross output, $m $107 $722 $1,268 GDP, $m $32 $217 $459 Income (wages), $m $19 $121 $303 Employment 34 367 602 Source: ABS National Accounts and the Department of Agriculture, Water and the Environment. Table 68: Indirect economic impacts Option 1a Option 2(a) Option 2(b) Gross output, $m $199 $1,316 $2,307 GDP, $m $84 $551 $992 Income (wages), $m $49 $306 $564 Employment 78 922 1,313 Source: ABS National Accounts and the Department of Agriculture, Water and the Environment. Options 1 and 2(a) also have lower economic impacts compared with Option 2(b) in terms of output, value added, wages and employment. This is because a greater amount of economic activity occurs domestically when all waste material that was previously exported is now processed domestically and returns a higher value in the market. Significant flow-on impacts occur in Option 2(b) relative to the other options because capital investment is fully committed, which benefits the sectors that install and support these investments. Preferred option Option 2(b) is the preferred policy option. Option 2(b) would also provide the largest health and environmental benefits. The status quo option (Option 1) arguably presents the least short-term economic costs and the largest net benefit from the analysis in the CBA. Implementing the export ban (Options 2(a) and (b)) provides larger direct and indirect economic benefits to Australia and certainty for increased investment and innovation to see Australia capable of managing its own waste 134

problem and to address its environmental priorities. Additional government measures in Option 2(b) will help mitigate some of the short-term costs and quicken industry transition to support new production value and employment in the nearer term. 135

11. IMPLEMENTATION AND REVIEW Implementation Non-regulatory option Approval by COAG of the non-regulatory option (Option 1) would see waste exports continue to be permitted with the export of hazardous waste between countries that are parties to the Basel Convention regulated by the Hazardous Waste (Regulation of Exports and Imports) Act 1989 (Cth). Existing product stewardship regulatory requirements would continue under the Product Stewardship Act 2011 (Cth). Target 1 would be removed from the National Waste Policy Action Plan 2019. The management and regulation of domestic waste is primarily the responsibility of state, territory and local governments. State and territory governments would continue to regulate waste and recycling matters in their jurisdiction. A range of industry-led product stewardship schemes would also continue. Government, together with industry, will encourage improved outcomes through non- regulatory initiatives, such as:  Household education campaigns to lower contamination rates in kerbside waste collection.  Targets under the National Waste Action Plan 2019 including increased use of recyclable material in government procurement.  Work with industry to review technical engineering standards to ensure the use of recyclable materials is not discouraged. Regulatory options Approval by COAG of one of the regulatory options (Option 2(a) or 2(b)) in this RIS, would see the export ban apply to a proportion of total waste exports for plastic, paper, tyres and glass. The purpose of the ban is not to stop all waste-derived materials from being exported, as some of these materials are high value commodities which are ready for reuse or manufacturing. The intention is to stop the export of untreated and unprocessed wastes which have the potential to have a negative impact on human health and the environment in the receiving country. The regulation is likely to be required at the Commonwealth level as the Commonwealth maintains responsibility for all border controls. A regulatory framework would be designed to:  Provide assurance that Australia is taking responsibility for its own waste.  Minimise unnecessary burden on exporters or delays at the border.  Be consistent with Australia's international trade law obligations under the World Trade Organisation and Free Trade Agreements to which Australia is a Party.  Exclude exports from external territories to mainland Australia. 136

 Consider opportunities for cost recovery in line with the Australian Government Charging Framework. The regulatory framework could be implemented through the development of new Commonwealth legislation or amendments to existing legislation. A combination of approaches could be considered for the different waste streams. The regulatory option would be phased in, and in line with COAG's agreed timetable. If agreed, this could commence as early as 1 July 2020. The design and implementation of the framework would be completed in consultation with stakeholders. If Option 2(a) was agreed, governments would not undertake targeted interventions or provide financial assistance to support implementation. Under Option 2(b), implementation of the regulatory option would be supported by targeted government interventions to help improve the recyclability of the material streams, build markets and associated demand.  Targeted government interventions could include: - Development or review of technical standards to encourage increased use of recyclable material. - Explore changes to landfill levies and regulatory standards that prevent landfilling of recyclable materials. - Product stewardship schemes and material design standards. - Improved data collection and reporting. - Measures that are outside the RIS process because they are not regulatory in nature, such as transitional industry assistance and changes to government procurement policies. As part of the implementation, COAG would release a response strategy detailing the national system-level challenges, opportunities and actions where the Commonwealth, States and Territories, and local government will focus its attention and resources.  This response strategy would include the final definitions and timetable for the restriction of waste plastic, paper, glass and tyre exports. Review of new export restrictions The National Waste Policy Action Plan 2019 sets the overarching direction for priority action on waste management and recycling in Australia until 2030. If agreed, any government interventions would be progressed as part of the National Action Plan Target 1. It would be up to individual jurisdictions to complete appropriate regulatory impact analysis of any further interventions that may be considered as part of the implementation of the response strategy within each jurisdiction. The National Waste Report is a national measure of waste and resource recovery in Australia, with the 2018 National Waste Report providing a baseline for measuring national 137

progress on achieving the targets and actions in the National Action Plan. In addition, the national waste account published by the ABS87 integrates economic and environmental data to improve our understanding of the challenges and opportunities for Australia's waste and resource recovery industries. The account will provide contemporary information to help measure progress on delivering the national targets. Monitoring and evaluation of the National Action Plan will be ongoing, driven by a cross- sector reference group made up of government, non-government organisations, industry and business representatives. 87 https://www.abs.gov.au/Ausstats/abs@.nsf/0/B3B9F11D331B0EADCA257B16000E1987?OpenDocu ment 138

APPENDIX A: NINTH MEETING OF ENVIRONMENT MINISTERS Agreed Statement - 8 November 2019, Adelaide88 The ninth meeting of Australia's Environment Ministers has put forward a proposed timetable for the progressive phase out of problem waste exports from July next year, while also committing to ambitious waste reduction targets for all states and territories under a New National Waste Action plan. Meeting in Adelaide today, the Commonwealth, state and territory Ministers reaffirmed their commitment to working together to deliver practical environmental outcomes that address the range of challenges facing our environment. Topics ranged from waste, to procurement strategies, product stewardship, biodiversity, climate change, feral cat eradication, blue carbon abatement, indigenous heritage and ivory trade. Key issues: COAG Waste Export Ban Ministers agreed that waste plastic, paper, glass and tyres that have not been processed into a value-added material should be subject to the export ban. They further determined that the ban should commence on 1 July 2020 with a phased approach. Ministers agreed the phase out should be completed by the following dates:  All waste glass by July 2020.  Mixed waste plastics by July 2021.  All whole tyres including baled tyres by December 2021.  Remaining waste products, including mixed paper and cardboard, by no later than 30 June 2022. This timetable reflects the unique challenges of each jurisdiction, and the preparedness of some jurisdictions to complete the phase out ahead of schedule. Ministers will further test the timetable with industry and local government, while also developing response strategies and undertaking independent market analysis. The decision follows the August 2019 Council of Australian Governments' (COAG) charging environment Ministers with the development of a timetable for banning the export of waste plastic, paper, glass and tyres. All jurisdictions acknowledged resourcing, from Commonwealth, states and territories, and industry will be required to effectively implement the ban. In early 2020 Ministers will provide further advice on final timetables, definitions and response strategies to First Ministers for their confirmation. 88 https://www.environment.gov.au/system/files/pages/4f59b654-53aa-43df-b9d1- b21f9caa500c/files/mem-9-agreed-statement.pdf 139

National Waste Policy - Action Plan Environment Ministers agreed to a new National Waste Policy Action Plan that will drive the implementation of Australia's National Waste Policy. It includes ambitious targets to make Australia a world leader in waste management and recycling, including:  An 80 per cent 'recovery' rate of material across all waste streams.  Significant increases to government procurement of recycled materials.  Halving the amount of organic waste sent to landfill. All Ministers have committed to identifying any significant procurement opportunities over coming months such as major road projects that could use significant amounts of recycled material. The Commonwealth agreed to take a leading role. This reflects a wider commitment from the Commonwealth and states to drive procurement strategies for recycled material. The Commonwealth Government will prioritise work with states and territories and relevant industry and standards bodies to develop engineering specifications and standards to support the use of recycled materials in building, construction and infrastructure development, for use across all jurisdictions. The Commonwealth Government will report back on progress at the next Meeting of Environment Ministers. A cross-sector reference group involving government, non-government organisations, industry groups and business representatives will also be established to review progress on the Action Plan's implementation. To support the delivery of strategies within the Action Plan, Ministers also agreed to encourage major battery manufacturers to participate in a new Battery Stewardship Scheme to improve the rate of battery recycling. For those states and territories with container deposit schemes, Ministers agreed to work together to expand and harmonise the scope and alignment of schemes and product labelling for beverage manufacturers. Ministers agreed to write to the Australian Packaging Covenant Organisation to set out their expectations with respect to new packaging targets. Australia's Strategy for Nature Environment Ministers endorsed a national framework for government, non-government and community action to strengthen Australia's biodiversity and care for local environment areas. Australia's Strategy for Nature 2019-2030 is the result of extensive collaboration between the Australian Government, all state and territory governments, and the Australian Local Government Association. The work will position Australia to be well ahead of the new global biodiversity framework to be released in 2020. Feral cat control 140

Ministers agreed the need to identify and evaluate new feral cat control strategies to protect our species. These strategies include synthetic biology, and Ministers agreed to report back at their next meeting. Feral cats in Australia kill an estimated 459 million native mammals, 596 million reptiles and 316 million birds each year. Digital Transformation of Environmental Assessments Ministers agreed to work together to digitally transform environmental assessment systems, providing greater access to shared environmental data, less duplication and greater transparency. Delays within the current system are a costly frustration to both proponents and environmental groups and have already been identified as a key area to address within the review of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the EPBC Act) under Professor Graeme Samuel. Climate Change The Ministers reviewed a number of issues relating to climate change including the progression of 'blue carbon' measurement to identify abatement opportunities in aquatic environments. The expediting of calculation methods, particularly for the reintroduction of tidal flows to restore mangroves and salt marshes, was agreed along with the progression of opportunities under the Emissions Reduction Fund. Ministers also discussed the Intergovernmental Panel on Climate Change Special Reports on Climate Change and Land, and Oceans and Cryosphere. Ministers agreed that the Commonwealth would provide a detailed presentation on its plan to meet Australia's emissions reduction targets under the Paris Agreement to the next Meeting of Environment Ministers. This will include an opportunity to understand how states and territories are contributing to those outcomes. Coastal Erosion Coastal erosion and inundation was acknowledged as a risk that requires a collaborative approach from all levels of government. Ministers agreed to establish an intergovernmental working group to collate existing information on coastal erosion and inundation hazard risk management, and propose a collaborative approach to coastal erosion for consideration through a future Meeting of Environment Ministers. Heritage sites Ministers supported the addition of Murujuga to Australia's World Heritage Tentative List in 2020. With more than one million images, Murujuga (the Dampier Archipelago and surrounds) has the world's largest, densest and most diverse concentrations of rock art carvings in the world. Ministers also discussed how to better protect sites of Indigenous cultural heritage within their jurisdictions, noting the fire damage caused to ancient Aboriginal rock last summer in Queensland's Carnarvon Gorge National Park. Yabby nets Ministers will also pursue a nationally consistent approach to address the negative impacts that 'opera-house' yabby nets have on Australia's native wildlife, in particular on platypus. 141

Ivory ban There was agreement that all jurisdictions would identify appropriate mechanisms to eliminate domestic trade in ivory and rhinoceros horn, including working with relevant trading houses. Ministers agreed to write to make a submission through the Commonwealth's review of the EPBC Act. 142

APPENDIX B: NATIONAL WASTE ACTION PLAN - 201989 The National Waste Policy Action Plan 2019 was prepared by the Australian Government, state and territory governments and the Australian Local Government Association. The National Action Plan creates targets and actions to implement the 2018 National Waste Policy. These targets and actions will guide investment and national efforts to 2030 and beyond. National Waste Policy: From waste to resource We all generate waste and this waste has an impact on our environment. We all have a role in working to reduce waste where possible, making productive use of our waste as resources where we can't avoid waste generation. This is important for the sustainability of our environment, our economy and our own wellbeing. The 2018 National Waste Policy: Less waste, more resources was agreed by Australia's Environment Ministers and the President of the Australian Local Government Association in December 2018. It sets a new unified direction for waste and recycling in Australia. The policy provides a framework for collective, national action on waste management, recycling and resource recovery to 2030. It reflects new ways of thinking about waste as a resource, and it applies principles of a circular economy to waste management to support better and repeated use of our resources. Those circular economy principles for waste are: 1. Avoid waste 2. Improve resource recovery 3. Increase use of recycled material and build demand and markets for recycled products 4. Better manage material flows to benefit human health, the environment and the economy 5. Improve information to support innovation, guide investment and enable informed consumer decisions. National Action Plan This plan complements and supports the implementation of national packaging targets developed and agreed by Australian businesses and industry through the Australian Packaging Covenant Organisation, and the separate policies committed to by each state and territory jurisdiction set out in Appendix B of the National Action Plan. National targets 1. Ban the export of waste plastic, paper, glass and tyres, commencing in the second half of 2020. 89 National Action Plan 143

2. Reduce total waste generated in Australia by 10% per person by 2030. 3. 80% average resource recovery rate from all waste streams following the waste hierarchy by 2030. 4. Significantly increase the use of recycled content by governments and industry. 5. Phase out problematic and unnecessary plastics by 2025. 6. Halve the amount of organic waste sent to landfill by 2030. 7. Make comprehensive, economy-wide and timely data publicly available to support better consumer, investment and policy decisions. Note: All targets will be measured against baselines in the 2018 National Waste Report. Key action areas to deliver against the targets The key action areas will drive change in the waste industry, businesses, governments and the community, and make Australia more responsible for its own waste. Along with other specific actions on research, national policy setting and targeted investment, the following action areas will be critical to achieving the national targets. Ban the export of waste plastic, paper, glass and tyres Banning the export of waste plastic, paper, glass and tyres, while building Australia's capacity to generate and use high value recycled commodities will increase our resource recovery rate and produce high quality materials for reuse. Transforming these wastes into high value materials will create jobs, build a more sophisticated industry, and provide positive outcomes for the environment and community wellbeing. Phase out problematic and unnecessary plastics Once plastic enters the environment it never disappears, breaking down into smaller and smaller fragments, impacting aquatic life. Plastic products and packaging are some of the main contributors to plastic waste in the environment and oceans. Business and industry groups are developing a priority list of problematic and unnecessary plastic packaging as part of delivering on the National Packaging Targets. Developing a national plastics plan and working with the Pacific region will ensure firm and collective action to reduce the amount of plastics used, and the amount ending up in our rivers and oceans. This existing work will be complemented by community campaigns to clean up plastic waste on beaches and in our rivers, and support for consumer education and tools to improve recycling of plastics. Governments use their purchasing power to increase recycling 144

Without stable demand, there is little incentive for investment in innovation or new infrastructure. Governments and major companies have an important role in promoting sustainable procurement. For example, increasing procurement of goods and infrastructure containing recycled materials will help to:  Stimulate demand for recycled materials relative to virgin materials.  Encourage innovation and investment in recycling to meet demand from new markets.  Support domestic jobs and industries by retaining the value of recycled materials.  Encourage economy-wide behaviour change. An early focus will be purchasing goods and investing in infrastructure that contains recycled materials such as glass, plastic and rubber. Improve waste data collection and information sharing Better data will inform better decision making and reduce the risks of illegal dumping and stockpiling of wastes. Clearer understanding of how waste moves around Australia, how kerbside recycling is processed and reused, and how high value recycled commodities are traded are all key to measuring success. As close to real time reporting, and easy to use online systems will enhance investment and growth in our waste management sector, and help all levels of government work together on common policy and systems approaches across Australia. The full Action Plan is available at https://www.environment.gov.au/protection/waste- resource-recovery/publications/national-waste-policy-action-plan. 145

APPENDIX C: DETAILED COST BENEFIT ANALYSIS ASSUMPTIONS The top two export destinations (Indonesia and China) account for more than 50 per cent of all exports for plastics over the last two years. These countries are also large manufacturers of plastics and plastic products. Until the imposition of plastic waste materials restrictions by China, it was the largest destination market for Australia's exports of plastics. It has now been replaced by Indonesia as the primary export market with other countries within the top ten export group maintaining their share of exports over the last year. Figure 21: Export Plastics by destination: Top 10 countries, 2018-19, '000 tonnes '000 tonnes '000 tonnes 25 25 20 20 15 15 10 10 5 5 - - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019 Indonesia Malaysia Taiwan Thailand Vietnam France Korea, Republic of Mozambique Turkey All Other Countries China (including Hong Kong and Macau) Source: Blue Environment Report for the Department of Agriculture, Water and the Environment, ABS 2019, waste data export from Australia database, https://www.environment.gov.au/protection/waste-resource- recovery/national-waste-policy/waste-exports The value of Australia's exports of plastic materials remains low due to the basic level of recycling (sorting and compacting) that occurs prior to export. 146

Figure 22: Export Plastics by destination: Top 10 countries, 2018-19, $m $m $m $6 $6 $5 $5 $4 $4 $3 $3 $2 $2 $1 $1 $0 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019 Indonesia Malaysia Taiwan Thailand Vietnam France Korea, Republic of Mozambique Turkey All Other Countries China (including Hong Kong and Macau) Source: Blue Environment Report for the Department of Agriculture, Water and the Environment, ABS 2019, waste data export from Australia database, https://www.environment.gov.au/protection/waste-resource- recovery/national-waste-policy/waste-exports The international market for Australia's paper and cardboard is the largest (by weight and total value) and most stable out of all the selected recyclable materials. China continues to remain the largest import partner with Thailand, India, Indonesia and Malaysia combining to receive up to 90 per cent of export volume. The market is well diversified where the above listed countries (combined) are willing to purchase a significant amount of recyclable paper and carboard materials. This may be due to a high level of relatively strict regulation (contamination content) coupled with the limited availability of less expensive materials used in making paper and cardboard. Figure 23: Export Paper and Cardboard by destination: Top 10 countries, 2018-19, '000 tonnes '000 tonnes '000 tonnes 120 120 100 100 80 80 60 60 40 40 20 20 - - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019 China (including Hong Kong and Macau) Thailand India Malaysia Indonesia Vietnam Korea, Republic of Pakistan Taiwan Belgium All Other Countries 147

Source: Blue Environment Report for the Department of Agriculture, Water and the Environment, ABS 2019, waste data export from Australia database, https://www.environment.gov.au/protection/waste-resource- recovery/national-waste-policy/waste-exports Since November 2018, the export price of paper and carboard materials has been declining with import countries benefiting from reduced prices. The trend seems to have turned recently with the reduced prices recovering slowly. This situation has put MRF operators under higher financial pressure with regards to paper and cardboard negatively impacting longer term profits in the industry overall. Figure 24: Export Paper and Cardboard by destination: Top 10 countries, 2018-19, $m $m $m $30 $30 $25 $25 $20 $20 $15 $15 $10 $10 $5 $5 $0 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019 China (including Hong Kong and Macau) Thailand India Malaysia Indonesia Vietnam Korea, Republic of Pakistan Taiwan Belgium All Other Countries Source: Blue Environment Report for the Department of Agriculture, Water and the Environment, ABS 2019, waste data export from Australia database, https://www.environment.gov.au/protection/waste-resource- recovery/national-waste-policy/waste-exports India has been an important trading partner with regards to recovered tyres, but the export volumes continue to remain volatile. This is perhaps due to increasing local uncertainty about the use of imported tyres in India. More stable trading partners include Singapore and Korea, where most of Asia's tyres are manufactured, and therefore it is not unreasonable to posit that tyres exported to these countries are used in the manufacturing of new tyres for the region. The trade with the USA, has a significantly different dynamic. The types of tyres exported there are specialised (aviation and heavy vehicles), usually retreaded by specialist manufacturers and subsequently, at least partially, re-imported into Australia. Tyres is the only category with significant amounts specified under the re-export category. 148

Figure 25: Export Tyres by destination: Top 10 countries, 2018-19, '000 tonnes '000 tonnes '000 tonnes 4.0 4.0 3.5 3.5 3.0 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019 United States of America Singapore Korea, Republic of Malaysia India El Salvador Romania Spain Honduras Jamaica All Other Countries Source: Blue Environment Report for the Department of Agriculture, Water and the Environment, ABS 2019, waste data export from Australia database, https://www.environment.gov.au/protection/waste-resource- recovery/national-waste-policy/waste-exports The highest single valued trading partner is the USA providing further evidence to the high valued specialised tyres, while all other exports relate to a lower price level suggesting that those exports are focused on passenger vehicle tyres. Recently, the value of exports into the top ten countries increased suggesting the capacity for recycling in those countries is increasing overall. Figure 26: Export Tyres by destination: Top 10 countries, 2018-19, $m $m $m $3.0 $3.0 $2.5 $2.5 $2.0 $2.0 $1.5 $1.5 $1.0 $1.0 $0.5 $0.5 $0.0 $0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019 United States of America Singapore Korea, Republic of India Malaysia El Salvador Romania Spain Honduras Jamaica All Other Countries Source: Blue Environment Report for the Department of Agriculture, Water and the Environment, ABS 2019, waste data export from Australia database, https://www.environment.gov.au/protection/waste-resource- recovery/national-waste-policy/waste-exports 149

The export market for glass is relatively illiquid due to its size compared to export markets for other recyclables. This is due to the traditional use of recycled glass in glass production within Australia. The largest export market for recycled glass is Malaysia with the amount of exports relatively volatile with an increasing trend. All other countries constitute a very small proportion of total exports of glass. Figure 27: Export Glass by destination: Top 10 countries, 2018-19, '000 tonnes '000 tonnes '000 tonnes 3.0 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019 Malaysia United Arab Emirates Singapore Papua New Guinea Namibia Cambodia Brunei Darussalam Canada Bangladesh All Other Countries Turkey Source: Blue Environment Report for the Department of Agriculture, Water and the Environment, ABS 2019, waste data export from Australia database, https://www.environment.gov.au/protection/waste-resource- recovery/national-waste-policy/waste-exports Consistent with the small size of the market, prices for different quality of glass vary significantly. The value of exports to Malaysia are broadly in line with its export volumes suggesting that its quality is primarily recycled glass. 150

Figure 28: Export Glass by destination: Top 10 countries, 2018-19, $m $m $m $0.18 $0.18 $0.16 $0.16 $0.14 $0.14 $0.12 $0.12 $0.10 $0.10 $0.08 $0.08 $0.06 $0.06 $0.04 $0.04 $0.02 $0.02 $0.00 $0.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019 Malaysia United Arab Emirates Singapore Turkey Papua New Guinea Namibia Cambodia Brunei Darussalam Canada Bangladesh All Other Countries Source: Blue Environment Report for the Department of Agriculture, Water and the Environment, ABS 2019, waste data export from Australia database, https://www.environment.gov.au/protection/waste-resource- recovery/national-waste-policy/waste-exports Waste plastic Envisage Works 2019 estimate that consumption of plastics in Australia totalled 3.4 million tonnes in 2017-18. Of this consumption:  2 million tonnes (58 per cent) was sourced from imports of finished and semi-finished goods;  1.1 million tonnes (32 per cent) was sourced from locally manufactured products from imported virgin resin;  0.2 million tonnes (6 per cent) was sourced from locally manufactured products from domestic virgin resin, and  125 000 tonnes (4 per cent) was sourced from locally manufactured products made from processed recyclate. Of the 3.4 million tonnes of plastic consumed in 2017-18, an estimated 2.5 million tonnes entered the waste stream. Approximately 87 per cent of plastic waste was sent to landfill (including an unknown amount of domestic stockpiling) and 13 per cent recycled (Table 69). These figures exclude plastics consumption into medium to longer term applications (greater than 12 months) and the use of plastics in applications that often do not enter waste streams at end-of-life (e.g. underground pipes). Table 69: Waste plastic, 2017-18, '000 tonnes Waste Stream Waste generated Landfill Recycled Municipal Solid Waste 1,155 992 163 Commercial & Industrial 1,223 1,072 151 Construction & Demolition 122 116 6 151

Total 2,500 2,180 320 Source: Envisage Works 2019, 2017-18 Australian Plastics Recycling Survey - National Report Of the estimated 320 000 tonnes of recycled plastic generated in 2017-18:  Approximately 160 000 tonnes (~50 per cent) was exported from Australia90;  Approximately 30 000 tonnes (~13 per cent) was used in other applications;  Approximately 130 000 tonnes (~41 per cent) was re-processed domestically; and  An unknown amount was stockpiled. High density polyethylene (HDPE) and polyethylene terephthalate (PET) account for over half of annual recycled plastics (at 30 per cent and 25 per cent respectively). Most of these recycled plastic polymers are exported, 76 per cent for PET and 52 per cent for HDPE. In analysis of available data on state waste generation and recycling, the CIE found that:  South Australia has the largest amount of domestic recycling;  Victoria has the largest share of plastic exports (55 per cent); and  NSW/ACT accounts for the largest share of plastic landfill (35 per cent). Plastic waste constitutes the highest proportion of landfilled amounts of total waste generated (from selected materials). New South Wales is expected to have retained the same level of recycling with a greater percentage of exports while all other states are following current trend in recycling and exports. Queensland is experiencing the highest growth rate in plastic waste while still retaining the highest proportion of landfilling and lowest proportion of exports. Victoria has the largest recycling rate and has a lower total plastic waste generation than Queensland even though it has a larger population. Figure 29: Plastics material flows by jurisdiction '000 tonnes '000 tonnes 1,000 1,000 900 900 800 800 700 700 600 600 500 500 400 400 300 300 200 200 100 100 - - 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* New South Wales Victoria Queensland Western Australia South Australia Tasmania ACT Northern Territory Recycling Exports Landfill Recycling Exports Landfill 90 For commodities 39151000, 39152000, 39153000 and 39159092, sourced from ABS 2019, waste data export from Australia database, https://www.environment.gov.au/protection/waste-resource- recovery/national-waste-policy/waste-exports 152

Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste-reports/national- waste-report-2018, The CIE forecasts. Waste paper The CIE estimated that consumption of paper and paperboard in Australia totalled 5.6 million tonnes in 2016-17. Of this consumption, source material comprised:  3 million tonnes of imported products, and  2.6 million tonnes of domestically sourced products. The 2018 National Waste Report estimates 5.6 million tonnes of paper and cardboard waste was generated in 2016-1791. Approximately 60 per cent of paper and cardboard waste was recycled and 40 per cent sent to landfill (including an unknown amount of domestic stockpiling). Table 70: Waste paper and cardboard, 2016-17, '000 tonnes Waste Stream Waste generated Landfill Recycled Municipal Solid Waste 1,975 1,133 842 Commercial & Industrial 2,946 1,023 1,922 Construction & Demolition 81 74 7 Total 5,591 2,230 3,361 Source: 2016-17 waste proportions from the Department of the Environment and Energy 2019, National Waste Report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste- reports/national-waste-report-2018 Of the estimated 3.4 million tonnes of recycled paper and cardboard generated:  Approximately 1.3 million tonnes (approx. 39 per cent) was exported from Australia;  Approximately 1.6 million tonnes (approx. 46 per cent) was re-processed domestically (some of which was subsequently exported as a consumer product and some used domestically) 92 and  An unknown amount was stockpiled. In analysis available data on state waste generation and recycling, it showed that:  Most of the paper and cardboard waste are generated in Victoria, NSW and Queensland. 91 Blue Environment 2018, National Waste Report 2018, p. 30, November 92 IndustryEdge 2019, Assessment of Australian paper & paperboard recycling infrastructure and 2018-19 exports, including to China, p.4, Geelong West, October 2019 153

 Victoria and WA are export a relatively larger proportion of their paper & cardboard waste compared to other jurisdictions. The nature of paper is that it may be used in energy recovery processes rather than landfilled when the contamination rate is higher than allowed under the recycling and export requirements. The largest amount of paper and cardboard is generated in Victoria with both recycled and exported amounts (with rates of 52 per cent and 25 per cent of total paper waste generated respectively), with South Australia producing a similar result (56 per cent and 22 per cent respectively). These recovery rates are significantly higher in comparison to the five largest states where the recovery rate is around 50 per cent. This performance may be due to a higher level of substitution between plastics and paper in Victoria and South Australia relative to other states. Queensland has a significantly lower level of paper generation further suggesting the inverse case of substitution between plastics and paper. New South Wales is exhibiting a combination of high generation of waste paper and lowest rate of recycling among the populous states with 58 per cent of paper destined to go to landfill. 154

Figure 30: Waste paper and cardboard material flow by jurisdiction '000 tonnes '000 tonnes 2,500 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 - - 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* New South Wales Victoria Queensland Western Australia South Australia Tasmania ACT Northern Territory Recycling Exports Landfill Recycling Exports Landfill Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste Report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste-reports/national- waste-report-2018, The CIE forecasts. Waste glass APCO estimate that 1.3 million tonnes of post-consumer glass packaging was generated in 2017-18. Approximately 55 per cent of plastic waste was sent to landfill and 45 per cent recycled (Table 71). Table 71: Waste glass, 2016-17, '000 tonnes Waste Stream Waste generated Landfill Recycled Municipal Solid Waste 720 342 379 Commercial & Industrial 229 124 105 Construction & Demolition 8 2 6 Total 958 467 490 Source: APCO 2019, Australian Packaging Consumption and Resource Recovery Data, October There is a demand for larger pieces of recycled glass, known as 'cullet', which can be used in remanufacturing of glass packaging after being beneficiated (cleaned and sorted). However, this source of demand has been falling because the domestic production of glass packaging has been falling, and imports of glass packaging increasing. Glass fines, which are below the size required for glass remanufacturing, result from sorting of kerbside materials results in crushing of the glass. These glass fines are generally used in construction applications (such as road base) or landfilled. Of the estimated 582 000 tonnes of recycled glass generated in 2017-18:  Approximately 18 000 tonnes (approx. 3 per cent) was exported from Australia  Approximately 564 000 tonnes (approx. 97 per cent) was re-processed domestically, and  An unknown amount was stockpiled. Glass has the highest overall rate of recycling out of the selected recyclables. The fundamental reason for this is a strong local glass manufacturing industry requiring the 155

recycled glass as a less expensive input into local glass manufacturing process. The recycling rate is highest in South Australia (80 per cent) with other states following (approximately 50 per cent) due to established tradition of collection, sorting and recycling aided by the presence of various refund schemes. The use of glass waste, once sorted, is wide and therefore attracts a large amount of interest from local industries including the construction industry. It is for this reason, coupled with the glass manufacturing, results in glass being the least exported material with only Victoria and New South Wales exporting significant amounts (6 per cent and 3 per cent respectively). Figure 31: Waste glass material flow by jurisdiction '000 tonnes '000 tonnes 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 - - 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* New South Wales Victoria Queensland Western Australia South Australia Tasmania ACT Northern Territory Recycling Exports Landfill Recycling Exports Landfill Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste-reports/national- waste-report-2018, The CIE forecasts. Waste tyres Envisage Works 2019 estimate that 543 000 tonnes of new tyres were sold in Australia in 2018-19, all of which were imported93. New tyre sales were supplemented by a small amount of domestically sourced casings and spares (approximately 32 000 tonnes). The 2018-19 end-of-life tyre waste generation, landfill and recycling quantities are shown in Table 72. Approximately 69 per cent of end-of-life tyres were recycled and 30 per cent sent to landfill (including domestic stockpiling and onsite disposal). Table 72: Waste tyres, 2018-19, '000 tonnes Waste Stream Waste generated Landfill Recycled Municipal Solid Waste - - - Commercial & Industrial 465 140 323 Construction & Demolition - - - Total 465 140 323 Source: Envisage Works 2019, Tyre flows and recycling analysis: Final Report - Prepared for the Department of the Environment and Energy, October Of the estimated 323 000 tonnes of end-of-life tyres generated in 2018-19: 93 Envisage Works 2019, Tyre flows and recycling analysis: Final Report - Prepared for the Department of the Environment and Energy, October. 156

 255 000 tonnes (approximately 79 per cent) was exported from Australia94. Note that export data we have used suggests a lower figure of 100 000 tonnes. This large discrepancy between export data and survey data has been noted by Envisage Works attributable to historically high levels of underreporting waste tyre exports, and  68 000 tonnes (approximately 21 per cent) was re-processed domestically. Since the closure of the tyre manufacturing industry in Australia in 2010, relative difficulty of material recovery as well as the classification of tyres as hazardous waste, there are limited local uses for tyre materials. Locally, tyre materials have to be repurposed to other uses rather than returned back to tyres as it is possible with the other recyclables which is why once recovered, tyres are either exported of landfilled. Tyres have the highest rates (38 per cent) of exports out of all the selected recyclables. With the highest levels of recovery due product stewardship programmes there exists a significant opportunity to increase exports of tyres in the near future to markets that manufacture tyres reducing the amount that is landfilled each year. New South Wales is increasing total weight of waste tyres generated due to their use in transportation and other heavy industries while other states are experiencing a decline in both tyre recovery and export. Certain types of tyre of exports other than of passenger vehicle tyres (e.g. aircraft and heavy vehicle) have a strong secondary market due their ability to be re-tread and their life extended (may be subsequently imported with re-export amounts also recorded), however these only account for a small proportion of all tyre materials exported. Figure 32: Waste tyre material flow by jurisdiction '000 tonnes '000 tonnes 160 160 140 140 120 120 100 100 80 80 60 60 40 40 20 20 - - 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* 2018* 2019* New South Wales Victoria Queensland Western Australia South Australia Tasmania ACT Northern Territory Recycling Exports Landfill Recycling Exports Landfill Source: 2016-17 data from the Department of the Environment and Energy 2019, National Waste report 2018 database, https://www.environment.gov.au/protection/waste-resource-recovery/national-waste-reports/national- waste-report-2018, The CIE forecasts. Table 73: Timing of policy scenarios 94 As reported by local collectors and processes. Envisage Works 2019, p17 note a significant discrepancy between the customs export dataset and the exports as reported by local collectors and processors. 157

Material Scenario 1 Scenario 2 Scenario 3 Scenario 1 Scenario 2 Scenario 3 Segment MSW Plastics 2022 2022 2022 100% 100% 100% MSW Paper 2022 2022 2022 100% 100% 100% MSW Tyres 2021 2021 2021 100% 100% 100% MSW Glass 2020 2020 2020 100% 100% 100% C&I Plastics 2022 2022 2022 100% 100% 100% C&I Paper 2022 2022 2022 100% 0% 100% C&I Tyres 2021 2021 2021 100% 100% 0% C&I Glass 2020 2020 2020 100% 100% 100% C&D Plastics 2022 2022 2022 100% 100% 100% C&D Paper 2022 2022 2022 100% 0% 100% C&D Tyres 2021 2021 2021 100% 100% 0% C&D Glass 2020 2020 2020 100% 100% 100% Note: The quantity of whole tyres that are baled and exported has been allocated as MSW waste, and whole tyres for retreading has been allocated as C&I waste. In the National Waste Report, all tyres are allocated as C&I. Source: The CIE. Table 74: Time required for a new facility to be operational Paper Plastics Tyres Glass Years 3 2 2 1 Note: The policy is assumed to be decided by 2020. This means that a paper facility would be operational in 2024. Source: The CIE; IndustryEdge and Full Circle Advisory. Table 75: Export prices Waste stream Material Average price Export volume Export value $/tonne KT $m MSW Plastics 232 84 20 MSW Paper 50 436 22 MSW Tyres 66 53 3 MSW Glass 49 0 0 C&I Plastics 232 95 22 C&I Paper 313 656 205 C&I Tyres 1026.83 8 9 C&I Glass 49 0 0 C&D Plastics 232 8 2 C&D Paper 313 26 8 C&D Tyres 1 027 0 0 C&D Glass 49 0 0 Total Plastics 232 187 43 Total Paper 210 1 118 235 Total Tyres 216 61 13 Total Glass 49 0 0 158

Waste stream Material Average price Export volume Export value $/tonne KT $m Total All 213 2 733 582 Note: Prices for paper are differentiated across streams so that the weighted average export price is achieved. The price of MSW paper is set at $50/tonne. For tyres, the price for MSW tyres is the price for whole waste tyres and the price for C&I/C&D is the price of whole tyres not designated as waste, both from Blue Environment analysis of customs data. The price for plastic is not differentiated across streams as we do not have good information on which to base this. Mixed MSW plastic prices are substantially lower than the estimate in this table, while sorted MSW is substantially higher (e.g. baled HDPE and PET). Because there are no options that limit the type of plastic, differentiating prices by stream does not make a difference to the analysis. Prices for tyres are based on customs data provided by Blue Environment and allocated to whole baled versus exempted. Source: CIE analysis; Blue Environment analysis of customs data. Table 76: Land requirements and costs Industrial Paper Plastics Tyres Glass land values $/m2 m2 m2 m2 m2 NSW/ACT 725 1 0.25 0.25 0.25 VIC 393 1 0.25 0.25 0.25 QLD 321 1 0.25 0.25 0.25 SA 205 1 0.25 0.25 0.25 WA 438 1 0.25 0.25 0.25 TAS 205 1 0.25 0.25 0.25 NT 205 1 0.25 0.25 0.25 Note: The industrial price for Sydney is set at the lower bound, as the average price from Colliers is too high to be representative of locations for new paper facilities. Source: https://www.colliers.com.au/en-AU/Research/Industrial-Research-and-Forecast-Report-Second-Half-2019; Paper land requirements provided by IndustryEdge; plastic land requirements provided by Full Circle Advisory; Tyres and glass assumed to be the same as plastic. Table 77: Landfill costs and levies Levy Cost Total $/tonne $/tonne $/tonne NSW/ACT 143.6 70 213.6 VIC 63.3 70 133.3 QLD 75 70 145 SA 110 70 180 WA 70 70 140 TAS 0 70 70 NT 0 70 70 Note: The landfill resource cost is set equal across jurisdictions. The actual gate fees charged are potentially higher than this in NSW and lower in QLD. Sources: NSW EPA, Waste levy rates 2019-20 http://www.epa.nsw.gov.au/wasteregulation/waste-levy.htm; Victorian Auditor-General's Office 2018, Victorian Auditor-General's Report - Managing the Municipal and Industrial Landfill Levy, p.21, EPA South Australia, Waste levy rates 2019, http://www.epa.sa.gov.au/business_and_industry/waste-levy; WA Department of Environment Regulation, Landfill levy rates 1 July 2019 onwards, https://www.der.wa.gov.au/about-us/media-statements/112-landfill-levy-rates-to-rise-from-january-2015, https://www.qld.gov.au/environment/pollution/management/waste/recovery/disposal-levy/about/waste-levy-map, Transport Canberra and City Services 2019-20, Landfill fees for household waste, https://www.tccs.act.gov.au/about-us/fees_and_charges Table 78: Transport costs Economic Environmental Social $/tonne $/tonne $/tonne NSW 0 0 0 159

VIC 0 0 0 QLD 102 13 17 SA 74 10 12 WA 193 5 1 TAS 44 1 1 NT 237 3 1 Note: This assumes road transport for all states except WA (rail) and NT/TAS (shipping). NT and QLD are transported to NSW if there is no facility in their state. WA, SA and TAS are transported to Victoria. This is based on the cheapest transport cost option. Source: CIE interstate waste transport model. Table 79: Material that is residual Segment Material Overseas residual Domestic residual Per cent Per cent MSW Plastics 19% 39% MSW Paper 20% 20% MSW Tyres 5% 5% MSW Glass 5% 5% C&I Plastics 20% 20% C&I Paper 5% 5% C&I Tyres 5% 5% C&I Glass 5% 5% C&D Plastics 20% 20% C&D Paper 5% 5% C&D Tyres 5% 5% C&D Glass 5% 5% Note: The MSW plastic for domestic is based on the sorting efficiency of going from a 4-4-2 (HDPE-PET-Other) bale of mixed plastic to a 2-2-6 share. This implies about 80-85 per cent of PET and HDPE is extracted in domestic sorting. For overseas sorting we assume all HDPE and PET is extracted. For C&I and C&D plastic, there is little information amount recycled and that is residual, and the resin types are very different to MSW - much more plastic LDPE film from packaging, for example. For paper, the residual is based on discussions with the waste industry and IndustryEdge, although contamination rates are not readily available. The destination of residual waste overseas is not known. Anecdotally, this is likely to be predominantly burning, as a source of energy. For residual waste in Australia, we assume this is landfilled. If this is instead directed to waste to energy facilities, then the costs would be about the same. Source: The CIE, as per above. Table 80: Prices of products produced Product Material input Stream Central case $/tonne of output HDPE pellets Plastic All 1100 PET pellets Plastic All 1100 Shredded tyres Tyres All 45 Recovered Paper Pulp Paper MSW 515 Recovered Paper Liner Paper C&I/C&D 605 Corrugating Medium Paper C&I/C&D 595 Coated Kraftback [Cartonboard] Paper NA 1025 Uncoated Cartonboard (Grayback) Paper NA 880 Note: All plastic produced is assumed to get the average of HDPE and PET prices. Source: IndustryEdge; Full Circle Advisory; The CIE. 160

161

Table 81: Paper facility costs and market synopsis Recovered Paper Pulp Recycled Corrugated Packaging Recycled Cartonboard/Folding Box Board Low Medium High Low (2.8m) Medium (5.7m) High (8.4m) Low Medium High Capacity Reference output capacity (tpa) 100 000 200 000 300 000 150 000 320 000 450 000 150 000 240 000 300 000 Implied input capacity (tpa) 140 000 280 000 420 000 210 000 448 000 630 000 210 000 336 000 420 000 Facility life (Yrs) 12 14 16 25 25 25 25 25 25 Capex Total Facility Capex (No Land) 190 000 000 248 000 000 295 000 000 306 000 000 437 000 000 661 000 000 342 500 000 437 000 000 534 000 000 Opex Operating expenses per input tonne (AUD/t) 85.00 77.00 72.00 105.00 100.00 94.00 138.00 130.00 115.00 Operating expenses per input tonne (AUD pa) 11 900 000 21 560 000 30 240 000 22 050 000 44 800 000 59 220 000 28 980 000 43 680 000 48 300 000 Market Synopsis Global market (Mt)~ 2018 3.5 110.0 49.6 Australian market (t)^ 2018-19 80 000 808 100 133 800 New Zealand market (t)^ 2018-19 20 0000 115 000 110 000 Australia 2018-19 Production (t) 80 000 1 188 000 0 Imports (t) 0 69 200 134 100 Exports (t) 0 449 100 300 Apparent Consumption (t) 80 000 808 100 133 800 Source: IndustryEdge. 163

APPENDIX D: ENVISAGE WORKS ESTIMATES OF COSTS OF FURTHER PROCESSING Envisage Works 2019 compare the differences between the recovered and virgin commodity prices, based on existing prices, and conclude:95  It is not financially viable to process recycled PET bottles back into a virgin PET resin, given the current virgin resin price;  The use of recycled glass instead of virgin materials for new glass packaging is marginal; and  The use of recycling fibre-based packaging instead of virgin pulp is also marginal. The indicative costs of using recycling PET bottles and fibre-based packaging are shown in Table 82 and Table 83 respectively. These totals would be compared to the virgin material prices in Table 15, less some adjustment for the price of recycled versus virgin resin. Note that these conclusions reflect existing prices and are testing whether it is viable to process within Australia versus other available export markets. If there was no export market then we can consider whether further processing is viable relative to landfilling, by using the price of landfilling as the purchase cost. For PET, further processing would be highly viable, relative to landfilling. Table 82: Indicative costs for recycling PET bottles Cost component Cost Comments $/tonne of product Purchase cost a 500 Sorted PET bottles (1.3 tonnes to produce 1.0 tonne of PET pellets). Transport 40 Transport from the MRF to the reprocessing facility. Assumed around 100 km. Includes handling. Sorting, chipping and hot washing 300-400 Opex and capex estimate. Includes float separation, rinsing and drying. Decontaminated, extrusion and 400-500 Opex and capex estimate. Assumed suitable for food- pelletising (pellets production) grade applications or fibre spinning. Landfill costs 40 Disposal of residual processing wastes (~20% of incoming material). Total 1 300-1 500a Approximate production cost. a Co-product processing cost or sale value (e.g. recovered HDPE bottle caps) is not considered Source: Envisage Works 2019, Recovered Resources Market Bulletin: October 2019, Victorian Market Intelligence Pilot Project (edition #07), p. 14 Table 83: Indicative costs for recycling fibre-based packaging (based on mixed kerbside paper & cardboard) Cost component Cost Comments $/tonne of product Purchase cost a -50 Unsorted kerbside paper & cardboard at the ingoing MRF gate of 1.4 tonnes. Assumed typical gate fee for councils. MRF sorting cost 100-150 Approximate MRF cost for sorting 1.4 tonnes of mixed 95 Envisage Works 2019, Recovered Resources Market Bulletin: October 2019, Victorian Market Intelligence Pilot Project (edition #07), pp. 14-15 152

paper & paperboard with assumed 10% lost to landfill at the MRF level. Transport 20 Transport from the MRF to the paper mill of 1.25 tonnes. Assumed around 50 km return. Stock preparation and board 300-350 Approximate cost for pulping and paper production, production with assumed 20% lost to landfill. Reel handling, storage & delivery to 130 Transport from paper mill to box forming facility of 1.0 box plant tonnes. Landfill cost 80 Disposal of both sorting and processing wastes (~30% of collected paper & paperboard). Total 580-$680a Approximate production cost. a Note that the cost excludes the kerbside collection cost Source: Envisage Works 2019, Recovered Resources Market Bulletin: October 2019, Victorian Market Intelligence Pilot Project (edition #06), p. 16 153

APPENDIX E: EXPORTS UNDER THE BASE CASE Table 84: Exports 2019 Jurisdiction Segment Material Indicator 2019l kT NSW MSW Plastics Exported 28.43 VIC MSW Plastics Exported 39.58 QLD MSW Plastics Exported 7.95 SA MSW Plastics Exported 1.34 WA MSW Plastics Exported 6.89 TAS MSW Plastics Exported 0.09 NT MSW Plastics Exported 0.01 ACT MSW Plastics Exported 0.00 NSW MSW Paper Exported 91.87 VIC MSW Paper Exported 116.23 QLD MSW Paper Exported 86.23 SA MSW Paper Exported 32.62 WA MSW Paper Exported 106.26 TAS MSW Paper Exported 0.88 NT MSW Paper Exported 2.07 ACT MSW Paper Exported 0.00 NSW MSW Tyres Exported 18.33 VIC MSW Tyres Exported 19.09 QLD MSW Tyres Exported 5.51 SA MSW Tyres Exported 4.02 WA MSW Tyres Exported 5.98 TAS MSW Tyres Exported 0.00 NT MSW Tyres Exported 0.00 ACT MSW Tyres Exported 0.00 NSW MSW Glass Exported 0.00 VIC MSW Glass Exported 0.00 QLD MSW Glass Exported 0.00 SA MSW Glass Exported 0.00 WA MSW Glass Exported 0.00 TAS MSW Glass Exported 0.00 NT MSW Glass Exported 0.00 ACT MSW Glass Exported 0.00 NSW C&I Plastics Exported 51.16 VIC C&I Plastics Exported 30.55 QLD C&I Plastics Exported 6.67 SA C&I Plastics Exported 1.61 WA C&I Plastics Exported 5.10 TAS C&I Plastics Exported 0.12 NT C&I Plastics Exported 0.00 ACT C&I Plastics Exported 0.00 NSW C&I Paper Exported 88.43 154

Jurisdiction Segment Material Indicator 2019l kT VIC C&I Paper Exported 366.89 QLD C&I Paper Exported 81.96 SA C&I Paper Exported 40.66 WA C&I Paper Exported 74.15 TAS C&I Paper Exported 3.31 NT C&I Paper Exported 0.81 ACT C&I Paper Exported 0.00 NSW C&I Tyres Exported 2.89 VIC C&I Tyres Exported 3.01 QLD C&I Tyres Exported 0.87 SA C&I Tyres Exported 0.63 WA C&I Tyres Exported 0.94 TAS C&I Tyres Exported 0.00 NT C&I Tyres Exported 0.00 ACT C&I Tyres Exported 0.00 NSW C&I Glass Exported 0.00 VIC C&I Glass Exported 0.00 QLD C&I Glass Exported 0.00 SA C&I Glass Exported 0.00 WA C&I Glass Exported 0.00 TAS C&I Glass Exported 0.00 NT C&I Glass Exported 0.00 ACT C&I Glass Exported 0.00 NSW C&D Plastics Exported 1.82 VIC C&D Plastics Exported 4.05 QLD C&D Plastics Exported 1.28 SA C&D Plastics Exported 0.19 WA C&D Plastics Exported 0.41 TAS C&D Plastics Exported 0.00 NT C&D Plastics Exported 0.00 ACT C&D Plastics Exported 0.00 NSW C&D Paper Exported 0.00 VIC C&D Paper Exported 4.00 QLD C&D Paper Exported 16.58 SA C&D Paper Exported 0.29 WA C&D Paper Exported 4.42 TAS C&D Paper Exported 0.01 NT C&D Paper Exported 0.47 ACT C&D Paper Exported 0.00 Note: MSW tyres is whole waste tyres, C&I tyres is other whole tyres. Source: The CIE, based on inputs from Blue Environment. 155

APPENDIX F: ENVIRONMENTAL AND SOCIAL COSTS OF WASTE TRANSPORT The environmental and social costs of transport utilised in domestic waste management are outlined below. The environmental and social costs of shipping exports internationally are not discussed. Estimating environmental costs Estimates of the costs of these environmental impacts are set out below. These break costs into:  Mode -- rail and road. There is no information available for sea freight. We have assumed sea freight has no environmental externalities except for GHG emissions, and that GHG emissions are the same as those of rail freight. There may be other environmental impacts related to shipping of waste, such as oil pollution of water that we have not included.  Rural and urban -- environmental externalities are substantially higher in urban areas because a larger human population is impacted. Table 85: General environmental costs (medium) Urban Urban Rural Rural Road Rail Road Rail $/000 tonne kms $/000 tonne kms $/000 tonne kms $/000 tonne kms Air pollution 26.32 4.25 0.26 0 GHG emissions 5.86 0.44 5.86 0.44 Noise pollution 4.39 1.85 0.44 0 Water pollution 3.95 0.11 1.58 0.11 Nature and landscape 0.43 1.09 4.4 1.09 Urban separation 2.93 1.09 0 0 Upstream and downstream costs 23.43 23.43 Source: TfNSW 2016, Principles and Guidelines for Economic Appraisal of Transport Investments and Initiatives, Table 60, March. 156

Table 86: General environmental costs (low) Urban Urban Rural Rural Road Rail Road Rail $/000 tonne kms $/000 tonne kms $/000 tonne kms $/000 tonne kms Air pollution 12.77 4.25 0.14 0 GHG emissions 2.93 0.44 2.93 0.44 Noise pollution 2.92 1.85 0.3 0 Water pollution 1.32 0.11 0.8 0.11 Nature and landscape 0.43 1.09 4.4 1.09 Urban separation 1.47 1.09 0 0 Upstream and downstream costs 20.5 20.5 Source: TfNSW 2016, Principles and Guidelines for Economic Appraisal of Transport Investments and Initiatives, Table 60, March. Table 87: General environmental costs (high) Urban Urban Rural Rural Road Rail Road Rail $/000 tonne kms $/000 tonne kms $/000 tonne kms $/000 tonne kms Air pollution 32.21 4.25 0.32 0 GHG emissions 10.24 0.44 10.24 0.44 Noise pollution 5.86 1.85 0.61 0 Water pollution 4.83 0.11 1.93 0.11 Nature and landscape 0.89 1.09 8.79 1.09 Urban separation 4.4 1.09 0 0 Upstream and downstream costs 26.36 26.36 Source: TfNSW 2016, Principles and Guidelines for Economic Appraisal of Transport Investments and Initiatives, Table 60, March. To give an example of these costs, suppose a tonne of waste was transported 1000kms by road, of which 100kms was urban96. Then the environmental cost would be:  $11.40 for road transport for air pollution, GHG emissions, noise and water pollution, and a potential $27.70 for additional environmental externalities.  $1.20 for rail transport for air pollution, GHG emissions, noise and water pollution, and a potential $1.20 for additional environmental externalities o note that this does not include any environmental impacts from the transport of waste from the generator or transfer facility to the rail terminal and from the terminal to the receive. 96 This is roughly the distance and task between Sydney and South East Queensland landfills. 157

Table 88: Example of environmental costs Road Rail Journey length (kms) 1 000 1 000 Share urban (per cent) 10 10 Environmental cost (using mid-point estimates, $/tonne) air, water, noise and GHG emissions 11.4 1.2 other potential environmental impacts 27.7 1.2 Source: The CIE. For some types of environmental impacts, there is additional information beyond that contained in the TfNSW Guidelines. The NSW Office of Environment and Heritage has previously compiled a detailed inventory of the physical air pollution within the greater Sydney metropolitan area from different sources, including rail freight97. The NSW EPA has also commissioned Environ to investigate options to reduce locomotive air and noise emissions98. Environ notes that Diesel-fuelled locomotives are an important contributor to anthropogenic fine particulate and oxides of nitrogen emissions (NOx). The World Health Organisation (WHO) has classified diesel engine exhaust as being carcinogenic to humans. It found that exposure to diesel exhaust is a cause of lung cancer and increases the risk of bladder cancer. In Australia, there are no air emission limits for new or remanufactured locomotives99. This study found that the overall health costs associated with locomotive emissions from diesel fuel were $66 million per year. This included costs related to particulates less than 10 micrometres (PM10) and Oxides of Nitrogen (NOx) only. While it is difficult to compare across studies, the air pollution costs per tonne kilometre from Environ 2013 for urban areas appear to be smaller than those in the TfNSW Guidelines. We use the TfNSW Guideline figures as these cover a wider range of air emissions. The transport of waste may have greater environmental impacts than the transport of general freight, particularly the transportation of hazardous waste. Issues could include:  Greater dust issues from transport of construction waste and the potential for asbestos escaping during transportation. NSW EPA have sampled some containers containing asbestos with only tarpaulin coverings. Note that it is not possible to place a cost on this, as the extent to which asbestos may escape and cause asbestos-related disease cannot be easily estimated;  Leaking of waste during transport or in rail yards, particularly from water entering unsealed containers and leaching out of containers;  Biosecurity concerns around the transportation of waste, including: 97 NSW Environment Protection Authority 2008, Air emissions inventory for the Greater Metropolitan Region in NSW: Off-road mobile emissions, Technical Paper 6. 98 Environ 2013, Scoping Study of Potential Measures to Reduce Emissions from New and In-Service Locomotives in NSW and Australia, prepared for NSW Environment Protection Authority. 99 Environ 2013, Scoping Study of Potential Measures to Reduce Emissions from New and In-Service Locomotives in NSW and Australia, prepared for NSW Environment Protection Authority, p. vii. 158

-the spread of fire ants in NSW. There is a fire ant exclusion zone in Port Botany and the EPA indicates that relevant interstate recipient waste facilities are in the Queensland fire ant exclusion zone. The Queensland Government has estimated that fire ants would impose costs of $43 billion in South East Queensland alone over a 30 year period100. Federal and State Governments have collectively spent $300 million in fire ant eradication, from the first known incursion of red fire ants into Australia in 2001101. Overseas evidence also suggests that the potential impacts are substantial102. The extent to which freight related to waste poses a higher risk than other freight has not been investigated by the CIE; - the spread of phylloxera (a type of insect) which can severely damage wine growing areas. Most areas of Sydney are infected. Regional areas to the north of Sydney are not currently infected103; - shipping can lead to costs associated with ballast water and biofouling, such as movement of barnacles and other water-based invasive pests104. These issues are not specific to the movement of waste. Estimating social costs We estimate three forms of social cost, which apply only to road transport:  Costs from accidents.  Costs from congestion imposed on other road users.  Costs from wear and tear on the road. Accidents Additional road transportation is expected to lead to additional accident costs imposed. Accident costs are borne by both the heavy vehicle and its occupant and other vehicles involved in an accident. Crashes involving heavy trucks accounted for 20 per cent of NSW road fatalities in 2012105. Note that we estimate accident costs for the additional road freight only, as the accident costs related to rail freight would be negligible. The amount of accident costs reflects:  The number and severity of the additional accidents related to the long haul transport of waste, and  The costs associated with these accidents. We use accident data from the federal Bureau of Infrastructure Transport and Regional Economics (BITRE) Road Fatalities Database and collected by BITRE for injuries to estimate heavy vehicle crash rates. We only include crashes where there are reported 100 Invasive Species Council 2015, Red imported fire ants, Fact sheet, January. 101 Invasive Species Council 2015, Red imported fire ants, Fact sheet, January. 102 EPA website, http://www.environment.nsw.gov.au/pestsweeds/FireAntsSpread.htm. 103 nd NSW Government Gazette, No. 189, 22 December 2006. 104 See for example National Oceans Office 2011, South East Regional Marine Plan: Impacts of Shipping, http://www.environment.gov.au/resource/impacts-shipping ; and PWC 2011, Proposed Australian Biofouling Management Requirements, Consultation Regulation Impact Statement, prepared for Department of Agriculture Fisheries and Forestry, December. 105 NSW Centre for Road Safety 2014, Heavy Truck Fatal Crash Trends and Single Vehicle Heavy Truck Crash Characteristics, January. 159

injuries. The crash rates for fatalities and other injuries are shown in Figure 33 from 2010 to 2014. Figure 33: Fatality and injury rate for heavy vehicles Fatalities per billion Non fatal injuries per vehicle kms billion vehicle kms 50 200 45 180 40 160 35 140 30 120 25 100 20 80 15 60 10 40 5 20 - - 2010 2011 2012 2013 2014 Ridgit fatalities (LHS) Articulated fatalities (LHS) Ridgit non fatal injuries (RHS) Articulated non fatal injuries (RHS) Note: The fatality rate is fatalities per billion vehicle kms, while the injury rate is the number of injuries per billion vehicle kms. The injury data does not include data from Queensland. Data source: The CIE, based on: BTRE 2016, Heavy vehicle safety: crash analysis and trends, Information sheet 78; BTRE 2015, Australian Infrastructure Statistics Yearbook 2015, Table T 4-2; BTRE 2017, Australian Roads Death Database. The cost of fatalities and other crashes is taken from TfNSW Principles and Guidelines. We use estimates for serious injury crashes, given that heavy vehicle crashes are more severe than those involving light vehicles, and BTRE 2016 indicates most reported injuries involved hospitalisations106. We do not include any costs for crashes without reported injuries. The overall crash costs per vehicle kilometre are shown in Figure 34: Crash costs for heavy vehicles. This would mean a 1000 km trip would have a crash cost externality of approximately $7 per tonne from crashes. 106 BITRE 2016, Heavy truck safety: crash analysis and trends, Information sheet 78. 160

Figure 34: Crash costs for heavy vehicles Item Low High Mid Fatalities per billion vehicle kms 9 15 12 Cost of fatality ($m/fatality) 7.3 7.3 7.3 Non-fatal injury crashes per billion vehicle kms 125 150 137.5 Cost of non-fatal injury crash ($m/crash) 0.5 0.5 0.5 Cost per 1000 tonne kms 5.8 8.3 7.0 Note: We assume each truck carries 23 tonnes on average. This is consistent with BTRE data for articulated trucks in BTRE 2011, Truck productivity: sources, trends and future prospects, Research Report, Chart F2.7. Source: The CIE; as noted in text; TfNSW 2016, Principles and Guidelines for Economic Appraisal of Transport Investments and Initiatives, Table 52, March. Note that we do not differentiate the safety impacts by urban and rural areas. The rates outside of capital cities are lower, although very close to the average rates because most vehicle kms are outside of capital cities107. There may be additional costs related to the clean-up of hazardous wastes following an accident. Because of a lack of data, we do not include any additional cost from this. Additional road congestion Where heavy vehicle movements happen during periods when there are other road users and roads are busy, then this can lead to congestion impacts on other road users. These congestion costs include additional time (delays) and higher vehicle operating costs. These are only relevant for urban areas, as rural areas are not in general subject to congestion. To estimate congestion costs, we start with TfNSW estimates of an average congestion cost per vehicle km of 180 cents for articulated trucks108.  The TfNSW estimate is based on scaling up the congestion cost for a passenger car. We expect that the transport of waste will be less distributed to peak periods than light vehicle movements.  The TfNSW estimate is for Sydney as a whole. We expect that the urban areas for heavy vehicle traffic will tend to have less congestion than Sydney, noting that this includes urban areas of towns that are not bypassed, and outer areas of Brisbane. Given the above, we have halved and then halved again the TfNSW congestion cost figure to give an estimate of 45 cents per vehicle km. With an average assumed waste load of 23 tonnes, this gives a cost of 2 cents per urban tonne km. To give an example, a 1000 km journey, in which 10 per cent was in urban areas, would have a congestion cost of $2 per tonne. Road wear and tear Heavy vehicles impose road wear and tear. The heavy vehicle charging arrangements are designed to cover these costs, such as charges per litre of fuel. We do not include the fuel excise costs and instead include these costs as a social cost. 107 BITRE 2016, Heavy truck safety: crash analysis and trends, Information sheet 78. 108 TfNSW 2016, Principles and Guidelines for Economic Appraisal of Transport Investments and Initiatives, Table 21, March. 161

The cost is based on TfNSW Principles and Guidelines, which estimates a cost of 18 cents per vehicle km for a six axle articulated truck109. This amounts to slightly less than 1 cent per tonne km, or $8 for a 1000 km trip per tonne. This may overstate marginal costs, as it is based on the NTC's method of allocating out road maintenance costs, some of which may not be incremental to the number of heavy vehicles. Hence, we use this as the high estimate. The alternative method is the ARRB lifecycle costing method. This estimates a marginal cost for rural arterial roads of 0.8 cents per standard axle repetition110 km, which gives a lower marginal cost than the NTC method. The cost for freeways would be below that for arterials. Given this, we take a lower bound as zero and an upper bound from the TfNSW Guidelines, with the mid-point as the average of the two. 109 TfNSW 2016, Principles and Guidelines for Economic Appraisal of Transport Investments and Initiatives, Table 65, March 110 Martin, T., Thoresen, T., Clarke, M. and Hore-Lacey, W. 2010, 'Estimating the marginal cost of road wear on Australia's sealed road network', HVTT11: International Heavy Vehicle Symposium, 2010, Melbourne, Victoria, Australia, Victorian Transport Association, Melbourne, Vic, 12pp. 162

APPENDIX F: ENVIRONMENTAL EXTERNALITIES FROM CHANGES IN RECYCLING For changes in the amount of material that is recycled and landfilled, we use lifecycle analysis prepared by RMIT for Sustainability Victoria111. This study considered:  Global warming -- Climate change effects resulting from the emission of carbon dioxide (CO2), methane or other global warming gases into the atmosphere - this indicator is represented in CO2 equivalents.  Photochemical oxidation -- measurement of the increased potential of photochemical smog events due to the chemical reaction between sunlight and specific gases released into the atmosphere. These gases include nitrogen oxides (NOx), volatile organic compounds (VOCs), peroxyacyl nitrates (PANs), aldehydes and ozone. This indicator is of importance in areas where photochemical smog is likely to be a problem, such as in urban transport environments.  Eutrophication -- the release of nutrients (mainly phosphorous and nitrogen) into land and water systems, altering biotopes, and potentially causing oxygen depletion effects such as increased algal growth.  Mineral resource depletion -- the additional investment required to extract minerals resources due to depletion of reserves, leaving lower quality reserves behind, which will require more effort to harvest.  Fossil fuel depletion -- the additional investment required to extract fossil fuel resources to depletion of reserves, leaving lower quality reserves behind, which will require more effort to harvest. The study also measured precursors to environmental impact, such as land use, water use, solid waste and cumulative energy demand. The first three environmental impacts are valued. We would expect that mineral and fossil fuel resource depletion is adequately reflected in market prices and would not need to be separately valued. The cost of emissions in $/t of CO2 equivalent emissions is $34,21, based on the average carbon value between 2018 and 2027 supplied by DELWP112. For photochemical oxidation, we use PAE Holmes 2013 values for Victoria.113 These estimates are damage costs for PM2.5. The estimates from RMIT are for volatile organic compounds). The damage costs for VOCs are estimated by applying the relative ratio of damage costs for these pollutants relative to PM2.5 as estimated by EEA (2014) to the PM2.5 damage cost estimated by PAE Holmes (2013).114 As noted above, EEA quantified the health effects of VOCs resulting from the formation of 111 RMIT 2015, LCA of Kerbside Recycling in Victoria, prepared for Sustainability Victoria. 112 DELWP carbon values are projections for a lower, central and upper case of carbon valuations to 2050. We adopt the nominal $2016 carbon values from the central case estimate, and convert these into real $2019 using the ABS CPI for Melbourne to-date and a projected 2.5 per cent rate of inflation to 2027. 113 PAE Holmes 2013, Methodology for valuing the health impacts of changes in particle emissions, prepared for NSW EPA, p. viii, https://www.environment.gov.au/system/files/pages/dfe7ed5d-1eaf- 4ff2-bfe7-dbb7ebaf21a9/files/methodology-valuing-health-impacts-changes-particle-emissions.pdf. 114 European Environmental Agency, 2014, Costs of air pollution from European industrial facilities 2008-2012 - an updated assessment. 163

secondary PM and ozone. As such the damage costs for VOCs do not include damages relating to the primary components. However as noted by EEA (2014), including the damages relating to primary VOCs. The estimates applied are shown in Table 89 . Values shown are escalated using the CPI to 2019. Table 89: Damage costs for air pollution SUA code SUA Area Population Population Damage cost Damage cost VOCs density PM2.5 Km2 No. People/km2 $/tonne $/tonne 2011 Melbourne 5 679 3 847 567 677 $190 000 $9 107 2016 Sale 46 14 259 313 $88 000 $4 218 2020 Wangaratta 58 17 687 307 $86 000 $4 122 2004 Bendigo 287 86 078 299 $84 000 $4 026 2003 Ballarat 344 91 800 267 $75 000 $3 595 2005 Colac 55 11 776 215 $60 000 $2 876 2010 Horsham 83 15 894 191 $54 000 $2 588 2008 Geelong 919 173 450 189 $53 000 $2 540 2017 Shepparton - Mooroopna 249 46 503 187 $52 000 $2 492 2006 Drysdale - Clifton Springs 65 11 699 180 $50 000 $2 397 2012 Melton 266 47 670 179 $50 000 $2 397 2022 Warrnambool 183 32 381 177 $50 000 $2 397 2019 Traralgon - Morwell 235 39 706 169 $47 000 $2 253 2014 Moe - Newborough 105 16 675 158 $44 000 $2 109 2018 Torquay 126 15 043 119 $33 000 $1 582 2015 Ocean Grove - Point Lonsdale 219 22 424 103 $29 000 $1 390 2001 Bacchus March 196 17 156 87 $24 000 $1 150 2002 Bairnsdale 155 13 239 85 $24 000 $1 150 2013 Mildura - Wentworth 589 47 538 81 $23 000 $1 102 2007 Echuca - Moama 351 19 308 55 $15 000 $719 164

SUA code SUA Area Population Population Damage cost Damage cost VOCs density PM2.5 Km2 No. People/km2 $/tonne $/tonne 2009 Gisborne - Macedon 367 18 014 49 $14 000 $671 2021 Warragul - Drouin 680 29 946 44 $12 000 $575 2000 Not in any SUA 216 296 693 578 3 $900 $43 Source: PAE Holmes 2013, Methodology for valuing the health impacts of changes in particle emissions, prepared for NSW EPA, p. viii, https://www.environment.gov.au/system/files/pages/dfe7ed5d-1eaf-4ff2-bfe7-dbb7ebaf21a9/files/methodology-valuing-health-impacts-changes- particle-emissions.pdf; European Environmental Agency, 2014, Costs of air pollution from European industrial facilities 2008-2012 - an updated assessment. Note that air pollution costs may not actually be incurred in Victoria, as manufacturing activity is often in other locations. We apply the full air pollution cost, even this is outside of Victoria. For eutrophication, RMIT presented estimates in terms of the cost of phosphates. Using previous unpublished estimates prepared by BDA and CIE for the cost of water pollution in NSW (averaging ~$3000 per tonne of total phosphorus) and a conversion from phosphorus to phosphate of 3. Based on this we then use a value of $1000 per tonne of phosphate in real $2019. There are also specific estimates of externalities from landfilling for Australia, shown below. The cost of disposing of waste to landfill depends on a range of factors, including the type of material, the size of the landfill, how it is managed and the local climate. BDA Group (2009) estimated the full cost of landfill disposal in Australia in various climates, under best practice controls, as well as poor controls. BDA Group's cost estimates included:  Private costs.  The cost of greenhouse gas emissions.  The external cost of other air emissions.  External costs associated with leachate.  The disamenity impacts associated with landfills. The private costs and disamenity impacts estimated by BDA are inflated to 2012/13 dollars using the national Consumer Price Index. These estimates suggest that the total cost of landfill ranges between $45 per tonne up to around $113 per tonne, depending on the size of the landfill and the controls in place. In our analysis we include resource costs and pollution costs directly based on the RMIT LCA. We add a further $10 per tonne for disamenity impacts not covered already. Comparisons across material types This study measures the environmental impacts for each material type separately, such as glass and PET. However, while it estimates the impacts from garden organics, it does not measure the impacts from food organics. We have assumed that the environmental impacts of diverting one tonne of food organics from landfill to recycling are equal to the estimated impacts for diverting one tonne of garden organics.115 115 One study that considered the environmental impacts of food and garden organics found that the net benefit of recycling (rather than landfilling) FOGO was around 20 per cent less than the net benefits of recycling garden organics. This suggests our approach may slightly overestimate the externalities from food organics. However, this study was from NSW, is older than the RMIT analysis (2010 compared to 2014), and didn't consider photochemical oxidation or eutrophication. For these reasons and to maintain simplicity, we have assumed there are equal impacts from diversion to 165

The impacts for each material type, measured in physical units such as tonnes of greenhouse gas emissions, are shown in Table 90. These impacts are all positive, meaning that there are greater environmental impacts from landfill compared to recycling. Table 90: Environmental impacts from landfill relative to recycling, physical measures Material type Global warming Eutrophication Photochemical oxidation CO2 tonnes PO4 tonnes VOC tonnes Glass 0.53000 0.00036 0.00230 Paper/cardboard 0.42131 0.00176 0.00190 Plastics 0.77724 0.00086 0.00281 Organics 0.72200 0.00012 0.00150 Source: RMIT LCA, The CIE. Comparison across impact types cannot be made without placing a weighting on the importance of each impact type. We use the monetary value of these impacts to compare their importance. Monetised environmental impacts The assumed value of environmental externalities in per tonne terms is shown in Table 91. Table 91: Cost of environmental impacts from landfill relative to recycling, by region Cost category Units Dense urban Low density Inner regional Outer regional (rearloaders) urban (sideloaders) Cost of global warming $/t CO2 34 34 34 34 Cost of eutrophication $/t PO4 1000 1000 1000 1000 Cost of photochemical oxidation $/t VOC 9107 9107 2361 861 Note: CO2 refers to carbon-dioxide equivalent, PO4 refers to phosphates, and VOC refers to volatile organic compounds. Source: The CIE. We multiply the cost per physical unit (e.g. tonne of volatile organic compounds) by the physical measure of environmental impact by material type. For example, the cost of global warming associated with a tonne of glass to landfill (relative to recycling that glass) is 0.53 tonnes of CO2- equivalent emissions multiplied by $34/tonne of CO2, equating to $18 per tonne of glass to landfill. Summing together the monetary cost of global warming, eutrophication and photochemical oxidation impacts from each material type gives the costs of landfill relative to recycling shown in Table 92. Table 92: Total environmental costs of landfill relative to recycling recycling of food and garden organics. See: NSW EPA, 2010, Environmental benefits of recycling, available at: https://www.epa.nsw.gov.au/-/media/epa/corporate-site/resources/warrlocal/100058- benefits-of-recycling.pdf 166

Material type Dense urban Low density urban Inner regional Outer regional (rearloaders) (sideloaders) $/VOC $/VOC $/VOC $/VOC Glass 39 39 24 20 Paper/cardboard 34 34 21 18 Plastics 53 53 34 30 Organics 38 38 28 26 Source: The CIE. 167

APPENDIX G: SUMMARY OF JURISDICTION POLICY SETTINGS Table 93: Summary of state and territory policy settings Landfill levy (2019-20) Strategy document (including targets) Other (please see table notes for key) ACT MSW $98.45/t ACT Waste Management Strategy: Towards a sustainable Container deposit scheme  Introduced Jun 2018 Canberra 2011-2025. Waste generation grows less than population. Expand reuse of goods. Waste sector is carbon neutral by 2020. Double energy C&I $170.55/t generated from waste and recover waste resources for carbon Landfill bans  TVs & computers sequestration. Recovery rate increases to over: Mixed C&I with >50% $232.70/t Cutlery, stirrers, polystyrene recyclable material Single-use plastics ban  containers � 85% by 2020 � 90% by 2025. www.TheCIE.com.au (The dollar figures are prices rather than levy Internal hazwaste tracking  amounts, as ACT owns the landfill and sets fees) Household chemical collections  Free drop-off at two facilities 168

NSW Metro area: NSW Waste Avoidance and Resource Recovery Strategy 2014- Container deposit scheme  Introduced Dec 2017 21. � Waste $143.60/t By 2021-22: $129.20/t Landfill bans  � Virgin excavated natural material � reduce waste generation per capita � Shredder floc � increase recycling rates for: Single-use plastics ban  $71.80/t Regional area: - MSW from 52% (in 2010-11) to 70% � Waste - C&I waste from 57% to 70% Internal hazwaste tracking  $143.60/t � Virgin excavated natural - C&D waste from 75% to 80% material $129.20/t � increase landfill waste diversion from 63% (in 2010-11) to � Shredder floc 75% $71.80/t www.TheCIE.com.au Coal washery rejects CleanOut events and Community � establish or upgrade 86 drop-off facilities or services for Household chemical collections  $15.00/t Recycling Centres household problem wastes � continue to reduce litter items. NSW Circular Economy Policy Statement 2019 outlines next 169

steps to incorporate circular economic principles into NSW's 20-year Waste Strategy. Landfill levy (2019-20) Strategy document (including targets) Other (please see table notes for key) NT Waste Management Strategy for the Northern Territory 2015- 2022 Container deposit scheme  Introduced Jan 2012 No landfill levy Landfill bans  Single-use plastics ban  Only bags No specific targets are included in the strategy. Internal hazwaste tracking  Household chemical collections  QLD General waste: MSW, C&I, $75/t Container deposit scheme  Introduced 1 Nov 2018 C&D (proposed) Waste Management and Resource Recovery Strategy 2019 Regulated waste: By 2025: � Category 1 $155/t � reduce MSW per capita by 5% Landfill bans  � increase state average MSW recycling rate to 55% (from � Category 2 $105/t 32% in 2018) � increase C&I recycling rate to 65% (from 47%) Plastic, compostable and Single-use plastics ban  biodegradable bags � increase C&D recycling rate to 75% (from 51%) www.TheCIE.com.au � reduce waste to landfill by 10% Internal hazwaste tracking  Drop-off availability subject to Targets are also set for 2030, 2040 and 2050. Household chemical collections  arrangements by individual councils 170

SA Metro Adelaide: South Australia's Waste Strategy 2015-2020 � Solid waste Container deposit scheme  Introduced 1977 $110/t By 2020: � Shredder floc $62/t � 35% reduction in landfill disposal from 2002-03 level Non-metro Adelaide: Ban on a range of hazardous, � 5% reduction in waste generation per capita (from 2015 baseline) problematic and recyclable � Solid waste $55/t Landfill bans  materials, including most e- $31/t � landfill diversion targets in the metro area are: waste � Shredder floc - 70% for MSW Bag ban. Ban on other plastics Single-use plastics ban  under consideration. - 80% for C&I No levy for packaged asbestos waste - 90% for C&D Internal hazwaste tracking  � maximise diversion in non-metro area Statewide household chemical Household chemical collections  drop-off TAS Draft Waste Action Plan (2019) (pending outcome after Container deposit scheme  Under consideration consultation) Landfill bans  - The Tasmanian Waste and Resource Management Strategy (2009) (under review at the time of writing) Single-use plastics ban  Introduced Nov 2013 Voluntary levy adopted by regional waste Framework in place but not groups at levels of $0 to $7.50/t Internal hazwaste tracking  operational No numerical targets are included in the strategy Household chemical collections  Selected regional programs VIC Metro and reginal: www.TheCIE.com.au Statewide Waste and Resource Recovery Infrastructure Plan � MSW $65.90/t (2016-2046) Container deposit scheme  � C&I and C&D $65.90/t Rural: 'Category A' prescribed No numerical targets included in the plan. industrial waste, paint, industrial � MSW $33.03/t Landfill bans  transformers, grease trap waste, � C&I and C&D oil filters, whole tyres and large $57.76/t containers. E-waste ban from 1 171

Prescribed industrial (hazardous) waste: Jul 2019. Circular economy policy expected to be published in early Plastic bag ban introduced Nov � Category B $250/t 2020. Single-use plastics ban  2019 � Category C $70/t Internal hazwaste tracking  � Asbestos $30/t Household chemical collections  Statewide program WA Putrescible $70/t Waste Avoidance and Resource Recovery Strategy 2030 Container deposit scheme  To be introduced Jun 2020 Inert $105/m3 $70/t approx. From 2020, recover energy only from residual waste By 2025: Landfill bans  � 10% reduction in waste generation per capita � Increase material recovery to 70% Plastic bag ban introduced Jul Single-use plastics ban  2018 By 2030: � Less than 15% of waste generated in metro regions is Internal hazwaste tracking  landfilled � All waste is managed and/or disposed to better practice facilities Eight metropolitan and five Household chemical collections  regional, permanent household � 20% reduction in waste generation per capita chemical drop-off points � Increase material recovery to 75% Source: BlueEnvironment and Randell Consulting, 2020, National Waste Report, 2020 forthcoming. www.TheCIE.com.au 172

APPENDIX H: DETAILS OF RECYCLING CAPACITY Paper and cardboard Table 94: Paper and cardboard re-processing facilities Facility operator Facility location Capacity Accepts MSW Accepts other (tonnes/year) NSW Visy Recycling Smithfield 250 000   Visy Recycling Tumut 700 000   Visy Recycling Albury a 265 000   Orora Botany 425 000   Victoria Australian Paper Maryvale 80 000   Huhtamaki Preston 15 000   Visy Recycling Coolaroo 280 000   Visy Recycling Reservoir 110 000   Queensland Fibre Cycle Toowoomba 7 000   Fibre Cycle Helensvale 9 000   Visy Recycling Gibson Island 170 000   South Australia Fibre Cycle Lonsdale 12 000   Tasmania Norske Skog Boyer 290 000 N/A N/A Western Australia Nil N/A N/A Northern Territory Nil N/A N/A ACT Nil N/A N/A a Not operational, facility closed after being sold by Norske Skog in 2019. Sources: Industry Edge communications; https://www.norskeskog.com/About-Norske-Skog/Press-room/Press-releases/English-press-releases/Norske- Skog-announces-sale-and-closure-of-Albury-mill?PID=4123&M=NewsV2&Action=1; https://planetark.org/ourpartners/PaperRecyclingPlant.cfm; https://majorprojects.planningportal.nsw.gov.au/prweb/PRRestService/mp/01/getContent?AttachRef=MP05_0120-MOD- 8%2120190507T022815.291%20GMT; https://www.norskeskog.com/Business-units/Australasia/Norske-Skog-Boyer Table 95: Paper and cardboard collection and sorting facilities Facility operator Facility location Capacity Accepts MSW Accepts C&I (tonnes/year) NSW Visy Recycling Smithfield 300 000   Visy Recycling Tumut 750 000   Visy Recycling Albury 200 000   Cellmark Mona Vale 80 000   Cleanaway Albury Unknown   173

Facility operator Facility location Capacity Accepts MSW Accepts C&I (tonnes/year) Orora Botany 500 000   Polytrade Grafton 80 000   Polytrade Rydalmere Unknown   Victoria Australian Paper Maryvale 130 000   Australian Paper Truganina 85 000   Recovery Australian Paper Hallam 70 000   Recovery Visy Recycling Springvale Unknown   Visy Recycling Heidelberg Unknown   Visy Recycling Coolaroo Unknown   Queensland Visy Recycling Carrara Unknown   Visy Recycling Murarrie Unknown   Visy Recycling Gibson Island 220 000   Tasmania Cleanaway Derwent Park 60 000   Veolia Spreyton 40 000   South Australia www.TheCIE.com.au North Adelaide Edinburgh 180 000   Waste Management Authority Visy Recycling Wingfield Unknown   Western Australia Cleanaway Perth 160 000   Southern Canning Vale 75 000   Metropolitan Regional Council Northern Territory Cleanaway Darwin Unknown   ACT Re.group Hume Unknown   Note: Figures provided in the tables are estimates and should be used with caution. Source: IndustryEdge communication; http://www.re-group.com/services/. Plastic Table 96: Number of plastic repressor facilities by jurisdiction in 2017-18 ACT NSW NT QLD SA TAS VIC WA Total Number 0 14 0 9 6 2 25 2 58a a Excludes ~8 facilities known to be operating in 2017-18 but no data was available. Note: Source: Envisage Works 2019, Plastics infrastructure analysis update - Project report, Table 15 November, p. 25 Table 97: Top ten Australian plastics reprocessing facilities by throughput 174

Facility operator Capacity (tonnes/year) Accepts MSW Accepts other NSW Visy Recycling Unknown a   Astron Sustainability Unknown a   Dunlop flooring Unknown a   Martogg group of Unknown a   companies Polytrade Unknown a   Victoria Advanced Circular 70 000   Polymers Astron Sustainability Unknown a   Cryogrind Unknown a   Dunlop flooring Unknown a   GT recycling Unknown a   Martogg group of Unknown a   companies Olympic Polymer Unknown a   Processors Polymer Processors Unknown a   Queensland Astron Sustainability Unknown a   www.TheCIE.com.au Action products Unknown a   Martogg Group of Unknown a   Companies Resitech Industries Unknown a   South Australia Recycled plastics Australia 20 000   a >2 500 tonnes per year. Note: List excludes multiple smaller facilities with output less than 2 500 tonnes per year in 2017-18. Sources: Envisage Works 2019, Plastics infrastructure analysis update - Project report, Table 15 November, p. 30; https://astronsustainability.com/resin/; https://www.dunlopflooring.com.au/about/; https://olympicpolymers.com/; https://www.polymerprocessors.com.au/; https://www.rtigroup.com.au/about-us/; 175

Glass Table 98: Glass beneficiation facilities Facility operator Facility location NSW SKM a Sydney Victoria SKM a Melbourne Visy recycling Melbourne Polytrade Melbourne Queensland Owens Illinois Brisbane South Australia Visy recycling Adelaide a SKM recently went into administration. The ownership arrangements are unknown. Source: Blue Environment 2019, Packaging collection, sorting and recycling infrastructure mapping: Prepared for the Australian Packaging Covenant Association, 23 August 2019. Table 99: Glass re-processing facilities Facility operator Facility location Capacity (tonnes/year) NSW Owens Illinois Penrith Unknown a www.TheCIE.com.au Victoria Owens Illinois Melbourne Unknown a Alex Fraser Clarinda 200 000 Downer Melbourne 20 000 Queensland Owens Illinois South Brisbane Unknown a South Australia Orora Adelaide 350 000 Owens Illinois West Croydon Unknown a Tasmania Nil Western Australia Nil Northern Territory Nil ACT Re.Group Hume Unknown a Total production across all Owens Illinois facilities was 650 000 tonnes in 2017-18. Individual site capacity is unknown. Source: Blue Environment 2019, Draft Packaging collection, sorting and recycling infrastructure mapping: Prepared for the Australian Packaging Covenant Association, 23 August 2019 176

Tyres Table 100: Tyre re-processing facilities Facility operator Main activities NSW Bandag Re-treading BSV Tyre Recycling Australia Baling, shredding and crumbing Ecoflex International Civil works JLW Services Shredding and crumbing Ray Johnson Scrap Tyre Disposals Casings Green Distillation Technologies Pyrolysis Victoria Oz Tyre Recyclers Baling, shredding and crumbing Tyre Crumb Shredding and crumbing Queensland Australian Tyre Processors Shredding BG & JM Barwick Shredding Chip Tyre Shredding and crumbing Ozcom Recycling Casings Seven Star Rubber Crumb Shredding and crumbing Tyre End Casings Green Distillation Technologies a Pyrolysis www.TheCIE.com.au Western Australia Elan Pyrolysis Lomwest Enterprises Civil works Pearl Global Pyrolysis National Tyrecycle (ResourceCo) Shredding and crumbing a Not operational. Toowoomba facility in development approval stage. Note: Excludes an unknown number of companies specialising in baling and exporting of, most likely to Asia for TDF applications. An estimated 258 000 tonnes of tyre waste is exported annually for this purpose. Source: Envisage Works 2019, Tyre flows and recycling analysis: Final Report, October, pp. 21-22; https://www.gdtc6.com/tyre- recycling/ ; REC, et. al., 2019, End-of-life tyres supply chain and fate analysis, November, pp.37-40 177

APPENDIX I: INPUT-OUTPUT ECONOMETRIC MODELLING Methodology The method used to estimate the economic contribution of the recycled waste management was to apply econometric modelling techniques to the Australian Input-Output databases, State and Territory State Accounts and Waste Accounts from the ABS. These databases capture in detail the structure of all industries, use and supply or products, wages, turnover, value added and profits in a fully integrated framework through inter-linkages. These databases were combined with National Accounts data to provide annual estimates and the waste material under assessment in this Decision RIS was identified for the waste and recycling industries. Economic impact analysis using inter-industry models provides a method to evaluate the effects of a project or proposed policy change. The Input-Output econometric modelling approach was selected over other economic impact methods because of transparency and timing, however, the approach does assume that the structure of the economy will remain largely unchanged through the analysis period. This methodology allows the quantification of additional demand for goods and services as well as labour through the computation of industry specific multipliers. These are obtained through a mathematical operation known as the Leontief Inverse applied to the Direct Requirements Coefficients of the I-O table. Below is a high-level flow structure. Figure 35: Input-Output flow structure www.TheCIE.com.au Direct Effect Industry Consumption Effect Total Effect Wages Effect Impacts on Other Impacts on Changes in Total Economic + Industries + Household = Industry Output Contribution Consumption Consumption Total multiplier Simple multiplier Spill-overs to other industries/regions via inter- regional/inter-industry commodity flows The indirect (production) The induced (consumption) The total change in output The direct contribution contribution to output and contribution to output and and employment is to output and employment is generated generated for the overall employment is generated employment is for each industry as its economy as a result of the by each industry as it generated by the employees spend their original changes in industry purchases input goods and change in economic wages on household output. services generating output activity of selected consumption providing (revenue) for other industries due to output (revenue) for other Accounted for in businesses. changes in demand for businesses. multiplier calculations its output (revenue). Already accounted for in final goods 178

The Input-Output econometric modelling was used to estimate the direct, indirect116 and total economic contribution/impact of the recycled waste sector to a range of economic variables, including output, GDP/GSP, and jobs. Input-Output econometric modelling uses fixed multipliers based on industry output (i.e. recycled waste paper, plastics, tyres and glass sectors), assuming that the structure of the economy remains relatively unchanged by economic events. As such, caution should be used when interpreting the results. Key findings All options have a positive direct and indirect benefit across all the macroeconomic variables. In the case of Option 1, it shows that consumer education and work on standards will improve the performance of the industries. However, as the expansion in the industry leads to more unprocessed waste being exported, many of the potential economic benefits for Australia are lost. In Option 2(a), capital is committed by industry to process previous unprocessed exported waste material into a higher value-added output. However, without further government support, risk remains in the industry and it is assumed that some industry participants don't fully invest in the capital required and some waste material is landfilled. Nevertheless, the material that is processed provides are great value that the material than the unprocessed material that was previously exported. Option 2(b) provides the highest contributions to the economy, with the support of government interventions it sees the required capital fully committed by industries and the benefits impact Australia domestically. www.TheCIE.com.au In short, Options 1 and 2(a) also have lower macroeconomic impacts compared with Option 2(b) in terms of output, GDP, wages and employment. This is because a greater amount of economic activity occurs domestically when all waste material that was previously exported is now processed domestically and returns a higher value in the market. The impact analysis suggests that Option 2(b) would best assist in transitioning industry to a circular economy and deliver on Australia's commitments to better managed its own waste. The three proposed options using Input-Output Econometric modelling, these impacts are shown in Table 101 and Table 102. Table 101: Direct economic impacts Option 1 Option 2(a) Option 2(b) Gross output, $m, PV $107 $722 $1,268 GDP, $m, PV $32 $217 $459 Income (wages), $m, PV $19 $121 $303 Employment, jobs 34 367 602 Source: ABS National Accounts and Input-Output Tables Table 102: Indirect economic impacts Option 1 Option 2(a) Option 2(b) 116 Indirect impact is composed of production-induced and consumption-induced impact. 179

Gross output, $m, PV $199 $1,316 $2,307 GDP, $m, PV $84 $551 $992 Income (wages), $m, PV $49 $306 $564 Employment, jobs 78 922 1,313 Source: ABS national accounts and Input-Output Tables Future study This analysis demonstrates the significance of the waste and recycling sector to the national and state and territory economies. Further detailed modelling could include:  Further analysis focusing on the supply-chain of recycled waste as locally sourced intermediate goods to support relevant manufacturing and construction sectors. This will create a more horizontally and vertically-integrated circular economy, which will result in the greatest contribution to environmental-friendly economic prosperity. Better understanding the upstream and downstream of industries and services related to recycled waste sector will support more strategic growth strategies that benefit and maximise economic benefits across jurisdictions.  Undertake a more detailed analysis of waste recycling activity at state level, as well as inter-regional waste movement, to better understand the composition of Australian Industry Content (AIC) in comparison to overseas imports of raw and/or intermediate goods related to paper, plastics, tyres and glass. www.TheCIE.com.au 180

APPENDIX J: CONSULTATION RIS STAKEHOLDER QUESTIONS The purpose of a consultation RIS was to canvass the regulatory options under consideration to determine the relative costs and benefits of those options. The Consultation RIS posed 25 questions across the following key areas:  problem;  policy objectives;  policy options and impact analysis; and  Options 2(a) and 2(b) - Prohibit or restrict exports of waste plastic, paper, tyres and glass. The stakeholder questions in the Consultation RIS are presented below under each of these headings. Problem 1. Do you agree with the problems that have been identified? 2. What effect do you think the problems could have on the waste and recycling sector, consumers and environmental regulators? 3. Do you have any information, analysis or data that supports characterising the impact of the problems identified? 4. Are there any other problems that you think should be considered as part of the RIS? If so, www.TheCIE.com.au please set out what they are, what effect you think these problems could have and how the problems should be addressed. Policy objectives 5. Do you agree with the policy objective as outlined? 6. Are there any other objectives that you think the Commonwealth, state and territory governments should be pursuing in addressing the problems? If so, please set out what they are. Policy options and impact analysis 7. What is your role in the waste stream (producer of waste, collection, recycler, exporter)? 8. How have waste import restrictions imposed by other countries impacted your activities? 9. What would be the longer-term implications if similar import restrictions are imposed in other export markets? 10. Are there other existing or future government or industry-led initiatives that are relevant to addressing the problem? 11. Does the status quo achieve the policy objectives? 12. Are current laws and government policies sufficient to address the problem? 13. How effective are industry-led initiatives for addressing the problem? 14. Are there any other benefits or costs associated with the status quo? 181

15. Do you have any suggestions that could help a future education campaign? What kind of information should be provided as part of an education campaign? Options 2(a) and 2(b) - Prohibit or restrict exports of waste plastic, paper, tyres and glass 16. Are there any other benefits or costs or unintended consequences associated with Options 2(a) or 2(b)? 17. Under a prohibition or restriction on waste exports, how should the ban be designed to achieve the policy objectives while minimising costs and adverse impacts? 18. Under a prohibition or restriction on waste exports, do you consider there are waste materials that should continue to be eligible for export? Please provide details. 19. What sort of penalties should apply to businesses that fail to comply with an export prohibition or restriction? 20. What kind of costs (including compliance costs) or loss of income will businesses face to comply with export prohibitions or restrictions? Will these costs be passed on and if so to who? Please provide data where possible. 21. How do recycling service providers manage changes of law in their contracts? What costs could introducing a prohibition or restriction on waste exports trigger under these contracts? How would service providers seek to manage these costs? Please provide details. 22. What impacts will Options 2(a) or 2(b) have for relevant markets, including impacts on www.TheCIE.com.au prices and competition? 23. Do you consider there is existing Australian markets and infrastructure have capacity to respond to a prohibition or restriction on waste exports? If not, please provide details such as: a) What is the infrastructure capacity gap that will need to be filled? b) How long will it take to commission the infrastructure? c) What is the cost of building the infrastructure and who will bear this cost? 24. Do you believe that the combination of costs and benefits under Option 2(a) are superior to other options? 25. Do you believe that the combination of costs and benefits under Option 2(b) are superior to other options? 182

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