Oireachtas Joint and Select Committees
Tuesday, 17 October 2017
Joint Oireachtas Committee on Communications, Climate Action and Environment
Waste Management (Tyres and Waste Tyres) Regulations: Discussion
We now turn to the main business of this evening's session, which is scrutiny of Statutory Instrument No. 400 of 2017 Waste Management (Tyres and Waste Tyres) Regulations. This was laid before the Houses of the Oireachtas on 15 September 2017. These regulations may be annulled by both Houses of the Oireachtas within 21 sitting days after they were laid, in accordance with section 7(3) of the Waste Management Act 1996, and the committee decided to scrutinise these new regulations, which come into effect from 1 October 2017, provided they are not annulled or otherwise found problematic in this session.
I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the chairperson to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
I also wish to advise witnesses that any submission or opening statements they have made to the committee will be published on the committee website after this meeting. The audio and visual will be online also.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
I also remind members to turn off their mobile phones or turn them to flight mode, because they can interfere with the sound system and make it difficult for the parliamentary reporters to report the meeting, and it can also interfere with television coverage and live streaming.This is not always obvious. It might appear to be fine at the time, but on looking back at a video clip it is distorted.Even if it does not appear to be so, it can happen within the equipment.
I would like to welcome witnesses from the following organisations: the officials from the Department of Communications, Climate Action and Environment and representatives from the Environmental Protection Agency, EPA; the Protecting Uplands and Rural Environments project, PURE; Repak End of Life Tyres, ELT; Producer Register Limited, PRL; the Independent Tyre Wholesalers and Retailers Association; the Irish Tyre Industry Association, ITIA; the Irish Road Haulage Association, IRHA; the Irish Farmers Association, IFA; and the Association for Tyre Retail Standards, ATRS. I will invite witnesses in a moment to give evidence, and then we will proceed to a question and answer session with the members.
The committee will now proceed to consider the statutory instrument. The nuclear weapon is annulment, but we have a variety of options. It is a normal item of business that we consider such secondary legislation when it comes through, so we will now proceed to do so. The opening statements have been circulated to the committee and they will be published on the committee's website after the meeting. Representatives from the County and City Management Association, CCMA, could not join us today, however they have made a submission which will also be published on the committee's website after the meeting.
I will call on the first witness from each organisation. As part of your submission you may wish to introduce additional witnesses from within your organisation but we will start with one witness from each organisation to lead out. We have one change to the witness list. We will hear from Mr. Niall Murphy, CEO of the Irish Tyres Industry Association, rather than Mr. Paddy Murphy, the president, as was initially planned. We will take Mr. Murphy when we get to him, in sixth place on the list.
Our first witness is Mr. Matt Collins, assistant secretary to the Department of Communications, Climate Action and Environment. We will listen to Mr. Collins' evidence and then we will move on accordingly.
Mr. Matthew Collins:
Thank you, Chairman, for inviting us here to discuss the proposals to address waste tyres. The members of the committee have received a paper outlining the background and introduction of these regulations and the Department's interactions with stakeholders in that regard. I would like to draw members' attention to the main points raised in that submission, rather than go through it in full detail.
These regulations were signed by the Minister as a means of dealing with the chronic problem of waste tyres in Ireland. The scale of the problem is now such that the Minister has made available €1 million this year to 23 different local authorities who have reported illegal stockpiles of tyres dumped within their own jurisdictions. The new structures that are being introduced deliver on recommendations stemming from a report in 2013, which looks specifically at how the tyre industry was operating the producer responsibility schemes. The report found the schemes were not fit for purpose.
The recent regulations signed by the Minister enable the establishment of a full compliance scheme for tyre operators, financed by a visible environmental management cost, or VEMC. Similar compliance schemes have operated very successfully across other waste streams, including packaging, waste electrical and electronic goods, batteries and farm plastics. The introduction of the VEMC will standardise and formalise a charge that tyre retailers already apply to purchases of new tyres by consumers, and ensure that the fee they pay goes towards what it is supposed to support, the environmental treatment of waste tyres. The Department met on several occasions with different sectors of the tyre trade, including representative bodies, manufacturers, wholesalers, retailers, waste tyre collectors and recovery operators, to discuss the design of the new scheme. In addition to this, all three tyre representative organisations and tyre manufacturers were consulted in the drafting of the new regulations. Their input into same was very constructive. The Department recognises that the new scheme is a different approach for the industry, and will continue to work closely with the industry as it develops.
I thank the committee.
I thank the witness. We will now move to the next witness from the EPA. So that witnesses can consider their submissions, I will outline the order in which they will be taken. First is Dr. Eimear Cotter from the EPA and he will be followed by Mr. Tony Keohane from Repak, Mr. Ian Davis from PURE and Mr. Dominic Henry from PRL. After that I understand Mr. Niall Murray from the Irish Tyre Industry Association and Mr. Eamon Daly will make a joint submission.
We will then hear Ms Verona Murphy from the Irish Road Haulage Association; then Mr. Thom Fox, Chairman of the Association for Tyre Retail Standards; followed by Mr. Thomas Cooney, Chairman of the IFA committee on environment and rural affairs.
I now call Dr. Eimear Cotter from the Environmental Protection Agency, EPA, to make her statement.
Dr. Eimear Cotter:
Thank you very much, Mr. Chairman. I thank the committee for the opportunity to come here and discuss the recently published waste management regulations. I am joined by my colleague, Dr. Tom Ryan, who is a Programme Manager at the Environmental Protection Agency. First, by way of introduction, the EPA's mission is to protect and improve the environment as a valuable asset for the people of Ireland, and to protect against the harmful effects of radiation and pollution. A substantial area of the EPA's activities in achieving that mission is the enforcement of environmental legislation assigned to it by the Oireachtas.
On waste tyres that are not appropriately managed, there are environmental risks. For example, illegal dumping of waste can cause environmental pollution,and stockpiles of tyres pose a fire risk. Used and waste tyres also have a significant visual impact. Appropriate management of this waste is therefore necessary if health and safety risks and pollution are to be avoided. As an indication of the size of the issue being managed through these regulations, information published recently by the EPA showed that approximately 28,000 tonnes of waste tyres were managed in 2014 in Ireland. In total, 43% of managed tyres were recycled, while 35.6% were exported and used as a fuel.
The EPA welcomes these new regulations, which are designed to maximise the re-use, recycling and recovery of waste tyres. The new regulations will strengthen the regulatory control of waste tyres by tracking the journey of each tyre from its first appearance on the market to the point where it becomes waste. They involve obligations on producers in places - importers in Ireland's case - as well as retailers, waste collectors, local authorities and the EPA. In addition, the new producer responsibility initiative will include collecting information on tyres and waste tyres in the distribution, collection and waste treatment network, which will assist in meeting data caps, particularly on the level of unauthorised disposal.
The role assigned to the EPA is very specific and is set out in section 45 of the regulations, which describes an enforcement role in relation to tyre producers, a tyre producer being the first person to put a tyre on the market as a tyre sale or on a vehicle. The producers' obligations include registration and provision of information to the registry body, the retention of records, and the display of a registration number. The EPA's approach in this enforcement role will be consistent with its overall enforcement principles; proportionality in the application of environmental law and in securing compliance; consistency of approach in response to incidents and use of powers; transparency in how it operates, to ensure public confidence; a risk-based approach, targeting activities that cause the greatest environmental damage or pose the greatest threats to the environment; and the application of the polluter pays principle, working towards ensuring that persons who cause environmental damage are held financially accountable for their actions.
The key objectives of the EPA's enforcement activity in respect of these regulations will be to determine compliance with the requirements of the regulations for all known tyre producers in the State on an annual basis, with an appropriate enforcement response to non-compliance, commensurate with the EPA's enforcement principles. We will also work to identify and engage with other operators, who may be tyre producers under law but are failing to meet their obligations through ignorance or wilful non-compliance, the so-called "free riders". Again, the EPA will follow through with an appropriate enforcement response and escalate that response as required. The EPA will also work closely with the various stakeholders, in particular Repak ELT, local authorities and the Producer Register Limited, to ensure awareness of the requirements of the regulations and in the development of compliance guidance. We in the the EPA welcome these regulations as a means of improving the management of waste tyres, maximising their reuse, recycling and recovery and addressing data gaps. In our specific role, we will undertake our enforcement activities in line with the principles I have outlined and work with other stakeholders to assist compliance as appropriate. I thank the committee.
Mr. Tony Keohane:
I thank the Chairman, Deputies and Senators for the opportunity to address this committee.
Repak End of Life Tyres, ELT, a company limited by guarantee, was incorporated on 24 July 2015 under Part 18 of the Companies Act 2014. Repak ELT applied with a detailed submission to the Department of Communications, Climate Action and Environment to be the approved waste management scheme, and was granted an approval by the Minister from 1 October 2017 to 31 December 2022, subject to an interim review in 2020. Repak ELT is a not-for-profit company. It was set up to manage a compliance scheme for producers and retailers to ensure that their waste tyres were managed in an environmentally sound manner. Twenty countries in Europe have end of life tyres producer responsibility initiatives. Repak ELT's mission is to provide legal compliance for its members under the Waste Management (Tyres and Waste Tyres) Regulations 2017, and in doing so to focus on providing a cost-effective solution and responsible, environmentally sound recovery methods for waste tyres.
Repak ELT is a separate legal entity to Repak Limited, the compliance scheme for packaging waste. There is a service level agreement between the two entities, which enables synergies to be created and Repak ELT to draw on the considerable experience and lessons learned by Repak Limited throughout its successful 20 years of operation. Such experience covers the full range of compliance activities, including data capture and storage, membership recruitment and management, auditing, target achievement, communications, awareness raising and behavioural change.
On behalf of its members, Repak ELT will be responsible for all tyres sold to the consumer with a visible environmental charge, and for the waste tyres coming off the market to be collected by authorised waste collectors. So far, since the introduction of the Waste Management (Tyres and Waste Tyre) Regulations 2017, we have 1,695 members, representing retailers, wholesalers and producers, while over 2,013 outlets have been signed up to the scheme. These include 1,375 retailers and 114 producers, with the balance being authorised treatment facilities. The industry has responded positively to the introduction of the regulations. A total of 21 collectors have been approved, based on having up-to-date tax clearance certificates, national waste collection permits on all vehicles and verified outlets for the recycling and recovery of waste tyres.
The visible Environmental Management Cost, vEMC, introduced as part of the regulations, is formalising an existing charge that was applied by most retailers. The Minister has set this cost to be €2.80 for car tyres and €1.50 for motorbike tyres. The vEMC for truck tyres will be introduced in January 2018. The visible charge will pay for the following; the collection and transportation of tyres for recycling and recovery; the recycling and recovery cost; contribution to the historic stockpile fund; the funding of Producer Register Limited; education and awareness for the public and producers; administration costs of the scheme, including auditing; and the build-up of a contingency reserve fund which is a standard requirement for all full producer repsonsibility initiative, PRI, schemes.
Repak ELT has put in place a comprehensive communication and awareness programme for consumers and for all potential obligated businesses in the past 12 months, including but not limited to a road show at five venues across the island of Ireland. This was attended by theDepartment, the Enivronmental Protection Agency, EPA, the Waste Enforcement Regional Lead Authorities, WERLAs, the Producer Register Limited, PRL and Repak ELT, as well as producers, retailers, car manufacturers and collectors. A campaign of direct letters, emails, direct calling, radio advertising and a website with all the necessary information to comply are all in place. A consumer radio awareness programme will commence in January 2018.
As with any new compliance scheme, behavioural change is required and will take time. The initial response from the tyre industry has been positive. Repak ELT will support the enforcement process as required with the statutory authorities. Repak ELT’s long-term strategic objectives are; to maximise complce levels and grow the membership base of Repak ELT; to meet agreed ELT recovery and recycling targets in a cost-effective and environmentally sound manner; to continually benchmark with other EU member states to pursue excellence in recycling and recovery and promote best practice aligned to the waste hierarchy; to build up a sufficient contingency reserve over time; to contribute to abatement programmes for historic stockpiles; and to deliver a sustainable financial plan.
I can assure the committee that Repak ELT would use its best endeavours in delivering a compliance scheme that protects our environment with the help of all the stakeholders.
Mr. Ian Davis:
I thank the Chairman and the committee. PURE is a partnership project and the first of its kind in Ireland. It incorporates statutory and non-statutory organisations, including Wicklow County Council, South Dublin County Council, Dún Laoghaire-Rathdown County Council, Coillte, the National Parks and Wildlife Service and the Wicklow Uplands Council. It was established to combat illegal dumping and fly-tipping in the Wicklow-Dublin uplands. The project is funded by the Department of Communications, Climate Action and Environment, with additional financial and in-kind contributions from the other key stakeholders. PURE was officially launched in September 2006 as a three-year pilot initiative.
The PURE project focuses directly on combatting illegal dumping and fly-tipping in the Wicklow-Dublin uplands by utilising a multi-discipline approach incorporating a number of enforcement and preventative measures, media and public relations campaigns, public awareness campaigns, community projects, and educational initiatives. These include a lo-call phone line with the EPA, 1850 365121, that people can use to report directly to PURE; environmental effectiveness; a dedicated clean-up vehicle; GPS and GIS databases to record all incidents of fly-tipping; deployment of PURE covert CCTV; public awareness campaigns; multimedia environmental exhibitions; a website and various social media; community initiatives, such as the PURE mile; education programmes; and a media campaign.
I receive reports and complaints of illegal dumping through a number of channels, the EPA phone line, the PURE office, emails and social media such as Twitter and Facebook, etc. I have received over 10,000 complaints and reports since 2007. The PURE GPS and GIS database records all incidents of illegal dumping by GPS. I then transfer this information into a GIS database system, a mapping system, which provides comprehensive information on date of collection, time of collection, location of dumping, landowner, type of waste dumped and the waste quantity on the site. The GPS also enables the user to take a photograph of the site.
Since PURE was established, the project has built up a comprehensive baseline of data on illegal dumping, with over 10,000 individual dumping sites recorded from the Wicklow-Dublin uplands. This is invaluable information in combating, preventing and alleviating illegal dumping. From 2007 to 1 October 2017, the PURE truck has removed over 3,000 tonnes of illegal dumping from the Wicklow-Dublin uplands. To place the total tonnage collected by PURE into context, in 2016 the PURE truck collected 252.59 tonnes of illegally dumped waste. This resulted in 110 truckloads, with an average weight of 2.3 tonnes. Using the figure of over 3,000 tonnes of total waste collected, this indicates that over 1,331 full truckloads of illegally dumped rubbish has been removed from the Wicklow-Dublin uplands since the establishment of PURE. PURE collects illegal dumping from all the organisations involved in the project. I work with a diverse range of community groups, organisations like the PURE mile groups, walking groups, running groups, cycling groups, and special interest groups. I assist them in the removal of illegal dumping and provide advice on suitable preventative measures in relation to illegal dumping.
In 2017, the PURE truck has removed eight truckloads of tyres from the Wicklow-Dublin uplands, with a combined weight of 11.59 tonnes. It is estimated that 1 tonne of tyres equals 200 car tyres, which provides a figure of over 2,300 tyres being dumped in the Wicklow-Dublin uplands. It is estimated that 1 tonne of tyres equals 200 car tyres and, considering that between 2009 and 1 October 2017 PURE removed a total of 64.13 tonnes of tyres, this provides a total figure of over 12,820 tyres being removed from the Wicklow-Dublin uplands during this period.
The establishment of PURE has removed a number of past inefficiencies relating to illegal dumping in the Wicklow-Dublin uplands including early identification of illegal dumping sites, and the swift removal of illegally dumped waste which reduces further dumping occurring at a particular site. For the past 11 years, PURE has been effective in developing a multi-disciplined approach in combating illegal dumping, incorporating both statutory and non-statutory organisations. This has involved enhancing public awareness of dumping, and engaging with all demographics, the young and the old, through the creation of innovative projects such as primary and secondary schools' projects, PURE animation, PURE music, PURE wisdom, PURE theatre, encouraging community participation in the PURE mile, PURE environmental awareness exhibitions, and running a successful regional and national media campaign to highlight the illegal dumping issue. I have provided a selection of photographs of illegal dumping in the Wicklow-Dublin uplands.
Mr. Dominic Henry:
I thank the Chairman, Deputies and Senators for the opportunity to speak today. Producer Register Limited was established in 2005 to assist producers achieve compliance under the then newly introduced waste electrical and electronic equipment, WEEE, regulations. We are a not-for-profit company and currently have four staff. While our remit is quite large, it can in today's context be summarised by the registration and acceptance of the reporting of confidential data from producers. This annual registration process is a simple form-filling exercise and can usually be completed in about ten minutes. Producers have the option to register online or by post.
In order to calculate what producers owed in regard to the financial liability for the collection, recovery and treatment of their products at end of life, we developed the WEEE black box in 2005. This is an online portal into which producers can submit their commercially sensitive data and we will then calculate global figures to give to the compliance schemes, as well as pure financial liability details. We are pleased to inform the committee that in the 12 years since the black box started operations, there have been no security breaches or data leaks from the black box.
In 2008, we were asked to take on the same role for batteries and we developed a similar black box. Likewise, we have attached the tyre black box onto the existing black box and this would be very helpful for producers who have multiple obligations. They would be able to register through one portal and those producers that might have battery and tyre obligations, for instance, would be able to report into the same black box.
Our functions under the tyre regulations are, inter alia, the establishment and maintenance of a register of producers placing tyres on the market within the State. We need to determine the market share of each producer placing tyres on the market and that is done through our black box. We calculate the visible Environmental Management Cost, vEMC, liability of each producer and provide that figure only to the compliance scheme, Repak ELT. We advise the compliance scheme of the amount owing by each producer and we are obliged to report to the Minister for Communications, Climate Action and Environment within six months of our year-end on our activities during the previous year and our financial statements. We also need to provide the Minister with any other such information as he might require from time to time. When a producer applies to register with us, we will provide him with a unique registration number which will remain with him throughout the time he is registered with us.
I thank Mr. Henry. We will now hear from Mr. Niall Murray of the Irish Tyre Industry Association, ITIA. I understand he will be making a short presentation with Mr. Eamon Daly of the Independent Tyre Wholesalers and Retailers Association, ITWRA.
Mr. Niall Murray:
The ITIA and the ITWRA represent all the manufacturers, both of the major producers and a large number of retailers. We would like to thank the committee for giving us the opportunity to make a submission on SI 400.
As an industry, we recognise that we have both a legal and moral obligation to recycle our tyre waste in an environmentally appropriate manner. To give the committee some background, in March 2012 a minor desktop study costing €17,675, called the all-island waste tyre survey, was commissioned jointly by the Department of the Environment in Northern Ireland and the Department of the Environment, Community and Local Government in the Republic of Ireland. The most damning conclusion of this report was that between 24% and 50% of the waste tyres arising in the Republic of Ireland were unaccounted for. Regrettably, this survey had serious transcription errors from one calculation to the next which effected the final mathematical calculations and the statistical conclusions reached. We have attached some appendices to show how these errors were created.
In June 2012, Minister for Environment, Community and Local Government, Phil Hogan, ordered a broader review of the producer responsibility initiative model in Ireland, including waste tyres. A draft copy of this report was published in November 2013 which identified two key performance indicators that were used to measure the waste management performance of the existing compliance schemes. Of the waste tyres, 24% to 50% were unaccounted for, and 800 economic operators were not registered with a compliance scheme. The then Minister, Phil Hogan, relied on this inaccurate statistical analysis of waste collected and the implied postulation that 50% of the numerically non-compliant economic operators equated to 50% of the tyres placed on the market when he announced his decision to consider the imposition of a full producer responsibility initiative at the national waste summit on 28 November 2013.
The Minister, Phil Hogan, announced the establishment of tyre working groups in a press release in May 2014. The first tyre working group meeting was held on Tuesday, 27 May 2014. Most of the key stakeholders were in Germany attending a pre-eminent tyre conference and trade show. The tenor of future meetings was set by the absolute refusal of the chairman to consider rescheduling the initial meeting to facilitate attendance by stakeholders. The second meeting was held on Wednesday, 25 June 2014 at which Repak and the WEEE Registry Society, now PR Limited, were presented on the agenda for presentation, discussion and approval. No input or discussion took place with stakeholders prior to this meeting, so that the presumption has to be that the PR Limited and Repak ELT solution was pre-ordained by Department of the Environment, Community and Local Government officials. As a result of a very strong protest by the two industry representative bodies present at the meeting, the ITIA and ITWRA, the two organisations were allowed to present a joint industry solution at the third tyre working group meeting on Tuesday, 29 July 2014. This presentation was rejected by departmental officials. At a subsequent tyre working group meeting on Tuesday, 7 October 2014, when both organisations presented their individual solutions, each was summarily dismissed without discussion. This was not a very robust consultative process.
Instead of leading the process and potentially developing a consultative conclusion, departmental officials stymied the process with rigidity and overt formality, allowing positions to become entrenched because of the restrictive nature of the process itself. Each group was permitted to present without any effective conference. While the Environmental Protection Agency, EPA, the County and City Management Association, CCMA and the National TransFrontier Shipment Office were all present at the tyre working group meetings, they did not participate in the outcome or recommendations and had no public input into the final documents considered by the Department.
There are three major deficiencies in SI 400 which will result in the failure of this instrument to ensure the environmentally appropriate management of tyre waste. Market disruption in Northern Ireland is not dealt with in any way. The reporting requirements for small tyre shops are confusing and convoluted and place a very significant administrative burden on small family tyre businesses. Enforcement resources are being squandered. Fixed penalty notices were to be a central foundation of new tyre regulations to enhance enforcement efforts by local authorities.
The Minister for Communications, Climate Action and Environment, Deputy Denis Naughten, made the point in his 18 September 2017 press release that the visible environmental management charge, visible EMC, would formalise and standardise the existing charge the consumer already pays when purchasing new tyres. This is simply not correct. At a meeting held in the Minister's constituency office on 15 September 2017, at which he met with two stakeholders, he stated that he understood the previous scheme, the TRACS compliance scheme, charged €2 per car tyre. It was pointed out to the Minister that this was not the case and that the scheme only ever collected a unit fee of €0.10 per tyre from producers to fund the administrative costs of the black box and reporting to the compliance scheme. The retailer paid the cost of recycling tyres from their revenue stream. The Minister further claimed in this same press release that the visible EMC for car tyres would be €2.80 and €1.50 for motorcycle tyres. This charge will in fact be €3.44 for cars and €1.85 for motorcycles. VAT is applicable at a rate of 23% on all retail sales, and legally VAT must be quoted in all retail pricing.
In correspondence between the environmental solicitor, William Fry, and the Minister, it was pointed out that under chapter 2, section 8(3) of the Waste Framework Directive 2008/98/EC it states: “When applying extended producer responsibility, member states shall take into account the technical feasibility and economic viability and the overall environmental, human health and social impacts, respecting the need to ensure the proper functioning of the internal market”. This is a legal requirement. We have attached appendix D and E to our submission to the committee showing this correspondence. In an answer to this correspondence by the principal officer of the Department of Communications, Climate Action and Environment, it was claimed that the flow of tyres from one jurisdiction to the other was more a direct result of currency fluctuations. With a visible environmental management charge of €3.44 and €13.50 respectively for car and truck tyres, the flow will only be one way. Two weeks ago, it cost €1.12 plus VAT to collect, recover and recycle a car tyre. Today, the exact same car tyre will cost €3.44 to recycle, a 250% increase, which will be passed on in full to the Irish motorist. Market distortion will occur because this visible environmental tax is not payable North of the Border and significantly exceeds the commercial cost of properly collecting and recycling a tyre.
Of the tyres imported into Ireland in 2016, 48% were directly imported from Europe, according to CSO figures. Free movement of goods within Europe precludes any official notification of these tyre imports to the Irish authorities. Tyres do not have a serial number. It is not credible to suggest that more than 2,500 small and medium-sized producers will self-declare these imports and pay the mandated environmental levy, nor is it credible to suggest that Repak ELT has designed and can fund an enforcement model capable of cost effectively inspecting and auditing 2,500 plus economic operators to oversee these imports, particularly when tyres can freely flow across the Border and the waste arising can be shipped back North, or worse, fly-tipped south of the border. This will be become even more evident when a visible environmental management charge is added to truck tyres and they cost an extra €13.50 per tyre in January 2018.
The principal officer also stated in his reply letter referred to above, which we include in appendix E of our submission to the committee, that as a result of the new regulations, for “the first time there would be a clear view of tyre data coming on to and off the Irish market”. The new regulations include all of the new car, truck, tractor and farm machinery franchise dealers in the country, the 82,500 second-hand vehicles imported in the year to date from the United Kingdom and Northern Ireland and all of the hardware shops which sell wheeled garden equipment such as lawn tractors etc. All of these entities are importing tyres and have obligations to register as producers and must now pay the applicable environmental charge. It is not credible to suggest that Repak ELT can account for all of the potential tyre waste arising from all of these producer categories while maintaining a level playing field for compliant operators. The environmental impact from market distortion will be a dramatic increase in fly-tipping North and South, as retailers, farmers and transport companies purchase tyres they do not register to remain competitive and need to get rid of the waste arising.
A very important fact to note is that the confidentiality of the black box is today totally compromised by virtue of the fact that anyone can work out a tyre company’s market share by dividing their Repak ELT invoice by €3.44. Producers are entitled to and the scheme should ensure the confidentiality of commercially sensitive information at an absolute minimum. The reporting provisions for tyre retailers are administratively punitive. What is not recognised by the regulations is that practically every retail tyre dealer in Ireland will in fact be obliged to register as both a producer with PR Limited and as a retailer with Repak ELT. Most tyre dealers purchase tyres from Northern Ireland and the UK and further afield on a daily basis. Of all tyres placed on the Irish market, 23% come from Northern Ireland or the UK. As a producer, all retail tyre dealers must report the number of imported tyres they have sold on a monthly basis to PR Limited. In effect, they also must report as producers what they sell to themselves as retailers. They will then be invoiced €3.44 for each car tyre imported and placed on the market by Repak ELT.
As a tyre retailer they must also make a monthly report to Repak ELT, using ten headings, eight categories and 35 sub-categories under each heading. In most retail tyre shops, these reports will have to be completed by hand, as the computer programmes used at retail level are not sophisticated enough to automate the reporting process. I refer to the third schedule, part 11 of the new regulations, where it says, “information to be provided for the purposes of reporting to an approved body”.
We have added that as appendix C. The environmental impact of these confusing reporting requirements will be inaccurate market data resulting from double counting in some cases and distorted reporting from the list of retailers already mentioned struggling to report tyre purchases, sales and waste recovery under eight categories and 35 sub-categories.
Enforcement, and particularly fixed penalty notices, has been recognised by all stakeholders as a key component of a successful enforcement regime. Fixed penalty notices were discussed and promised at every stage of the process as a way to cost effectively manage enforcement resources. All of the stakeholders have publically supported fixed penalty notices at one time or another, including the RPS Group, which carried out both the all-island survey and a review of the PRI model in Ireland for the Department of Housing, Planning and Local Government, the Department itself, the EPA, CMMA, the Tyres Working Group, TWG, sub-committee on enforcement, PR Ltd., Repak ELT and both the ITIA and the ITWRA. Fixed penalty notices as an enforcement tool was promised at all TWG meetings and used as a means to maintain industry involvement in a process with which it was very uncomfortable.
The Minister has indicated that he has made €9 million available with regard to waste enforcement. He has also indicated that he will initiate robust enforcement procedures shortly after the new regulations are introduced. Given the way in which the regulations are constructed, there is very little self-policing, which means that there will be a continuous requirement to engage in costly enforcement actions with a consequent drain on enforcement resources. One of the key recommendations of the review of the producer responsibility initiative model in Ireland document was that non-compliance penalties would be set at an appropriate level and that there would be additional use of civil sanction. The environmental impact will be a squandering of enforcement resources on an ongoing basis because the scheme must be policed continuously rather than monitored continuously.
We feel this scheme will fail because front loading the vEMC has complicated the reporting protocol beyond the competency levels of most retail computer systems, requiring retailers who import from Northern Ireland to report the transaction first to PR Ltd. using one protocol and report the exact same transaction to Repak ELT Ltd using completely different criteria. This creates an administrative and reporting nightmare for the retailer. A back-loaded scheme would capture every tyre placed on the market, reducing reporting and auditing complications considerably. A back-loaded scheme would also allow for the free market to control the cost of collecting, treating and recovering tyre waste in an environmentally appropriate manner.
The producer definition has resulted in three manufacturers opting out of the scheme as producers. Northern Ireland wholesalers are offering to take back waste to allow southern tyre shops to circumvent the need to register. There are so many operational loopholes in this legislation that it has no chance of realising the recovery targets that have been set. The design of this compliance scheme compromises the very environmental outcome desired by all compliant stakeholders but there is a solution. The Minister and his Department maintain that a single compliance scheme is the answer. At one time, the industry supported this position in the full expectation that, as is with best practice throughout European countries operating a PRI, the compliance scheme would be operated and controlled by the industry itself. As it now stands we have a "not for profit" company, Repak ELT, which will receive over €6.5 million per annum in administrative fees without having recycled a single tyre.
As a consequence of a threatened legal challenge by the environmental solicitor firm William Fry to the award of the compliance scheme contract to Repak ELT as a monopoly, the new regulations now include a provision for a second scheme. The industry wrote to the Minister notifying him of its intention to apply to run an industry-led compliance scheme, one with the full support of key producer and retail stakeholders. This proposal was rejected by the Minister, however.
Most of the industry wants a compliance scheme which provides a level playing field for compliant operators with a commercially viable recycling fee which does not distort the marketplace and a reporting format which recognises that the industry consists of mostly small family-run Irish-owned businesses that want waste tyres to remain a waste issue and not become a trading issue. The framework already exists for such a model in the new regulations. The industry can deliver a much lower cost of compliance through proper controls and a more self-enforcement regime where precious enforcement resources can be deployed to counteract persistent non-compliers. The only requirement is for the Minister and his Department officials to recognise that a compliance scheme has a much better chance of being a success when those in it support the process 100%. This is something the industry will deliver should the Minister accept its application to run and fund an industry-led PRI compliance scheme which is fit for purpose, amends the current legislation to set the vEMC at a maximum of €3.44 rather than a fixed fee of €3.44 while recognising the full extent and scope of the underlying legislation.
Ms Verona Murphy:
The Irish Road Haulage Association, IRHA, is the recognised national representative body of the licensed road haulage industry in the Republic of Ireland. The association seeks to promote professionalism, excellence and safety in the operation of road transport businesses. There are approximately 3,700 licensed haulage operators at present in Ireland. The sector supports 50,000 jobs accounting for approximately 2.5% of total employment in the Irish economy. Most of our members are based in rural areas throughout the country providing local jobs. In addition to its strong employment contribution, the sector is also central to getting essential goods for consumers and businesses in and out of Ireland. As such, the sector provides the life blood for Irish commercial and consumer life.
The IRHA fully understands the reasoning behind this new scheme. The illegal dumping or storing of waste tyres, particularly car tyres, is a problem that must be tackled. However, the scheme must be well planned, properly executed and above all amount to a fair and proportionate response. The imposition of a charge of €11 on truck tyres will in no way deal with a problem that is manifestly a problem with car tyres, which account for 94% of the total tyres sold in the State annually and which have little or no end-of-life value. It is not truck tyres that are fly tipped or strewn in the ditches of Ireland. Truck tyres account for a tiny percentage of total tyres sold in the State and are fully recycled through reuse within the State and then by exporting. However, the proposed charge is almost four times the charge for a car tyre when it is generally accepted that end-of-life car tyres retain little or no value and so form a considerable source of waste.
No case has been made to justify the imposition of such a high charge on truck tyres and the IRHA is deeply concerned at the arbitrary manner in which the €11 charge plus VAT was decided. This level is almost four times the level set for car tyres - to date we have not been told why. The IRHA requested a cost breakdown analysis for the charge from the Department but none has been forthcoming. We were told that the charge will go towards collection fee, transport fee, recycling-recovery fee, scheme management costs, auditing, marketing costs, education awareness costs and contingency reserve. However, no information has been given on the breakdown of the charge, that is, how much of the charge goes toward each element listed. The very same list of costs is given for car tyres and yet the rate set for a car tyre is €2.80 plus VAT, which is €3.44.
The system as it exists at the moment operates on the simple assumption that a tyre will have a single use life at the end of which it must be disposed of as waste. Therefore, when a new car tyre is purchased, the consumer pays for its inevitable disposal. This assumption simply does not apply to truck tyres as the same tyre will be retreaded several times after its first use yet it is the purchaser of the new tyre who must stump up the €11 plus VAT. The regulations came into force on 1 October and it is alarming how little preparation has been put into deciding a fair system to deal with the fact that truck tyres are recycled and reused many times before eventually being exported for further uses elsewhere or disposed of. A further meeting is being held at the offices of Repak later this month to discuss this further. The IRHA believes that proper scrutiny and oversight of the activities of Repak would have ensured that this issue was decided upon long before now.
It is very important I set the context for the IRHA's approach to this issue. Our members are facing a considerable threat to their viability arising from uncertainty associated with Brexit.
This has already manifested itself by creating huge issues of financial insecurity and challenge for members, particularly in circumstances where they are having real challenges in providing assurance to their lenders about the future stability of the market. This is a direct, immediate and current impact of Brexit on our members' businesses. The road haulage industry is at the forefront of the economic relationship between the UK and Ireland. Policy makers in Ireland need to ensure that this vital component of Irish economic life is protected to the greatest extent possible.
In the context of such uncertainty the IRHA, at our members' direct instruction, has been directed to engage with the Government to ensure that no new additional costs are imposed on our members. Specifically, we have been instructed to vigorously oppose any costs which are either unnecessary or not properly grounded. We believe that the proposed visible environmental management cost, vEMC, on truck tyres is one such measure which is misplaced and misdirected as it applies to our members. We believe that the imposition of a charge of €11 plus VAT per tyre on our members is unjustifiable and ignores the commercial reality facing our members. It represents a significant additional cost in circumstances where hauliers have absorbed numerous recent cost increases and simply cannot continue to do so in an unprecedentedly challenging operating environment. The proposed charge comes at a time when the IRHA is already seeking emergency measures to avoid a real risk to the viability of its members and the thousands of jobs that they support.
The IRHA has made it clear to the Department that the charge will force members to purchase tyres outside of the State as hauliers are already absorbing numerous cost increases and cannot countenance a new charge, especially one which is totally unjustifiable. Many of our members are already sourcing their fuel outside the State where there is a more effective fuel rebate system in place due to greater recognition of the essential user status of the haulage industry as a lifeblood of the economy. Now it appears our members are being forced to source another support service outside the State, a State which is failing its indigenous haulage industry and the 50,000, mainly rural, jobs it supports.
In conclusion, the IRHA believes that the charge for large truck tyres should be set at 0%, as it is at present for agricultural tyres, for an initial period of at least 36 months to allow the industry cope with this hugely challenging period and thereafter the charge should be set at a special rate but no higher than the rate set for the car tyre.
Mr. Thom Fox:
I thank the Chairman for the invitation to appear here today. I am unaccustomed to this type of audience. I would prefer to be doing a tractor puncture at 5.55 p.m. than be here today. I am joined by Kevin Farrell and Brendan Byrne. We are all former Irish Tyre Industry Association, ITIA, council members. We established ATRS along with Darren Darker, Sean McCullough and Cormac Farrell to give retailers a voice and a platform to build and promote best practice among compliant tyre operators. We have engaged with the Department of Communications, Climate Action and Environment, the tyre working group, the Road Safety Authority, RSA, and Repak ELT. We have a mailing list of 500 retailers who receive our newsletters and our website iswww.atrs.ie. We are tyre operators with outlets across the country with many years in business. We strive to have consistently high standards for safety and service. We are all automotive technician accreditation, ATA, accredited tyre fitters.
The founding retailers who formed ATRS felt that as both of the other tyre representative organisations represented more than one sector, each sector could not be effectively represented and set up ATRS as a retail-only organisation to fully represent the retail sector. Retailers have long been looking for regulation in our industry as the compliant operators must battle daily against the black economy traders who have popped up in our industry without any requirement for them to be trained or competent to fit and repair the most important and often overlooked safety component of a vehicle. This, along with the dumping of tyres nationwide, means that regulation in our industry has long been needed and is something retailers have been calling for.
We see the introduction of the Waste Management (Tyres and Waste Tyres) Regulations 2017 as a good foundation for the establishment of new standards for our industry which we would like to see established as a trade with enforceable standards for fitting, repairs and the safety of the products going onto the national fleet. We welcome the fact that some tyre categories have not had a vEMC imposed on them just yet and we will continue to engage in the further examination of how best to manage these tyres. We are sure that an agreement can be reached with a fit-for-purpose outcome through the tyre working group's next meeting.
The number of tyre operators in Ireland is estimated at just over 3,000. A culture of compliance is building in the tyre industry and more than 2,000 members joined the Repak ELT tyre scheme in the first two weeks of the new regulations. As the first piece of regulation to specifically deal with the tyre industry, the swift uptake of compliance shows how needed and welcome the regulations are to tyre operators. The compliant operators now need to be supported with targeted enforcement to deal with the non-compliant free riders as a priority.
The stipulation that all operators must join the compliance scheme has been a catalyst to have a new culture of compliance building in our industry. The fact that it will be public knowledge who is signed up to the scheme and who has remained non-compliant, should make identifying free riders in the system very simple. Enforcement is weak. Enforcement is something that the entire industry has always agreed on yet it has only a brief paragraph in the regulations. This urgently needs to be expanded. There simply must be consequences to non-compliance. Enforcement checks must start with non-compliant operators.
The definition of producer in the regulation has resulted in some of the main manufacturers who sell directly into Ireland not joining the scheme. Retailers do not want to be producers especially not for tyres from suppliers who have been producers under previous regulations. The onus, especially on small owner-operator retailers to join Repak ELT and the Producer Register Limited, PRL, is unnecessary.
ATRS recommends the following actions to ensure the successful implementation of the new regulations: reduce the vEMC on compliance as previously agreed. Retailers should be able to do all their reporting through Repak and an opt-in to the PRL for any for any producer of tyres would reduce the administrative burden on retailers. It makes sense that the reporting takes place with the option to opt in from where the bulk of their submissions are made. Targeted and visible enforcement has been promised and fixed-penalty notices must be brought in to support the new regulations.
Cross-Border co-operation would help to allay concerns in the industry.
Part worn tyres pose both a safety and environmental risk. Part worn tyres shipped in from Europe do not follow established sales chains which could leave them open to under and non-reporting and containers of part worn tyres can have up to 30% of unusable tyres in a consignment. They place a heavy burden on environment and should be subject to a vEMC that reflects this imbalance.
The Association for Retail Tyre Standards would like the committee's support and encourage all public representatives to support the fixed penalty notices when they are before the Dáil. ATRS works with all stakeholders in the tyre industry and will continue to engage with the local authority enforcement officers, the EPA, Waste Enforcement Regional Lead Authorities, the Road Safety Authority and the Department to make sure that in carrying out our business activities we continue to protect the environment.
The new regulations for tyres are most welcomed by ATRS and we will do all we can to ensure they are implemented successfully. With robust enforcement the regulations could be positive for all compliant operators and could be a starting point for other standards to be introduced in our industry.
Mr. Thomas Cooney:
I thank the committee for inviting the IFA to address you today on the Waste Management (Tyres and Waste Tyres) Regulations 2017.
The management of waste tyres is to be funded through the visible Environmental Management Cost, vEMC. The IFA has previously made submissions to agencies including Repak expressing the view that this funding model effectively allows tyre manufacturers to sidestep their obligations, as defined in the producers responsibility principle.
This front-loaded model, where the full vEMC is paid at point of purchase by the consumer, places an unacceptable and disproportionate cost burden for the management and disposal of waste tyres to the end user, namely farm families, rather than the companies that put the product on the market. IFA members, particularly in north eastern and north western counties have also raised the issue of VAT and vEMC evasion, which could occur unless the Department can secure a commitment to introduce a similar scheme in Northern Ireland. While the majority of people may act legally, it is not acceptable that they should subsidise and pay for the minority that seek to evade paying VAT or vEMC. Therefore, the long-term success of this tyre initiative can only be achieved if a similar scheme is introduced in Northern Ireland.
Regarding waste tyres used on farm machinery, the Department of Communications, Climate Action and Environment has decided not to introduce a vEMC until it better understands the various types of tyres used in the sector. However, from the outset it has always been made clear to IFA that this vEMC would be cost neutral to the sector, with the cost being no greater than existing charges paid by farmers. The Department must set out the basis of how this will be achieved.
The Minister for Communications, Climate Action and Environment, Deputy Denis Naughten, has allocated €1 million to clean up the stockpiles of waste tyres, which are illegally dumped around the countryside and this is welcome. However, it does not address an underlying issue in the Litter Pollution Acts, which has seen local authorities in counties including Kilkenny and Kerry instructing farmers to clean up the mess of serial dumpers, under section 6(2) of the Litter Pollution Acts. I hope the committee members would agree that it is wrong that there is legislation which effectively criminalises me as a farmer and holds me responsible for dumping by others on my farm. We are asking members to change this and to instead increase the enforcement powers of environmental officers in local authorities to pursue and prosecute serial dumpers who recklessly dump tyres, construction rubble and household litter across the countryside.
Waste tyres have particular uses on many farms: to anchor silage pits, reduce silage spoilage and ultimately to protect polythene covers. However, some farmers also switch from pit silage to round bales when conserving grass. Often farmers paid for the transport and receipt of these waste tyres when they were delivered to the farms. It is important the Department of Communications, Climate Action and Environment would provide an allocation to address the situation where farmers need to move these tyres off farms. I welcome the willingness of the Department to identify a solution here.
I ask the Committee to closely examine and seek to address the concerns which the IFA has raised here.
I thank Mr. Cooney. That concludes the opening statements and evidence from the witnesses. We will now move to questions which I will group. There are four members present including myself. Deputies Stanley and Smith have business in the Chamber and may rejoin us if they can. I will put a number of questions to the witnesses, and Senator Joe O'Reilly who has indicated, can come in after that. We will take that block of questions and then Senator Michael McDowell and Deputy Robert Troy who has joined us today.
Can the witnesses give some clarity on the process involved in choosing Repak, ELT, as the registration body on this? From the statements, there seems to be controversy on this. Is there a review mechanism built into the regulations at which point such a review might commence after a given period, whether it be 12, 24, 36 months or another appropriate period when there would be a chance to assess whether these difficulties were seen in practice?
My second question is more of a policy matter. I saw some recent reports about a situation in Limerick, I believe, where tyres were being substituted unofficially and possibly illegally as a source of fuel. Is there potential to use tyres as a substitute for carbon fuels as a source of carbon themselves? If we are discussing the disposal of tyres, do they provide an opportunity for fuel?
I welcome all the witnesses before the committee and thank them for their presentations. In deference to the fact that the witnesses presented their cases so succinctly, I will try to stick to specific questions of which I have a number.
My first set of questions are for Mr. Matt Collins, assistant secretary of the Department. Mr. Niall Murray made a very serious allegation, which is not an allegation made against Mr. Collins personally, but is a serious observation, that there was a cavalier attitude in the consultation process to his sector, that there were meetings that were not facilitated and there was a failure to listen to his organisation. That is a very serious allegation and I would like Mr. Collins to respond. If that is the case, it is reprehensible in a democracy, especially when there is money, payment and jobs at issue.
Mr Cooney and Mr. Murray raised the Northern Ireland dimension. This is very important to me as a Border representative, especially when Brexit is looming. Will Mr. Collins outline what efforts have been made in harmonisation to ensure that Northern Ireland was on the same page as ourselves? Is our implementing this before it has got through the ministerial bodies agreement with Northern Ireland a case of putting the cart before the horse?
Ms Verona Murphy of the Irish Road Hauliers Association made the point that the reasons for haulage tyre charges are very arbitrary and unexplained. Will the witness respond to that?
Will Dr. Cotter of the Environmental Protection Agency, EPA, explain specifically how the EPA will enforce the regulations? This is relevant in the matter of job displacement in my region. How will the EPA police things in such a way that Northern Ireland tyres do not become an attractive option? Can she provide evidence for how this will be undertaken? I put a similar question regarding supervision and policing of regulations to Mr. Tony Keohane from Repak ELT.
I ask Mr. Henry and Mr. Collins to elucidate on the following important matter. I am concerned that commercially sensitive information could be available through the black box. In other words, the information could be retrieved and manipulated by competitors, which would be a very serious situation were it to apply.
Mr. Niall Murray has said that figures in the desktop study are flawed and that the figures on which all of this is premised are flawed. That aspect is of great concern to the committee and I ask him to elaborate.
My questions are important to the people I represent and, therefore, I do not apologise for asking them. These issues are important to the people who live in my region. Small businesses and small retailers with a small number of staff, often no staff, will have to practise formal record keeping, which is an issue that relates to what was mentioned by Mr. Fox. What kind of staffing will they need? What kind of administrative burden will be imposed? Will this aspect cause a problem for their businesses?
Sterling fluctuation is another matter and is at times quite low. Has that been factored in? To what degree will sterling fluctuation displace jobs in the Republic? That question reasonably also goes back to the Department.
I have two final questions. The charges run the risk of attracting business across the Border and, again, I am concerned about the displacement of jobs in the Republic.
The Senator is entitled to ask questions. There is a bit of phone interference. I remind everybody again to check that their phones are on airplane mode because there is a signal interfering with the speakers.
I have two specific questions for Mr. Cooney. What cost will farmers incur if there is no financial assistance to remove the tyres if farmers have changed to using round bales? The use and type of tyre must be registered. Will the scheme impose an administrative burden on farmers?
I have done my best to keep to questions. The issues I have highlighted are of real concern. All of them are based on the premise that I fear the loss of jobs in my community and a dislocation of economic activity.
The Senator has asked valid and important questions. I propose to put my block of questions along with those asked by the Senator and put them to the various witnesses. I am not sure if there is a particular natural order of reply or if different witnesses want to comment. Perhaps the Department officials want to respond initially and then we will take responses before moving on to taking questions from Senator McDowell and Deputy Troy. I call on Mr. Collins to comment first.
Mr. Matthew Collins:It is important to understand the context of this matter. The tyre waste problem was a critical issue that impacted on rural communities. The fact that 750,000 waste tyres will be collected by the taxpayer this year is a real matter of concern. More than €1 million of taxpayers' money will be used to address the issue in 2017. The original scheme dates back almost a decade. In 2007 regulations were brought in but within three years the matter had become a major issue in the media because the "Prime Time" programme carried out a special investigation into the issue. Later a further report was conducted into the sector and, again, concerns were raised.
Let me outline what happened. Around 2014 we engaged with the different stakeholders in this area. Between 2014 and this year there has been an extensive range of discussions and meetings. There have been multilateral meetings with the tyres working group to which all stakeholders were invited. Some stakeholders chose not to attend but we continued to provide information to all stakeholders throughout the process. We try to operate in the most open manner possible. I would have to say we were not cavalier about this matter. We recognised that there are real businesses involved in this sector that have their own legitimate concerns. However, at the same time we were facing one of the most critical local environmental issues throughout the country. The fact that 23 local authorities have applied in recent months for special funding to tackle waste tyres demonstrates how extensive this issue was.
I appreciate what was said by Ms Murphy from the Irish Road Haulage Association. She talked about the level of job creation her sector provides in Ireland yet it was rural Ireland that faced the brunt of the environmental damage that was being caused. We had to balance difficult competing factors. On the one hand, there were commercial concerns. On the other hand, damage was being done from an environmental perspective that had an impact on individual farmers and communities throughout the country. That is why concerns were raised about the effectiveness of the original self-operated scheme called the track scheme.
We looked to see what options were available to us as a State and a society to address the waste charge. We had some models of producer responsibility initiative, PRI, schemes that were operating. That is the reason we chose to go down the route of the Repak End-of-Life Tyres, ELT, model. It presented the best opportunity, as a State, to provide a functioning and effective mechanism for the management and recovery of waste tyres throughout Ireland.
It is true to say that we have also considered whether the issue will be subject to review. I can assure members that one thing we do a lot of is continual monitoring of what is happening in the sector and reviewing of the implementation of our policies. This is the process. We have had an ongoing review and learned from what did and did not work. We were alarmed by the number of issues. Many Deputies raised issues with us and we also responded to concerns raised by local authorities and community representatives from around the country. We have learned from the process. Engaging with the people allowed us to address concerns and design a model that we think will be effective.
I accept that it will not be possible to meet every concern expressed by the commercial sector. The process of discussion took place between 2014 and right up until this year. There has been a three-year process during which the working group met regularly. There have been quite a number of bilateral meetings. In fact, the Minister also carried out a number of bilateral meetings to take account of the concerns expressed by the different sectors. It is a challenging policy choice for him because he must take account of the valid concerns that have been expressed. He must also live up to our obligations under European legislation in order to protect the environment. We have obligations to Europe and to the local communities who are affected by this matter.
To be clear, it is true that a six and 12 month review were agreed to as part of the tyres working group, a fact that is known to all of the stakeholders. Again, we will consider the matter. We would like to continue that level of engagement with the stakeholders. For example, we have invited the Irish Road Haulage Association to engage further with us about their concerns. We also continue to engage with the IFA on the issues the association has raised about tyres used by farmers.
There is clear evidence of our willingness to engage with stakeholders. For example, we engaged with the Irish Farmers Association to develop an approach to tackling farm plastics and the process has been very informative. We are more than open to engaging with the different stakeholders.
In terms of price fluctuations in Northern Ireland, it is important for us to make it clear that we are not introducing a new surcharge. The original scheme already had charges built into the arrangement. We are introducing a very clear and visible environmental charge.
It is not going to be the key driver of the concerns. What is really happening due to Brexit North and South is the currency changes. That is the key driver of trade flows over the Border rather than the different categorisation of a charge being used for environmental management.
A question was posed to the EPA about enforcement. I assure committee members that the enforcement of this particular area has been put as one of the priorities of our enforcement policy by the Government. That is implemented by the regional waste enforcement officers. Our waste management system is operated on a regional basis now. It is agreed by all the waste stakeholders. Tyres are a priority not just for this scheme, nor the initiative to recover 750,000 tyres, but also in terms of the enforcement scheme because it is important that all stakeholders understand there should be a level playing field and that the level of compliance will grow in time. The level of compliance to date for the scheme that has still to reach its implementation date is very positive. More than two thirds of members have signed up at this stage.
The authorities in Northern Ireland have also been involved in this process so they are fully aware of the process we have been engaged in. They were part of the tyres working group. We will encourage them to look at how we are implementing this. We have shared quite a lot of policy interaction between North and South. It is something that we think is very important to maintain and that we continue to have regular meetings. We will meet again with our counterparts in Northern Ireland this week. We are continuing to give a strong focus to our engagement with the Northern Ireland authorities, albeit I recognise the current administrative difficulties under which they are operating.
Some questions were asked about fuel. If it is okay I might let the EPA address the alternative uses of fuel. I might leave the question about the commercial sensitivity of data to the witnesses from the Producer Register Limited, PRL, to address how the black box operates and how data are protected.
Dr. Eimear Cotter:
The potential outlets for waste tars is to be used as a fuel in cement kilns or our waste energy incineration plants. It is important to say that the regulation of such a process would happen under the EU industrial emissions directive and therefore the licence that would regulate how those plants operate would impose very strict emission limit values and other conditions to ensure that no environmental pollution would occur as a result of such co-firing with waste tars.
In terms of cement plants we would impose conditions where a cement plant would have to undertake a test programme for each waste stream to ensure they burn in accordance with the licence conditions and within the emissions limit values. Were it to happen it would be very much regulated under the industrial emissions directive.
If it is okay I will ask my colleague, Dr. Tom Ryan, to respond to the enforcement question.
Dr. Tom Ryan:
As to how the EPA will enforce in this area, I remind the committee that the EPA's enforcement role is quite specific in relation to producers as defined under the regulations. The EPA has a great deal of experience in enforcing environmental legislation, including other producer responsibility indicatives such as the waste electrical and electronic equipment recycling, WEEE, for batteries. We will bring that wide breadth of experience to enforcing compliance in this sector. The general approach will involve writing to non-compliant operators, following up with site visits where appropriate and escalating matters up to and including prosecution where appropriate.
With regard to distance sellers and the movement of tyres here from other jurisdictions, in contravention of the regulations from a producer perspective, our enforcement activities will be very much intelligence-led. As a regulator-enforcer we proactively gather information from a wide variety of sources and we act proportionately on the basis of the information. That could include site visits, escalating up to prosecution where appropriate.
Mr. Dominic Henry:
When a producer reports to the black box, his data disappears into it, so to speak. The black box calculates the visible environmental management cost, vEMC, liability of each producer and we then communicate with Repak ELT via secure communications and we give it a very simple report which shows, for instance, producer A, and the amount of the vEMC due and producer B and the amount of the vEMC due. Repak ELT will then invoice the producer for that amount that he in turn has collected from his customers. The information flows from ourselves to Repak by secure communication. Repak will invoice a producer and if the producer wishes to share that information with somebody else there is nothing that can be done but with regard to the black box itself the information is confidential. We are prohibited by law from sharing that information with any third party and the black box is prohibited from sharing it with us. We are prohibited also from sharing any data that may allow a third party to calculate the market share of a producer.
I thank the witnesses who are present today. I am a bit concerned about the answers we have received in relation to Northern Ireland. It seems to me that a scheme of this kind should have been implemented on an agreed North-South basis. From the answers we got, it appears to me that although there was a desire for some kind of co-ordination there has not actually been implementation on a North-South basis. We have not been told that there was a plan and that somebody backed off from it. We have heard nothing. This seems to be very much a solo run as presented here today, with a few pious sentiments that we would encourage Northern Ireland to do something similar.
The effectiveness of the approach does depend on dealing with Northern Ireland from two points of view. First, there are people who are in a position in Border counties to get their tyres north of the Border; in particular those in the haulage industry can get the tyres changed in the North, full stop, without any hassle in the first place. I did not hear any answers on that from the Department. The question was fairly and squarely put to the Department but I did not hear an answer as to who in the Department consulted who in Northern Ireland, what plans were put in place and what discussions took place on a North-South basis to tackle the problems. I presume we are not all devils here and they are not all saints up there and there is dumping of tyres and environmental impacts in Northern Ireland as there are here. I would like a clear indication of precisely what was done on a North-South basis to attempt to get an agreed outcome.
The second point is that this is a fairly elaborate scheme which almost inevitably displaces trade north of the Border if it is implemented at the moment. I did not hear anybody here explaining who did an economic study on this, who decided what the effect would be and what countermeasures there would be to stop trade moving from the South to the North, both in terms of the ordinary consumer and in particular commercial vehicles.
This must be faced up to. The regulatory system proposed is very elaborate. We are entitled to clarification on the likely implications of it for the retail trade in the South and on the displacement of trade South-North and, in the event of significant displacement South-North, how the aims of these regulations will be met if retailers and producers in Northern Ireland are not in the scheme, but no explanation has been tendered. We are hearing nothing on that front. If this regulatory system is to make sense it, it must confront those problems.
I note that under regulations 38 and 39 farmers will be required to register if they want to place tyres over the polythene covers on silage pits. Why is this being imposed on farmers? Why are farmers who want to keep silage pits anchored with 30 or 40 tyres being required to register as the proprietors of 30 or 40 used tyres? This seems to me to be slightly crazy. There are other areas where tyres are used, namely, boat yards. I know this because I have a house on the Shannon. Are boat yard proprietors to be required to register as the proprietors of 30 or 40 tyres, which are often used to turn over boats safely? They are also used on informal jetties as protections for boats and so on. Is this area to be covered by the regulations?
Dr. Cotter dealt briefly with the issue of the disposal of tyres through their use as fuel. I would like clarification on the disposal strategy in Ireland for used tyres. For example, are they to be exported, granulated in Ireland or burned in Ireland? I note that large sums of money are to be paid to Repak to recycle tyres. Perhaps one of the Repak witnesses will tell us how it proposes to do that. If it makes sense to put a percentage of shredded tyres into the manufacture of cement, we need to be told about it. Dr. Cotter has helpfully told us this would be subject to licensing, testing and monitoring. Can the witnesses tell us if this is an aim, or are tyres to be exported?
I would like some clarification on the situation pertaining to Northern Ireland, the displacement effect and if we are seriously going to require farmers to register the use of tyres in the above-mentioned circumstances. I note also that it is proposed to apply a maximum number of tyres per square meter for use on a silage pit floor. This is very detailed regulation. I am scared that this system will not work such that in three years' time we will have other witnesses before this committee or its successor saying that it did not work and that fly-tipping is still going on up in the Dublin mountains.
Could the local authorities operate depots where they would receive and make payments for tyres brought in? Has consideration be given to the operation of depots and payment for tyres brought in, on the same basis as a deposit was previously paid on bottles?
My concern is the Border issue. I have not reconciled how this circle is to be squared. Two systems on this island will not work. The men and women in the white vans on both sides of the Border will have field day with this. The Border counties have been mentioned. Tyres from the North are often found as far south as Kerry and Cork. That is the reality. Ireland is a small island, it being a little over 300 miles in length. How this is to be done has not been explained.
In regard to previous discussions on the issue, in the previous Dáil I was spokesperson for the environment when it was linked to local government. As far as I recall, there was only one meeting with our counterparts in the North on a number of environmental issues, including tyres. I open to correction - there are probably minutes available of that meeting - but as far as I can recall all of the people who participated in that meeting, including Assembly Members, Deputies and Senators, were in agreement that a uniform system for the island of Ireland was required. Perhaps the Department officials would explain how it is proposed the two systems will work. If following Brexit we end up with a hard border, unless there is a soldier with a machine gun stationed not only on every road, but in every field on each side of it, it will not be possible to stop cross-Border trade. We have had an open border for 21 years and that is not going to change. It will not happen. People North and South will not tolerate it. We have an open Border and that is the future. Regardless of what we come up with here, two systems for end-of-life tyres is unrealistic. I would welcome a response to that from the Department officials.
The Environmental Protection Agency, EPA, interacts with the local authorities in regard to enforcement. Perhaps the witnesses from the EPA would elaborate on the role of the local authorities in that regard. In regard to Repak, Mr. Keohane mentioned that 1,489 people have signed up to the scheme and there are 120 collectors. How many collectors have not signed up? The industry representatives have called for the introduction of a back-loaded scheme rather than a pay-at-purchase scheme. I see where they are coming from, but how would the back-loaded scheme work? Are they certain it can be set up in a way that ensures everything is captured and 20% to 40% of tyres do not end up in a field somewhere? I note the problems the industry representatives have identified in relation to the other scheme but I ask them to elaborate on how what they are proposing will capture all of tyres processed through the wholesale and retail markets here.
On the agricultural issue, I have visited a lot of farmyards over the past six or seven months for various reasons. The improvement in compliance by farmers is notable. Every shed now has a gutter on it and there is no water or effluent leakage into fields or water courses and so on.
Farmers have tightened up environmental standards across the board which demonstrates that some schemes are working and the IFA, ICMSA and other bodies have bought into them and are pushing them. I cannot see for the life of me why a farmer has to register each tyre on a silage pit. It is grand introducing this on Kildare Street but when this is implemented in the agricultural sector, it will be bureaucracy gone made. We have to find a simpler way to do this. Piles of tyres are not thrown in the corners of fields. Farmers use the same tyres year after year on silage pits. If they need more, they will be get them and they are responsible in their use of them. They will not dump tyres. It is amazing how neat farmyards have become over the past 15 or 20 years. I have been in yards for a number of reasons this year observing what is going on. Even over the past four or five years, there have been huge improvements, which is all to the good. Environmental standards have improved but I ask the departmental officials to address the provision of a simpler scheme. There are obvious ways to address this but I do not wish to hold up the meeting discussing them. The Department must revisit this issue.
No matter how well-intentioned this statutory instrument is, I cannot see how it can be ensured this will work with two systems and 520 km of a border. There are good people living on each side of the Border. However, anywhere in the world where there is an open border, people on either side will take advantage of it and not because they are evil. For example, if something is 2/6d on this side of the border and it is 3/6d on the other side, people will go where it is 2/6d and there is a different set of regulations. For as long as the Border has been in place, that has gone on. The people living along it do not have two heads and they are not different from the rest of us. It is a fact of life that this is what will happen. It relates to the iron laws of economics. They play the capitalist game of supply and demand, cost and return.
The reality is tyres are going south as far as Cork, Cobh and Bantry and not just to the Border counties. The two systems will not work and a uniform system on the island is the only way to address this. I would like the Department and Repak to address that question.
Perhaps that can considered in the responses to the questions from the two members. Three other members are offering. Many issues are being raised and it might take a while to get through the responses. While we want to do justice to the issues, brevity would be welcome as well. I call Mr. Collins on behalf of the Department.
Mr. Matthew Collins:
I will refer the questions from the Senator to Repak ELT on the different uses of the tyres and how it manages the tyres that are collected.
With regards to farmers registering tyres, we are not trying to impose anything new on them. They register their tyres with the local authority and we are bringing that into a single scheme. Rather than have a local authority managed tracking scheme and a Repak ELT tracking scheme, we will have one scheme. The benefit is that will enable to track those tyres and bring them into the system for collection as well. It will, therefore, work to the benefit of the farming community. It is not meant to implement anything new. It is something they do at the moment without any of the benefits of tracking and the collection of tyres.
The sum of €11 was agreed by the tyres working group on 30 May. That is where the figure came from. Hauliers have raised concerns in respect not just of Northern Ireland haulage, but of international haulage. We have asked the association to come back to us on that and to discuss that further. We are again open to examining that.
On the North-South issue, we had engagement with Northern Irish officials. They were members of the working group but the question is how we will address the environmental issue of tyres going missing and ending up in our countryside. It does not matter if someone is from Northern Ireland, Sweden, France, Germany or Canada, the scheme is designed such that once the tyres are placed on the market, that is where the legal responsibility for registering the tyres comes from. That is where enforcement will play a key role. Local authority officials are unable to attend the meeting because of the weather conditions but they have a key role in enforcement at retailer level to ensure retailers are registering their tyres. That is one element that will ensure the scheme-----
I am conscious that all members have not asked their initial questions yet. We can have a to and fro later. Will Mr. Collins wrap up his comments? I want to allow Deputies Troy and O'Keeffe and then we can have a round-table if we need to.
Mr. Matthew Collins:
The eVMC provides a collection scheme for the retailers. The point of the eVMC being applied is it will not be the case that an unauthorised van can collect the tyres. In that scenario, a retailer is paying another operator to take away his tyres. However, this scheme arranges for his tyres to be taken away. The retailer is opting to pay for a service that is provided under this compliance scheme. An economic choice has to be made by operators. Are they going to pay for the service or will they participate in the collection service provided by the scheme? It does not make sense for a retailer to pay for a service that is provided by this scheme. His registered tyres are collected by the scheme but he will opt out of the scheme.
Mr. SÃ©amus Clancy:
I will answer three questions together in one reply. To date we have 1,695 members who have joined up to Repak ELT. Of that, quite a number of producers and retailers in the North have already signed up. I am not sure of the exact number but we can come back to the committee with that. They will be accountable for the tyres they place on the market in the South. We have 21 collectors signed up at the moment and there are five more in the process. They must have tax clearance certificates and waste permits for collection. They must have licences for storage and they must have authorised facilities to bring those tyres for recycling or recovery.
Senator McDowell asked about recycling. In Ireland today we only have one recycling facility for this waste and it is in County Louth. It can currently facilitate up to 20,000 tyres. It is taking approximately 8,000 tyres for recycling and it produces crumb rubber from that. It is a new facility. An existing facility went to the wall. With regard to recovery, the facility in Limerick owned by Cement Roadstone Holdings, CRH, is looking to take in tyres for recovery. The actual steel in the tyre is used as clinker for manufacturing cement. Outside of that, all of the rest of the tyres currently leave Ireland mainly for recovery abroad to locations such as India, Korea, some to Turkey and to South America. All of those facilities are now being dealt with on the basis that they have authorised legal permanent facilities given by the specific country. We now have full traceability. Heretofore there was no accountability in the traceability of tyres for where they went, inside the country or outside. Under the new regulations that are now required, we have a cradle-to-grave solution. Producers putting tyres on the market now have to account for who they sell their tyres to, be they wholesalers or retailers, for who collects the tyres and for where they end up. Of course as this is a new scheme there will be leakage. On the first phase we identified 2.6 million tyres collected last year but we know there are considerably more than that placed on the market. No one in this room knows the exact quantity of tyres that are placed on the market. It is estimated at somewhere between 3.4 million and 4 million tyres. The whole idea of this scheme is to give full accountability and traceability for the tyres placed on the market.
There will be a chance for a second round because I know that Deputies have a number of questions to put and that maybe not all questions have been answered. That could also be considered in our deliberations when the committee enters into private session and when we assess the merits or demerits of the regulations. Any answers given or not given - as the case may be - will be pertinent to that. I am conscious that there are two other members who wish to contribute. We have been taking questions since shortly after 5 p.m. when we entered public session. I propose to take Deputies Troy and O'Keeffe, we will hear those responses and then we will take a break. We will suspend the meeting for five minutes, which is the usual protocol after two or so hours, and we can continue on with the second round if members and witnesses want to do so. If we need, we can do a third round to get the answers that are needed.
It is normal protocol to break after two hours of questioning. We need to break anyway as we need to come back in private session. If the committee is not going to break I ask the Deputy to take the Chair for five minutes so I can take a break. We will return to that as a housekeeping matter.
I thank the committee for inviting the representatives and for giving the opportunity to scrutinise this statutory instrument. I had requested this during the summer. Having listened to the questions here this evening I am glad that I requested the scrutiny because there still seems to be a number of outstanding issues. It is quite alarming that even at this stage, despite the fact that the working group was in progress for in excess of three years, it is still not able to answer each question. Some of the answers that are given say this or that will be worked on or worked out as the scheme transpires or as it is implemented. There appears to have been quite a lack of consultation with the key stakeholders - a number of whom are here today - and the only one that I can gather is any way supportive of the proposal is the Association for Tyre Retail Standards, ATRS, even though it has identified a number of queries around enforcement and so on. Will Mr. Fox tell the committee how long has the association been formed? He made a reference to the association being a breakaway group from another existing body. How many members has the ATRS? Mr. Fox said that he has a mailing list of 500. I have a considerable mailing list but I would not consider them all to be members of my political party. There is quite a difference between a mailing list and who is a paid-up member of an organisation. I would be interested to know how may actual members there are in the organisation.
This whole issue came about because there was and is a problem around the illegal dumping of tyres. It must be tackled. It is a blight on our landscape, it is a huge environmental issue and it has to be tackled. Why did Repak ELT not go out to tender? I certainly did not get a satisfactory answer on that. Reference was made to €6.5 million allocated to Repak ELT from an administrative aspect. Perhaps the witnesses could respond on that issues. Mr. Collins said that €1 million would be spent this year in collecting waste tyres and that 750,000 waste tyres were collected last year. To my mind that is around €1.33 per tyre. If the tyre can be collected for €1.33, where did the witnesses get the figure of €3.50 per tyre? Without going out to tender the persons who will pay these additional costs are the men and women who buy the tyres. That is who will pick up the costs. I note the presence here of Mr. Frank McDonagh, who is a compliant operator. He provides 30 good jobs in my home town of Mullingar. He pays his taxes and does everything right but from what Mr. Collins alluded to earlier, there is nothing in this scheme that will deter those who are non-compliant. There is nothing here to catch the cowboy. Again, the person who will be caught here and who will face additional increased charges is the person who is being compliant year in and year out. There appears to be no difference there.
My colleague Senator McDowell spoke about the North and I also am somewhat concerned about the lack of economic studies pertaining to the North-South Border element. It is not just about the North and the South of Ireland. We are a very small island but when one looks at the haulage industry it is an international industry. Those people are going to be able to avail of cheaper tyres on the Continent, in the UK or wherever. What will that do to our industry here? There does not appear to be any relevance or any reference to that. The witnesses have said that it is only currency fluctuations but it is not just about currency fluctuations. It is okay for every one of us who is around the outer body of this committee room because we are civil servants who get paid weekly or monthly. Most of the people at the front of the room who work in this industry and with hauliers are working on very small margins. Any new costs that are introduced unnecessarily have a consequence on their businesses and on the jobs they supply and provide in their respective communities. It is disappointing, on listening to what is being said here this evening, that this aspect does not take any cognisance. This working group has been in operation for three years and we have yet to establish what the vEMCs are for agricultural use tyres. We have yet to establish what the penalties are for persons who are non-compliant. When speaking of what was going to be done, Mr. Collins said it was going to be rolled out as a priority.
I would have imagined that non-compliance and the associated penalties would have been among the first things to be considered. It is disappointing that three years into this operation, the witnesses do not have the answers on penalties. We do not know why it did not go out to tender. It is acknowledged that 750,000 tyres were collected last year at a cost of €1 million yet there is now going to be a charge of €3.44, which is over 250% more. Why is that? Why are we charging €11 for tyres on the haulage vehicles?
How can we have confidence that this commercially sensitive information is not going to get into the wrong hands? It boils down to the fact that a very bureaucratic system is going to implemented to target the cowboys. There are cowboys out there who need to be targeted and penalised. However, the exchange a few moments ago demonstrated that if those cowboys want to continue as they are now, that is, going across the Border to buy their tyres and then undercutting compliant operators in the Republic, we do not even know what penalties are going to be introduced to ensure they cannot do so.
The Department needs to revisit this issue and to work with the stakeholders. All the stakeholders are unified in wanting a fit-for-purpose system that will eradicate non-compliant operators and the scourge of illegal dumping in our countryside. However, the system must not be overly costly or bureaucratic as this could potentially cost us jobs in our economy.
I thank the Chairman. At the beginning, the question was asked as to how Repak got the job. I have been watching proceedings and I do not think this question has been answered, unless I missed the response while walking to the committee room. On what basis was Repak appointed as the organisation to run this operation?
Another question the Chairman asked was how the rates were struck. Repak is supposed to be a non-profit organisation. On what basis is it striking the rate for the collection? I welcome that the agricultural community has been given some flexibility as regards the time to decide their rate. Did Mr. Collins's Department consult with the Department of Transport, Tourism and Sport when it was formulating what rate it should charge to the members of the Irish Road Haulage Association? Did it take into due consideration that in the past 12 or 16 months, the Minister, Deputy Ross, got a derogation for heavy goods vehicles in respect of laden weights and axles? We have hauliers experiencing a cost bomb where they have to introduce extra axles on their vehicles to haul the same goods as they were hauling before. All those costs add up in respect of the number of tyres required. Was the derogation thought about in this context before the Department struck a high rate for the members of the Irish Road Haulage Association? It is creating a phenomenal hive of activity in commerce and jobs and so on. There are issues arising. I would be afraid to see small retail tyre operators lose out on the business if people should move their purchasing outside this jurisdiction. It is a concern and I ask the officials to revisit the area of the imposition of the costings because Repak is a non-profit organisation.
Has the Department secured a final destination for the disposal of all these rubber tyres? What happens if Limerick does not go ahead? There is a major appeal and a Bord Pleanála hearing in train there. If that project does not take off, can the officials be certain of destinations in Turkey, China or Korea? They are still growing economies. How compliant are they with environmental measures?
Mr. Matthew Collins:
I will address Deputy Troy's questions first. I understand the criticism that we are leaving some things open. What we are trying to say is that we are providing flexibility as we are implementing the new scheme in order that all the stakeholders can have an input. It is important to think about what we are trying to achieve here. We are simply asking the tyre industry to be able to do what other areas such as electronic equipment waste, packaging, batteries or farm plastics have been doing for years. It is an effective way of managing and controlling the waste and is no more than that. The concern was the complete failure of the previous scheme. That is why we moved on to this proposal.
The Minister at the time appointed Repak ELT to the run the scheme under the 2007 regulations. That was the Minister's decision and he was basing it on the best available experience at the time in terms of well-run schemes that are meeting European and national obligations in respect of waste reduction.
On the suggestion of a lack of consultation, I do not think it is a fair criticism. We have had a process that has taken three years, in which all stakeholders have been able to take part. We have even gone as far as providing information to stakeholders when they choose not to attend. It has been an open process, which also included determining how the rates were set. The different stakeholders engaged in the working groups and decisions were made on the appropriate level of charging.
The penalties are set out in the Waste Management Act. To clarify, we have made an allocation of €1 million for this year for the purpose of collecting tyres that have been illegally dumped in the countryside. That is undergoing public procurement through the local authorities, which have already identified approximately 750,000 tyres. I am not able to say what the cost per tyre will be. We have to wait to see how much it costs to have them collected. I cannot say what the cost per tyre of illegally dumped tyres will be. We will just have to wait for the outcome of the procurement process.
On being very bureaucratic, we are trying to provide a system that meets the requirements of the environmental goals. We have taken on board many of the concerns of the different stakeholders, both commercial operators and environmental and community perspectives. It is a matter of operating a scheme that is the same as what we operate for packaging, batteries, farm plastics and so on. We are not being more bureaucratic than we are for other waste streams that are particularly damaging.
Deputy O'Keeffe asked me how the rate was struck. It was part of the tyres working group. On the hauliers' derogation, the tyres working group was open to all stakeholders. If there have been developments in the hauliers sector and those issues are not brought forward to us, it is very difficult for us to be able to respond. We have invited the Irish Road Haulage Association to come forward with its concerns and proposals. If people do not raise issues, it becomes very difficult for us to engage. That was the purpose of the engagement.
On the costings and destinations, Repak outlined a number of different types of uses for waste tyres, as well as destinations in terms of different countries to which they may be exported.
Mr. SÃ©amus Clancy:
I thank Deputy Troy. We are not civil servants but we work closely with the Civil Service in trying to define where we are going. We do not get €6.5 million from anybody. It comes from the visible fee that the consumer pays, which is €2.80 a tyre plus VAT. VAT is charged at the same rate on all. It is taking what is an existing charge today, which will vary from €1.76 right up to €3.50 and beyond, plus VAT, charged by retailers to the consumers for a tyre that they have purchased and for the waste tyre being taken away. The core issue now is taking that money and ensuring it is used for the purpose for which it was intended which is the environmental management of that tyre.
In regard to tyres outside the jurisdiction, having looked at 20 countries throughout Europe, the rate, at €2.80, is very much on par with what is out there. When it comes to large and small truck tyres, the average charge in Europe various between €10 and €14 a tyre. By all means, if a person buys tyres outside of the jurisdiction, that is what he or she will pay for the environmental disposal of those charges.
With regard to the facilities that are being used outside of Ireland, they are subject to transfrontier shipment regulations and the identification of those facilities are subject to environmental regulations in those countries and only approved through the transfrontier shipment, TFS, office here in Ireland. That is for the transportation of any waste that leaves the country.
With regard to Repak itself, we are a not-for-profit organisation. There is a detailed breakdown which all the stakeholders have around the table here of how the €2.80 was made up. For the record, there was a total of 28 meetings held with all the sub-groups, in which some of the participants here decided to partake and some decide not to partake. That goes all the back to March 2015. The haulage sub-groups met three times again in 2016, and the end of waste criteria sub-group was in June 2016. There has been comprehensive engagement with industry and with all the stakeholders. Those who chose to participate did so in a voluntary and open way, and some decided not to participate.
Mr. Fox was asked how many members he represents. It be an interesting question for all the stakeholders here to see how many members they have in their respective associations versus the 3,000 economic operators we expect are out there in the market. There is only one thing here that everybody has to remember. It is the consumer who is paying for this, one way or another. It is making sure that we are doing right by the consumers, in using the money that they pay currently that is now being regularised, ensuring it is spent in the most cost-effective way for recycling and the recovery of the tyres as it was intended, and to stop the blight on the landscape of tyres being dumped illegally. The system prior to 1 October placed no responsibility on the industry to account for the tyres that it was disposing of. From 1 October, through the scheme, members, as in the industry, will be accountable for those that join up to the scheme for where their tyres are disposed of, recovered or recycled, or whether they go to a waste-to-energy plant.
I have one question for Mr. Clancy before we break. I want to understand it before we come back. If Repak has a shipload of tyres going to Turkey, Korea, China or wherever, does Repak pay them for the load or do they pay Repak for the load?
We are back in public session and will resume our deliberations on the statutory instrument relating to waste tyres. Just before the break, members and others had the opportunity to put their questions and to elicit at least a first round of responses. Members and witnesses can now contribute further, ask additional questions or probe further if they feel their questions were not satisfactorily answered in the first round. I am aware that at least one of the witnesses wants to make further comment. I invite Ms Murphy to make some initial remarks and ask members and witnesses who wish to speak to indicate their intentions in that regard.
Ms Verona Murphy:
The issue of further consultation with the IRHA was raised by Mr. Collins. I would like to set out the background to this matter so that those watching proceedings are not under the illusion that everything about this process is kosher. The IRHA was visited in 2015 by two representatives of Repak - not of the Department - and something that was supposed to take 30 minutes actually lasted two hours and 15 minutes. The removal of ties and jackets ensued, with the questions that were raised by the IRHA. Those questions were never answered. We were told that they would be back to us; that Repak would return and answer those questions. We actually never heard from Repak again on those questions.
In response to Mr. Collin's assertion here that we must engage, we have engaged but we have not received an answer to the questions we have asked. I am not sure if he is aware of that but our letter was addressed to his colleague, Mr. O'Donoghue, who is sitting beside him. If Mr. O'Donoghue can answer the question on how the €11 is broken down across the things it is supposed to cover, then we may be to further engage.
On behalf of my members, I would like to the public and this committee to understand that ours is a competitive sector. Everything we do is competition based. Once one raises the cost base in Ireland, which is already approximately 30% higher than in the other European countries that have road haulage sectors, one sends companies outside the jurisdiction. They register abroad. The cost to the Exchequer of a truck leaving the jurisdiction is €250,000. Far be it from me to tell them to buy their tyres and pay the €11. The IRHA and its members support a scheme that will help to keep Ireland environmentally-friendly. We all have children and we all understand the need. However, at only 6% of the market, we do not feel that we are in any way responsible.
The charge of €11 was not agreed. The minutes of the meeting indicate that, basically, it was dictated to the people attending that a charge would be agreed and that was it. Anybody here who took part does not agree with the sentiment put forward by Mr. Collins that it was agreed as if we put it forward or those who took part put it forward. This is not as transparent as anybody would think from the statements of Mr. Collins. I do not believe we can support this scheme, although we are prepared to support a scheme. I reiterate the words. It should be well planned, properly executed and, above all, a fair and proportionate scheme that keeps us as an industry competitive so we can support jobs in local and rural Irish areas.
Mr. Paddy Murphy:
I am president of the Irish Tyre Industry Association, ITIA, and the managing director of the largest retail company in tyres and car service in Ireland. What comes to me as I sit here is if this was such a robust consultative process, why are we all sitting here and why is there such disagreement? Why is all of this going on at the last moment? The feeling is we have been in rooms but we have never been heard. We believe a scheme can work and we are willing to engage if we are heard and listened to in order to develop that scheme. We are willing to engage with stakeholders but we also want competition as it drives down price for the consumer. I represent the consumer as the president of the ITIA as our members deal with retail customers.
All these charges are on new tyres in order to deal with the waste of the future. The simple fact is no new tyres are in bogs or the sides of lakes. They are nowhere except in storage. This should be focused on dealing with waste tyres but that is not what is going on. We have built a cumbersome, bureaucratic and unenforceable system that does not recognise the system in the North. It will fail because the industry will be frustrated and angry at not being listened to. I do not deny we have been in the rooms but we have not been heard. We are asking that this committee give us the chance to be heard and develop a proper scheme. We can do that. It absolutely can be done as we are as interested in removing waste from this market as much as anybody.
Mr. Eamon Daly:
My first concern relates to the Environmental Protection Agency, EPA, and the environment and the understanding of the market in Ireland. It is not just about Northern Ireland. There are European companies like Inter Sprint and Van Den Ban that come here every week with trucks to sell tyres. There is also the UK and the North to consider. We also have foreign online sellers and if somebody brings in four tyres, under the current regulation, he or she can take away four tyres as waste. I can stand corrected on that but it is my understanding. If there is a levy on truck and agri tyres, there is no need to track those tyres as farmers and hauliers are not going to pay that charge. The 2,500 retailers are currently producers. We are not talking about the number of members that Repak has as retail members and we really need to talk about producers. These are the people who are supposed to pay this charge.
It is very interesting to hear about the formalisation of an existing charge as we can produce copies of invoices to show what was paid previously. This is not even a first cousin to what was the previous charge. There is distortion in the market, as pointed out by William Fry. With regard to dealers in Northern Ireland or outside the State, this regulation is national and will not apply to those people. They will be outside of enforcement and any regulation or audit process. My concerns are simple. If there is evasion, which is a major concern, there will be VAT issue compounded on that. There is no question that this will increase fly tipping and there is already distortion there. There is no competition. The result is simple and it will be job losses. That is where my concern lies.
Mr. Thom Fox:
I will respond to Deputy Troy's question on when we were formed and what is our body. We were all prominent members of the ITIA and specifically the retail section. Our president at the time was Mr. Kevin Farrell and in 2015 he engaged with retailers when doing a tour of the country. We were told the current system of Tyre Recovery Activity Compliance Scheme, TRACS, was not functioning properly because waste was not being tracked properly. It was indicated that an industry-led scheme was tried but it was not working because of environmental factors and the fact that tyres could not be tracked. At that stage it was mooted there would be producer responsibility initiative, PRI. At the time, the ITIA president engaged with all members and particularly retail members because we went around the country and asked them what they thought of the matter. The overwhelming majority of people visited wanted a PRI. With that regard he had a mandate from retail members to try to work with the Department and have a fit-for-purpose PRI scheme, which was going to imposed on the market anyway as the previous example did not work.
A PRI puts responsibility on the producer; it would catch a tyre at the beginning of a process and it could be picked up at the end. It is a very logical and simple scheme. The ITIA decided at that stage it wanted to do something different and the president left the organisation. As far as I know, the ITIA then withdrew from talks with the Department. The retailers spoken to at the time had given a mandate to the ITIA to negotiate a deal on our behalf. It stepped away from the talks but we still wanted a PRI as it is the best way of capturing tyres sold on the market. It would have alleviated the problems of back-street traders and people who were non-compliant, as they would have to comply and demonstrate where tyres were bought. They are one of the biggest thorns in the legitimate side of the competent retailers in Ireland. Second-hand tyres proliferated all over the country with no tracking of waste tyres. Waste tyres were coming into the country and in my submission I noted that in a container, over 30% would be waste and could not be put on cars because they were so bad. They were ending up as an environmental problem.
That was the mandate at the time but Mr. Farrell left the organisation because he lost the mandate from the board. At that stage, the retailers who were still interested in and wanted regulation in our industry looked to plough ahead and go to the Department so as to influence the negotiations. Unfortunately, we came in late to the stage but we have had meetings with the Department and tried to get the best deal possible for retailers. That is who we represent. We have put forward arguments but we were shot down on many of them because they would have been unpalatable for other groups in the industry. We asked for concessions but they were shot down because the Department wanted everybody on board. It felt some issues we have would not be tolerated by other groups.
However, we are where we are.
We have no official membership. I have listed the names of the directors of the ATRS on my sheet. We are the directors. We have no money; we pay for anything we want to do ourselves because we are interested in having proper regulation in the retail sector. We engaged with the Department and we got clearance. We are a limited company with a statutory body. We had to make our bona fidesknown to the Department before it would see us.It has accepted our .bona fides. We have also met with the RSA and talked to Repak. We want to be a positive force for having proper regulation in the country.
We welcome that the truck levy has been postponed. We will be looking to see it postponed further because it would result in a distortion of cross-Border traffic and we do not want to see anybody going out of business. There is another workable solution for the truck industry for tracking the tyres, which is something we will discuss with the Department in the tyre working group. I will not discuss it here today because it is probably not the place for it. I just want to get our message across that we are a bona fideorganisation. We are here to support legislation that supports family retail shops. We want things to be done right. We do not want the backstreet traders having a free ride to destroy businesses. All competent retailers pay their taxes and rates and pay their staff. They do everything above board yet there is no regulation in the industry. This is the first piece of regulation that will level the playing field for retailers who have been compliant all down through the years.
I am not quite happy with the way the Deputy questioned the bona fides of our organisation and asked how many members we have. I will leave it at that.
I am sorry to disappoint Mr. Fox. I did not want to cast aspersions on his organisation. He made a comment that his was a break-away organisation from an existing group. I wanted to know how many people broke away from the organisation and how many members there are. Mr. Fox implied he was representing a large body by saying he had a mailing list of 500. I was simply pointing out that a mailing list is not reflective of a membership of an organisation. However, I accept Mr. Fox's bona fides. Everyone around the table wants to achieve the same ultimate goal which is the elimination of tyres and waste in our countryside and what we are discussing is how to achieve it in a cost-effective manner.
Mr. Niall Murray:
I wanted to address the question of the size of the market. Several speakers have said that one of the problems they had was determining the size of the market. The CSO publishes tyre numbers on the market on an annual basis. As the last president of TRACS, which was the previous compliance scheme, I have added an appendix to our presentation to show what the numbers were. I will read out some of the relevant ones.
TRACS represented all of the manufacturers and most of the major producers in the country and a very large cross-section of retailers. In our best year, we were able to report on 90% of the tyres put on the market, according to the CSO numbers. It is a matter of public record, contained in the annual TRACS report and tied to the CSO figures, that in 2014, collectors reported 83% of the waste arising. The reason the TRACS failed was not because the members did not support the idea of reporting the tyres coming on and off the market. It was simply a question of there being no enforcement at the collection point. Mr. Collins mentioned an exposé on "Prime Time" on RTE in which five very large dumps of tyres were displayed. In each case, that dump was as a direct result of a collector with a permit from the local authority collecting tyres with absolutely no intention of recycling the tyre. At the time, representatives of TRACS and the ITIA visited every local authority in the country asking how we might help them to identify non-compliers. In nearly every case, the problem was one of resources. They did not have the resources to go out and visit the people who were not compliant. In the early days, TRACS knew exactly who the economic operators were in the country. It presented a list of the non-registered members to every local authority on a monthly basis so resources could be targeted at the non-compliant people operating in the industry. It is not correct to say the numbers of tyres placed on the market are unknown. They are absolutely known. The CSO gathers the numbers from the Intrastat reports on companies like mine which import tyres. If the Intrastat report does not show a figure that is within 5% of the VAT return, there is an audit. The numbers are absolutely beyond reproach. It is incorrect for anybody around the table to say they do not know the size of the market.
Mr. Frank McDonagh:
I am a fairly large importer of tyres. I am also a retailer of tyres. We are currently in a situation in which we must report all the imported tyres we placed on the market to PRL. We do not have a problem with that at all. We think it is a very good system because that is where we collect the data on the market. We currently have a situation in which only the car tyre category, which includes cars, vans and 4x4s, is attracting a visible fee of €3.44. If PRL sends that information to Repak at the end of the month, Repak will send us the invoice to pay. It is a simple calculation for anybody looking at that information on a debtors list in the Repak organisation. I am not casting any aspersions on Repak. I say that categorically. However, under the requirements for keeping information confidential, it is not allowed. It is the simplest thing to work out. If €3.44 is divided into the number of tyres, everybody will know what I am doing. Currently it is against EU regulations and the law in Ireland. I have just been informed the relevant ISO standard is 27001. What am I to do next month when I have to report what I have placed on the market? Do I give the figures, in which case the possibility arises that everything I do will be known to a third party? It does not stand up. There are serious glitches. The whole thing has not been thought out properly. That is one thing.
Deputy Brian Stanley asked what we could do. We have already established by what Mr. Niall Murray has said, that the tyre industry is one that wants to be compliant. We have shown that in the previous scheme which tried to determine what comes on the market and where it goes. We are essentially a compliant organisation.
We then hear, however, of the scourge of tyres being thrown everywhere around the country. The actual cost of disposal currently amounts to approximately €1 per car tyre yet we have been told at this meeting that tyres are being dumped. What will happen when the cost rises to €3.44 per tyre? The dumping problem will be crazy. There is also huge discrepancy between the positions North and South. Lorry loadss of tyres will come into the South but where do they go then? These numbers will not be captured in the figures outlined and this will be true of many various avenues. The ITWRA is saying that the retailers of Ireland will capture all of the waste and allow it to be dealt with in an economic manner. If the Minister wants to engage well with the tyre industry, then he needs, first, to let the industry run this scheme and, second, to set a maximum rather than a specified fee. Competition will then result from that maximum fee. It is a very simple solution.
I have a question for the EPA. Has it had the power to gain access to retailers' or wholesalers' premises up to now? Has the EPA been doing its job in the context of monitoring and checking if people are compliant in how they dispose of tyres? Was there monitoring in operation before this system came into play? What role did the EPA have up to now?
The figure of 1,695 has been given as the total number of those who have signed up to the scheme. Does Repak have an estimate as to how many retailers have not signed up?
In response to Mr. McDonagh's comment, I have no doubt but that the majority of legitimate tyre wholesalers and retailers will ensure that their tyres are disposed of properly. My question, however, was very specific: how can a back-loaded scheme be tightened up to ensure that everything will be captured?
Dr. Eimear Cotter:
The EPA had no role in the previous scheme at all so the enforcement role set out for us now in the regulations is new. Previously, we gathered information and data on the numbers of and various treatment routes for waste tyres. We publish this information on our website where it can be accessed by any stakeholder. Our work in this regard remains ongoing.
Mr. SÃ©amus Clancy:
In response to Deputy O'Keeffe, Repak has no enforcement role to play other than to support enforcement through the provision of relevant information on retailers. We pass this on to the local authorities in order to support the Department, the EPA and the industry.
I would also like to correct a few things. The haulage sub-group had three meetings, one of which was attended by the IRHA. It did not come to the other two meetings, despite having been invited. On the issue of previous schemes, there were two such schemes, one, TWA, run by the ITWRA, and the other run by the ITIA, which was known as Tracks. Both schemes failed. The maximum ever number of members in Tracks amounted to approximately 800, though I stand to be corrected on that. It currently has approximately 90 members, while the ITWRA scheme has in the region of 30. We have no idea, however, as there are no websites or the like to confirm the size of these organisations. It is important to note that during the whole consultation process, even though Repak and almost everybody else consulted as part of the tyre working group meetings, the ITWRA did not attend any of them. I believe it attended two tyre group working meetings over the past two and a half to three years. The opportunity was there to consult and to contribute to all of the different working sub-groups, namely: distance sellers dealing with Northern Ireland; enforcement; finance; transition; historic stockpile; environmental targets; permitting; registration and reporting; agricultural; haulage; and end-of-waste criteria. Other meetings were held with all of the bodies as part of the consultation process, amounting to more than 60 meetings in total. It is very disingenuous, then, for people to claim that there has been no consultation on what has happened to date or what has been put forward in legislation. There are sections of the regulations that Repak does not like. In fairness to the Department, however, it tried to accommodate the needs and feedback of all of the stakeholders involved.
In response to the question about membership, there are, as I stated, 1,695 members current members of the scheme. Based on our research, we estimate there to be approximately 3,000 economic operators out there at the moment. Hence, compliance only stands at approximately 66% based on what is out there. This is based only on those who have joined; they still have to provide the relevant information. That is the next step. It is certainly a big challenge to establish the number of members and what they have out on the market. The overriding issue to remember, however, is that Repak has investigated all 20 schemes that have operated in Europe and not one of them is back-loaded. The reason for the latter is that this is a producer responsibility scheme, whereby producers take responsibility to ensure that the tyres they place on the market are managed in an environmentally proper fashion all the way to the consumer. This is also a cost-neutral scheme for all operators because, ultimately, it is the consumer who pays. I have here the invoices charged for tyres by of all of the different operators dating back to 2015, running from €1.60 up to €3.50 and beyond for truck tyres and so forth.
Not just yet. Ms. Murphy can offer her defence in a moment. We could go on all night with this but we are not going to. There is a lot of road yet to be covered here and we will take some final comments. Mr. Henry and Ms Murphy have indicated.
Ms Murphy can ask for clarity through the Chair but, unfortunately, she may not get it because that is how these committees sometimes work. We will try. All questions, both answered and unanswered, will be considered in the final deliberations so Ms Murphy can take some solace in that. We will now take Mr. Henry, Ms Murphy and Deputy Troy and whatever logically follows from there. We will then bring the matter to a close. We also need to convene in private session before the evening is out. I call Mr. Henry.
Mr. Dominic Henry:
I would like to address Deputy Troy's question about the confidentiality of the producers' information. The black box into which the information will be submitted has been accepting data from producers of electrical and electronic equipment since 2005. Would it be in order for me to name some of the multinationals that submit information to it? In the white goods sector, we have Whirlpool and Bosch; for ICT equipment, we have Dell and IBM; for medical and other large-scale equipment, we have Siemens; and for consumer equipment, we have LG, Samsung and Apple.
All of these producers, quite willingly and without question, submit the data to the black box. We supply the same type of information regarding financial liability that we will supply to Repak ELT to the existing WEEE and battery schemes. As I said earlier, we have had no data leaks or security breaches since 2005, when we commenced operations.
Ms Verona Murphy:
On consultation, I say to Mr. Clancy that the Irish Road Hauliers Association is a voluntary organisation. I sit here today on behalf of my members because I am a small indigenous haulier trying to survive. We do not have time to attend meetings that do not yield answers. Once is enough to ask. I also ask Mr. O'Donoghue to tell me when we will get the answers to the questions we have asked, although Mr. Collins says we have not engaged. This is why I am here today. Do not accuse us of not trying to co-operate. There is a level at which we must cut loose. When a consultation becomes a dictatorship, it is a waste of my time and that of my members.
I remind everyone that all questions and points should be directed through the Chair. Do the witnesses wish to respond to those points? We have gone around the table. They do not have to respond because the point was made and has been taken.
Mr. Clancy stated that he has invoices which show that this charge has been passed on to customers at between €1.50 and €3.50 over recent years. Why did Repak ELT decide to impose a higher charge on its customers? It did not go to tender but made that decision. A point was made about the comparison with other European countries. However, reputable contractors or operators collected and recycled tyres at €1.50 per tyre heretofore, which was acknowledged, but Repak ELT still decided to increase the charge to €3.44 inclusive of VAT. Why was that?
Mr. SÃ©amus Clancy:
First and foremost, we did not make the decision on the €2.80, the previous Minister, Deputy Kelly, did. That was based on the consultation and, I am sure, the feedback he received from the various parties. He set the charge at €2.80. In the context of what is out there in the market, there is a race to the bottom in terms of tyres and the collection of tyres. With the race to the bottom, everything goes south in terms of charges and that adds to the illegal dumping of tyres. I refer to circumstances whereby tyres are collected on a Friday and the same operators do not have them on the following Monday. Now, with a visible fee and with a direct allocation of that fee, the collection, transportation and proper recycling and disposal of those tyres will come out of the €2.80.
I will allow Senator McDowell in but, on a point of information, it is not usual that witnesses contribute multiple times and engage with each other. Members have the prerogative to ask questions - and supplementary questions if required - but I cannot allow everybody back in again because there is a limit.
The point was made earlier by one of the witnesses, and I have forgotten by whom exactly, that truckers' tyres, which are commercial tyres, are not the subject of being dumped throughout the country and that it is car tyres that are being dumped. Is this accepted? The point was made that one does not find truck tyres up on the Featherbeds or wherever. Therefore, I go back to the €11 and ask myself why, if they are not being illegally dumped, will they be the subject of a much larger fee.
Mr. Matthew Collins:
I want to help clarify in response to Deputy Troy. It is actually the Minister who sets the fee. From the Minister's perspective, what we are trying to achieve, on which we are all agreed, is the environmental objective of reducing the number of waste tyres and properly managing the waste tyres that come into Ireland. At present, while people dispute it, we do not know how many tyres come in and go off the Irish market. In layman's terms, the proposal is asking the tyre industry to do what other sectors that produce waste, such as those relating to electronics, batteries and farm plastics, have done. A single vEMC is a standard feature of any producer responsibility scheme. This is why there will not be different types of vEMCs. The Minister sets the vEMC, having taken account of views through the working group. The process will be reviewed, and we have set out that there will be six-month and 12-month reviews to ensure that the scheme is working properly and as we would expect. This is the clarification I wanted to give.
I thank everyone. This has been long session. I understand that people have strong views on the matter. We have had a good exchange of views. As a committee, it is our job to be deliberative and extract information from witnesses so we can adjourn to make decisions and plan a path forward. I thank all of the witnesses for giving of their time this evening. I know it has been long session. The committee will consider the matter further in private session. I propose, as per the normal convention, that we will publish the opening statements and submissions received. I thank all those present for their time, input and engagement during this long session.