Russia introduces waste producer responsibility

The new year saw the entry into force of a brand new law amending the rules and requirements of waste management in Russia. Numerous follow-up regulations are to be anticipated. Commercial waste producers, including consumer products manufacturers, and waste management players will need to keep a close eye on these developments. We last reported on waste management law in Russia on 4th December 2014.

The end of December 2014 brought in the rapid development of expected changes in waste management legislation in Russia, details of which had been published over the course of 2014. As a result, Federal Law № 458-FZ "On Amendments to the Law 'On Production and Consumption Waste' (the "Law") was enacted on 29 December 2014 and came into force on 1 January 2015, rather than in 2016 as originally envisaged.

New basic principles

The Law renders manufacturers and importers responsible for ensuring that targets are met for the recycling of end of life goods. In the West this is known as Producer Responsibility. They can do this by organising their own recycling systems, enter into a contract with a regional recycling operator, or by paying an environment fee which will be used (i) to finance the regional collection, transportation, treatment and recycling of the end of life waste, and (ii) to build the infrastructure necessary for the recycling and treatment of waste.

Surprise provisions

Some important features appear in the Law but were not included in the bill or were substantially amended. These are summarised below.

The Russian Government will be responsible for outlining the recycling targets that must be met, and for setting the rates of environment fees for different goods. Environment fees for January to September 2015 (inclusive) will have to be paid by 15 October 2015, and for October to December 2015 (inclusive) by 1 February 2016.

The Law states that the collection, transport and recycling of waste in each region of Russia is to be carried out, for a period of not less than 10 years, by a single regional operator selected by the authorities of each region on a competitive basis. For manufacturers and importers, signing a contract with the regional operator will be an alternative to undertaking waste management recycling themselves or to paying the environment fee.

The Law also creates a new system for licensing waste management activities, and all licences issued before the Law entered into force will only be valid until 30 June 2015. As a result, the holders of these older licences will have to obtain new ones before the end of June this year. The same requirement will apply to those manufacturers and importers who will wish to organise waste recycling processes of their own and avoid paying the environment fees.

New waste management infrastructure

Under the Law, new waste management infrastructure will be built solely through the use of the Russian public procurement system. This is in contrast to the plans envisaged at the bill stage, for the setting up of a special state fund that was to operate through public-private partnerships and co-investment, and which would have used the environment fees levied to finance the projects.

Comment

The Law’s entry into force means that not only waste management contractors, but also manufacturers and importers of goods, will need to closely monitor the Russian Government’s adoption of the numerous regulations that are already provided for by the Law, such as those establishing the mandatory recycling targets and rates of environment fees. They will subsequently have to adapt their business activities to the rapidly changing legislative environment over the course of 2015.

Western companies will be very familiar with the concept of Producer Responsibility. They will be aware of teething issues with such laws in the early stages and that the responsibilities under such laws tend to increase over time.