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Oil Stewardship Advisory Council - 5th Meeting, 11 June 2002

Present at the meeting were:

Members
Mike Williamson (Chair)
Mark Borlace
David Braham
Patrick Colmer
Doug Hagen
Cathie Halliday
Wayne Hart
Paul Howlett
Graham McGarry
Bryan Nye
Gary O'Connor
Andrew Poole
Bob Pullinger
Richard Webb (for Phillip Glyde)
Fred Wren

Others
Dr Sharman Stone (Parliamentary Secretary) present for welcome, morning tea and end of meeting.
Simon Frost (Dr Stone's office)
Bruce Male (Environment Australia)
Paul Dworjanyn (Environment Australia)
Megan Smith (Environment Australia)
Donna Bond (Secretariat officer)
Barry Huguenin (Delynda) - present for items 6 and 7d only.
Members of the Regional Waste Management Group present for morning tea only.

Summary Record of Discussions and Resolutions

Standing Items

Item 1: Welcome and apologies/proxies

The Chair welcomed delegates and introduced Dr Sharman Stone, Parliamentary Secretary to the Minister for the Environment and Heritage.

Dr Stone expressed her appreciation that the meeting was being held in Shepparton and said that it was important for the Council to come to rural areas. She said the Government was strongly committed to the product stewardship arrangements for waste oil, and was encouraged by the program's current focus on collection points in rural and regional Australia.

The Chair announced that members of the Waste Management Development Group would be coming to morning tea.

The Chair introduced and welcomed a new member, Mr Bob Pullinger, chairman of the Oil Recyclers Association of Australia (ORAA) and Mr Richard Webb from Environment Australia, who was representing Mr Phillip Glyde who was unable to attend.

The Chair passed on apologies from Mr Martin Kirwan and Mr Phillip Glyde.

Mr Williamson welcomed the new Environment Australia staff, Mr Paul Dworjanyn and Ms Megan Smith. He also farewelled Mr Bruce Male and on behalf of the Council thanked him for his excellent work.

Item 2: Adoption of the Draft Agenda

The Chair said he wished to rearrange items 7a-d. Item 7d would immediately follow item 6 and then return to items 7a, b and c.

Item 3: Approval of Minutes of the Last Meeting

The Minutes of the last meeting were approved without amendment.

Matters arising from previous meeting: nil.

Item 4: Declaration of Conflicts of Interest in Agenda Items

Mr Wren and Mr Pullinger declared interest in the transitional assistance funds for rural areas. Mr Hagen declared interest in plastic recycling.

Item 5: Oral Report from the Australian Taxation Office (ATO) on the Product Stewardship Arrangements for Waste Oil (Patrick Colmer)

Mr Colmer reported:

Mr Nye expressed concern regarding the very limited notice for exemptions provided by Government. Mr Colmer and Mr Male said the Government allowed a two week lead time and asked Mr Nye what the preferred time frame would be. Mr Nye said that a 2 month lead time would be preferable.

Dr Stone thanked Council members for the opportunity to address the Council and left the meeting at 9.35am.

Matters Arising From Previous Meeting

The Chair said agenda items would be re-ordered to enable the meeting to progress. Items 6 and 7d would proceed when Mr Huegenin arrived.

Item 7: Report from Environment Australia on the PSO Transitional Assistance Funds

7a) Summary of Round 1 Projects

Mr Webb reported:

Referring to the PPK and Delynda studies, Mr Nye said the work had already been done. The information resided with industry. He said that he doubted the projects provided value for money and that OSAC should have been involved in the selection process for transitional assistance projects.

Mr Webb said that the purpose of the PPK and Delynda studies was to deliver reports on waste oil in Australia, which would be publicly and centrally available. Mr Poole agreed.

There was dynamic discussion relating to when OSAC should be informed of transitional assistance projects and what OSAC's precise role was. Several OSAC members said that OSAC should have a role in determining the types of projects funded. The Chair read the role of OSAC from the PSO Annual Report: '..the primary function of the Council is to provide a broad range of advice to the Minister for the Environment and Heritage on the product stewardship mechanisms and their operation, the oil recycling and oil production industries and markets'.

Discussion ensued relating to OSAC's role, Environment Australia's role in the decision making process and the problems of confidentiality.

The Chair suggested that the issue of OSAC's involvement in the selection and priority of projects funded under the transitional assistance package be discussed more fully at agenda item 12.

7b) Local Government Grants and Round 2 Assessment Process

Mr Webb reported:

Local Government Grants

Expression of Interest - Round 2

Mr Male said EA will try and fill any gaps with the local government grants after looking at GIS mapping and working with jurisdictions. It is unclear when the next round of local government grants will be announced.

Mr Pullinger suggested that the collection facilities in larger rural centres could be used as central collection points to consolidate loads of waste oil. Mr Male said that they had been in contact with Eco- Recycle Victoria and Resources NSW to discuss collection points.

Mr Wren and Mr Hagen said they had spent considerable time encouraging local councils in their states to construct collection facilities. Mr Wren said that the low numbers of applications in other states indicated the problems councils had in understanding the process.

There was general discussion on the possibility of OSAC becoming involved in assessing local government grant applications, and determining where larger collection hubs should be located.

A discussion ensued about the problem of empty lubricant containers. Mr Male outlined EA's work engaging the States with the waste oil issue. Mr Pullinger added that discussions should not stop with State governments and that local governments should be included in these discussions.

Item 6: Oral report from AIP on AIP-VISY Oil Container Collection Trial (Bryan Nye)

Mr Nye presented the Australian Institute of Petroleum's work on waste oil container recycling. Mr Nye reported:

Mr Howlett addressed the problem of low volumes and asked whether the problem was that they were only looking at oil containers. Mr Nye said a small percentage of the total HDPE bottles in Australia are oil bottles but under the NEPM they are only obliged to take care of oil bottles. However, they were willing to look at other containers.

Item 7d) Presentation by Delynda on the Progress of their Oil Container Recycling Study

Mr Huguenin presented information on Delynda's study on the recovery and recycling of oil containers. He reported:

Mr Huguenin said he was interested to hear from anyone if they had more information on the state of play in other countries, the supply chain both here and overseas, technology options and end product. The report was expected to be completed in 2-3 weeks.

Mr Male said that EA would send copies to OSAC members when the report is available. There is also a 50 page Power point presentation available if anyone is interested.

Item 7c) Communications Strategy Update

Mr Male reported:

Mr O'Connor proposed that the Chair write to relevant programs and groups, such as Chem Collect, drumMUSTER and the Kerbside Recycling Group, advising of OSAC's activities and aims. This could be a way of identifying synergies. This was agreed.

Mr Nye raised his concerns with the Delynda consultancy. Mr Hart said that he found Delynda's presentation very interesting and informative - particularly the international information.

Whether OSAC should be included in assessing proposed transitional assistance projects was discussed.

Mr Poole suggested OSAC write a letter to the new Minister and reiterate the priorities of the Council. It was agreed to discuss this further at agenda item 12.

Mr Pullinger asked to know what the ground rules were for applying for transitional assistance funds. Mr Male said that grants were only given to commercial enterprises if there was a guaranteed public good. A lot of industry applications were knocked back because they were looking at it as an industry assistance package.

Item 8: Report from Environment Australia on the Progress of the Exemptions Submissions

Report from Mr Male.

Mr Colmer said that it would be difficult to administer a remission circumstance for the latter group of oils. For this reason, the ATO would not recommend exempting them but look at refunding certain users such as printers etc.

Mr Male reported that the Prime Minister, Treasurer and the Minister for Justice and Customs have agreed to abolish the automatic indexation of the oil levy. The Australian Taxation Office is preparing the appropriate legislative instruments to give effect to this.

Mr Nye requested at least two months notice on the removal of the indexation.

Item 9: Progress Report from Environment Australia on the Fuchs' Assessment

Report from Mr Male.

The Chair asked whether Mr Poole could be engaged in the process of assessing Fuchs claims since he accompanied him to see Fuchs last year. Mr Poole said that he had some knowledge of their technology, his company did not have a conflict of interest and he would be happy to be involved in the project for OSAC.

Mr Nye said he would like to see the draft report from the consultants. He suggested that the consultancy brief expand to include whether Fuchs use or intend to use genetically modified canola oil.

Item 10: Report from Environment Australia on Oil Testing

Report from Mr Male.

Mr Hart asked whether Environment Australia was comfortable with the recommendations made by the consultants. Mr Male said they were at the moment but were also waiting on the assessment by the technical experts in the Chemicals and the Environment Branch in EA on the veracity of the recommendations.

Item 11: Discussion of the PSO Annual Report for 2001 (Environment Australia)

Mr Male said that the annual report for the period 1 January 2001 to 30 June 2001 was tabled in Parliament on 19 March 2002. He noted that Council members had only recently received a copy of the report, and apologised for the delay.

The Chair noted that the report complied with the requirements under the Product Stewardship (Oil) Act 2000, but it was unclear who the target audience was.

Mr O'Connor said that page 16 of the report states that benefit payments are well below forecast figures, and that modelling predicted a higher expenditure. Mr Male said that this was because it was thought that the benefit might draw out waste oil, but this didn't seem to have happened. The program was otherwise progressing as predicted.

Mr Poole noted that the report states that there are only 34 companies registered as claimants. Mr Colmer noted that 38 are now registered. There was some discussion about the number of companies engaged in oil recycling in Australia.

Ms Halliday asked where the priorities on page 12 of the report had come from. Mr Male said that they were developed from Senator Hill's selected projects under the first round of transitional assistance funding.

Item 12: Discussion of OSAC's Mission

The Chair invited Council members to speak on some of the issues briefly discussed during the meeting, including priorities for transitional assistance funds and the role of OSAC.

Mr Borlace said that the Council should be more proactive and that at the moment they were, in the main, reactive.

Mr Nye suggested that the Council advise the Minister of what they think should be funded under transitional assistance funding, and that the approach to management of waste oil should be more holistic. For example they could advise the Minister that oil packaging and filters should also be considered as part of the transitional assistance.

Mr Poole said that regional areas still require some attention. Infrastructure is required. He said that the communication strategy is important and real technical research into the recycling of oils is required. He also noted that after initial grants have been provided to local government, it may be necessary to double the size of some collection facilities, if it seems that they can act as collection hubs. There was general discussion on OSAC facilitating the process of selecting suitable locations for central collection hubs.

Mr Howlett said that OSAC should engage in some strategic thinking about how to encourage lube-to-lube recycling. Mr Pullinger said that the new diesel standard carries problems for recycling oil, (it may not be possible to use waste oil as a diesel extender) and that this is something that OSAC has not yet investigated. He said that lube-to-lube is a great concept, but unless it is embraced, it is unclear what will happen to the remainder of the waste oil.

Mr Howlett noted that OSAC should be thinking about how Council members can contribute out of session.

The Chair said that he would speak to members individually out of session, and that two or three members could travel to Canberra with the Chair to discuss with EA how OSAC might best progress their roles and communicate with the Minister. Between now and October the Council should progress the issue of OSAC's engagement.

Item 13: Next Meeting

It was agreed the next meeting should be in Sydney on 15 October 2002. Mr Nye suggested that Council members take a tour through an oil refinery (likely to be Caltex or Nationwide). It was agreed that this would be useful, and should occur on 14 October.

The meeting closed at 2.45 pm.

Summary of Follow-Up Activities

Environment Australia

Chair

Mr Poole