Key sections from options paper
Reducing contamination at households is a good place to start in improving the value and stability of the waste and recycling market. This is best done through informative, educative and non-punitive measures. In particular, standardising services will go a long way to reducing confusion among householders about how to recycle correctly.
Set minimum standards for household waste and recycling services
The ability for the waste authority to set service standards will be important to ensure that all Victorian households receive services that are consistent state-wide and meet community expectations. This is in line with the Recycling Victoria commitment (action 5.1) to ensure all households have access to four core waste and recycling services (organics, glass, comingled recycling, and residual waste). These standards will support and complement the Victorian Government’s state-wide recycling education campaign (Recycling Victoria action 2.3), with both interventions vital to ensure households know which items go in which bin.
The standards will be enacted through subordinate legislation. It is likely they will cover aspects of household waste and recycling services, such as items that must be accepted, bin lid colours, and transparency on household waste charges. It is intended that standards will be reviewed regularly.
It is important to balance the need for state-wide consistency against the potential for standards to discourage innovation or improvement in the service. Options to overcome this include:
- requiring that services are consistent with the standard, but providing for exemptions for councils to test improvements, which could then potentially be incorporated into the next iteration of the standard
- requiring that councils, when communicating with households, clearly distinguish between core services (i.e. those set out in the standard) and additional services, so that state-wide education can focus on the consistent core services.
Clear responsibility for delivering waste and recycling services
It is proposed to clarify in legislation that councils are responsible for providing households in their local government area with both waste and recycling services, and that Victoria’s alpine resort management boards are responsible for providing these services in resort areas. This would not necessarily be a collection service – the obligation may be fulfilled through providing reasonable access to drop-off points, or in some cases, to home composting equipment. There is potential to expand this obligation to include providing services to small businesses.
This legislative clarity is an important prerequisite for establishing state-wide consistency and standards for these services. It provides local councils a clearer starting point to determine how much risk they bear and where this risk should be borne by other parties.
This responsibility will also include a requirement for councils to report back to households on the performance of the waste and recycling services they provide. This information should include waste volumes, contamination rates, and other information to enable households to assess their council’s performance against service standards and contributions to state-wide goals, as well as incentivising better recycling practices by households.
Ensuring contractual arrangements for councils’ waste and recycling services are robust and contribute to state-wide outcomes
There is a significant unrealised opportunity to improve recycling outcomes through more effective procurement and contract management of recycling services by councils.
There are two key opportunities for improvement:
- Sending a clear, consistent signal to the market about what outcomes are expected, and the priorities of those outcomes (including making it clear that lowest price does not necessarily equal best value).
- Supporting councils to procure and contract manage recycling services to a high standard.
Proposed measures to deliver on these opportunities are set out below.
The waste authority will provide specialist support to help councils procure and manage recycling contracts
Recycling is often seen as an extension of councils’ longstanding waste collection and disposal services. However it is more complex and adds new risk elements, including exposure to commodity markets, and the need to ensure households properly separate recyclables from residual waste.
These complexities mean that specialist expertise is required to procure and contract-manage these services to a high standard. It may not be efficient for all councils to retain this expertise in-house. Therefore, the waste authority will offer comprehensive support to councils to procure and contract-manage these services.
This will include:
- providing education, advice and assistance in framing contracts and negotiating contract terms with providers;
- providing standard form contracts for council use;
- specifying criteria against which councils should assess tenders;
- reviewing procurement plans, tenders and contracts; and
- providing contract management assistance, including expert advice and support on enforcing contractual conditions with providers (e.g. reporting provisions).
The waste authority will support councils to collaborate in procuring waste and recycling services
Victoria’s seven Waste and Resource Recovery Groups already support collaborative procurement of waste and recycling services by councils and negotiating and managing collective contracts. It is proposed that this function transfer to the waste authority, and be subject to some improvements:
1.Clearly articulating strategic objectives for procurements: these could include supporting a diverse market and avoiding the risks presented by market concentration, encouraging innovation or meeting Victoria’s waste and recycling goals, and, alongside price, they would be weighted and used to select a preferred tenderer.
2.Support voluntary proposals for collaborative procurement: the waste authority could publish guidance for best practice collaborative procurement, endorse voluntary proposals by councils and provide support for implementation as required.
3.Linking procurement to planning approvals and land releases: where possible, councils participating in the procurement could offer suitably zoned and located land (e.g. in locations identified as priorities in the Victorian Recycling Infrastructure Plan) to establish new infrastructure, or commit to preserving buffers around infrastructure, as part of the procurement. This would remove a barrier to entry and help ensure that infrastructure is strategically located.
4.Strategically grouping councils into procurements: councils could be strategically grouped to maximise attractiveness to potential bidders, achieve state-wide outcomes, improve regional access to services, and minimise overall costs (e.g. smaller councils with access to available land for infrastructure establishment may be grouped with larger councils that have the benefit of scale).The waste authority could also strategically cluster councils to optimise the scale of the tender.
5.Stabilise tender process by binding councils once commenced: the risk of councils withdrawing from a collaborative procurement has discouraged some recyclers from tendering. The waste authority will support councils to determine the costs and benefits of participating in a collaborative procurement at an early stage. Once a decision is made by a council to engage in this process, it would be bound by contractual measures to remain in the process. This may be reinforced by legislative powers of the waste authority (see below).
Legislative powers will underpin this support
To complement the above measures, the waste authority will have powers to intervene, where required, in councils’ procurement of waste and recycling services.
These powers are proposed to include abilities to:
- mandate use of standard form contracts (in full or in part), with the ability for councils to liaise with the waste authority to tailor provisions to their specific requirements
- mandate that councils provide procurement and contractual documents (e.g. procurement plans, requests for tender, tenders, and contracts) to the waste authority for review and approval
- prevent councils from withdrawing from a collaborative procurement once they have agreed to participate
- publish a contract register, if the waste authority deems it is required to increase transparency and competition (e.g. through providing clear signals to recycling sector participants about commodity prices, quality, and availability).
Achieving state-wide goals, including recycling targets, will require service providers to contribute to these outcomes. Improving information available throughout the supply chain is a clear starting point, as it will enable all involved to make better decisions. Importantly, this information will improve the effectiveness of government investment in incentives to industry, including research and development, innovation, infrastructure and market development grants. This information will also be critical for infrastructure planning, which will provide certainty to industry and include increased emphasis on contingency planning. At times, the waste authority may need to step in to solve specific problems (e.g. for a particular waste stream and/or market issue) through some form of scheme. It is proposed the Act include powers to enable this.
New reporting obligations will be established to provide necessary data about the performance of the sector including reporting by industry, councils, and the waste authority. This will provide the community with confidence in the sector, enable industry to make informed investment decisions and ensure that the regulatory framework is achieving its objectives.
Under the amendments to the Environment Protection Act 2017 and associated subordinate legislation, which will come into effect in 2021, waste and recycling facilities that require licences (approximately 15-20 of the larger facilities) and permits (approximately 50 medium facilities) will be required to report monthly on waste type and volumes going into and being processed by their facilities.
However, the reporting requirements for these new EPA permissions will exclude reporting on recovered materials leaving facilities when they are no longer considered to be waste. Also, an estimated 2,500 smaller waste and recycling operators will only need to be registered with the EPA, and so will not be subject to EPA’s mandatory reporting requirements. As a result, EPA’s modernised permissions system will not on its own provide a comprehensive picture of how materials flow through the economy.
To address the data gaps, it is proposed that:
- Regular reporting of additional data on the material flows out of waste and recycling facilities (e.g. weight/volume/value) is sought from those facilities requiring EPA permits or licences. Consideration will be given to how provision of this information can be aligned with EPA’s reporting requirements to ease administrative burden for industry.
- For those facilities not subject to an EPA licence or permit (including some secondary reprocessors) market information be sought by survey, sampling and extrapolation of other data collected.
- In addition, the authority will have a power to mandate provision of certain data by facilities where a need is established (e.g. a critical gap in information obtained through surveys and sampling).
- It will be important for any additional data collection to align as much as possible with existing requirements to avoid duplication.
To improve the management of data, it is proposed that:
- Data on waste infrastructure, landfill capacity and mass balance reporting is able to be shared across government agencies and, in aggregated, de-identified form, with the public and industry.
- There will be a legislative obligation on the waste authority to regularly publish summary reports so that government, industry and the community have access to quality information about the state of the sector.
Details of what data will be required to be provided is subject to further consideration as part of the development of regulations under the new Act. However, it could include:
- mass balance reporting on quantities (weight and volume) of materials received, stored, processed at site, source, destination and type of processed and unprocessed material (including tonnes of materials recovered, quality and value of processed material per material type)
- infrastructure processing capacity – and for landfills, information of remaining airspace in cubic metres of cells that are operational, with planning/works approval, under construction and/or under design
- landfill composition data, including quantity received at site per waste type and source (e.g. kerbside MSW collections, other MSW, transfer station waste, C&I, C&D).
Power to establish recycling market schemes
Different waste streams may experience opportunities and challenges at different times due to changing market conditions. It is proposed that the waste authority be given a power to respond to these key opportunities and challenges as they arise.
The new Act will provide the Minister with the power to establish schemes to respond to specific challenges and opportunities, as a contingency measure for the purposes of facilitating market development and improving recycling outcomes.
Such a power would be comparable to:
- the Protection of the Environment Operations Act 1977 (NSW), which includes a power to develop specific schemes for economic measures where the “EPA may develop and implement schemes involving economic measures as a means of achieving cost-effective environmental regulation or environment protection.” 
- the Waste Avoidance and Resource Recovery Act 2001 (NSW), includes a power to develop “Extended producer responsibility schemes”  through regulations.
Under the proposed Act, such schemes could include:
- mandating targets for specific parts of the sector, which may be accompanied by requirements to report against the targets – or use of recycling credit trading schemes where recycling targets need to be met and credits generated by those who exceed targets can be sold to those who are unable to meet them.
- a scheme designed to allow the waste authority to manage particular waste streams (e.g. mixed plastics) by bundling them and auctioning them in tranches – thereby ensuring service providers meet clear state-wide standards and providing a more level playing field to open the market to new participants.
Any schemes enacted through these powers will be developed under subordinate legislation and will be subject to consultation and cost-benefit assessments.
Product stewardship schemes require producers to be responsible for the end of life disposal or recovery of a product. An example of this is a container deposit scheme where beverage companies cover costs associated with people obtaining refunds for recycling their beverage containers.
The Victorian Government continues to advocate for expanded and strengthened national product stewardship arrangements. However, there is a case for introducing a broad product stewardship power into the Act to:
- align with equivalent legislation in other jurisdictions (WA, QLD, NSW, SA);
- reinforce Recycling Victoria’s focus on the need for shared responsibility in a circular economy
- allow for state-based leadership on product stewardship in the absence of national initiatives.
The introduction of such a provision would require clear definitions of the type of schemes that could be introduced. Before any such scheme could be established, a clear need for the scheme would need to be demonstrated, and there would need to be no conflict with national schemes or effective voluntary schemes already in place.
It is proposed to shift provisions related to Victoria’s waste and resource recovery infrastructure planning framework from environment protection legislation to the new Act as it strongly aligns with the objectives and functions of the new waste authority.
This also presents an opportunity to reform and improve the framework. As noted in Recycling Victoria, the new infrastructure planning framework will:
- include hazardous waste infrastructure
- plan for waste to energy facilities
- improve state-wide risk and contingency planning for waste and resource recovery infrastructure
- ensure land use planning systems align with infrastructure planning.
Importantly, consolidation of the current state-wide infrastructure plan and seven regional implementation plans into a single plan – the Victorian Recycling Infrastructure Plan (VRIP) – is proposed. The new VRIP would consider both state-wide and regional priorities and include the detailed infrastructure schedules that are currently part of regional plans. These infrastructure schedules are an important mechanism for reducing reliance on landfills and – because landfills are responsible for 66 per cent of greenhouse gas emissions from Victoria’s waste sector – reducing Victoria’s greenhouse gas emissions. This supports Victoria’s transition to a net zero greenhouse gas emissions economy by 2050, in accordance with the Climate Change Act 2017.
Infrastructure plans guide a range of government interventions including investment facilitation, grants, land use planning and regulatory approvals. The benefits of one plan include increased system-wide oversight, better integration and reduced duplication of effort. However, consideration needs to be given to how regional issues are sufficiently emphasised and considered in a single plan. Feedback is sought on preferred legislative or other measures to ensure this.
More detailed information on the content and specific objectives of the new VRIP, the data required to inform it, and the process for developing it (including opportunities for stakeholder engagement) and implementing it will be included in subordinate legislation.
To ensure the effective transfer of these provisions to the new Act and to meet Recycling Victoria’s commitments, it is proposed to expand the current objectives of the planning framework to include:
- effective risk management, including integration of contingency planning with emergency contingency planning provisions under the Emergency Management Act 2013
- effective integration with other relevant government policy, planning, and approval and decision-making processes (e.g. environment protection and land use planning decisions)
- application of the waste hierarchy (with a possible cross reference to the new EP Act).
This will enable appropriate emphasis on risk management and contingency planning as well as clarify that the waste hierarchy will guide the plan’s development.
 Victoria’s Greenhouse Gas Emissions Report 2019: https://www.climatechange.vic.gov.au/__data/assets/pdf_file/0016/443014/Victorian-Greenhouse-Gas-Emissions-Report-2019.pdf
Introduction of a new waste authority provides an opportunity to clarify and streamline the role of state government agencies and improve Victoria’s system-wide leadership and oversight of the waste and recycling sector. This will address the findings of several reviews that have noted these weaknesses in the current Victorian system. The current arrangements were last modified in 2014, when seven WRRGs were established to co-ordinate and facilitate the delivery of waste and recycling across their regions. Each WRRG has its own board, its own staff and its own approach to working with local councils and businesses in its region. Many waste and recycling businesses and local councils have struggled to understand the different roles and responsibilities of the WRRGs and Sustainability Victoria. In addition, the global and multi-faceted nature of the current challenges facing the waste and recycling sector require a streamlined and integrated approach, with a strong focus on market stabilisation and the achievement of state-wide policy goals, including the transition to a circular economy.
The following principles have been used to assess an appropriate governance model:
- Efficiency and effectiveness: ensure the best use of resources in establishment and ongoing operation, including making best use of expertise/capabilities in existing entities
- Transparency and accountability: have clearly defined roles and responsibilities and clear procedures for sharing information between entities and with the public
- Integrity: allow for an appropriate degree of autonomy and minimise potential conflicts of interest or duty
- System-wide stewardship, planning and leadership: bring functions together in one entity to deliver public value and consistency where appropriate, across the system as a whole
- Tailoring solutions to meet local needs: use a coordinated approach to partner with and support local councils, communities and industry, and a commitment to regional, place-based service delivery.
Proposed governance model for the waste authority
Figure 5 shows the proposed new governance arrangements, including the functions of the new waste authority and how they will sit alongside functions of other government departments and agencies. It is proposed that the authority is established as a separate entity, consolidating the functions currently being performed by the seven WRRGs, the statewide infrastructure planning function currently performed by Sustainability Victoria, and the additional regulatory and oversight functions outlined in this paper.
Sustainability Victoria would retain all its existing functions (with the exception of statewide infrastructure planning). This ensures that Sustainability Victoria can continue its established role in working with Victorian communities and businesses on a broad range of sustainability issues.
There are no changes proposed to the functions of the EPA in regulating the waste and recycling sector to minimise risks to human health and the environment, including the regulation of litter and illegal dumping. Similarly, DELWP’s role in providing statewide policy on waste and recycling remains unchanged in this model.
As the governance model for the waste authority is finalised, further consideration will also be given to the legislative and administrative measures needed to ensure effective coordination and alignment between agencies.
In recognition of the impacts on existing government entities, appropriate transition arrangements will be developed. The internal governance and administrative arrangements for the waste authority will continue to be considered as part of transition planning.
Consolidation of functions enables leadership, transparency and accountability
Under this model, the waste authority will be well-positioned to provide the leadership required to achieve a stable and reliable waste and recycling market.
Combining regulatory, procurement and sector planning functions into a single waste authority provides an opportunity to coordinate functions to achieve state-wide waste and recycling goals.
A state-wide entity with a regional focus
Given the new authority will combine the functions currently undertaken by the WRRGs, it will be essential that it has a strong regional presence and a focus on regional needs embedded in its governance structure.
While establishing a state-wide entity ensures system-wide leadership, role clarity and efficiency, there will need to be a focus on how local connections and partnerships with councils – currently facilitated by the WRRGs – are maintained. This is particularly important for waste and recycling, as issues differ significantly between metropolitan and regional areas given the issues of scale and distance that arise in rural areas.
It is proposed that the legislative framework establishing the authority embeds rural and regional considerations through clear legislative objectives and the establishment of representative advisory committees that guide the waste authority on its strategic decisions. This will elevate the importance of regional issues within the new authority, ensuring it appropriately prioritises issues affecting regional businesses and communities.
The following objectives are proposed to ensure a strong regional focus is a priority of the authority (based on similar objectives used by Regional Development Victoria). The authority will:
- facilitate the coordinated delivery of government waste and recycling programs, services and resources in rural and regional Victoria
- facilitate consultation between the public and private sectors and communities about waste and recycling services in rural and regional Victoria
A requirement to establish advisory committees
It is proposed the Act includes a requirement for the waste authority to formally draw on regional expertise through the establishment of advisory committees. These would include:
- a local government advisory committee or committees - with representation across Victoria, these committees would ensure local government expertise is used in decisions made by the authority
- a regional advisory committee – a single committee with representation from each region, or a committee per region, the regional advisory committee) would bring together regional expertise, including from businesses and community leaders, to advise the waste authority on the opportunities and challenges in regional Victoria.
Establishment of committees could include clear guidelines set by the Minister to ensure regular meetings (with appropriate use of technology to facilitate participation) and transparent consideration of their advice.
The following options are also being considered for inclusion in the legislative framework to further embed this strong regional focus:
1.Engagement policy: include a specific legislative requirement for the waste authority to adopt a community engagement policy that outlines how it will consider local/regional views and priorities and undertake appropriate consultation in performing its functions (similar to obligations for local councils under the Local Government Act 2020)
2.Powers to define regions or clusters for service delivery: as with the Emergency Management Act 2013, include powers for defining regions within a Schedule, regulations or statutory guideline for the purpose of regional service delivery. This could align with a need to consider regions under the infrastructure planning framework.
 Infrastructure Victoria (2020) – Advice on Recycling and resource recovery infrastructure, p80; VAGO (2019): Recovering and Reprocessing Resources from Waste, p37; Victorian Parliament (2019) Inquiry into recycling and waste management final report, p41.