We have noted with deep concern the current discourse around the development and possible enactment of a Statutory Instrument (SI) compelling manufacturers of packaging materials like plastics and bottles to remove them from the environment after use by consumers.
Whereas Zambia Association of Manufacturers (ZAM) supports measures to promote the development of a clean and healthy environment in Zambia, we are strongly against the alleged measure to compel manufacturers to venture into garbage collection and waste management. In this regard, we wish to highlight that the need for HEIGHTENED LEVELS OF CONSULTATION with ZAM and other stakeholders in the development of Statutory Instruments whose intentions may be noble but unworkable and ultimately damaging to Industry in practice.
Specifically, our areas of concern regarding the potential enactment of the draft SI include;
Exponential Increase in the Costs of Production: This is due to the fact that manufacturers will need to further invest in expanding their operations to include garage collection and possibly recycling.
Increased Commodity Prices: An increase in costs arising from compliance to the SI will certainly be passed on to consumers. This in turn will fuel inflation and reduce demand for locally manufactured packaging and products. Ultimately, this means that Zambian products will become more expensive on the market. The knock-on effect of the same is decreased levels of competitiveness of Zambian products. This is directly contrary to the aspirations of the Proudly Zambian Campaign, the Industrial Policy, and the Local Content Strategy which seek to promote increased consumption of quality locally manufactured products and services in addition to promoting local sourcing of inputs in Industry.
Increased Importation of Packaging Materials and Products: Due to the increased costs of packaging materials and finished products, consumers and manufacturers will switch preferences and begin to opt for cheaper more affordable packaging options and products. This will undoubtedly kill existing packaging industries, as well as hamper business for users of their packaging materials leading to potential downsizing and closure of firms.
Loss of Employment: Manufacturers of packaging materials will have to adjust their cost structures to cater for an increment in costs of compliance to this SI. This will translate in downsizing and job cuts in order to meet the same, with the dual effect of reducing the workforce, as well as reducing productivity in these firms.
Reduced Revenue Collections: Job losses arising from higher compliance costs will result in significant loss of revenue for the Government in the form of reduced PAYE and NAPSA collections by the Zambian Revenue Authority (ZRA). This will have direct and dire implications on the Authority’s ability to meet debt servicing requirements amongst other public-sector expenditure obligations, including repaying long outstanding refunds to the business community.
Reduced Forex Earnings: For companies that are exporting, this will translate into a loss of forex earnings as productivity and capacity to meet export demand will be reduced, as well as the final price of exported commodities increasing.
“Whereas we understand the need to champion a clean and green Zambia, we must equally champion measures that will not destabilize Industry and cause the economy to spiral into a period of accelerated economic downturn.”
The cost of doing business in Zambia is already substantially higher than in previous years, and as such, the focus must rest on measures to reduce the cost of doing business. We therefore recommend the following;
Immediate-term Interventions:
Immediate Withdrawal of the Draft SI on Packaging Waste until further consultations with all stakeholders have been conducted, and input provided by Industry on the contents of the draft Instrument.
The Ministry of Water Development must conduct a Regulatory Impact Assessment to establish the broad impact of this measure on Industry and the Zambian economy at large before enactment and avoid back tracking.
Medium to Long-term Interventions:
Waste management must be anchored in good waste management practices and thus requires a change in mindset of the Zambian people on how to manage waste products. Picking up after the consumer, with no accountability from them is not a sustainable solution to the problem. The following recommendations are provided to address these concerns in the Zambian economy at large.
i Increase Sensitization on Good Waste Management Practices to All stakeholders.
ii Increase Incentives to Promote Recycling Initiatives/Waste Management – Chibolya Primary School’s action to turn plastic waste into handbags is just one example of how Zambians can turn plastic waste into a business.
iii Enhance Enforcement of Regulations on Waste Management – Countries like Rwanda for example have actually introduced jail sentences to disincentive littering by the general public Similarly, the general public can be fined for littering to discourage this behavior.
This responsibility cannot therefore solely be placed on local manufacturers. Furthermore, Manufacturers are already burdened with a number of costs including levies aimed at supporting garbage collection by the Council. The measure proposed by the SI effectively supplants the role of the Councils, leaving manufacturers and other stakeholders at large to question the reasoning behind payment of these levies, and indeed the role of the Council in maintaining clean and safe environments within which business can operate.
Author is Chief Executive Officer of ZAMBIA ASSOCIATION OF MANUFACTURERS