This paper summarizes Government's policy on the collection and recycling of waste and advises on the difficulties experienced by the recycling trade and how these could be overcome.

Background

2. At present, most domestic waste is collected by the Provisional Municipal Councils and delivered, sometimes via the network of Refuse Transfer Stations, to the three strategic landfills. Only relatively small amounts, say 10%, of the domestic waste stream is recycled.

3. Most of the commercial and industrial waste produced is collected and transported by private waste collectors. A higher percentage of the waste produced, over 50%, is recycled. The remainder is taken to the landfills for disposal.

Policy on Collection and Recycling of Waste

4. The Waste Reduction Framework Plan (Framework Plan) presented to Members on 6 November 1998 laid down Government's broad policy framework on waste reduction for the next ten years. The objectives of the Framework Plan are:

• to extend the useful life of our strategic landfills;
  
  
• to minimize the amount of waste produced that requires disposal;

• help conserve the earth' non-renewable resources;

• increase the waste recycling rate;

• show to the administration, the Provisional Municipal Councils, commerce, industry and the public the true costs of waste management so that we can review how these costs are met; and

• encourage maximum efficiency in waste management operations and minimization of the costs associated with the collection, treatment and disposal of wastes.

5. Waste recycling is clearly a useful tool for waste reduction, but it is also a business that needs to respond to market requirements if it is to remain viable. Business objectives may not always coincide with the policy objective of reducing waste.

6. The Framework Plan also lays down the guiding principles to be employed in achieving our objectives. These include employing the "polluter pays" and "user pays" principles; using market instruments wherever possible; maximizing private sector involvement; and building on existing strengths.

Difficulties faced by the Waste Recycling Trade

7. The recycling trade has reported a number of difficulties facing it. The main difficulties claimed are:

• "unfair" competition from overseas due to other countries subsidizing the export of their waste paper;
  
  
• falling prices for recycled paper and products made from recycled materials
  
  
• land-related problems. The high cost of land; the long distance of suitable land from where the waste is created; and the short tenancies available;
  
  
• recycling companies are small and face problems in investing funds in more advanced technologies and in raising funds;
  
  
• high cost in Hong Kong for labour, fuel etc.; and
  
  
• unstable supplies of clean, good quality material suitable for recycling.

Solutions Proposed by the Waste Recycling Trade

8. The recycling trade's representatives have proposed a number of solutions. The demands they have made to Government are summarized as follows:

• provide interest-free or low interest loans;
  
  
• stop import of waste paper;
  
  
• provide land at low rates/rents for storing and baling paper waste;
  
  
• waive charges at public cargo working areas;
  
  
• introduce waste paper recycling schemes similar to those overseas;
  
  
• negotiate with a private company, owned by mainland authorities, to lower their import inspection charges for waste paper;
  
  
• provide land for temporary storage of waste paper;
  
  
• provide direct subsidies of $200 per tonne of waste paper;
  
  
• give policy support to the recycling industry;
  
  
• reduce diesel fuel tax and vehicle licence fees;
  
  
• establish a fund to support the market price of waste paper;
  
  
• give preference to waste collectors applying to the Special Finance Scheme for Small to Medium Enterprises;
  
  
• urge exporters to disclose export prices;
  
  
• provide paper collection bins or cages;
  
  
• establish pilot trial waste paper collection centres;
  
  
• take over the Concordia waste paper mill, and establish a fund with the profits gained to assist the industry; and
  
  
• reduce electricity charges.

The Administration's Response

9. The waste paper recycling industry includes paper mill operators, exporters and collectors/transporters. Paper mill operators and some exporters are also involved in local collection and transportation, essentially to secure their supplies of waste material.

10. The Administration has established a number of criteria against which to assess the demands made by the recycling industry, as follows:

• it should not take action to help one sector if that damages a different sector of the industry. For example, providing a free collection and delivery service might be very welcome to the paper mills and exporters, but might adversely affect collection/transportation companies;
  
  
• any measures must be consistent with the Governmen's environmental, economic, trade, competition and fiscal policies;
  
  
• they should conform to our international trade obligations under the World Trade Organisation;
  
  
• we will not interfere in private business relationships; and
  
  
• legal requirements cannot be ignored. Any proposals that imply legislative changes must be considered carefully.

11. The Administration has met the trade representatives three times in December 1998 to listen to their problems and their proposed solutions, and to give initial reactions. PELB/EPD also accepted an invitation to visit some typical waste collection/recycling facilities. It is fair to say that the trade was disappointed at the Administratio's refusal to accept many of the demands, and that consideration of other proposals would take time because of the need to consult other bureaux/departments and consider the wider implications. Nonetheless, the meetings have enhanced understanding on both sides. Further meetings are planned which will examine measures acceptable to both parties in more detail.

12. A number of measures which meet some of the trade's demands have already been included in the Framework Plan:-

• introducing "bring systems" to encourage members of the public to bring specific recyclable materials to convenient collection points to facilitate recovery of waste material;
  
  
• amending the Buildings Ordinance to require the provision of larger refuse storage chambers and adequate space at each floor in new buildings to allow for waste recovery facilities;
  
  
• identifying suitable sites for waste recycling under short term tenancy. A site in Tuen Mun was leased in July 1998 to a local plastic waste recycler; a second short term tenancy was let out in September 1998. More potential sites are under consideration for leasing under restricted tender. Meanwhile, we are considering whether vacant Government buildings might be used for a short period for waste recycling industries. The feasibility of using restored landfills will also be explored;
  
  
• stimulating the market for recycled products. The Administration will promote environmentally responsible purchasing. This will encourage purchase of products with high recycled content and reduced packaging. In addition, enhanced public education and publicity will also help develop and sustain the recycling market;
  
  
• maintaining a relatively stable supply of clean recyclable materials to the recycling industry. The Administration will shortly initiate a study on the integration of material recovery facilities into the waste management system. Meanwhile, other studies have been funded to formulate measures to facilitate recycling and recovery of used glass bottles and plastic waste.

13. Separately, the Provisional Municipal Councils have provided recycling bins at public areas. This will be expanded. The Regional Services Department has let out waste collection contracts for source-separated recyclable material in two districts. Dedicated vehicles are provided to collect recyclable material at designated collections, which will be transported for recycling.

14. As mentioned previously, one important element of the Framework Plan is to encourage more private sector involvement. One of the key tasks of the proposed Environment and Food Bureau, which will oversee both the Environmental Protection Department and the proposed Food and Environmental Hygiene Department, will be to rationalize and redistribute the waste management functions within the Administration. The aim is to better co-ordinate, and implement the delivery of waste management services in future, at lower costs to taxpayers, ratepayers and users.

15. Members will recall that we have recently stressed the importance of ensuring that waste disposal costs are made apparent to waste producers, as an incentive for them to reduce the amount of waste created and to support the sorting and diversion of useful material to the recycling industry. Charging schemes such as landfill charges are also consistent with our own general fiscal, trade and economic policies, and our international trade obligations, unlike subsidies. The early introduction of landfill charges was one of the few measures that all sectors of the trade, and the Administration, agreed was mutually beneficial.


Planning, Environment and Lands Bureau
January 1999