E C O N O M I C I N S T R U M E N T S
Local producer boxed-in by government
By Paul Csagoly
Packager complains that laws don't do enough and taxes aren't really 'green.'Just outside Hungary's capital of Budapest is a factory that produces some 10,000 tons of packaging material a year. That's a lot of packaging. This particular type of packaging takes decades to degrade naturally which means a serious potential waste problem. The factory owner, Tetra Pak, says it's doing everything it can. But the company can't do much without more help from Hungary's government.
Tetra Pak is famous for its Tetra briks, rectangular cartons made from a combination of paper, plastic and aluminum. These cartons, capable of keeping drinks fresh for longer times, now hold the vast majority of Hungary's milk and juice products.
"We create no air, soil or water pollution problems here," says Eva Baka, Manager for Tetra Pak's Environmental Services.
Nearly 99 percent of all waste created at the factory is recycled. Finished packages are rolled in spools at Tetra Pak and then shipped to clients where the boxes are formed with special on-site machinery, thereby reducing transportation costs. And Tetra Pak ships any packaging waste produced by clients to recyclers.
Tetra Pak has also given free bale press machines, for compressing waste, to its major clients. "One landfill operator in Siofok was "extremely angry" at me because our client's waste stopped going to his landfill," Baka recounts.
Tetra Pak's main environmental problem is waste created once the consumers have finished their drinks. Tetra Pak only recovers 1-2 percent of its products now. One result is that Tetra Pak pays a product charge to the Hungarian government. In 1995, a new government law levied product charges on polluting products such as packaging, tires, batteries, refrigerators, lubricants and gasoline.
For packagers, the charge is applied if they fail to recover a certain percentage of their products. In 1996, the law required a recovery ratio of 12.5 percent. In 1999, it rose to 27 percent and in 2000 it will be 50 percent. Total annual revenues to the government from all Hungarian packaging charges amounts to about three billion forints (EUR 12 million), says Baka.
"This is not workable," she says, explaining that the problem is not with the charge itself but rather with how the money is being used. "The government is painting the tax green but it's not. It's just so that they can get more money."
The 1995 packaging law called for all revenues from the new charge to go toward solving waste problems from packaging. But in 1996, the law changed so that now only 25-30 percent goes to the problem. The rest goes to the government's general budget, she says.
"Where is our guarantee that the government will use the taxes to solve the packaging waste problem?" asks Baka.
Fixing the problem could mean that municipalities begin selective waste collection systems and encourage recycling, new recycling technologies are initiated, or money could be spent on educating the public on waste reduction and recycling.
Baka refers to Germany as a model to follow. There, the government decides on a waste recovery ratio but doesn't get involved in how it's done. Packaging companies give a non-profit organisation a fee, which it uses to organise a system of recovery through help with local municipalities (e.g. putting up recycling bins). This system puts a green dot on recyclable packages and ensures that the recovery ratio will be within the government-defined limit. And the packager avoids a penalty.
In Hungary, the government decides on the ratio, collects all the money and doesn't really use it to fix the problem.
"If taxes are raised more, we don't want to close the factory and I don't think the government would want this either," says Baka. The factory employs over 150.
Baka adds that Tetra Pak is voluntarily investing its revenues to improve Hungary's waste problem. From 1979-1999, Tetra Pak had a nation-wide education program for kids aged 9-12. Kids learned about packaging, waste and recycling and played with hands-on computer games. Over 400 schools and 50,000 kids were visited, and the kids loved it, says Baka.
Baka also wanted to encourage cities to start selective collection programs, to help recover their used packages. Some did, including Gyor and Pecs.
That's not enough and Tetra Pak can't coordinate a nation-wide recycling program, says Baka. Unless the government directs the revenues from the charges to improving the problem, the problem will not go away É but Tetra Pak might.
