The Plastic Reduction and Circular Economy Act 2021 (Act) commenced on 29 November 2021, implementing the first stage of reforms outlined in the NSW Plastics Action Plan, aimed at reducing waste generation from harmful plastics.

The Act phases out the supply of problematic or unnecessary plastic items and introduces a framework for mandatory product stewardship requirements for brand owners of regulated products. However, much of the detail of the implementation of the Act is still unknown, as this will be prescribed in regulations made under the Act, which are yet to be exhibited.

Phasing out of single-use plastics

The Act makes it an offence for a person, while carrying on a business, to supply a prohibited item. Carrying on a business is broadly defined, and includes charitable, educational, sporting and community activities.

An item may be prohibited either because it is a ‘prohibited plastic item’ or because it fails to comply with the design standards applicable to that item.

Prohibited plastic items

‘Prohibited plastic items’ are prescribed items that are unnecessary or are problematic for environmental, human health or economic reasons, including reasons relating to waste management or resource management. Prescribed items will be taken to be unnecessary or problematic, if the Minister has formed such an opinion, having regard to the precautionary principle^[1] and, among other things, the difficulties encountered in the collection or recycling of the item.

The following items are currently prescribed for the purposes of this definition, from the following dates:

Lightweight plastic bags	1 June 2022
Single use plastic straws, stirrers, cutlery, bowls, plates and cotton buds	1 November 2022
Expanded polystyrene food service items (such as cups, bowls or plates)	1 November 2022

Items containing machine-automated integrated plastics (for example, pre-packaged food with a spoon sealed inside) are not prohibited plastic items, unless otherwise prescribed, nor are garbage bags or supermarket bags used for fruit, vegetables or meat.

Design standards

The Act provides for the regulations to prescribe design standards for a particular item for environmental, human health or economic reasons, including (among other things) waste management, increasing recycling and promoting waste avoidance. Design standards that may be prescribed include requirements for material from which an item may be made or the way in which an item may be designed, constructed, manufactured, packaged or labelled.

The only design standard currently prescribed for the purposes of the Act is a prohibition on the use of plastic microbeads in personal care products, such as face washes, exfoliants and shampoos. This design standard will commence on 1 November 2022.

Additional prohibited plastic items or design standards and exemptions

Additional prohibited plastic items or design standards may be prescribed in the future by the regulations.

The Act requires the Minister to take reasonable steps to implement an eight-week consultation period for any regulation prescribing a prohibited plastic item or design standard, with the relevant provision to commence no earlier than six months after the regulation is published (unless urgent or otherwise in the public interest).

The NSW Environment Protection Authority (EPA) has a broad power to grant exemptions under the Act, including for a particular premises or product, or for the supply of drinking straws to persons with a disability or medical requirement.

Regulation and compliance

Supplying a prohibited plastic item or an item that does not comply with a design standard, while carrying on a business, attracts a penalty of up to $55,000 for a corporation. It is also an offence to provide false or misleading information in the supply of a prohibited plastic item or an item for which there is a design standard.

The maximum penalties for the relevant offences are doubled for offences committed by manufacturers, producers, wholesalers and distributors.

The EPA also has the power to issue a compliance notice on the occupier of a premises or a supplier, which can require action such as ceasing supply of the item or carrying out independent testing on the item. It is an offence to fail to comply with a compliance notice. The EPA may also take action to cause the notice to be complied with and recover its costs for doing so.

Mandatory product stewardship

Parts 3 and 4 of the Act provide a framework for the imposition of product stewardship requirements and targets on brand owners.

Product stewardship requirements may be imposed by the regulations, including (among other things) for the:

1. use of recycled materials and the design and longevity of a product
2. reduction of litter or unlawful waste disposal
3. re-use or recovery of a product and its impact on waste management.

The regulations, or the Minister, may also set targets, including percentage-based targets, for these requirements.

The product stewardship requirements will apply to ‘regulated products’ prescribed by the regulations. In addition to the eight-week consultation period for the regulation, the relevant provision of the regulation prescribing a regulated product must not commence earlier than 12 months after the regulation is published (unless urgent or otherwise in the public interest).

Regulation and compliance

The regulations can require a brand owner to submit, for approval by the EPA, an action plan setting out how they intend to comply with the prescribed requirements, targets or record keeping obligations under the Act. As a condition of approving an action plan, the EPA can require the provision of a financial assurance, such as a bond or bank guarantee, to secure funding for the actions set out in the plan, which the EPA can draw upon to carry out that action if the brand owner fails to do so.

It is an offence for brand owners to contravene a product stewardship requirement or target, attracting a penalty of up to $440,000 for corporations, plus $44,000 for each day the offence continues. It is also an offence to provide information on product stewardship requirements that is false or misleading.

Conclusion

The Act represents a small step towards alleviating the growing pressure on local governments in dealing with increased waste generation and limited recycling options. With only 10% of plastics in NSW currently being recycled,^[2] and many landfills projected to reach capacity within the next 15 years,^[3] the phasing out of problematic plastics is a good first step, together with the broader strategies adopted in the NSW Waste and Sustainable Materials Strategy 2041.

As the Act largely provides a framework for additional details to be prescribed by the regulations, it will be necessary to wait until the proposed regulations are exhibited to understand the full reach of the Act.

The proposed regulations will also reveal how it is intended that the product stewardship requirements will interact with existing schemes, such as under the Australian Packaging Covenant and Part 8 of the Protection of the Environment Operations (Waste) Regulation 2014 (NSW).

^{[1] The precautionary principle is the principle that if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used a reason for postponing measures to prevent environmental degradation.
[2] Second reading speech to the Plastic Reduction and Circular Economy Bill 2021 (NSW).
[3] NSW Waste and Sustainable Materials Strategy 2041 (June 2021), page 11.}