While the plastic bag tax has become a cash cow for government, bringing in R221-million since 2004, the company tasked with promoting the recycling of plastic bags is struggling to get off the ground.
Buyisa-e-Bag, the company in question, has seen a mere R44-million of the funds generated since it became fully operational in 2005, leaving R177-million to churn around in the general fiscus.
The treasury says that the funds have not been earmarked exclusively for Buyisa or any plastic bag recycling projects. Instead, how the levy money is spent depends on organisational capacity to spend the funds provided. What remains of the funds generated through the levy goes towards other government concerns, such as health and education.
According to the treasury, expenditure at Buyisa has been ”slower than anticipated”, leading to no transfer of funds being made to the company for 2006/07, although Buyisa has received a total of R24-million for 2005/06. Buyisa gives a different breakdown of funds received. As of the 2007/2008 financial year the company will receive R20-million a year.
While Buyisa was registered in 2004, about the time that the levy was instituted, the company became fully operational only in late 2006, says to CEO Benny Makgoga. According to Makgoga, the company received R12-million for 2005/06 and another R12-million for 2006/07, with a payment of R20-million due for the 2007/08 financial year.
”Considerably more is being collected and kept by treasury than is being put back into the plastics industry cycle,” says David Hughes, executive director of both the Plastics Federation of South Africa and Buyisa.
This is against a backdrop of government’s considerable financial gain. In the 2004/05 financial year government received R41,2-million from the levy, in 2005/06 it collected R61,4-million and in 2006/07 cash increased to R75,1-million.
The levy was instituted as a ”disincentive to the excessive use of the plastic bags”. The money, says the treasury, is collected and paid into the National Revenue Fund. From there funds are allocated to Buyisa-e-Bag through the department of environmental affairs and tourism as a transfer payment to the company.
One of the chief obstacles facing Buyisa, says Hughes, is the difficulty the company has in navigating its way through red tape at local government and municipal level. Securing the rights to sites where buy-back centres for plastics can be established and acquiring the correct permits for recycling is a slow process, he says.
Buyisa has utilised pre-existing buy-back centres and enabled small entrepreneurs to formalise their operations. But recycling plastics is still problematic, given that a considerable amount of plastic bags are required to generate sufficient income from collection for recycling. Other waste commodities, such as scrap metal and paper, have a ”good value-to-mass ratio”, says Hughes. But there is a great deal of education that needs to be done before people begin to register the value of plastics, he says.
One of the key focus areas for Buyisa is low-income suburbs and smaller municipalities where there is little or no waste management. It is here that plastic bags are still a major nuisance. Without concerted ”political will” from local government at these levels, tapping into the household plastic waste cycle in these areas is very difficult.
”How do we tap into that stream?” asks Hughes. The remainder of the money generated by the plastic bag levy could possibly be spent on addressing that very question. The levy would be more effective if there was increased focus on ”extended producer responsibility”. ”Keep the specifications on bag thickness, but allow the producers and interested parties in the industry to do the job,” he says. ”It does raise the moral question: if you tax a bag, should the revenue be spent on the rest of the plastics industry?”
Despite these teething problems, Buyisa is using its funds on a number of projects, including clean-up campaigns involving up to 6 000 participants, five school recycling education campaigns and waste management workshops.
”The plan was for Buyisa-e-Bag to establish 30 multi-recycling buy-back centres by March 2007, but the target was not achieved,” says Thoraya Pandy, spokesperson for the treasury. ”However, the initial model for the centres has been tested and costed and the first 30 centres should be operational by the end of 2007/08.”
Retailers might be another group raking in cash through the levy. Plastics bag manufacturers are required to pay 3c on all bags they produce and make payment directly to the South African Revenue Service. Retailers can charge consumers as much as they see fit for each plastic bag.
”The retail prices of plastic bags are not regulated and therefore any retailer can, as with any other product, charge the price they deem appropriate in a competitive, free market system,” says Brian Weyers, marketing director of the Shoprite Group. Weyers is adamant, though, that Shoprite does not make a profit on bags.
”Shoprite Checkers sells both the 12-litre and the 24-litre bag substantially below cost and therefore does not make any money on the sale of plastic bags. The selling prices are 15c and 21c respectively,” he says.
Pick ‘n Pay also sells bags below cost price and does not make a profit on their sale, says Graeme Laithwaite, procurement director. Prices in store are 20c for a 24-litre bag and 15c for a 12-litre bag, according to Laithwaite.
None of the retailers could give the cost price of a plastic shopping bag.
The department of environmental affairs and tourism was unable to respond to questions from the Mail & Guardian by the time of going to press.
