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FOR RELEASE: APRIL 13, 1994

WHO IS RESPONSIBLE FOR GARBAGE?
INFORM STUDY FINDS LESSONS FOR UNITED STATES 
IN GERMANY'S EFFORTS TO MAKE THE 'POLLUTER PAY'
NEW YORK, NY -- Germany's controversial solid waste law
is a valuable source of policy mechanisms that can be
considered as the basis for waste reduction strategies
in the US, a new report by INFORM finds. The law has
been having an impact on packaging waste in Germany and
on thinking about packaging waste in the US and around
the world. 

The report, Germany, Garbage, and the Green Dot:
Challenging the Throwaway Society, by INFORM Senior
Fellow Bette K. Fishbein, is the first thorough and
authoritative examination in English of Germany's law,
the Ordinance on the Avoidance of Packaging Waste. It
explores in detail the provisions of the law, the
troubled system established by industry to implement
the law and the impact of the legislation. It also
identifies key areas for consideration by US
policymakers in light of the law's achievements, and
problems, to date. The report will be released on April
13. 

A new role for the private sector: responsibility for
packaging waste costs

The packaging ordinance, passed in 1991 but not fully
effective until January 1993, makes industry
financially responsible for its packages to the end of
their life cycles. This includes management of the
packages as waste (collecting, sorting and recycling)
after consumers discard them. Shifting the cost of
managing packaging waste from the public to the private
sector effectively "internalizes" waste management
costs. Senator Max Baucus of Montana has said that
funding waste management with public money subsidizes
wastefulness; Germany, in effect, has removed that
subsidy for packaging waste.  

"Germany has virtually redefined the bottom line of
companies that do business in that nation," says
Fishbein, "since the cost of managing packaging waste
now must be included. This gives companies a compelling
incentive to consider reduction and recyclability when
they design packages and products and select materials
for them." In Germany, the philosophy of making those
who produce packages and products fiscally responsible
for recycling and disposal is called the "polluter
pays" principle. The concept is also called extended
manufacturer's responsibility in the US.     

Germany's strategy relies on two basic assumptions,
according to INFORM's report. First, that industry is
key to waste and materials policy because it determines
what packages and products are produced; and second,
that incentives are a more effective public policy tool
for modifying industry practices than "command and
control" government regulations. 

Manufacturers must take back, reuse, and/or recycle
packages

The Packaging Ordinance required manufacturers and
distributors, beginning in December 1991, to take back
transport packaging (packaging used to ship goods to
retailers, e.g., corrugated containers, crates,
pallets). It called for retailers to install bins as of
April 1992 so that customers could leave secondary
packaging (packaging designed to market the product,
prevent theft, or aid self-service, e.g., blister
packs, outer boxes) in the stores. As of January 1993,
mandatory deposits were to be imposed on nonrefillable
containers for beverages, washing and cleansing agents,
and water-based paints; customers could also return
primary packages (the basic packages, e.g., the soup
can, the applesauce jar) to retailers.

The law provided an exemption to the primary packaging
rules if industry would implement an alternative,
privately financed plan that could meet the specified
goals for collecting and sorting packaging materials
and refilling beverage containers. The exemption was
granted for an industry plan called the "Dual System,"
run by the industry-created private company Duales
System Deutschland GmbH (DSD). DSD has suffered a
number of problems and financial crises, which have put
it on the brink of bankruptcy.

Impact so far: new thinking, less waste, reduced
packaging, innovative solutions Germany's law has
extended the scope of manufacturers' thinking,
according to INFORM's report, now that they are
responsible for their packages when consumers discard
them. "In the past a company could package big, and the
taxpayer would pick up the tab for the waste," says
INFORM's Fishbein. "With companies now required to pay
fees based on a package's weight and materials, they
will calculate costs to make packages differently. This
should lead to lighter, more easily recyclable
packages."

The impact of the law could be seen quickly in the
reduction in secondary packaging on store shelves. The
outer boxes around toothpaste tubes and liquor bottles
all but disappeared, and other packages were reduced in
size, or made of more recyclable materials. Many of
these examples are illustrated in INFORM's report.
Transport packaging has been affected too; one company
has developed a modular, reusable shipping container of
plastic that replaces single-use corrugated containers
and is expected to last 10 years, and other shipping
container systems for various products have been
developed.

The law has spawned these additional changes:
          ~ Packaging waste in the municipal solid
waste stream has decreased by over one million metric
tons since the law's passage in 1991 through 1993,
according to DSD. 
          ~ Secondary packaging has been reduced by 80
percent, according to DSD. Retailers pressured
suppliers to reduce this packaging in response to the
law's requirement that stores provide bins so that
consumers can leave it behind.
          ~ Consumer product manufacturers have
modified their packaging; changes include reducing the
size of containers, selling products in concentrated
form, and replacing packaging made of mixed materials
with single-material packaging that is easier to
recycle.
          ~ In anticipation of legislation that would
apply the "polluter pays" principle to products (e.g.,
automobiles, electronic equipment), some manufacturers
have begun taking back products voluntarily, automakers
have taken steps to make cars more recyclable,
electronics manufacturers have made changes to increase
their products' lifetime.

"The government gave industry incentives to reduce
waste and use materials more soundly, and industry has
clearly begun to respond," says Fishbein. "The key
issue in looking at Germany's legislation is not
whether DSD succeeds or fails. It's the concept of
manufacturer's responsibility to the end of the
lifecycle of what the manufacturer makes."

Manufacturer's responsibility: could it happen here?
"The question of who is responsible for waste needs to
be addressed in this country," says Joanna D.
Underwood, INFORM's president. "Those who generate
waste in our society often don't pay for it and have
little incentive to do anything about it. Neither
producers nor users have incentives to be less
wasteful."

Germany, Garbage, and the Green Dot features an
important chapter on implications of the German
approach for US waste policy. In the United States,
notes Underwood, the public is pressuring local
governments to meet higher and higher recycling
targets. "Recycling won't succeed unless industry has a
stake in the process. Extended manufacturer's
responsibility is one way of doing that."

INFORM's study describes a number of policy options
under consideration in the US related to the principles
inherent in Germany's initiative, from making producers
pay for managing waste created by their packaging and
products, to mandated minimum content and virgin
materials taxes. Newark, NJ Mayor Sharpe James,
chairman of the US Conference of Mayors' Solid Waste
Task Force, feels making manufacturers responsible for
recycling "would help correct a situation in which
municipalities are picking up the tab to recycle huge
amounts of waste produced by the private sector ...
there need to be incentives to minimize waste." 

"The proper incentives are needed to promote industrial
creativity in solving waste problems and in efficiently
using our resources," Underwood says. "We need to find
a way of adapting manufacturer's responsibility in the
US that will provide the right stimulus." 

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INFORM is a national nonprofit environmental research
organization that examines business and municipal
practices that threaten our environment and public
health, assesses changes businesses and government are
making to improve their performance, and identifies new
business strategies and technologies moving the US
toward an environmentally sustainable economy. INFORM's
research currently focuses on strategies to reduce
industrial and municipal wastes and preserve air and
water quality. 

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To order copies of Germany, Garbage, and the Green Dot:
Challenging the Throwaway Society. Please send $25.00 + $3.00 S&H
for 1st book $3.00 each additional book.  Countries outside of US,
$8.00 for 1st book + $4.00 each additional book (surface), $20.00
for 1st book + $10.00 each additional book (airmail) to INFORM,
Inc., 381 Park Avenue South, Suite 1201, New York, NY  10016.  Non-
profit discounts available.

Germany created the controversial legislation because
it was facing a true solid waste crisis. The nation's
population is more than eight times as dense as that of
the US in a space the size of Montana. Germany's
disposal capacity is due to run out in two to five
years, and intense public opposition blocks the siting
of new landfills and incinerators. The law targets
packaging waste because it accounts for more than one-
third by weight of MSW. 

Transport packaging accounts for about one-third of
Germany's packaging waste stream, primary packaging for
about two-thirds, and secondary packaging for less than
one percent.

DSD was charged with ensuring that the government-set
goals for recycling packaging materials are met, and
that the refill rates for beverage containers do not
fall below the 1991 levels. Consumer product
manufacturers pay fees to DSD to put "green dots" on
their packages, which represent a recycling guarantee.
DSD then collects and sorts the packages consumers have
discarded and directs them to recyclers. Households put
the appropriate waste in their yellow DSD bins, and
bins for paper and glass are scattered around
neighborhoods.

DSD has suffered a number of problems and financial
crises, which have put it on the brink of bankruptcy.
Unable to recycle all of the plastic it has collected,
DSD has stockpiled plastics within Germany and dumped
plastics around the world. "They tried to go too far
too fast," says Fishbein.