Packaging Europe

Julian Carroll, Managing Director of EUROPEN, articulates his vision for a global harmonisation of packaging regulation, along the lines of the European model, as the blueprint for both sustainability and significant supply chain efficiencies.

Several years ago we were facing increasingly strident demands for ‘more sustainability’ all along the packaging value chain. And all along that chain, our response was uncoordinated. Sometimes, it was even in direct conflict with what was happening somewhere else along that chain.

We had to learn to deal with an unusual new type of risk, arising not directly from our own actions, but from our uncoordinated reactions to new pressures. Demands for greater sustainability have mushroomed across the global business agenda. They were, and are, being felt by companies everywhere. The consequences for our business have been far-reaching. As packaging, the green lobby’s favourite whipping boy, increasingly came to be seen as a symbol of humanity’s fallen environmental state, recycling became more than a sensible household chore. It became an act of grace, a source of redemption.

Packaging, the facilitator

This phenomenon is stoked by the fears associated with globalisation. For millions, packaging waste has become a symbol of a world suffering from the evils of global integration. As we know, those views are deeply mistaken. Far from being a source of iniquity, globalisation has brought extraordinary benefits to the world. In his fine new book, ‘Why Globalisation Works’, Martin Wolf of the Financial Times goes to great pains to show that at no previous time in history have so many people so quickly been lifted out of poverty. That should be a source of immense pride to our industry. We have played a crucial part in this extraordinary tale. Without packaging, there is no globalisation. No trade in manufactured goods. No Asian economic miracle. Global business models, and thus global prosperity, are impossible without packaging.

Nevertheless, the packaging business is under scrutiny. Consumers, environmentalists and regulators all have opinions – and these are seldom positive. They look at packaging in isolation, cheerfully ignoring its fundamental role in improving people’s lives. Sadly, this commonly held but uninformed opinion is not new.

Governments everywhere are developing new regulations, adopting new policies and mandating new targets. Corporations are taking a multitude of initiatives all aimed at achieving sustainability goals. These efforts are sometimes counterproductive and often conflict with the well-intended goals of others in the supply chain. The French and British governments, as well as the European Commission, are encouraging retail to develop their own packaging reduction programs, often failing to recognise the dangers of contradictory demands being placed on suppliers. Germany is discriminating between beverage containers on criteria that have little to do with overall environmental impact. South Korea, Taiwan and China all have rules dictating the allowable ratios between packaging space and product volume.

When seen in isolation, each of these initiatives may have merits. The trouble is that collectively, they risk being counterproductive. Without coordination or commonly agreed goals, they are quite likely to disrupt supply chains. In the end, that means they may achieve little overall environmental gain. On the contrary, they may raise environmental burdens.

The European example

Thankfully, within Europe at least, this problem has become history. The European Union first introduced regulations about the environmental impact of packaging in the early 1990s. It did so not just for environmental reasons, but also, even primarily, to facilitate open trade within the different member states.

In other words, the European Commission recognised that conflicting packaging policies and regulations were a technical barrier to cross border trade. This same regulation also introduced producer responsibility for the management of packaging waste.

At the time, most of our industry was against it. And no wonder. Who wants fresh, onerous legislation? Despite this opposition, change came. In retrospect, it was inevitable. Municipalities and public authorities were facing the strain of dealing with increasing amounts of packaging waste. Yet it worked. Take the example of the country where I live, Belgium. Henry Meirsonne, Managing Director of the Belgian packaging waste recovery system FOSTPlus, has described how producer responsibility, shared between industry, the public authorities and consumers, has enabled Belgium to achieve a packaging waste recycling level of more than 93% and an overall recovery rate of 96%.

Those are outstanding numbers. Now, almost twenty years later, there is very little opposition to the principle of extended producer responsibility. Simply put, a common approach has made many of the headaches with which we are so familiar on a global scale a thing of the past in Europe.

The debate moves on

There’s no more producing different packages for different countries. No more hodgepodge of well-meant but in practice impractical, expensive or even counterproductive legislation. The high recovery rates achieved under extended producer responsibility have led to a remarkable reduction in the public criticism of packaging waste. In Europe, at least, we’ve been let off the hook a little.

The companies that operate under EPR have not gone bust because of it. On the contrary, EPR removed one irritant from the mix of pressures they have to operate under. The experience has had its costs, for sure, but has also had a hugely positive impact on the entire packaged goods sector. It also proves that embracing extended producer responsibility offers a much more certain future for our business. It is far less costly. It avoids the disruption caused by dozens, or even hundreds, of various rules in different cities, counties or states.

Today the debate in Europe has moved beyond contesting the advisability of EPR. Today the stakes are perhaps even higher: we have to ensure that all corporate packaging initiatives fit into the overall sustainable development picture. The packaging supply chain is often so very long and diverse that the risk of disruption due to uncoordinated initiatives remains very real.

Catching up

The European advances I have described are significant and worthwhile. As far as the wider world is concerned, however, there is a lot of catching up to do. Many of the issues that bedevilled European trade twenty years ago plague global trade today. Different environmental rules in different markets constitute barriers to trade. They raise costs along the supply chain, and as a result they can actually lead to suboptimal environmental performance.

In part because of the positive European experience, there are now serious global efforts to deal with this problem. Firstly, the biggest consumer product producers from both sides of the Atlantic have teamed up with the largest retailers in a Global CEO Forum packaging project. They have tasked themselves with developing a set of global principles defining the contribution packaging makes to sustainability. These, the Forum agreed, should include a common vision, indicators, metrics and definitions, designed to ensure maximum sustainability while avoiding disruptions to the supply chain. Secondly, to underpin this, the International Standards Organisation, has agreed that work is to be started on the formulation of international standards for packaging and the environment.

Work is progressing quickly: common indicators should be available in the first quarter of next year. They will be extensively tested in actual trading situations before being disseminated as widely as possible. But I need to stress one thing. These tools are the voluntary creation of industry. They cannot work miracles: national regulations will still exist, and some will still be barriers to trade.

Thanks to these tools, however, we will have arguments and indicators that are the same from Beijing to Brussels, or Bombay to Boston. As we each work with our national regulatory authorities, we will push for common rules based on these common global principles. Over time, the differences between various regulations will diminish. The global consumer goods industry, up and down the supply chain, will help shape regulations that minimise the disruption to trade.

The Asian Packaging Federation has adopted guidelines on ‘environmentally conscious packaging’ to achieve a harmonised approach within the Asian region and so respond to increasing government pressure to regulate. The Asian guidelines are very closely modelled on the European CEN Standards. Meanwhile, in the USA the Sustainable Packaging Coalition is working to raise awareness of these issues. Moving up from these European, Asian and American efforts to arrive at agreed global definitions is the logical next step.

Global standards

A unified, worldwide set of metrics will enable companies and organisations to work together more effectively and allow them to reap numerous benefits: cost reductions flowing from fewer national versions, better coordination up and down the supply chain and greater compatibility between various regulatory regimes. We will also be able to reduce the global environmental impact of our business, because we will be able to analyse the data to identify and eliminate environmental ‘hot spots’. Up and down the supply chain, companies and organisations will have greater confidence that their legal and social obligations are being met, reducing compliance monitoring costs. Better data and common metrics will allow us to improve consumer perceptions, too, since we will be able to demonstrate, through solid data, the impact our efforts are having.

One may ask whether these benefits justify the effort. The answer is an emphatic yes. The European example shows that common rules bring huge benefits, including some that were totally unforeseen at the time they were agreed such as much greater freedom to operate and innovate than before. The alternative to voluntary global standards is not business as usual. It is a confusing set of contradictory, mandatory, and perhaps even incompatible national standards.

Marden Edwards

The global supplier of
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