Why are Producers of Micro & Small Units appealing for EPR Exemption?

Pratibha Sharma

23 Aug, 2023

In this article, we will try to understand why the micro and small units using plastic packaging are appealing for EPR exemptions, adherence to the Plastic Waste Management Rules, and whether these EPR exemptions are justified. Before we get into this, let’s first understand about EPR.

What is Extended Producer Responsibility?  

The Extended Producer Responsibility, commonly referred to as EPR, finds its basis in the concept of management of the life cycle of the product along with the Polluter Pays Principle, which essentially means that whoever pollutes the environment is liable to compensate for the damage caused. Thus the miscreant has to return the environment to its original state, irrespective of the intent. Many European countries have incorporated stringent EPR regulations for their producers, manufacturers, importers, etc., to make them re-evaluate the life cycle of their products and their overall impact on the environment.   

The emergence of Environmental Jurisprudence is not a recent occurrence. Government and Environmentalists have been campaigning and preaching the society about adopting environmentally safe practices and the importance of RRR (Reduce, Reuse and Recycle) Strategy. It has become imperative to downsize the plastic waste generated, which takes years to degenerate. As per the United Nations Industrial Development Organisation^[1] Report on ‘Recycling of Plastics in Indian perspective’ by Dr Smita Mohanty, CPCB has estimated that in 2017-2018, India generated approximately 9.4 million TPA plastic waste which amounts to 26,000 TPD (tonnes per day).

Thus it becomes crucial to intervene in the existing plastic waste management, which exhibits flaws as we witness its environmental repercussions. Waste is collected and transported by authorities and is ultimately dumped in landfills. Thus, proper waste disposal, particularly plastic and microplastic, is considerably overlooked. To counter that and address these concerns, the government has implemented the Plastic Waste Management Rules, which have evolved the idea of Extended Producer Responsibility.

In simpler words, the concept of EPR makes a producer or a manufacturer accountable for the life cycle of his product, to downsize the waste generated by manufacturing and consuming their products and at the same time forcing them to strategise a sustainable approach, thus making them think twice before they dump their waste untreated in the environment.   

The age-old debate of development v/s environment has often stirred discussions worldwide, which has already coined the concept of Sustainable Development. There is no denying that life without plastic is unimaginable right now, especially in the dearth of environmentally and economically friendly alternatives. But at the same, we are aware of the environmental threats plastic poses. With this logic in mind, legislators have decided to cast this responsibility on the stakeholders involved in the production and consumption of plastic in the form of EPR to mitigate the adverse effects on the environment. Thus we can say EPR is the pragmatic answer to all the environmental concerns for now.   

Who is required to register with CPCB as per the Plastic Waste Management (PWM) Guidelines?  

As per Section 9 of the PWM Rules, the entities who introduce plastic waste in the market due to their products in the form of carry bags, multi-layered packaging, plastic sheets etc., shall mandatorily register on the centralised portal developed by CPCB and shall fulfil the EPR to ensure environmentally sound management of this plastic waste. These entities are:  

1. Producer (P):  Producer is a person engaged in the manufacturing or import of carry bags or multi-layered packaging or plastic sheets and includes industries using plastic sheets or covers made of plastic sheets or MLP for packaging or wrapping the commodity.
2.  Importer (I): An importer is a person who imports and holds an IEC number unless otherwise specifically exempted. 
3.  Brand owners (BOs): Brand Owner is a person or company who sells any commodity under any registered brand label or trade mark.   
4.  Plastic Waste Processor engaged in: 

 (a) recycling,   

(b) waste to energy,   

(c) waste to oil, and   

(d) industrial composting.  

However, Brand Owners, which are working in micro and small scale as per the Ministry of Micro, Small & Medium Enterprises (MSME) criteria, have been allowed EPR Exemptions and have thus been kept out of the ambit of the said rule.  

Reasons for Micro and Small Scale producers to appeal for EPR Exemption

As a result of the exemption granted to the Brand Owners operating on a Micro and Small scale, the Micro and Small units identified as producers within the plastic packaging sector have also come forward to make an open request and appeal to our Hon’ble Prime Minister for a similar EPR exemption from the Regulatory framework.  The All India Plastic Manufacturers Association (AIPMA), along with the Organization of Plastics Processors of India (OPPI), and several other regional associations from various States such as Gujarat, Maharashtra, Karnataka, Telangana and Kerala have collaborated to seek exclusion from this regulatory framework by appealing for EPR Exemption, owing to the intricate EPR regulatory requirements and complexities, which pose a challenge for the micro and small units to comply due to their limited financial and human resources at their disposal.   

One needs to realise that these small and micro producers do not have the financial bandwidth, technical expertise, or capacity to cover the entire expense of waste management, let alone the total comprehensive recycling process. 

Before imposing such mandatory compliance and adherence to the EPR regulations, we must comprehend how this might make it difficult for Micro and Small units involved in plastic packing to survive in highly competitive markets and, let alone dream of entering the global market, impeding their viability. The costs for collection, sorting the waste, and then recycling it have been identified as one of the major impediments and strains on their financial budgets, thereby inflating the overall cost of their production, making these units’ appeal for EPR Exemptions.  

The major established enterprises, which already have an added cost management advantage, enjoy an additional edge in terms of price dynamics. Other reasons which probably is motivating these units to appeal for EPR Exemption are the lack of resources, techniques and data available, which has also left numerous micro businesses perplexed as they are unable to predict their future costs or make well-informed decisions and are thus often grappling with the unpredictability of their future existence in the market. Therefore, they may require to hire professionals and experts who can aid them in ensuring these comprehensive guidelines. For many enterprises, the high EPR cost has become a pivotal factor influencing the sustainability of their businesses in the light of the already existing un-level playing field.

Analysis

The heart of the problem lies in the operational and logistic challenges and realities these micro and small units face, which operate on a vastly different scale than their larger counterparts. The lack of technical know-how or finances, which are required to efficiently manage the waste generated as mandated by the EPR Guidelines, is a tough hurdle to cross. Furthermore, compliance with these rigorous rules and deadlines without any logistic support makes it an arduous task for these micro and small units to adhere to the EPR Guidelines for plastic waste management. The fear of inadvertent failure to comply raises the probability of facing dire consequences in the form of pecuniary penalties, which further adds to their apprehensions and, thus, to their demands for EPR Exemptions.  

Given these challenges, micro and small units engaged in plastic packaging are advocating for EPR exemptions. Therefore, there needs to be a more nuanced approach considering the exclusive circumstances of the micro and small enterprises before making such arduous mandatory provisions for them. The need for tailor-made solutions with a more balanced approach would be ideal in such an economically diverse scenario.

Implementing the concept of EPR on entities engaging in plastic packaging, especially in Micro and Small Units, is particularly significant given the socioeconomic context in India, where a considerable section of the country is already grappling with financial hardships. The ones advocating for this EPR exemption argue that these micro and small units are already fighting for their survival in the domestic industry. In such a scenario, the most feasible option could be either allowing EPR Exemptions for these micro and small units involved in plastic packaging, just like the exemption of the Brand Owners of these Micro and Small units or the other viable option could be sharing the cost and distributing the Extended Producer Responsibility (EPR) expenses. This model of equitable sharing of cost not only allows the micro and small businesses to keep their businesses alive and kicking, but it also encourages them to assume some responsibility for their actions, which tends to leave a long-lasting impact on the environment.  

Thus, before pointing fingers and playing the blame game regarding the ineffective implementation of the laws in the country, it becomes imperative to understand the ground realities and the reasons behind such failures and resistance from the beneficiaries. The EPR guidelines introduced provisions in the law which required the enterprises to have their own plastic waste collecting procedures in place and, at the same time, mandated them to achieve these targets within a short time period. Probably these inadequate timelines, along with the high regulatory and financial burdens placed on micro and small units, are the reasons for resistance and reluctance from their end, thereby incentivising them to claim EPR exemption altogether.   

Conclusion

The introduction of EPR Schemes inspired by Western countries should be adopted prudently and cautiously, keeping in mind the ground realities of our country. The rules must be adapted based on the social and economic fabric of the territory. To create a roadmap for sustainable plastic packaging, these concerns of the end users and beneficiaries have to be addressed and solved. Only then can we truly reduce the disposal of untreated plastic waste and tread on the road of sustainable development.  In conclusion, the appeal for EPR exemption for Micro and Small Units engaged in plastic packaging in India is rooted in their practical challenges and concerns. The financial burden, operational and technical difficulties, and increased competition in the market have further amplified their worries. While EPR Guidelines aim to promote environmental sustainability, its application should be concerned with economic viability to ensure a seamless transition towards sustainable waste management practices in India.

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