Companies are advised to become well informed on the newly released implementing rules and regulations (IRR) of the Extended Producer Responsibility (EPR) Act of 2022, the milestone environmental law that mandates companies to develop recovery programs for their plastic packaging waste.
The EPR IRR—also known as DENR Administrative Order (DAO) No. 2023-02—was issued by the Department of Environment and Natural Resources on January 24, 2023 and prescribes the procedures and guidelines for implementing the EPR Act.
The EPR Act or Republic Act (RA) No. 11898 institutionalizes EPR for plastic packaging waste and amends RA 9003, otherwise known as the Ecological Solid Waste Management Act of 2000. RA 11898 lapsed into law in July 2022.
EPR refers to the environmental policy approach and practice that requires producers to be environmentally responsible throughout the life cycle of a product, especially its post-consumer or end-of-life stage.
Under the EPR Law, obliged companies must be responsible for the recovery, treatment, recycling, or disposal of their products after these have been sold to and used by consumers in order to reduce the volume of plastic waste generated and extend the life of plastics by adding value or purpose through upcycling or recycling.
DAO 2023-02 states that within six months from the effectivity of the EPR Act, obliged enterprises, collectives, or producer responsibility organizations (PROs) must establish or phase in their EPR programs to manage plastic packaging waste; reduce production, importation, supply or use of plastic packaging; and achieve plastic neutrality.
These EPR programs include activities and strategies that reduce non-environment-friendly products such as the following:
- Adoption of reusable products, or redesign of the products to improve reusability, recyclability or retrievability
- Inclusion of recycled content or recycled materials in a product
- Adoption of appropriate product refilling systems for retailers
- Viable reduction rates plan
- Information and education campaign schemes
- Appropriate labeling of products, including information for the proper disposal of the waste product
They may also include product waste recovery programs that prevent waste from leaking to the environment, including the following activities:
- Waste recovery schemes through redemption, buy-back, offsetting, or any method or strategy for the efficient retrieval, recycle, and recovery of waste products
- Diversion of recovered waste into value chains and value-adding useful products through recycling and other sustainable methods
- Transportation of recovered waste to the appropriate composting, recycling or other diversion or disposal site in the country
- Cleanup of waste leaked to coastal areas, public roads, and other sites
- Establishment of commercial or industrial-scale recycling, composting, thermal treatment, and other waste diversion or disposal facilities for waste products
- Partnership with local government units, communities, and the informal waste sectors
Plastic packaging refers to products utilized to carry, protect, or pack goods for transportation, distribution, and sale. They include:
- Sachets, labels, laminates and other flexible packaging products whether single or multilayered
- Rigid plastic packaging products, whether layered with any other materials, including containers for beverages food, household goods, personal care and cosmetic products, including their coverings, caps or lids and other necessities or promotional items, such as cutlery, plates, drinking straws, or sticks, tarps, signage, or labels
- Plastic bags, including single-use plastic bags, for carrying or transporting goods
Entities obliged to implement EPR programs are large enterprises that generate plastic packaging waste, and micro, small and medium enterprises (MSMEs) when the total value of assets of all enterprises carrying the same brand, label or trademark exceeds that of medium enterprises.
While MSMEs are not covered, they are encouraged to practic EPR voluntarily or be a part of the network of obliged enterprises, collectives, or PROs practicing EPR, states the IRR.
Obliged enterprises must register their EPR programs with the National Ecology Center (NEC). In a public consultation on January 30, 2023, the Environmental Management Bureau said enterprises should register their EPR programs with the NEC within six months from the effectivity of the EPR Law, or by February 12, 2023.
Moreover, companies must comply with the targets under the recovery program for plastic product footprint generated during the immediately preceding year. The recovery targets increase annually from 20% by December 31, 2023 through to 80% by December 31, 2028 and every year thereafter.
DAO 2023-02 likewise provides for incentive schemes to encourage enterprises to develop or undertake an effective solid waste management system. Fiscal incentives include tax incentives for eligible activities; consideration of EPR expenses as necessary expenses deductible from gross income; and tax and duty exemption for donations, legacies and gifts that support and maintain efficient solid waste management programs.
Enterprises that fail to register their EPR programs or meet compliance targets for recovery stand to face fines and penalties.
Penalties range from P5 million to P10 million for the first offense, more than P10 million to 15 million for the second offense, and more than P15 million to 20 million for the third offense and automatic suspension of the business permit.