According to NCE RK "Atameken" introduction of EOP should be gradual, deliberate and transparent

Discussions on the implementation of the principles of EOP - extended obligations of producers (importers) broke out at the meeting at the NCE. The moderator of the meeting was the Deputy Chairman of the National Chamber of Entrepreneurs of Kazakhstan "Atameken" Nurzhan Altaev.

 The discussion was attended by Director of Waste Management Department of the Ministry of Energy of the Republic of Kazakhstan Zhan Nurbekov, managing director of LLP "operator of EOP" Rustam Temirbekov, interested manufacturers and importers, as well as international experts of PBN Hill + Knowlton Strategies Bashir Chalabi, Tetra Pak Anna Tarantsova.

As it is known, on 1^st of January 2016 the principle of extended obligations of producers (importers) was introduced in the Republic of Kazakhstan, shortening - EOP (recycling fee), which came into effect on 28^th of January this year The operator of the program of extended obligations of producers (importers) is LLP "operator of EOP".

EOP - is the obligation of individuals and legal entities, engaged in production in Kazakhstan or into import of goods to the territory of the country, to ensure collection, transport, processing, disposal, use and of waste, which is generated after the loss of consumer properties of the goods covered by EOP.

"Initially, the draft list of products that are subject to the extended obligations of producers (importers) included 1500 commodity groups. It included the finished products, goods and raw materials and semi-finished products, which are used for production. This meant multiple accrural of utilization fee on the good in the course of its production. After the discussion was formed the final list of goods, which consisted of 38 product categories - cars and their parts, batteries, oil, tires. But this is not the final list, its expansion is foreseen in the future. Perhaps already in 2017 the list will be expanded significantly", - said Nurzhan Altaev.

He noted that the EOP fee becomes an additional expense for the producers (importers), so the opinions were repeatedly expressed at NCE that in the current economic conditions, it is impossible to expand the list. According to him, the most likely candidates for entry into the list of enterprises today are the packaging and food industry.

Olzhas Ordabaev focused on major sensitive issues during implementation of EOP. Firstly, he said, in the current economic environment it is necessary to be very carefully while expanding the list, assessing all the costs of producers, importers. He also expressed the position of the Chamber on the need to register bona fide entrepreneurs: as payers of EOP, and companies that will engage in the processing and recycling.

"All entrepreneurs raised the issue of transparency in the activities of the EOP operator. (...) There were also questions about the mechanism of compensation and payment for services of collection, transportation and waste disposal. The absence of target indicators also concerns business. We need to understand clearly how much waste will be disposed for the money paid. There are certain questions regarding the use of their own collection systems. There are certain risks of multiple accrual of recycling fee", - he added.

Rustam Temirbekov, in turn, tried to answer some questions of the business community, which were voiced by NCE. "We analyzed the experience of implementation of EOP in different countries, including in Europe, the countries of the Customs Union. In order to ensure transparency of activities of the operator and the effective use of funds, which come to our accounts, as well as the development of SMEs in the field of recycling, we offer to carry out compensation for utilization on the competitive basis ", - he said.

The international expert Bashir Chalabi noted high risks of double taxation. In his opinion, the inclusion of raw materials and semi-finished products in the list, not only bears the risk of multiple recycling fees of the same product at different stages of its production, but also creates discriminatory conditions for Kazakh producers, who procure raw materials and semi-finished products in Kazakhstan and abroad (unlike importers of finished products, dealing only with the "final" goods and its packaging).

The representative of Tetra Pak Anna Tarantsova shared Ukrainian experience. "Today at landfills is stored 96% of municipal solid waste. It is about 13 million tons only in 2013. Only about 4% is processed and about 2% is burned, while in most European countries it is prohibited to store the solid waste, and the majority of packaging waste is recycled. The problem of Ukraine is that there is almost no infrastructure for separate collection and the necessary legislation in this area. Existing sorting centers are ineffective, and their number is insignificant, - she said. - As a result, valuable components in the composition of solid waste take up to 80%, which could be used as a source or recycled for energy purposes, bit it is simply piled up in landfills, causing severe environmental damage. And the money in the form of a collection gathered over the years from the importers and manufacturers of packaged goods, the monopoly operator uses it inefficiently".

The head of the company-operator noted that he understands the concerns of the business about the additional costs associated with the introduction of the recycling fee. "Probably because of the fact that the EOR was introduced initially for vehicles and there were quite high rates, this factor scared many participants of EOP. Now the question arises about the introduction of EOP for packaging, everybody is interested in the question of tariffs. There is a certain corridor rates for types of packaging. We counted the cost per unit. The cost of the recycling payment if we use the rates of the Customs Union will not even exceed 0.5%. This is a very small amount - 40-50 tiyn ", - he said.

Meanwhile, according to Chengis Kaskeev, director of the department on work with government agencies and the media at the brewery company "Efes Kazakhstan", there is no need to create a monopoly in EOP field, that is, no single operator, which, according to him, will only dictate terms to all manufacturers and importers.

"We insist on the fact that manufacturers and importers have the right to create their operators EOP. In general, the principle of EOP should be based on the following principles: the government only determines the standards and controls their execution, all other aspects should be regulated by the market and business ", - said Ch. Kaskeev.

By the results of the meeting, it was decided to adhere to the following principles during the implementation of EOP in the Republic of Kazakhstan: a consistent definition of a list of EOP products in order to avoid double imposition of utilization fee; application of international experience - compliance with basic international principle of EOP - "each who contributes to pollution of environment should pay "; transparency in the preparation of regulatory and discussion with business projects related to EOP regulations at all stages of their preparation; introduction of market practices in the implementation of EOP (considering the possibility of granting the company the right to provide waste disposal by entering into contracts with independent processing companies).