As the result of an EC Directive,
EC/94/62/C, members of the European Union are obliged to achieve certain percentages in
the recovering and recycling of packaging waste, with the collection of recycling data an
additional requirement.

The Food and Beverages Sector, of which
many companies are packers/fillers and often retailers (in the form of Drinks Dispensers)
will bear a heavy recycling burden, at best 36 per cent, from 2001. In addition by 2000,
wholesalers also have an obligation that will be equally difficult to fulfil.

Besides the costs of recovering and
recycling packaging, the administrative costs will be high. This is where the use of
quality software, such as JBA’s Activity Based Costing (ABC) will significantly
assist the obligation calculation.

EU countries are each implementing their
national solutions. In Germany, for example, most major distribution companies belong to
an organization which certifies products under the ‘Duales System’ or
Green Dot‘ system. Fritz Niehsen at JBA, Germany explains: “The
‘Duales System’ utilizes the Green Dot as its trademark. It indicates that the
packaging manufacturer or filler has paid a license fee to the System for packaging marked
with this symbol. This license fee, which is used to finance the subsequent collection and
sorting of the packaging, is based on the actual waste management costs.”

Shared responsibility
The UK is the only country with a shared producer approach to recycling, with the
obligation going right through the supply chain. Other European countries, such as
Germany, have single point responsibility.

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Nigel Wilmshurst of Ceres Logistics, a
company which interprets EC directives to calculate companies’ obligations says Ceres’ aim
is to help European companies reach the most cost-effective solutions, avoiding penalties
or undue costs. The current legal obligations, he says, are only the start of the producer
responsibility schemes.

However, Nigel Wilmshurst does not see this
European trend being adopted by America. Although the USA does not have a centralized
scheme, individual states have their own environmental schemes and legislation, a system
which seems to work well. Obviously though the US producers with plants serving the
European market-place must take these measures very seriously.

Investment by German industry in the ‘Duales System’ is
currently approximately DM 7 billion.

In the UK, where responsibility links along
the supply chain, those businesses which have to register will either own packaging,
supply packaging, have a turnover exceeding £5 million ($7.5m) (in 2001 £1 million
($1.5m)) or handle more than 50 tons of packaging a year. Companies can undertake their
obligations individually or join a scheme of which there are now many.

The UK targets are:Year Recovery Target Recycling Target

Year Recovery Target Recycling Target
1998 36 per cent 7 per cent
1999 38 per cent 7 per cent
2000 43 per cent 11 per cent
2001 on 52 per cent 16 per cent

Companies must calculate and analyze the
tonnage of packaging waste they have to recover and the quantity to be recycled, including
calculating the percentage obligation which depends on use of the packaging and the
national targets for the year in question.

Percentage obligations are:

Raw material
6 per cent
Converting 11 per cent
Packing/filling 36 per cent
Selling 47 per cent
Secondary Provider 83 per cent

An integrated approach
In order to comply with targets in the UK and Europe, accurate record-keeping is vital and
JBA offers practical help through its JBA System 21 ERP solutions for the Food industry.
Reports can be printed with all data required for official compliance and System 21 allows
for mistakes and omissions to be adjusted before generating a report either to completely
rebuild a month’s or quarter’s packaging data (at least an annual requirement) or to
annually adjust figures in a “Period 13” function.

The EC packaging directives, together with
pressures over the Year 2000 date and over new arrangements for handling single currency
transactions result in a considerable amount of responsibility for IT managers.