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Well-functioning supervision necessary for fair competition
Packnews writes in an article from February 13 about the lack of supervision and the simplicity of being a free rider when it comes to producer responsibility for packaging. Näringslivets Producentansvar shares the picture that emerges in the article and we welcome an extended supervision of producers who are not affiliated with any approved producer responsibility organization, PRO.
– For us, the issue of supervision is above all about the fact that we want competition on equal terms and a fair and functioning market. That producers who take responsibility and help finance the collection and recycling of the packaging they put on the market also have to pay for others is wrong in several ways. Supervision is an incredibly important tool to deal with the free-riding problem, comments Henrik Nilsson, head of business development and community relations at Näringslivets Producentansvar.
The free rider problem and its consequences
Today there is a problem with so-called free riders in the producer ranks, who, despite having producer responsibility, do not pay the packaging fee through a PRO. Thereby they ”free ride” on producers who finance the collection and recycling of packaging.
Free riding contributes to a distorted competition among producers – those who take their responsibility and are connected to a PRO are forced to pay for those who do not take their responsibility. The cost of recycling increases with the higher requirements that the new regulation places on producers, with the aim of reaching the recycling targets. The costs are distributed to the paying collective in the form of higher packaging fees, which ultimately also affect the end consumer in the form of higher prices for packaged products. If all producers with producer responsibility contributed, the packaging fees would not have to be increased to the same extent.
The unpaid fees also constitute important resources for innovation and development of collection and recycling. The more who participate and pay, the greater opportunities we have to drive development towards circular material flows.
Supervision of free riders has so far not taken place to a sufficiently high extent or with sufficient urgency, and we see a risk that announced cuts at the Swedish Environmental Protection Agency may further deteriorate the conditions for well-functioning and necessary supervision. Näringslivets Producentansvar is happy to assist the Environmental Protection Agency with information regarding the free-rider problem and how it affects the industry’s conditions to work towards the regulation’s goals and objectives.
Read the article in Packnews (in Swedish only): Har Naturvårdsverket koll på producentansvaret för förpackningar?
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