Public sector targets for procuring products with recycled content could be the game-changer the Australian recycling sector desperately needs.
Collectively, the federal, state and local government sector is responsible for billions of dollars of spend annually on products and services. In 2017-18, the federal government put contracts worth $71.1 billion out to market via AusTender – and that’s only a fraction of the total public sector spend across all levels of government.
Around 95 per cent of the federal contracts went to businesses with an Australian-registered address, and 85 per cent of suppliers in 2017-18 were small to medium enterprises.
The scale is massive. It’s no wonder the recent announcement by assistant minister for waste and recycling Trevor Evans that the state and federal environment ministers may agree to procurement targets around recycled content for public projects has got the recycling industry excited.
According to Government News, the federal, state and territory environment ministers are expected to decide on a target at the Ninth Meeting of Environment Ministers, due to occur before the end of this year.
The news comes as the crisis around the collection, processing and re-use of Australian recyclables continues to deepen. This past week saw news breaking that multiple councils in Melbourne, including City of Melbourne, have sent recyclables to landfill due to the financial difficulties of SKM Recycling.
The Waste Management and Resource Recovery Association described the target as a major plus for local councils and regional economies as it would stimulate the market for recycled materials produced by local processing operations.
Chief executive of the Supply Chain Sustainability School, Hayley Jarick, told The Fifth Estate it would “no doubt be a game changer for small and medium enterprises who play in this space.”
Every report into sustainability has singled out institutional spending and government spending as “massive drivers” of positive change.
This has already been seen in the commercial property space, where government mandates around NABERS ratings for its tenancies gave the energy-efficiency industry a massive boost and created a new normal for office buildings.
Ms Jarick said one of the biggest barriers for SMEs in the recycled product and circular economy space has been lack of demand to successfully scale up and compete effectively with other products.
There could also be flow-on effect for whole supply chains within the economy.
There may be “hiccups” and adjustments as the momentum builds, as the appropriate level of transparency and disclosure is adopted to demonstrate a product genuinely contains post-consumer recycled content, Ms Jarick said.
What manufacturers and broader industry needs to do now to prepare for the targets and the possibilities they generate is get educated and prepare to scale up.
The entire supply chain also needs to be ready for the “real trend pushing through for transparency in organisations”.
That will mean disclosure of where material comes from, how it is processed and how it’s arriving on site.
Ms Jarick said that while there are some companies operating in a “race to the bottom” manner, there are already some leaders and innovators in the circular economy space.
A recent School event on the topic saw industry players including GPT, Mirvac, Plastic Forests, and government agencies such as the EPA, come together to discuss progress and growth of circular approaches.
A shift towards targets for procurement could also be the shot in the arm Australian manufacturing, and especially manufacturing in regional areas, needs.
Ms Jarick says Australian manufacturing is in an interesting space.
Australians need to “do what they do best and innovate.”
She says that while circular economy focused procurement won’t replace sustainability policies in general, as an element of sustainability, greater uptake would be a “great step towards improving the whole.”
SMEs are well-positioned to scale up, Ms Jarick says, as they are “super-agile” and able to adapt their practices and products quickly.
There are also some larger firms that are “ready to go” if the demand is there.
“The United Nations, state, federal and local governments have been talking about this for years. [And] there are people in the market who are setting themselves up to succeed.
“It makes good business sense. It makes good environmental sense. It makes good economic sense in terms of jobs and regional economies.
“Now we have the burning platform of [the situation] where we cannot export our waste anymore, so it either goes to landfill or we use it productively.”
Some of the states are already ahead of the game. Victoria has both a social procurement framework that preferences Victorian enterprises and also last year announced a green procurement initiative.
- See our story – Victoria commits to “recyclables first” procurement policy.
Queensland has also decided to go a bit circular, with research, investment and procurement around recycled materials part of the government’s new waste strategy.
New South Wales, however, does not appear to have set any firm goals or targets, and Green Industries South Australia noted in a submission to an SA productivity Commission Inquiry into government procurement late last year that the SA government needs to do more to ensure procurement is driving positive change.