Bottom Line: Stewardship programs have made their mark across Canada and will continue to expand, specialize and become more complex. As brand owners, you should have a thorough understanding of product supply chains and agreements with suppliers to ensure that you comply with your obligations. While most stewardship programs are still focusing on educating brand owners and consumers about the various programs, watch out. A subtle shift is taking place, with some agencies aggressively pursuing non-compliant businesses and threatening enforcement proceedings.
Stewardship Programs Increase in Quantity and Specialization
Stewardship programs have had significant success in achieving their objectives – diverting an enormous amount of waste, shifting the cost and responsibility of waste management to producers and encouraging producers to design products in a more eco-friendly manner. For example, British Columbia alone diverted more than 40 million kilograms of electronic waste from landfills as a result of its stewardship program, a 20% increase in collection from the previous year. Brand owners are responsibly collecting and remitting eco fees as well, which provides a significant cost benefit to government and tax payers.
With the success of the initial stewardship programs, many provinces are rolling out new initiatives or expanding the scope of existing programs. Over a three-month period, from July to October 2012, stewardship programs were introduced for many new products including lamps, ballasts, outdoor power equipment, exercise equipment, sewing machines and leisure devices. Another trend is specialized, complementary programs for general product categories – like British Columbia's stewardship programs for electronics, including unique programs for electronic toys, batteries, office and computer electronics, small appliances, and electrical mowers and garden equipment.
Be Prepared – Enforcement Is Next!
Originally, regulators and agencies were primarily concerned with educating consumers and brand owners about the various stewardship programs and accompanying obligations. Regulators are starting to shift gears and conduct spot audits of registered brand owners to ensure proper remittance and record keeping and pursue obligated businesses that are not registering. Brand owners may face ministry compliance proceedings if they aren't proactively ascertaining their obligations and following through. It is always recommended that businesses seek legal advice to confirm their obligations, including whether they fall under the definition of brand owner, if they are required to register and remit, and if the remitter agreements they have entered into with suppliers comply with the legislation, stewardship agency requirements and industry practice.
Do you know the answers to these questions?
- Are your distributors complying with their obligations and registering? Who is ultimately responsible?
- What is the supply chain of the product? Who is bringing the product into the province? Is it being shipped from a distribution centre in a different province?
- Is your business legally defined as a resident in particular provinces? (Some provinces look at residency as the determinative factor, while some are instead concerned with introduction of products to marketplace.)
- Does the particular stewardship program or industry association require remitter agreements?
- Can the eco fee be passed onto consumers?
- Can the eco fees be disclosed on customer receipts?
- How should eco fees be displayed in marketing materials to comply with consumer protection and environmental legislation?
What's the Takeaway?
The stewardship programs and accompanying eco fees are growing and complex. Each province is unique and it is important to remain organized and consult with experts to ensure that your business is not subject to compliance proceedings or administrative fines.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
