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China Recycling Ban Could Impact Owners Corporation Waste Charges

China Recycling Ban To Impact Body Corporate Waste Costs?

Who would have thought that China’s foreign policy would have such ramifications on the humble Owners Corporation?

Unfortunately, a recent policy shift from the Asian superpower is set to have a big impact on Owners Corporations and their costs with respect to waste management – and it could be an even bigger pain than dealing with hard waste!

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Prior to 2018, China was the world’s biggest importer of recyclable materials, taking in more than 30 million metric tonnes of waste from all over the world, including Australia.

As one the planet’s biggest manufacturer, China had plenty of use for the world’s recyclable materials.

However, in July 2017 the Chinese government announced that it would no longer import recyclable waste products from overseas countries.

What was originally viewed as something of an opportunity for the local recycling industry has now turned into a crisis – and it is everyday people who are set to feel the brunt of the change.

With the recycling industry down a major importer of their products, they have had to make massive increases to their charges for accepting recyclable materials.

As a result, councils and waste management companies are having to increase their charges to the end customer for picking up and disposing of recyclable materials.

If your building’s waste management plan stipulates council pick-ups, you should expect an increase in your rates – or even a separate charge for waste.

Buildings with private waste management plans (which usually means you take your rubbish from your unit or apartment to common bins in the building) will see increases in the charges made to your Owners Corporation.

If your building’s waste is privately managed, you and your fellow owners will need to think about increasing your Owners Corporation’s budget for waste management at your next Annual General Meeting.

What Happened?

China’s ban on foreign recyclable material has placed a massive strain on the local recycling and waste industries.

For just a bit of context of what this means to the local industry, consider the following.

China imported an annual average of 619,000 tonnes of materials from Australia.

The value of those materials is approximately $523 million.

The ban was announced in 2017 and came into effect in early 2018.

Councils have continued to collect waste and recyclable materials as per their usual schedules, but are facing increasing difficulty in finding places to process the recyclables.

That was compounded last month when there was reported uncertainty with respect to Visy – one of the country’s biggest processors of recyclable materials – was reportedly telling several waste disposal companies that it would cease accepting recyclable materials.

Reports since have suggested that Visy and companies of its ilk have struck deals with councils and waste companies alike to continue to take recyclables. This compromise has come at a massive cost.

What has the impact been?

According to CSC Waste – a waste management company which services a number of Owners Corporations managed by Strata Plan – the increases imposed by recycling companies is like nothing they have seen before.

CSC director Ashley Castillo said the savings on recycling were now negligible when compared to landfill.

“Honestly, we’re having to pay almost as much as we do for landfill when it comes to disposal,” Ashley told Strata Plan.

“We use Visy and three years ago we used to get a rebate for the recyclable materials.

“But the ban from China has changed it.

“Like any commodity, the price of the recyclables used to go up and down, but these current increases are the worst we’ve seen.

“There aren’t any real changes on the short-term horizon.

“It will turn around, but it’s hard to say when. It could be years.”

In a letter to customers, which you can view HERE, CSC said prices for the disposal of recyclable materials had gone up twice in six months.

In the letter, CSC said it absorbed the original increase of 400 per cent.

However, with another 500 per cent increase since, CSC said it is unable to continue to absorb the increase in these costs.

What can you do?

In the short term, it hard to see any way to avoid an increase in charges.

Whether your waste is collected by the council or collected by a private waste management company, the extra charges for disposal at their end will eventually be passed on to the customer.

If your waste is privately collected, it may be worth checking your most recent rates and ensuring there is no charge for waste.

If there is, call your local council and start a discussion around having those charges removed.

This will ensure you are not paying for the increased cost of recyclable waste twice.

If you are on an Owners Corporation committee, you may also want to start a conversation with your Strata Manager to find out if your waste management contractor has advised of potential changes to their costs.

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