COST RECOVERY IMPACT STATEMENT

Accreditation of voluntary product stewardship arrangements under the

Product Stewardship Act 2011

January 2013 – March 2014

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Table of Contents

1. OVERVIEW ............................................................................................................. 3

1.1 Purpose ....................................................................................................... 3

1.2 Background ................................................................................................. 3

1.3 Australian Government Cost Recovery Policy ............................................. 4

2. POLICY REVIEW – ANALYSIS OF ACTIVITIES .................................................... 5

2.1 Description of activity .................................................................................. 5

2.2 Stakeholders ............................................................................................... 6

2.3 Conclusion .................................................................................................. 7

3. DESIGN AND IMPLEMENTATION ......................................................................... 8

3.1 Outline of charging structure ....................................................................... 8

3.2 Basis of charging – fee or levy .................................................................. 10

3.3 Legal requirements for the imposition of charges ...................................... 10

3.4 Costs to be included in charges ................................................................ 10

3.5 Summary of expected cost recovered revenue ......................................... 16

4. ONGOING MONITORING .................................................................................... 17

4.1 Monitoring mechanisms ............................................................................ 17

4.2 Stakeholder consultation ........................................................................... 18

4.3 Periodic review .......................................................................................... 19

5. CERTIFICATION .................................................................................................. 20

6. COST RECOVERY LINKS .................................................................................... 20

7. GLOSSARY .......................................................................................................... 21

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1. OVERVIEW

1.1 Purpose The purpose of this Cost Recovery Impact Statement (CRIS) is to demonstrate the compliance of cost recovery arrangements for the assessment of applications for accreditation of voluntary product stewardship arrangements under the Product Stewardship Act 2011 (the Act) with the Australian Government Cost Recovery Guidelines, July 2005 (Cost Recovery Guidelines). The cost recovery arrangements are considered significant as the total receipts for all cost recovery arrangements administered by the Department of Sustainability, Environment, Water, Population and Communities (the department) exceed $5 million per annum.

The cost recovery arrangements outlined in this CRIS will apply from January 2013 to March 2014. Given that the accreditation process is new, a departmental review of the cost recovery arrangements is to occur within 12 months of completing the assessment of the first round of applications. A revised CRIS will be in place by March 2014, prior to the commencement of a second round of applications.

1.2 Background Product stewardship is an approach to managing the impacts of different products and materials. It acknowledges that those involved in producing, selling, using and disposing of products have a shared responsibility to ensure that those products or materials are managed in a way that reduces their impact, throughout their lifecycle, on the environment and on human health and safety. Government may mandate product stewardship activities through regulation, or organisations may choose to undertake product stewardship activities voluntarily. Examples of existing voluntary product stewardship arrangements include collection and recycling of newspapers, recycling of mobile phones and designing and manufacturing improved PVC products.

In 2009 all Australian Governments, through the Environment Protection and Heritage Council, agreed to the National Waste Policy: Less waste, more resources (the National Waste Policy) 1

A key commitment under strategy one of the National Waste Policy was establishing a national framework underpinned by legislation that supports voluntary, co-regulatory and regulatory (mandatory) product stewardship and extended producer responsibility schemes to provide for the impacts of products being responsibly

. The National Waste Policy was later endorsed by the Council of Australian Governments in August 2010.

1 Environment Protection and Heritage Council 2009, National Waste Policy: Less waste, more

resources, p. 9

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managed during and at end-of-life. The National Waste Policy specifies that accreditation of voluntary product stewardship arrangements is to occur on a cost recovered basis through a fee-for-service.

On 8 August 2011 the Act came into effect satisfying the national legislation commitment under the National Waste Policy. In the context of the Act, the accreditation of voluntary product stewardship arrangements occurs when self-selected organisations voluntarily apply for, and are granted, accreditation from the Australian Government for voluntary product stewardship activities. Part 2 of the Act provides for the accreditation of voluntary product stewardship arrangements.

To fulfil the voluntary provisions of the Act, the Product Stewardship Regulation 2012 (the Regulation) came into effect on 24 November 2012 and the Product Stewardship (Voluntary Arrangements) Instrument 2012 (the Instrument) came into effect on 27 November 2012. The Regulation specifies application fees for the accreditation of voluntary product stewardship arrangements under the Act. The Instrument sets out the requirements and other details relating to the accreditation of voluntary arrangements for classes of products.

1.3 Australian Government Cost Recovery Policy In December 2002 the Australian Government adopted a formal cost recovery policy to improve the consistency, transparency and accountability of its cost recovery arrangements and promote the efficient allocation of resources. The underlying principle of the policy is that entities should set charges to recover all the costs of products or services where it is efficient and effective to do so, where the beneficiaries are a narrow and identifiable group and where charging is consistent with Australian Government policy objectives. Cost recovery policy is administered by the Department of Finance and Deregulation and outlined in the Cost Recovery Guidelines.

The policy applies to all Financial Management and Accountability Act 1997 (FMA Act) agencies and to relevant Commonwealth Authorities and Companies Act 1997 (CAC Act) bodies that have been notified. In line with the policy, individual portfolio ministers are ultimately responsible for ensuring entities implement and comply with the Cost Recovery Guidelines.

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2. POLICY REVIEW – ANALYSIS OF ACTIVITIES

2.1 Description of activity The accreditation of voluntary product stewardship arrangements aims to further the objects of the Act by:

• providing an avenue for recognising and encouraging product stewardship without the need to regulate

• providing assurance to the community that voluntary product stewardship arrangements are achieving real and effective outcomes.

Organisations seeking accreditation of a product stewardship arrangement under the Act do so on a voluntary basis. This approach differs from co-regulatory and mandatory product stewardship schemes where participation is mandated and enforced using regulations.

The process to obtain and maintain accreditation has been broadly categorised into three distinct activities: (1) application and assessment; (2) monitoring and compliance; and (3) renewal of accreditation. An overview of each of these activities is provided below.

Activity 1: Application and assessment

Applicants will be invited to submit an application for accreditation following a public notification by the department. The call for applications is likely to occur at a minimum of once per year.

Applications for accreditation will be assessed by the department to determine whether the arrangement meets the eligibility and accreditation requirements outlined in the ministerial determination.

The assessment of an application broadly involves the following steps:

• Documenting details of the application in an IT database

• Assessing each application against the eligibility requirements and accreditation requirements, including an assessment of the arrangement’s technical and financial viability. The department will engage consultants with relevant expertise to undertake the technical viability assessment and request that applicants provide a report of an independent financial viability assessment.

• Managing a public notification and comment phase

• Review of the assessment by senior staff

• Preparation of a recommendation report

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• Consideration of the recommendation report by the delegate of the Minister

• Briefing the Minister on the accreditation decisions taken under the Act.

If the application meets both the eligibility and accreditation requirements, it will be accredited and granted use of the Australian Government’s product stewardship logo, subject to specific conditions.

Consistent with the Government’s decision, there is legislative scope to cost recover the above activity under the Act. The assessment of applications will be cost recovered and any fees to be paid must accompany the application.

Activity 2: Monitoring and compliance

Administrators of accredited arrangements will need to report on their performance annually to demonstrate that they are meeting the conditions and requirements of accreditation. These reports will be assessed by the department. Accreditation may be cancelled where an arrangement has failed to comply with the conditions and requirements of accreditation. This activity will not be cost recovered and there is no legislative scope to do so under the Act.

Activity 3: Renewal of accreditation

Accreditation will be granted to successful applicants for a period of five years. To maintain accreditation following this period, the Administrator of an arrangement will need to re-apply for accreditation. This will involve an assessment by the department to determine if the arrangement meets the eligibility and accreditation requirements, as per Activity 1. Consequently, the fees imposed for assessing applications will apply to those arrangements seeking to renew their accreditation.

2.2 Stakeholders A range of stakeholders have an interest in the accreditation of voluntary product stewardship arrangements. However, cost recovery will only affect those stakeholders that apply for accreditation.

Likely stakeholders in the accreditation process include:

• State and territory governments: The National Waste Policy has been agreed by all Australian governments. The Australian Government has responsibility for the development and implementation of the product stewardship legislation. The role of state and territory governments is to support the establishment of an effective national framework for product stewardship, including the accreditation process

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• Waste management authorities (including local government): Responsibility for waste management and landfills varies across the country. Those parties with the greatest interest in voluntary product stewardship, due to the primary focus on managing waste, include state government, local councils and some private companies

• Industry associations and businesses: Many existing voluntary product stewardship arrangements are managed by industry associations and businesses. It is anticipated that additional industries and businesses will develop new arrangements for accreditation under the Act

• Environmental and other Non-Government Organisations (NGOs): These organisations are likely to be interested in ensuring the proposed and accredited arrangements are credible

• Community: Members of the community may be interested in opportunities to take advantage of services provided by accredited arrangements.

In considering the voluntary product stewardship arrangements that are currently operating, the department expects that applications will predominantly be made by industry associations, companies and/or other NGOs.

2.3 Conclusion The department is introducing cost recovery charges for the assessment of applications for Australian Government accreditation of voluntary product stewardship arrangements, including applications for renewal of accreditation. Costs relating to monitoring and compliance activities are not included in the cost recovery charges, as these costs will be funded by the Australian Government. The assessment of voluntary product stewardship arrangements is appropriate to cost recover for three key reasons:

1. Charging is efficient and cost effective

The framework for accreditation of voluntary product stewardship arrangements allows the department to accurately determine the number and level of resources required to efficiently assess each application. This has enabled the department to set fees that are in line with the service being provided to each arrangement Administrator. Given the transparency in the fee structure, applicants will be able to determine the amount of fees to be paid on submitting their application, making the fee collection efficient and cost effective.

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2. Benefit to administrators of accredited arrangements

Applicants who successfully obtain accreditation will be granted use of the Australian Government’s product stewardship logo. This will enable those involved in an accredited arrangement to:

• communicate to others that their product stewardship arrangement has been accredited by the Australian Government

• obtain national recognition for their arrangement.

3. Consistent with policy goals

Charging a fee for the assessment of applications is consistent with the policy goals for accrediting voluntary product stewardship arrangements, as it:

• is likely to enable a larger number of arrangements to be considered for accreditation than if funded from general tax revenue

• will enable appropriate resourcing to ensure applications are processed in an efficient manner, even if demand is higher than expected

• will signal to applicants the costs involved in assessing an application and deter organisations from submitting poorly developed applications.

There is the potential that charging an application fee may discourage some organisations from applying for accreditation. Organisations will need to make their own assessment as to whether the benefits of accreditation and use of the logo outweigh any costs incurred in obtaining accreditation.

3. DESIGN AND IMPLEMENTATION

3.1 Outline of charging structure Applicants will be required to pay the full cost of assessing their application for accreditation in one upfront payment. The Act specifies that this payment is to be submitted with the application. The application fees and fee structure are to be specified in regulations.

Accreditation will be granted for a period of five years. After this time, the Administrator of an arrangement will need to re-apply for accreditation. Application fees will also apply in this instance as the re-application process takes into consideration all of the requirements associated with an initial assessment.

An outline of the charging structure is presented in Figure One. The tiered approach to charging is intended to ensure that charges are explicitly linked to the services provided to each applicant.

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Figure One Overview of charging structure

A review of the charging structure and fees will be undertaken within 12 months of completing the assessment of the first round of applications and prior to the commencement of the second round of applications. This timeframe has been set as the accreditation process is new and adjustments may need to be made following the first year of implementation. A review of the cost recovery model will enable a

Accredited

Not accredited

Application Fees start at $20,600. Fees increase for arrangements

covering two or more parts of a product’s lifecycle

Assessment

Against eligibility, accreditation criteria and

public comment

Reporting Review of reports - no

fees apply

Additional information requested if needed

Applicant to re-apply in future round if shortcomings are addressed (with fees to apply)

Accreditation Renewal after 5 years

Applicant to re-apply (application fees apply)

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more informed assessment of the time and resources necessary to undertake an assessment and the likely number of applications that could be expected into the future. Further detail on the review process is provided in section 4.3.

3.2 Basis of charging – fee or levy Cost recovery charges can be introduced using:

• a fee that charges individuals or firms directly for the costs of providing the activity

• a levy on a group of individuals or firms (legally a form of taxation).

A fee is considered to be the most appropriate form of cost recovery for the assessment of applications for accreditation. This is because there is an identifiable recipient of the service (the applicant) and the recipient benefits if they receive accreditation.

3.3 Legal requirements for the imposition of charges Section 102 of the Act provides the legal basis for charging an application fee for accreditation of voluntary product stewardship arrangements. This provision determines that:

• an application under the Act must be accompanied by any fee specified in the regulations

• the Minister may approve different forms, and the regulations may specify different fees, for different classes of application

• the Minister may waive the whole or a part of a fee.

3.4 Costs to be included in charges The cost recovery charges include all of the costs associated with processing and assessing applications for accreditation during the first year. These costs are comprised of staff labour, including remuneration (i.e. salary and superannuation) and overheads (e.g. long service leave, worker’s compensation premium, staff training and development costs, human resource support costs, organisational service costs, accommodation costs and IT costs).

The charges are also comprised of the costs associated with engaging consultants with the relevant expertise to assess the arrangement’s technical viability and managing a public comment phase. These costs have been set conservatively and assume that the consultancy requirement for each application will be similar.

In developing the cost recovery model it was noted that some applications may be more complex than others and therefore require more time to assess. It is expected

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that the complexity of the applications will depend primarily upon the number of parts of the lifecycle that a product stewardship arrangement covers. For the purposes of the cost recovery model, the lifecycle has been categorised into three parts as shown in Figure Two.

Figure Two Product lifecycle parts

The time to assess applications is expected to be similar for the eligibility assessment and the majority of the accreditation assessment, regardless of the number of parts of a product’s lifecycle that the arrangement covers. It is assumed that in these areas there will be considerable efficiencies in assessing additional stages of the life cycle. It should be noted however, that arrangements that cover multiple parts of a product’s lifecycle will have more outcomes and milestones that are to be achieved and therefore require more time to assess.

A detailed account of the expected costs to assess applications covering one, two or three parts of a product’s lifecycle is provided in Tables One to Five. The costs shown:

• have been rounded to the nearest $100 for administrative simplicity

• are estimated as the accreditation process is new and therefore no baseline data exists to determine the amount of time needed to assess an application. To overcome this issue, the following was taken into consideration: the department’s experience in assessing applications, including assessing applications under the National Television and Computer Recycling Scheme; and stakeholder feedback received through public consultation on the cost recovery arrangements (refer section 4.2).

Manufacture

Activities relating to the manufacture of the product

Supply and/or Use

Activities relating to the supply and/or use of a product

End-of-life

Activities relating to the products end-of-life treatment

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Table One Estimated cost for assessing an application for an arrangement covering one part of a product’s lifecycle

Description of cost Staff time (days)

Assessment Officer

Assistant Director

Director

Assistant Secretary

Assessment of application (dealing with one part of product lifecycle) Initial processing of application (receipt application and lodge details in database) 0.3 Undertake eligibility assessment 1 Review eligibility assessment 0.3 0.1 Undertake accreditation assessment 8 Manage consultancies 0.6 0.3 0.1 Review accreditation assessment 2 1 Recommendation and decision Prepare recommendation report for delegate of the Minister 2.0 Review recommendation report 1.0 0.5 Consider and make decision on recommendation report 0.5 Prepare briefing for the Minister 0.2 0.2 0.1 0.1 Update database with decision 0.1 Upload details of accredited arrangement to website 0.2 Public comment phase Prepare information for release on website 0.3 0.1 0.1 Review and compile submissions and summarise comments 1.0 0.5 0.3 0.1 Total estimated days 13.7 4.4 2.2 0.7 Approximate staff daily rate $491 $592 $721 $941 Total estimated cost of staff time $11,575 Other direct costs Consultancy for technical assessment (outsourced) $9,040 Total estimated other direct costs $9,040 Total estimated cost of staff time and other direct costs $20,615 TOTAL ESTIMATED COST OF ASSESSING APPLICATION COVERING ONE PART OF PRODUCT LIFECYCLE (rounded to nearest $100 for administrative simplicity)

$20,600

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Table Two Additional estimated cost of assessing an application for an arrangement covering one additional part of product’s lifecycle

Description of cost Staff time (days)

Assessment Officer

Assistant Director

Director

Assistant Secretary

Assessment of application (dealing with one part of product lifecycle) Undertake accreditation assessment 3.0 Review accreditation assessment 0.6 0.3 Total estimated days 3.0 0.6 0.3 0.0 Approximate staff daily rate $491 $592 $721 $941 Total estimated additional cost of staff time $2,044 Other direct costs Consultancy for technical assessment (outsourced) $963 Total estimated additional direct costs $963 TOTAL ESTIMATED ADDITIONAL COST OF ASSESSING APPLICATION COVERING AN ADDITIONAL PART OF PRODUCT LIFECYCLE

$3,007

Table Three Total estimated cost of assessing an application for an arrangement covering

two parts of product’s lifecycle Description of cost Estimated Cost

Total cost of one part $20,615 Total cost for additional part $ 3,007 Total estimated cost of staff time and other direct costs $23,622 TOTAL ESTIMATED COST OF ASSESSING APPLICATION COVERING TWO PARTS OF PRODUCT LIFECYCLE (rounded to nearest $100 for administrative simplicity) $23,600

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Table Four Additional estimated cost of assessing an application for an arrangement covering two additional parts of product’s lifecycle

Description of cost Staff time (days)

Assessment Officer

Assistant Director

Director

Assistant Secretary

Assessment of application (dealing with one part of product lifecycle) Undertake accreditation assessment 6.0 Review accreditation assessment 1.2 0.6 Total estimated days 6.0 1.2 0.6 0.0 Approximate staff daily rate $491 $592 $721 $941 Total estimated additional cost of staff time $4,088 Other direct costs Consultancy technical assessment (outsourced) $1,925 Total estimated additional direct costs $1,925 TOTAL ESTIMATED ADDITIONAL COST OF ASSESSING APPLICATION COVERING TWO ADDITIONAL PARTS OF PRODUCT LIFECYCLE

$6,013

Table Five Total estimated cost of assessing an application for an arrangement covering three parts of product’s lifecycle

Description of cost Estimated Cost Total cost of one part $20,615 Total cost for additional part $6,013 Total estimated cost of staff time and other direct costs $26,628 TOTAL ESTIMATED COST OF ASSESSING APPLICATION COVERING THREE PARTS OF PRODUCT LIFECYCLE (rounded to nearest $100 for administrative simplicity) $26,600

Cost to seek additional information from applicant

The cost estimates assume that the applicant has provided all of the necessary information to make a thorough assessment of their application. Additional information would only be sought where the applicant appears to meet the requirements, but some essential information is missing. The Act requires that the fee for accreditation must be submitted with the application (i.e. one up-front fee). It does not allow for additional fees, in any form, to be charged. Therefore, the department may request additional information, but it will not charge a fee for seeking this information.

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Scope for refund of application fees

An application can be rejected after an assessment against the eligibility or accreditation requirements. The Act does not provide the authority to refund applicants any part of the application fee and requires that the full application fee must accompany the application when submitted. Consistent with the cost recovery guidelines, the fees have been set conservatively at the most efficient assessment process and based on an assumption that the applicant will provide all the required information in their application. Guidelines will accompany the application form to ensure applicants provide all requisite information necessary for assessment and accreditation. If needed, consideration will be given to whether amending the Act in the future to allow for refunds is appropriate.

Scope for waiving application fees

Under the Act, the Minister has discretion to waive application fees. However a fee waiver is not envisaged for voluntary accreditation, as individual organisations determine whether it is in their interest to seek accreditation and pay the fee. In the event that the Minister does waive an application fee this cost will be absorbed by the department.

Anticipated receipt of applications

The department expects that five applications will be received in 2012–13, the first year of accrediting arrangements. It is estimated that three of these applications will cover one part of a product’s lifecycle. The remaining two applications will cover three parts of a product’s lifecycle. These estimates have been based on feedback obtained through the consultation processes (refer Section 4.2) and the department’s discussions with potential applicants.

The different cost components associated with assessing the total estimated number of applications is as shown in Table Six.

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Table Six Cost components for assessing applications in 2012–13

Expense Description Rationale for inclusion

Estimated total annual cost

2012–13

Staff The cost of staff labour, including remuneration (salary and superannuation) and overheads (e.g. long service leave costs, worker’s compensation premium, staff training and development costs, human resource support costs, organisational service costs, accommodation costs and IT costs), involved in assessing applications.

Direct cost of undertaking assessment

$66,051

Consultants The cost of engaging consultants to undertake a technical viability assessments of applications

Direct cost of undertaking assessment

$49,050

TOTAL ESTIMATED COST $115,101

3.5 Summary of expected cost recovered revenue Table Seven provides a summary of fees and costs associated with assessing applications covering one, two or three parts of a product’s lifecycle. The small increase in costs is reflective of the added complexity associated with assessing applications where an arrangement covers multiple parts of the product’s lifecycle.

Table Seven Fees and costs for assessing applications

Number of parts of the product lifecycle covered

Application fee 2012–13

Estimated Cost 2012–13

1 part of the product lifecycle $20,600 $20,615

2 parts of the product lifecycle $23,600 $23,622

3 parts of the product lifecycle $26,600 $26,628

Based on the information provided in the preceding sections, Table Eight summarises the estimate of total revenue and costs expected in 2012–13. The total revenue and costs may be more or less than anticipated, depending on the actual number of applications received.

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Table Eight Estimated cost and revenue from application fees in 2012–13 Estimate of revenue Estimate of cost

Type of application

Number of applications

Revenue per application

Estimate of revenue 2012–13

Cost per application

Estimate of cost

2012–13

One part of product lifecycle

3 $20,600 $61,800 $20,615 $61,845

Two parts of product lifecycle

0 $23,600 $0 $23,622 $0

Three parts of product lifecycle

2 $26,600 $53,200 $26,628 $53,256

TOTAL ESTIMATED COST AND REVENUE

$115,000 $115,101

The Voluntary Product Stewardship activity is not anticipated to incur expenses or obtain revenue related to Cost Recovery activities between July 2013 and March 2014. Expenses associated with work undertaken by the department in this period are anticipated to relate to monitoring, compliance, administration and review activities. These activities have been identified as not being appropriate to Cost Recover and are therefore not detailed in this CRIS.

4. ONGOING MONITORING

4.1 Monitoring mechanisms Effective mechanisms for the ongoing monitoring of the cost recovery arrangements are necessary to:

• obtain feedback so that approaches to cost recovery can be adapted in response to changing circumstances

• ensure fees are based on efficient and transparent costs

• reduce the impact of major reviews of cost recovery arrangements by allowing minor issues to be addressed as they arise.

An assessment officer will be provided with a form to document the time taken to assess applications. This will include undertaking the public notification and comment process as well as time to procure and manage consultancies. The time taken to assess applications will be reviewed after each application round. This

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review will determine the efficient time taken to undertake an assessment and to identify the major factors which influence assessment times.

The total cost recovery revenue will be reported in the department’s annual report in accordance with the Finance Minister’s Orders.

4.2 Stakeholder consultation Extensive consultation has been taken to inform the development of the cost recovery arrangements including a formal public consultation round in February 2012 and a targeted consultation round in June 2012. The key outcomes of these consultations are outlined below.

February 2012 Consultation

The department released the Consultation Paper on the Proposed Model for Accreditation of Voluntary Product Stewardship Arrangements (February 2012 Consultation Paper) on 28 February 2012. The consultation paper sought feedback on the model for accrediting voluntary arrangements. Detailed information was provided on the proposed model and the fees associated with assessing applications, including how these fees were calculated.

To provide stakeholders with the opportunity to discuss the consultation paper with departmental officials, public meetings were held in Sydney, Canberra and Melbourne. These locations were selected as a review of existing and potential voluntary arrangements identified that they most frequently occur in these cities. These meetings were attended by 42 interested parties. The consultation period concluded on 27 March 2012. A total of 20 submissions were received from a wide range of stakeholders, including local government, individuals and non-government organisations. Most of the submissions were by industry associations.

The majority of submissions expressed their support for the proposed design parameters of the model. Although some suggestions were put forward to modify or refine the eligibility and assessment requirements, no submissions opposed the model.

Ten organisations provided comments on the proposed cost recovery arrangements. Three quarters of these commented on the proposed fee structure, with nearly half in favour of the approach. The remaining submissions suggested alternative structures, which were later investigated and found to be unsuitable as they were inconsistent with the Cost Recovery Guidelines or with the requirements of the Act.

Nearly all of the submissions provided comments on the appropriateness of the proposed fees. Although some noted that the costs were either too low or too high, there was a general consensus that they were appropriate. Some industry groups

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stated that the fees were only a small part of the broader cost of setting up or administering an arrangement.

The fees were revised following a review of the submissions and by giving consideration to the department’s more recent experience in assessing applications under the National Television and Computer Recycling Scheme.

The revised estimates were found to be higher than the estimates included in the February 2012 Consultation Paper. The main source of the increase related to the engagement of consultants to conduct an assessment on the financial viability of an arrangement. This new revised cost would have been prohibitive for some applicants. Consequently, the accreditation requirements and the cost recovery model were amended to remove this cost and allow applicants to provide their own independent report on the financial viability of the arrangement. This report is to be prepared in accordance with guidelines supplied by the department and submitted with the application.

As a result of changes to the assessment requirements, the estimated amended costs were reduced and are considered a more accurate reflection of the costs involved in assessing each application. However, given that the revised fees remained slightly higher overall than those identified in the February 2012 Consultation Paper, the department undertook further consultation with interested stakeholders.

June 2012 Consultation

On 8 June 2012 interested stakeholders were invited to comment on the Revised Cost Recovery Arrangements for Accreditation of Voluntary Product Stewardship Arrangements (the Revised Cost Recovery Paper). The consultation period concluded on 22 June 2012 and two submissions were received from industry. The views expressed in these submissions were divided in supporting and opposing the fees. One submission suggested that the fees should be subsidised. This recommendation was not possible as it is not consistent with the Government’s decision to cost recover voluntary accreditation.

4.3 Periodic review The Cost Recovery Guidelines require cost recovery arrangements to be periodically reviewed at least every five years. The department proposes to review the final fees and charging structure set in the regulations within 12 months of completing the assessment of the first round of applications and prior to the commencement of the second round of applications to ensure they are accurate and appropriate.

The review will take into account the results of the monitoring activities outlined in section 4.1 and will consider whether the fees are cost effective and if there should be a significant change to the fees. Any changes to the fees or charging structure will

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7. GLOSSARY

Accredited voluntary arrangement

A voluntary arrangement that is accredited in relation to a class of products in accordance with the Ministerial Determination to be made under Section 13 of the Product Stewardship Act 2011.

Administrator The entity responsible for administering an accredited arrangement and ensuring that the outcomes of the arrangement are achieved. This may be a product stewardship organisation established for that purpose.

Arrangement A set of activities or measures designed to achieve the outcomes for which accreditation has been sought. The details of each arrangement will need to be submitted to the department for accreditation and each arrangement will need to nominate an Administrator.

Class of product The product being addressed by the arrangement. To be determined by the type of product stewardship arrangements that come forward. For example, it could be broad (e.g. packaging) or narrow in scope (e.g. glass containers).

Cost recovery Fees and charges related to the provision of government goods and services (including regulation) to the private and other non-government sectors of the economy.2

Life cycle

Covers the time from when a product is manufactured through to the time of the product’s end-of-life treatment.

Product A thing (including a substance or mixture of substances) that is manufactured.

Product stewardship

An approach to managing the impacts of different products and materials. It acknowledges that those involved in producing, selling, using and disposing of products have a shared responsibility to ensure that those products or materials are managed in a way that reduces their impact, throughout their lifecycle, on the environment and on human health and safety.

Waste Waste associated with the product after it is disposed. It does not cover waste produced in the manufacturing process.

the Act Refers to the Product Stewardship Act 2011.

the department Refers to the Australian Government Department of Sustainability, Environment, Water, Population and Communities.

2 Australian Government Cost Recovery Guidelines (2005)

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Voluntary product stewardship

Voluntary product stewardship involves parties coming forward voluntarily to seek accreditation by the Australian Government of a product stewardship arrangement on a fee-for-service basis. Under the Act, participation across an entire industry in a voluntary product stewardship arrangement is not required.