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published on 11 November 2020 | Reading time approx. 11 minutes
Littering is on the increase. Who should take responsibility and bear the costs of waste disposal? This up-to-date issue was addressed by the legislator by introducing an amendment to the Circular Economy Act. The article discusses the new extended producer obligations which, in addition to the issue of littering, are also directly connected with the current debate on food waste and plastic packaging.
It is striking that in recent years our environment has become increasingly littered. Discarded single-use cups, packaging and – most recently – also single-use face masks can be found scattered everywhere across squares, along roads and paths and in nature, such as parks or the beach. It is from those places that litter must be additionally collected and removed. Consumer goods such as food, cosmetics, medicinal products and medical devices also contribute to this problem, especially because of their packaging. The English term ”littering“ describes specifically the act of uncontrolled throwing away packaging without prior sorting or throwing away waste into the environment. Should municipalities or public waste management authorities, and thus ultimately fee payers, when paying their fees, bear the costs of littering or should the costs of the entire process all the way to disposal or recycling be borne by manufacturers of products and their packaging? This would particularly affect manufacturers of chemicals, plastics, food, medicinal products and consumer goods.The costs of city cleaning and waste disposal are currently included in waste management charges and thus borne by fee payers. However, our existing systems cannot fully meet the needs for the collection and disposal of waste. In the end, waste is discarded on areas for which no city cleaning services are responsible, as well as in rivers and seas. That is why we all have the obligation as consumers to handle products and their packaging responsibly. It is, nonetheless, questionable, whether the final consumer – being the waste collection fee payer – may actually be charged for that in accordance with European law or what alternatives are available. In the end, it is the producer who has placed the product – and thus also its packaging – on the market, determined the material composition, and therefore has a decisive influence on the subsequent disposal options when this product becomes waste. The issue cannot be finally resolved just by appealing to everyone to handle the products responsibly and dispose of them properly.
Already in 2008 the Waste Framework Directive (Directive 2008/98/EC ) was adopted at the European level, which lays down the waste hierarchy:
In particular, the waste producer must bear the costs of waste management (polluter-pays principle). Amending Directive (EU) 2018/851, which came into force on 4 July 2018, introduced major changes such as the concept of extended producer responsibility, improvements in the end-of-waste procedure, defined minimum requirements for the extended producer responsibility scheme (i.e. implementation of e.g. financial and organisational responsibilities of the obliged parties) in cases where extended producer responsibility schemes are established, defined new rules on recovery (e.g. on separate collection) and on preparation, re-use and recycling (also including, among others, new rules on separate collection and updated quotas until 2035, with newly introduced calculation regulations). In addition, specific measures to avoid “food waste” have been implemented. Since EU directives are not directly applicable in the EU Member States, the objectives and measures must be transposed into national law. The deadline for implementation already expired on 5 July 2020. On 17 September 2020, the Bundestag passed the amendment to the Circular Economy Act (KrWG) (Act implementing the Waste Framework Directive of the European Union). The Act was promulgated in the German Federal Law Gazette [Bundesgesetzblatt] on 28 October 2020 and entered into force on 29 October 2020. By adopting this Act, Germany is now implementing the requirements of the new EU Waste Framework Directive. At the same time, specific powers to issue statutory instruments are established with the aim of implementing Directive (EU) 2019/904 on the reduction of the impact of certain plastic products on the environment (the so-called Single-Use Plastics Directive). We will address this in more detail later. The clear objective of the waste law reform is to increase waste prevention. Preparing for re-use and recycling of waste should be promoted in a sustainable way. The central instrument for this is the product responsibility established and proven in the previous wording of the Circular Economy Act, which is being expanded further and aimed in particular at raising awareness among consumers, environmental cleaning cost distribution based on the causation principle, and increasing the use of recycled materials.
Product responsibility, as a key element of the polluter-pays principle laid down in the Circular Economy Act, is regulated in Article 23 et seq. of said Act. This responsibility corresponds to the extended producer responsibility as set out in the Waste Framework Directive. It lays down essential foundations for the prevention and high-quality, resource-efficient recovery of waste. Already at the stage of production the generation of waste should be prevented. Controlling the waste flows in an environmentally friendly manner comes too late.Individual aspects of product responsibility are specifically listed in Article 23 (2) of the Circular Economy Act as amended, which is, however, a non-exhaustive list. This extended producer responsibility is particularly relevant for companies operating in the life sciences industry. It should be emphasised that the development, manufacture and market placement of products must be resource-efficient. The products should be technically durable and also repairable. The use of recycled materials, i.e. products from recycling processes, should be prioritised. Critical raw materials should be used economically and labelled in a manner enabling their recovery. The content of hazardous substances should be reduced. In this respect, those responsible for products (product managers) have a duty to exercise proper care of the products they manufacture and sell. In this context, the specific problem of food waste and regulatory changes relating to plastic packaging is of particular interest to the life sciences industry.
In view of the increasingly pressing problem of the “throw-away society” and the associated destruction of resources and littering the environment, the Circular Economy Act extends the basic duty of product responsibility to a duty of care of those responsible for the products they manufacture and sell. Products should be designed in such a way that their production and use reduce the generation of waste and ensure that the waste generated after their use is recycled or disposed of in an environmentally friendly manner. When the products are distributed, it should be ensured that the suitability for use of the products is retained and that they do not become waste (a duty to exercise proper care with regard to the distributed products). It should be emphasised that products should not be declared as waste only at the distributor’s own discretion. This should apply in particular to online distributors who have once hit the headlines because they destroyed products returned by customers. The handling of surplus goods is also covered. The duty to exercise proper care relates not only to your own behaviour, but also to the behaviour of third parties commissioned by the distributor, such as other warehouse keepers or staff at the point of sale.The product must remain suitable for use. To this end, precautionary measures need to be taken. Concepts and procedures must be defined by those responsible for the products concerned in order to meet the requirements. This includes, in particular, the following questions that should be addressed in terms of operation and organisation: How to handle the product? How should it be transported and stored? Is it possible to sell it for a reduced price? How is it organised? Are products that will no longer be sold donated?The duty to exercise proper care is not a guarantee of success, but it is associated with permanent precautionary and due diligence obligations. The duty to exercise proper care as a basic obligation does not result in any enforceable substantive legal obligations of the product manager. The duty of care must be implemented in legal regulations of the Federal Government or in special laws to be enacted, as has already been done, e.g., with the Packaging Act, the Battery Act or the Electrical and Electronic Devices Act.With the Circular Economy Act, the Federal Government as the legislator determines which specific products should be subject to the duty to exercise proper care and which measures must be taken to maintain suitability for use (e.g. protection against destruction of consumer goods, discounted sale of stock items or donation of food via food banks). Depending on the product group or industrial sector concerned, there may be different requirements regarding the content and the way of assuming product responsibility. In particular, these include requirements for take-back and return obligations, re-use, recycling and disposal of waste generated after use of the products, and other provisions on voluntary take-back. Reporting obligations may be defined for certain products in order to provide evidence of the use of the products, particularly their type, quantity, whereabouts and disposal, as well as the measures taken and planned to implement the duty to exercise proper care (transparency report). According to current trends, this obligation is being limited to companies that reach a certain turnover threshold, and the focus is placed on certain product groups, such as food and clothing.
Currently, the issue of “food waste”, i.e. food that is wasted or squandered, is being discussed time and again, especially with regard to foodstuffs. Many distributors destroy foodstuffs after their ‘best-before’ dates. Such a procedure will no longer be permissible in future. This is because the revised EU waste legislation (Amending Directive (EU) 2018/851 ) requires member states to take measures to reduce food waste at all stages of the food supply chain, monitor food waste and report on progress made. By amending the Circular Economy Act, the German legislator is following this instruction and is implementing the requirements of EU waste legislation in Article 33(3)(2)(g)(h) of the Circular Economy Act as amended.It is also required to implement schemes preventing the generation of waste, including food waste. Disposal as waste should be the solution of last resort. In early 2019, the Federal Cabinet adopted therefore the National Strategy for Food Waste Reduction . The aim is, among other things, to optimise processes in the economy and thus to ensure sustainable consumption and production patterns. This is where food business operators should step in because the long-term goal of reducing food waste can only be achieved through responsible corporate governance. To lower costs and achieve a more sustainable use of resources, companies should analyse production processes in order to determine where food waste arises. Business processes should be regularly monitored and adapted. New routine corporate activities should be incorporated. Innovative processes, in particular logistic systems, should be analysed and promoted, where necessary. In order to achieve a high level of transparency along the food supply chain, the involvement of operators in the form of provision of food waste data is required. Last but not least, operators should also review marketing and advertising schemes with regard to their impact on the appreciation of food.Also the so-called food redistribution of safe edible food in the form of food donations for those in need, especially by manufacturers and distributors, plays an important role in the reduction of food waste. What is interesting is that member atates have different approaches to this issue. While the donation of surplus food is compulsory for food business operators under certain conditions in some EU member states (e.g. France and the Czech Republic), other national legal systems are limited to providing incentives for food donations (e.g. Italy).In any case, however, a large number of legal questions arise throughout the EU for all those affected by food redistribution, especially in connection with liability, since even in the context of food donations their safety within the meaning of Article 14 Regulation (EC) No 178/2002 (Basic Regulation) must be ensured. Already in 2017 the European Commission adopted EU food donation guidelines as part of the Circular Economy Action Plan . The said guidelines seek to facilitate compliance of providers of surplus food with relevant requirements laid down in the EU regulatory framework, e.g. food safety, food hygiene, traceability and liability, and to promote common interpretation of EU rules applying to the redistribution of surplus food. Numerous actors take part in such redistribution of surplus food. Food donors are usually food business operators. This is because primary production, food processing and manufacturing, retail and other distribution as well as the catering and hospitality sectors, i.e. food business operators from each stage of the food supply chain, may be involved in the redistribution of surplus food. However, they are also primarily responsible for ensuring compliance with food law (cf. Article 17(1) of the Basic Regulation). The redistribution of food constitutes “placing on the market” of food within the meaning of food law (Basic Regulation). By the same token, also redistribution (ROs) or charity organisations (COs) which redistribute surplus food are to be considered as food business operators under food law. Article 21 of the Basic Regulation in conjunction with Directive 85/374/EC determine liability for damage caused by defective products. In the case of damage (e.g. food poisoning), in order to determine liability, the whole food supply chain is investigated on a case-by-case basis in order to identify where the problem occurred. Determining the facts and circumstances which may render an operator liable to administrative or criminal penalties and/or civil liability is laid down in the national law of the member states. These regulations can differ greatly depending on the member state, which causes considerable uncertainty for food business operators. The legal responsibility associated with food redistribution may well give rise to legal concerns for food business operators, which may be a barrier to the successful redistribution of food. This is because the above obligations apply regardless of whether food is sold or donated. The need for advisory services in the food industry is therefore increasing, especially due to the amendments in waste legislation.Moreover, there is also a follow-up issue arising from donations in kind that still requires a solution, namely VAT. This is because, depending on the implementation of VAT Directive 2006/112/EC into national law, VAT regulations may, in some cases, also be a barrier to food redistribution. What is certain, however, is that tax deductions and corporate tax breaks for companies involved in redistribution can provide economic incentives for food donation and thereby support the prevention of food waste.
As regards packaging, the German Packaging Regulation (VerpackV), which came into force in 1991, was a clear shift in trend towards decreasing waste. Manufacturers and distributors already have the obligation to take back packaging. On 7 November 2019, the Federal Cabinet also introduced a ban on plastic bags. The Regulation also serves to implement Directive 94/62/EC on packaging and packaging waste. Pursuant to this Directive, Member States must take measures to achieve a sustained reduction in the consumption of lightweight plastic carrier bags on their territory. In order to reduce the consumption of superfluous packaging, incentives should be created to encourage switching to reusable packaging. Here too, the aim is to combat littering. Germany initially took the path of a voluntary commitment by the retail industry, under which many distributors undertook not to hand over plastic carrier bags for free. It is now planned to completely ban plastic bags with a wall thickness of less than 50 micrometers through an amendment to Article 5 of the German Packaging Act (VerpackG]. Very lightweight small plastic bags with a wall thickness of less than 15 micrometers (called “T-shirt bags”, “Hemdchentüten” in German), which are mainly used for packing fruit, vegetables or meat products, will be exempted from the ban. For the latter, the aforementioned EU Directive provides for exceptions that serve the hygienic handling of purchased fruit or vegetables and prevent food from being wasted. Moreover, in these cases it is hardly possible to switch to more environmentally friendly alternatives. On the contrary, encouraging manufacturers to package their products in standard plastic bags by banning these specific bags should be avoided at all costs.Also in the context of the EU’s Circular Economy Action Plan, Directive (EU) No 2019/904 on the reduction of the impact of certain plastic products on the environment (Single-Use Plastics Directive) was adopted. This Directive specifies numerous measures to be taken in order to reduce the use of certain single-use plastic products, to limit careless disposal of these products into the environment, i.e. “littering”, and to better manage the plastic as a resource. Affected are single-use products made of plastics, the use of which should be reduced. From July 2021, single-use plastic products made of fossil raw materials such as crude oil will be completely banned, as will single-use plates or cups made of bio-based or biodegradable plastics. Cotton buds, cutlery, plates, drinking straws, stirrers and balloon sticks made of plastic as well as to-go drink cups, fast-food packaging and single-use food containers made of styrofoam will no longer be permitted in future. The food industry will be particularly affected. Each member state, also Germany, must implement this plan. Thus, on 24 June 2020, the Federal Cabinet passed the Regulation banning single-use plastics (EWKVerbotsV) , which implements the above-mentioned bans; violations are subject to a fine. The Bundestag must approve the Regulation, and the process is scheduled to be completed by the end of 2020. The Regulation is expected to enter into force on 3 July 2021.Furthermore, the Single-Use Plastics Directive provides for other measures that must be transposed into German law. The new regulations concerning beverage containers and their caps and lids will probably be of great importance, especially for food business operators. For example, in future, member states will have to ensure that beverage containers that have caps and lids made of plastic may be placed on the market only if the caps and lids remain attached to the containers during the products’ intended use stage (Article 6(1) in conjunction with Part C of the Annex to Directive (EU) No 2019/904). Thus, new requirements will be placed on the product design of beverage containers in the future and should be met by the business food operators already affected. It is generally to be expected that manufacturers will have to bear the costs associated with the placing of beverage containers on the market, since the regime of extended producer responsibility also applies here (cf. Article 8(1-2), Part E Sec. I. 3. of the Annex to Directive (EU) No 2019/904 in conjunction with the Waste Framework Directive and Directive No 94/62/EC).
Irrespective of product- and packaging-related legal obligations, it is becoming increasingly important for the marketing of products, and especially for products in the life sciences industry, to take into account environmental aspects and to assume social responsibility. The European Commission announces broad measures in the New Circular Economy Action Plan, adopted in March 2020 on the basis of the European Green Deal. The focus will be on avoiding waste altogether and transforming it into high-quality secondary resources. Products marketed in the EU should have a longer life span and be easier to reuse, repair and recycle. New mandatory requirements on the recycled content of plastics and also for packaging in the EU will be introduced. Finally, a new legislative initiative is planned to reduce food waste. In this respect, the Commission has already announced in the “From farm to fork” strategy published in May 2020 that it is intended to halving per capita food waste at retail and consumer levels by 2030.
It remains to be seen which of the above will actually be achieved. However, it is clear that companies are increasingly expected to take responsibility for the (global) impact of their activities and thus contribute to reaching the targets of sustainable development. Accordingly, those affected should not wait until obligations are sanctioned, but rather integrate the requirements into their already existing systems or, e.g., actively prepare solutions by evaluating the situation. This holds particularly true in view of the fact that the Federal Government is expected to pass regulations on financial producer responsibility and thus make manufacturers and distributors of products share the costs of cleaning the environment and the environmentally sound recycling and disposal of e.g. single-use plastic products and cigarettes. In any case, however, the amendments to the Circular Economy Act entered into force on 29 October 2020, i.e. one day after its publication in the German Federal Law Gazette. The details will be regulated by the Regulations passed by the Federal Government. Accordingly, manufacturers and distributors of products are required to follow the legislative and regulatory developments. This applies in particular to manufacturers of chemical, plastics and consumer goods. It remains to be seen whether appropriate solutions will help achieve the goal of waste prevention and, in particular, whether littering can be reduced. In any case, already today every individual can do something to prevent littering the environment. The responsibility of producers and distributors will increase in the future.
Nadine Juch
Associate Partner
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Dr. Barbara Klaus
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