A recent fight over funding Ontario’s blue box recycling system offers lessons for other provinces in the importance of establishing proper governance when setting up waste management or product stewardship agencies. The situation illustrates the potential for conflict between agency boards and the public interest as represented through elected officials.
The matter involves Waste Diversion Ontario (WDO) — an arms-length policy agency established by the provincial government a couple of years ago to administer industry funding of 50 per cent of the net costs of Ontario’s municipal blue box recycling programs. The WDO board of directors is comprised of municipal reps and some NGOs, but is said to be dominated by the minority of industry members (“stewards”) represented by Stewardship Ontario. The WDO also makes recommendations concerning product stewardship programs. So far, WDO-recommended programs for such things as scrap tires and used oil have failed to win government approval.
These rumors appeared well-founded this fall when the WDO and Stewardship Ontario spoke with one voice against a new initiative announced by the government and followed this by arbitrarily slashing industry funding of the blue box over the protest of municipalities and environmental groups.
On September 10, Ontario Premier Dalton McGuinty announced that deposits will be applied to all alcohol beverage containers in the province. Government internal polls indicated such a program would be popular with the public, which is already habituated to returning refillable beer bottles to The Beer Store. The Liberal government wanted to show some progress on the product stewardship front, and so the move was something of a rebuke to the moribund WDO.
Blue box recycling of glass tends to smash and mix glass cullet. This leads to contamination in recycling plants and, critics say, instead of higher-value bottle-to-bottle recycling much of the glass is “downcycled” into lower-value end-uses such as fiberglass manufacturing or road-bed construction (sometimes even within landfills). The Association of Municipalities of Ontario (AMO) has argued that such containers should be placed on deposit and kept out of the municipal waste system, as have other groups such as the Association of Municipal Recycling Coordinators (AMRC), the Recycling Council of Ontario (RCO) and the Municipal Waste Integration Network (MWIN) and the Toronto Environmental Alliance (TEA).
However, Stewardship Ontario and the Liquor Control Board of Ontario (LCBO) have opposed deposits of any kind for years. Stewardship Ontario members fear, naturally, that a successful deposit-refund system for alcohol beverage containers would be the thin edge of the wedge for placing other containers (e.g., soft-drink) on deposit, as is the case in most other provinces.
With unseemly haste, Stewardship Ontario and WDO issued a joint news release only hours after McGuinty announced the deposit system under the heading “Blue Box organizations wonder why they weren’t consulted on impacts of LCBO deposit-return plan — seek explanations.” The tone of the release was one of lobbyists who normally get their way having a fit of pique. It was unsettling to hear the executive director of the government agency complain against the government’s initiative — without approval from the WDO board.
But it didn’t end there. Stewardship Ontario rather petulantly suspended market development work for all materials (not just glass) lest the work be “undermined by another government decision.”
The most serious development, however, was the decision in October from the WDO board, against the wishes of the three municipal representatives and the environmental group representative in attendance, to remove $7 million from the stewards’ 2007 payments. Other WDO board members felt that no funding changes should be made until more is known about the actual cost savings from removal of LCBO containers.
AMO President Doug Reycraft subsequently wrote to Ontario Environment Minister Laurel Broten criticizing the WDO decision, stating, “I am sure you share our understanding that this was never the intent of this important initiative.” The LCBO $5 million payment should not change, AMO suggested, as the effect of the LCBO deposit system will not be known until the blue box cost, revenue and tonnage data are completed in 2008.
In the new deposit system containers will be returned to The Beer Store (not the LCBO) in recognition that the brewers already operate a successful deposit system for their containers. This also appeared to raise some dander at Stewardship Ontario and the WDO, as they made a request to the Brewers of Ontario questioning aspects of its 2005-2006 annual report. This request generated a harsh response from Canada’s National Brewers Eastern Canada President Jeff Newton. In a November 7 letter to WDO Chair Gemma Zecchinni, Newton called the request “clearly competitively vexatious in nature” and wrote, “This and other situations where the WDO name has been used for flagrantly inappropriate political purposes by certain interests on the Board make it clear that there is a compelling and immediate need for the Province to reconsider the governance structure and membership of the WDO as it completes its five-year review of the WDA and before new programs are subject to its questionable oversight and control.”
We agree. If the WDO is mostly a proxy for Stewardship Ontario, better that the elected government negotiate with the industry group directly rather than through some dubious, conflicted agency.
Guy Crittenden is editor of this magazine. Contact Guy at email@example.com