Co-authored by: Anna Tombs, Student-at-Law
As the recent media attention in BC
highlights, new obligations arising under the BC Recycling
Regulation1 (the
"Regulation") may soon significantly
impact businesses in the province. Established under the
Environmental Management Act2 (the
"Act"), the Regulation places
responsibility for the environmental management of a product across
its entire life cycle on the producer of the product. In 2011, the
Regulation was amended and the scope of its application was
significantly widened to include packaging and printed paper
products as designated products, as of May 19, 2014. As a result,
all "producers" of packaging and printed paper products
must by that date begin implementing an approved stewardship plan
for these products. Failure to comply with the Regulation could
result in harsh penalties, including fines up to
$200,000.3
The stewardship regime established under the Regulation, however,
is complex and can be difficult to navigate. Consequently,
determining a company's obligations under the Regulation is
challenging. The following discussion sets out some of the
preliminary questions that must be considered.
(1) Is the business product a designated
product?
First, a company will need to determine whether its
business' products fall under a designated product category
under the Regulation. For example, the packaging and printed paper
product category encompasses all "printed paper" that is
printed with text or graphics as a medium for communicating
information.4 This would include packaging and printed
paper used in the food, restaurant and retail industries. However,
given that a variety of other designated product categories have
also been established under the Regulation, an organization's
products may fall under more than one category. As a result,
careful evaluation of a business' products and their potential
categorization under the Regulation is required.
(2) Is the company a producer?
Next, a company will need to determine whether it falls under the
definition of "producer" under the Regulation. The
Regulation establishes three possible categories of producers and
places them within a hierarchy where the "top ranked"
steward will be subject to obligations under the Regulation over a
lower ranked steward. The three categories of producers and their
"rankings" are as follows:
(1) The manufacturer: a person who manufactures the product and
sells, offers for sale, distributes or uses it in a commercial
enterprise in BC under the manufacturer's own brand;
(2) The brand owner: if subparagraph (1) does not apply, a person
who is not the manufacturer of the product but is the owner or
licensee of a trademark under which a product is sold, distributed
or used in a commercial enterprise in BC, whether or not the
trademark is registered;
(3) The first importer: if subparagraphs (1) and (2) do not apply,
a person who imports the product into BC for sale, distribution or
use in a commercial enterprise.
Consequently, companies must carefully consider the nature of their
business and sales / distribution to determine whether they fall
under any one or more the "producer" categories. Then, if
the company does fall within one of the "producer"
categories, it must determine whether it is the entity responsible
for fulfilling the Regulation's stewardship obligations based
on whether it is the preferred or "top ranked"
steward.6 For example, if Company A is the brand owner
for a product, but Company B is the manufacturer of the product,
Company B will be designated as the "producer" because
the Regulation prioritizes the manufacturer over the brand owner
and first importer. As a result, Company A would have no
obligations under the Regulation. However, if Company B does not
satisfy the Regulation's definition of manufacturer, Company A
would be the "producer" and therefore responsible for
carrying out the Regulation's obligations.
Additionally, some guidance material prepared by the Ministry of
the Environment (the "Ministry") or
stewardship agencies can complicate matters by using terminology
that does not completely match the Regulation. For example, some
agency publications provide that producers must be residents of
BC7, implying that non-residents of BC are not subject
to obligations under the Regulation. However, no such residency
requirement is found under the Regulation itself.
Furthermore, incoming legislative exemptions have been announced by
the Ministry which will exempt certain small businesses from
compliance with the Regulation. A draft of these new exemptions is
anticipated to be released in late March 2014. Upon their release,
companies will need to review the proposed new exemptions to
determine if they impact their obligations under the
Regulation.
(3) How will your business implement a stewardship
plan?
In order to comply with the Regulation, a company that is a
"producer" of a designated product, such as packaging and
printed paper products, must either prepare and implement its own
stewardship plan or appoint an approved agency to do so on its
behalf. For example, the agency Multi-Materials British Columbia
("MMBC") has created a stewardship plan
for packaging and printed paper that has been approved by the
Ministry pursuant to the Regulation. Beginning on May
19th, 2014, MMBC will begin implementing and
administering this approved stewardship plan on behalf of its
registered members. Any producers of designated packaging and
printed paper not registered with MMBC, and not otherwise exempted,
will be required to implement their own stewardship plans approved
by the Minister of as May 19th, 2014. Other similar
agencies have created stewardship plans for designated products
under the Regulation and a complete list of plans approved by the
Ministry for all designated products may be found on the
Ministry's website8.
As described above, determining a company's compliance
requirements under stewardship regimes such as the Regulation can
be difficult and complex. As a result, it is recommended that
organizations seek assistance in confirming their obligations to
ensure compliance.
1 Recycling Regulation
, BC Reg 449/2004 (the
"Regulation").
2 Environmental Management Act, SBC 2003, c 53
(the "Act").
3 Section 16 of the Regulation.
4 Schedule 5 of the Regulation.
5 Section 1 of the Regulation.
6 Section 1 of the Regulation.
7 For example at pages 17-18 of the MMBC,"A Guide
to Help Businesses Meet Their Recycling Obligations in BC",
(11 September 2013) provides that "If your business or
organization is resident in BC and supplies packaging and
printed paper into BC, the next step is to determine if your
business or organization is responsible for the packaging or
printed paper as a brand owner, first importer or
franchisor."
8 See "Product Stewardship" (14 March 2014),
online: British Columbia Environment http://www2.gov.bc.ca/gov/topic.page?id=BEBA70369C274C8FBA4FB42BE828A9EB
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2014
