Circular Economy Part 2: Are there shortcomings in the current definitions of waste? - Waste Management

Waste avoidance, minimisation and resource recovery issues are now focus topics for governments at all levels across Australia, and there is general support for the pursuit of circularity as a means of improving sustainability.

In part one of the series, we considered the aspirations of waste policies and new waste laws being created throughout Australia. In this Insight, the second of our two-part series, we reflect on the concept of 'waste' and its regulation, and discuss why it is important for the law to provide a clear pathway for a material to lose its status as 'waste'.

What is waste?

Waste is generally understood to be 'materials that are no longer needed and are thrown away' or 'anything left over or superfluous'. This reflects a traditionally linear model of consumption - 'take-make-dispose' - where 'waste' describes something at the end of its life.

The problem, however, given the increasing push towards circularity, is that 'end of life' has lost (or at least, is losing) its status in the lifecycle of waste. Because in a truly circular economy, nothing would ever reach 'end of life' status.

So the meaning of 'waste' requires deeper consideration. For example, is it clear when something becomes waste? Can waste lose its status and if so, how? Is something waste if it is 'left over' for one person but a 'resource' to another?

How is waste regulated in Australia?

Waste is regulated by both common law (for example, nuisance, negligence and trespass) and statutory law in Australia, and all scales of governments are involved. For example:

the Commonwealth has enacted legislation to implement international agreements and, more recently, to promote effective waste management and encourage a circular economy for waste;
the States regulate waste by statutory schemes relating to environmental protection (and to a lesser extent town planning), and have recently introduced waste-specific laws, such as Victoria's Circular Economy (Waste Reduction and Recycling) Act 2021 (Vic) (Circular Economy Act); and
local governments are generally responsible for waste collection and transfer services to municipal constituents (although this is often outsourced to the private sector), and in some cases provision of landfill facilities.

It is notable that the 'new waste laws' enacted by various States over recent years are generally complementary to, rather than reformative of, existing laws. This means that the substantive regulation of waste primarily remains the realm of other laws, such as the Environment Protection Act 2017 (Vic) (EP Act) and the Protection of the Environment Operations Act 1997 (NSW) (POEO Act).

Such laws generally proscribe littering, pollution, contamination and/or the dumping of waste, and impose obligations relating to waste management that apply to those involved in generating, processing, transporting and disposing of waste, with more stringent obligations applicable to more hazardous types of waste. Non-compliance can lead to criminal liability, and significant penalties can be imposed.

Key issues with the concept of waste

It is becoming increasingly clear that those engaging in resource recovery activities are encountering gaps and obstacles to regulatory compliance, and this begs the question whether our laws are helping or hindering the journey towards circularity.

These issues in part stem from the fact that 'waste' is an expansive concept, and that most laws adopt a 'once a waste, always a waste' approach - for example, by expressly confirming that something can be waste despite the fact that it may be re-used, recycled or sold. Queensland is a notable exception to this. Although even there, the mechanism for waste to evolve from a waste to a resource under the Waste Reduction and Recycling Act 2011 (Qld) is not absolute and depends on conditions being met, often by multiple parties, in the waste-resource supply chain.

As such, most current laws suggest, somewhat irrationally, that in a circular economy eventually everything will be waste - having been at some point, and to someone, surplus, despite its utility elsewhere.

The courts have grappled with this on several occasions, and sought to recognise that at some point the 'waste' characterisation can be lost. For example:

in Environment Protection Authority v Terrace Earthmoving Pty Ltd[2013] NSWCCA 180, the NSW Court of Appeal found that if an owner does not have a continuing use for a particular material, but that the material may have a use at a later point in time, the material is to be considered a 'waste' until it is applied to a new use; and
in Eclipse Resources Pty Ltd v State of Western Australia (2016) WASC 62 the Supreme Court of Western Australia considered that the legislature's "evident concern to advance recycling and the reuse of waste" implies that a material will only remain 'waste' when it has no use whatsoever.

These cases suggest that the waste-owner's perspective will be an important consideration in determining its status, and on this issue the Victorian Supreme Court has sought to clarify that it is not the owner's subjective view of the material that is relevant, but how that material would be characterised when considered objectively from the perspective of the owner.¹

Clear as mud, right?

Implications

There are several implications from this uncertainty, for example:

close consideration must be given to the particular material and the context in which it is created in order to determine whether it is 'waste',² and if it is, what type of waste;
once something is 'waste', a conservative approach is to assume that the waste status continues to apply, because getting this wrong could lead to significant liability exposure; and
a resource that is 'waste' material will be subject to more onerous regulation (including with respect to storage, transportation, receipt and disposal) than a resource that is substitutable, but not 'waste' - a position that conflicts with the waste hierarchy.

Another emerging issue is that the more onerous obligations applicable to certain types of (typically hazardous) waste tend to lack flexibility and do not always align with the occupational health and safety requirements, which hinders the capacity for the rapidly developing resource recovery industry to innovate for better outcomes.

A better way?

It is clear that we need to move to a system that better recognises the potential for re-use and recycling in the waste framework. An important part of this is a clear pathway for 'waste' to lose its status as waste, which would provide much needed certainty and eliminate an unnecessary disincentive for those seeking to accelerate resource recovery developments in Australia.

There are arguably mechanisms already in place that can assist. For example, some statutory instruments (such as a 'Declaration of Use' in Victoria and 'End of Waste' code in Queensland) could be useful where available, and an expansion of storage rights may be considered pending the identification of opportunities for recycling or re-use. But more is needed.

In NSW, for example, there have been efforts to facilitate the re-use of waste through the resource recovery framework, which allows some wastes to be beneficially re-used. However, following the long-running Grafil prosecution,³ the framework has been criticised for its tendency to prioritise environmental protection objectives over and above circular economy outcomes. To address the perceived inflexibility of the framework, an independent review is currently being carried out to consider options to reform the framework so that it better balances the potential risks and benefits of resource recovery. An important goal of the review is to create new opportunities for the re-use of waste in the circular economy by establishing concrete pathways to remove the definition of waste for certain materials.

At a time where the world is focused on the environmental and financial cost of waste, it is clear that attention to traditional assessments and definitions of waste is much needed to facilitate a more expeditious transition to a truly circular economy.

Footnotes

¹ Dasma Environmental Pty td v Environment Protection Authority [2021] VSC 798, at [68].

² See Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie [2019] NSWCCA 174, [117]; Environment Protection Authority v Terrace Earthmoving Pty Ltd [2013] NSWCCA 180, [39]; Shannongrove Pty Ltd v Environment Protection Authority [2013] NSWCCA 179, [41].

³ See Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie [2018] NSWLEC 99; Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (No 3) [2020] NSWLEC 90.

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