Extended Producer Responsibility (EPR) is a policy that ensures producers are accountable for the entire life-cycle of their products, especially in managing these at the end of their life. EPR spans product and packaging design and development to its collection, recycling, and disposal. This strategy aims to reduce the impact of waste on the environment and hold producers accountable for their products, steering most of the responsibility of waste management towards producers and incentivizing them to encourage better practices and innovations.
Waste management has become an increasing global concern. Governing bodies and organizations are pressed for time and are pushed to create innovative and sustainable solutions to mitigate waste and its long-lasting effects. The history of EPR dates back to the 1990s where Sweden passed the first EPR Law, which focused on paper and packaging waste. Traced back to Swedish academic Thomas Lindhqvist, who introduced the concept of producers being responsible for their products to the Swedish Ministry of the Environment, EPR has now evolved and spread across countries around the world, with legislators establishing laws tailored to the needs of their community.
While laws in the Philippines have already been implemented to ensure proper solid waste management and initiatives towards waste reduction, such as the Ecological Solid Waste Management Act of 2000 (RA 9003), implementing these has been a challenge. The Philippines continues to be one of the biggest contributors to plastic waste in the world. In addition, RA 9003 primarily focuses on waste management and overlooks the entire lifecycle of a product, which plays a significant role in waste management as packaging design is a key factor that affects a product’s life from start to finish. To further strengthen policies and legislation dedicated to combating pollution, a new and more aggressive approach has been taken. This approach begins and ends with the producer.
EPR in the Philippine setting is fairly new, having only been passed into law in July 2022 and taken into effect on August 13, 2022. Additionally, the Implementing Rules and Regulations (IRR) of the law was signed in January 2023. The Extended Producer Responsibility (EPR) Act of 2022 or RA 11898 aims to address the rising concern of plastic waste in the Philippines through encouraging producers to reduce the amount of plastic they bring into the ecosystem and implement programs aimed to recover waste.
The EPR Act of 2022 is primarily concerned towards plastic packaging waste, ranging from sachets and single use plastics to rigid plastic containers and polystyrene. The law also directs stakeholders towards a common goal. By the end of 2023, 20% of the plastic generated during the year must be recovered. This target increases by increments of 20% and by 2028 and in the succeeding years, producers are required to recover 80% of their plastic waste produced during the year.
Enforcing EPR is a game changer for sustainable development in the Philippines. By holding producers accountable for post-consumer waste management, opportunities to innovate and establish programs and systems arise and further transform the changing landscape of sustainability.
The EPR Act of 2022 primarily targets large enterprises or brand owners who sell or supply a product under a brand or identity. These can be produced by the enterprise or supplied by a manufacturer or supplier. According to the Magna Carta for Micro, Small and Medium Enterprises (MSMEs), a large enterprise is an enterprise with total assets exceeding Php 100M. Moreover, the EPR Act of 2022 also holds manufacturers and importers accountable for the goods they supply for the use of general consumers.
In the case of MSMEs, they are not required to participate yet are also highly encouraged to take part in EPR-related initiatives.
Large enterprises are then required to recover a percentage of their plastic packaging waste each year. To do this, they can establish their EPR programs or work with Producer Responsibility Organizations (PROs) to support them in implementing EPR programs. Enterprises also have the option to join forces and create their own PRO. EPR programs can consist of developing waste recovery programs and facilities or collaborating with local government units, communities, and informal waste sectors to strengthen local initiatives.
These EPR programs must be registered with the National Solid Waste Management Commission (NSWMC) within six months of the law taking into effect. Programs are reported to the National Ecology Center (NEC), a newly established branch under the NSWMC. The NEC maintains the registry of EPR programs, and monitors and evaluates the compliance of its registration. When registering an EPR program to the NSWMC, the following information is required:
The NEC not only monitors the EPR programs alongside the Department of Environment and Natural Resources (DENR), the Environmental Management Bureau and the NSWMC, the NEC also acts as a resource center for recycling, given that its responsibilities also include the creation of a solid waste management information database that include solid waste management practices, processors or recyclers, and the materials recycled or bought by them and their prices.
In auditing and reporting the progress and compliance of their EPR program, obliged enterprises or their PRO are to implement an auditing system. This is done through an independent third-party auditor which will certify the accuracy of the data and the program compliance. This report is to be submitted to the DENR and will be made available publicly on their website.
The EPR Act of 2022 transforms the ways enterprises operate, as sustainability initiatives reshape their way of doing business in the Philippines. Practicing EPR is a constantly evolving and improving process that poses initial challenges yet leads towards rewarding outcomes and significant opportunities. Implementing EPR policies on a national level steers towards progress in creating a sustainable environment by bringing in private sector collaboration. For enterprises, EPR encourages new ways of thinking in product design, manufacturing, and in overall sustainability reporting.
Given that the EPR Act of 2022 requires enterprises to publish their reports to the public, there is a heightened urgency for producers to be accountable and transparent to governing bodies, consumers, investors, and the general public. Enterprises then must reflect on current practices and even revisit strategies geared towards sustainability. While efforts in ensuring accurate reports derived from strong sustainability performance metrics can be costly, the investment opens enterprises to fostering trust with the general public and may also potentially attract investors who greatly consider sustainability and social responsibility.
The financial implications of the EPR Act of 2022 also push enterprises to take responsibility for their plastic packaging waste. Obliged enterprises that fail to register their EPR programs or fail to meet their targets in plastic packaging recovery and diversion are subject to paying fines. If the company fails to meet their targets, they are to pay a fine twice the cost of recovery and diversion of their plastic footprint or its shortfall, or the respective fine, whichever is higher. Fines for failure to comply are the following:
Yet outstanding performances, innovations, and initiatives anchored towards solid waste management pose rewards and incentives for individuals, private organizations, obliged enterprises, and PROs, including non-governmental organizations. Large enterprises or their PROs can also apply for tax incentives for their EPR program, observing the process as indicated in the National Internal Revenue Code of 1997. EPR expenses are considered necessary business expenses deductible from gross annual income.
EPR upholds accountability for producers in how they manage their plastic packaging throughout its entire lifecycle. Yet this also requires collaboration and active participation across all sectors and stakeholders, such as manufacturers, brand owners, consumers, local government units, and informal waste sectors, in order to reach set targets. Through implementing EPR programs, enterprises can establish groundbreaking solutions in the country by collaborating with PROs and local government units. This then trickles down to creating improvements in current solid waste management practices and systems within different communities. EPR programs engage large enterprises with its stakeholders and potentially bring up livelihood opportunities for informal waste management sectors as well.
The future of the EPR Act of 2022 in the Philippines is in progress and is to further develop in the upcoming years. Within one year of its implementation, the NEC is to examine and update the list of products and plastic packaging material that shall be phased out. They are also to assess the volume or footprint of other generated wastes, such as glass, metals, and paper and cardboard, that can be included in the EPR scheme, eventually increasing other materials that need to be recovered by enterprises over time. In addition, within five years after the effectivity of the EPR Act of 2022, or whenever the need arises, progress, accomplishments, and the impact of the EPR Act, and the performance of its implementing agencies and the compliance of obliged enterprises shall be reviewed by Congress. This is to determine further steps, improvements, and changes needed to achieve targets.
Extended Producer Responsibility is more than just a practice that aims to shift the responsibility of waste management to the producers. EPR is a revolutionary approach anchored towards national progress in addressing environmental concerns. For companies, EPR drives reforms, improvements, and new discoveries on business practices. Successful EPR programs leverage companies in public trust and future-proof businesses in a rapidly changing environment where sustainability increasingly plays a key role in corporate strategy and operations.
At Keslio, we are deeply passionate about sustainability, equipping us with the expertise and extensive network needed to guide clients through their sustainability journey effectively and efficiently. Our expertise is particularly valuable for companies looking to embed sustainability practices into their businesses and investors looking to integrate ESG and impact into investment portfolios. To learn more about how Keslio can assist your organization on its sustainability journey, please don't hesitate to get in touch with us.
