By Kelvin McCulloch
To British Columbians:
Re: The Administration of Blue Box Recycling in British Columbia
The preparation and release of this article into the ‘court of public opinion’ is the very first step I will take to try once again since 2014 to convince the government of the province of British Columbia to correct serious matters of concern in the administration of Blue Box recycling by government in this Province.
There is a very long list of very serious issues that British Columbians should be concerned about in the administration of Blue Box recycling by the B.C. government, in my opinion. But the very first issue to address openly and honestly is the matter of the former government of this province using its regulatory authority to force private B.C. companies to sign private contracts with MMBC.
The second issue is far less stinging, while it is much more instructive of the difference between reality and the reality that can be created in the minds of people through skilful marketing.
I submit these two matters below for consideration by the court of public opinion and I commit to deliver a much longer list of issues next week.
Assertion 1: The former government of the Province of British Columbia used its regulatory power inappropriately to require hundreds of British Columbia companies to sign contracts with MultiMaterial BC/ Recycle BC.
The principle of freedom of contract: In 1875, the following legal principle was first espoused most succinctly by Sir George Jessel, a well-known British Judge who was one of the most influential commercial law and equity judges of his time:
“If there is one thing which more than another public policy requires it is that men (persons) of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by Courts of justice.
Therefore you have this paramount public policy to consider – that you are not lightly to interfere with this freedom of contract.”
The above principle or ‘freedom’ seems to conflict with the assertion below:
“The former government of the province of British Columbia used its regulatory power Inappropriately to require hundreds of British Columbia companies to sign contracts with MultiMaterial BC/ Recycle BC.’
But in my opinion, the above assertion is absolutely true. The strategy was used by the government to finance Blue Box recycling in the hands of private interests without going through the British Columbia Legislature to raise the money in the form of taxes. It was a ‘dodge’ of the normal channel for raising taxes and being accountable for the money.
In my opinion, what was done and how it was done must be disclosed publicly, not by the government, not by the Office of the Auditor General, but by an independent judicial public inquiry. A public inquiry is required to survey and interview the companies that the Government ‘brought to compliance’, to find out what the circumstances were that led them to sign contracts with MMBC and whether in their opinion they had any other alternative under the Packaging and Paper sections of the B.C. Recycling Regulations.
Then and only then can the matter be resolved factually and openly, so that we can get on to shoring up the freedom to contract and financing Blue Box recycling properly.
The government of the province of British Columbia brought into full force the Packaging and Paper section of the B.C. Recycling Regulation for the first time on May 19, 2014.
That regulation stated that substantially all the B.C. businesses in the province of British Columbia that flowed packaging and paper through to their customers had to have a government approved ‘Extended Producer Responsibility Plan’.
The above plans involved collecting back 75% of the packaging and paper products flowing through their businesses from their customers’ driveways and ‘managing the material to its end use, whether landfill or otherwise.’
The government called the businesses ‘producers’ in the regulation. The term ‘producer’ was a value-laden term which suggested to British Columbians that somehow these businesses were ‘responsible’ for something and should be ‘taxed’, basically in any way the government chose.
The regulation contained a second alternative, whereby the businesses could appoint someone who already had an approved plan to be their ‘agent’ for purposes of complying with the regulation.
The Construction of a Sham
Here is the problem with all of that.
First, the deadline for submitting an application to the government to get approval for an ‘Extended Producer Responsibility Plan’ passed on Nov. 19, 2012 when many of the companies knew nothing about any of it.
Second, when the companies looked at the wording of the regulation, it became very evident, very quickly, that:
- The first option under the regulation, to get approval for an ‘Extended Producer Responsibility Plan’, was deliberately impossible,
- and the second option, to appoint an agent, came down to appointing MMBC because it was the only entity that the Government had approved for this purpose. MMBC’s ‘Stewardship Plan’ to take over all Blue Box recycling in the province was approved on April 15, 2013.
The result that the government intended to produce was that every British Columbia company caught by the regulation would have to sign an MMBC contract.
This was how the former Liberal government planned to finance $80 million a year to pay MMBC for Blue Box recycling outside the jurisdiction of the B.C. Legislature.
Four years later, as of July 15, 2018, the scorecard for ‘Government-approved Extended Producer Responsibility Plans’ under the B.C. Recycling Regulation, is set out below:
(Note: In March 2018, the government approved an ‘Extended Producer Responsibility Plan’ in the hands of the newspaper industry. This was nothing more than a settlement of an ongoing dispute. This is one of the ‘other matters’ that will be addressed in future submissions to the Court of Public Opinion.)
The scorecard for approved ‘Extended Producer Responsibility Plans’ shows zero approved plans from inception on May 19, 2014, to today. In contrast, there are 1,142 contracts between BC businesses caught by the Regulation and MMBC.
If the ‘Extended Producer Responsibility Plan’ option under the Regulation had any legitimacy to it, the scorecard would have showed a significant number of such plans, approved and in the hands of private businesses. But there are literally none after four years There never have been any. There weren’t supposed to be any.
The government intended to funnel all the B.C. businesses into contracts with MMBC. It did not intend for any company in the province to have an approved ‘Stewardship Plan’ or and approved ‘Extended Producer Responsibility Plan’ of its own. And it made sure that none did although it has never accepted responsibility for what it did.
What it did is set out below.
Bringing ‘ProducerCo’ to Compliance
Please examine the attached letter from the Compliance Policy and Planning Division of the Ministry of Environment to a British Columbia company that I will call ‘ProducerCo’ dated Feb. 20, 2015.
‘ProducerCo has 27 store locations in British Columbia and is very well-known and much appreciated.
At the time ‘ProducerCo’ was trying to deal with the issue of complying with the Packaging and Paper sections of the Recycling Regulation, the vice president and legal counsel for the company called me to find out more about the regulation and what to do about it. She and everyone else in the management of the company, including the owners, could not believe they were being pushed into a contract with MMBC to pay for Blue Box recycling.
I met with her and a colleague from the company. After reviewing the regulation, we came to the same conclusion once again, that every company had to sign a contract with MMBC to comply with the regulation and there were no other valid alternatives to comply.
ProducerCo signed the MMBC contract.
And the vice president and legal counsel for this company has been waiting for an opportunity to explain exactly how the government pushed her into signing the MMBC contract ever since.
Based on the case above, it would appear to be fair to repeat the assertion above that the government of the Province of British Columbia has been using its regulatory authority to force British Columbia companies to sign private contracts with MMBC/RecyleBC.
The ProducerCo experience is one of many documented examples.
The Auditor General
In further support of the above assertion, I submit the following comments of the BC Auditor General from her November 2016 Report on Product Stewardship as follows:
In view of the comments above:
It no longer matters what the government has to say about this, the government has no credibility in this matter whatsoever.
It no longer matters what the Auditor General has to say about this. That office (OAG) had the opportunity to report this situation and was asked to do so at the time it undertook its 2015/2016 review. It failed to do so in its November 2016 report even though the situation was properly and fully presented to it.
What matters now is what the 500 or so companies that were that were forced to sign contracts with MMBC have to say about this. ProducerCo is waiting for its turn, so are all the others.
A Judicial Public Inquiry into the Administration of Blue Box Recycling in British Columbia
The only way to answer the question of whether the government of the province of British Columbia routinely forced B.C. companies to sign private contracts with MMBC is to ask them, especially the ones who were ‘brought to compliance’. Their responses need to be considered fairly, independently, and away from all the vested interests that are now established.
These steps are required to restore the integrity of the B.C. government insofar as it has consistently refused to take responsibility for forcing, coercing, or otherwise funneling companies into private contracts with MMBC (see attached letter).
The public Inquiry is also necessary to repair the damage done by the former government of the province to the legal principle of ‘Freedom to Contract’. The government has acted to weaken and even invalidate that principle. It needs to be restored and buttressed.
The Discrepancy in the Numbers
Assertion #2: There is a serious problem with the recovery rates reported for Blue Box Recycling in British Columbia
This assertion addresses the matter of the oft-quoted 75% recycling or ‘recovery rate’ for Blue Box recycling in British Columbia.
Over the history of the Packaging and Paper section of the B.C. Recycling Regulation, much has been made of the idea that under the new MultiMaterialBC/RecycleBC system, great progress was made over the former municipal system in the form of an increase in the ‘recovery rate’ for Blue Box contents.
Those who paid attention to the issue would be familiar with the oft-quoted statistic that the former municipal Blue Box system operated at a ‘collection rate’ of 53% to 60% and a ‘recycling rate’ of 50% to 57%. The impression left to the public was that much improvement was required because the provincial recycling program under municipal administration did not compare favourably with other jurisdictions.
After the former Liberal Government transferred responsibility for Blue Box recycling out of municipal jurisdiction into the hands of Multimaterial BC, suddenly the reported ‘recovery rate’ for Blue box recycling jumped from the lower municipal rates to 75% and higher. These higher ‘recovery rates’ have been reported by MMBC ever since.
From the standpoint of the public, all of this might have sounded like a dramatic improvement. Indeed, even the Auditor General of the province made a point of noting in her report in November 2016 that MMBC’s recovery rate was 80.1% in 2014 and 77% in 2015, although she was very careful to note that she “… did not audit this reporting”. Still, the mere publication of the 80.1% and 77.0% recovery rates in her report, together with various congratulatory comments about how well ‘stewardship’ was working in the province, lent all kinds of credibility to the proposition that everything was progressing very well over the former system.
But there is a serious problem with the numbers.
The recovery rate of the former municipal system
The 53% to 60% ‘collection rate’ of the former municipal Blue Box system was developed originally by Glenda Gies & Associates in her report prepared for Multi Material BC entitled ‘Current System for Managing Residential Packaging and Printed Paper in British Columbia’ dated March 2012.
In that report, Gies based her calculations on estimated volumes of 350,000 to 400,000 tonnes of packaging and printed paper available for collection in British Columbia annually, and 210,700 tonnes of material actually collected per year. Using these numbers, Gies reported the above ‘collection and recycling rates’ for the former municipal system. These statistics are set out in the table in the next section below.
MMBC’s ‘Stewardship Plan’ strongly suggested that the above rates were ‘low’ by comparison with other jurisdictions (Ontario, Manitoba, Germany).
The former Liberal government used this concept as partial justification for handing the entire system over to MultiMaterial BC.
The Blue Box recovery rate of MultiMaterialBC
Under its newly approved ‘Stewardship Plan (effective April 15, 2013) MMBC committed to achieve a 75% ‘recovery rate’ after it took over Blue Box recycling in the province.
The numbers MMBC reported in its annual reports since then are set out below.