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EBA Open Letter concerning the draft laws in the sphere of waste management

11/ 07/ 2017

The European Business Association addressed an open letter to the Chairman of The Verkhovna Rada of Ukraine, the Prime Minister of Ukraine, Vice Prime Minister for European and Euro-Atlantic Integration of Ukraine, Members of the Verkhovna Rada of Ukraine Committee on Taxation and Customs Policy, Members of the Verkhovna Rada Committee The Council of Ukraine on issues of environmental policy, nature management and liquidation of the consequences of the Chornobyl catastrophe, Members of the Verkhovna Rada of Ukraine Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety members of the Committee of the Verkhovna Rada of Ukraine on Budget, on a number of draft laws proposing to regulate the issue of waste management in Ukraine.

1. Concerning Draft Laws No. 4835, No. 4836, No. 4837 and a number of Other Legislative Initiatives

The Association member companies reaffirm their position (expressed in the letters of the Association No. 507/2016/01 of May 17, 2016 and # 718/2016/20 of July 12, 2016, which are annexed) regarding the need to reject the legislative initiatives registered with the Supreme Court The Council of Ukraine (hereinafter – the Verkhovna Rada) on June 16, 2016, which proposes to regulate the waste management system in Ukraine by introducing additional tax and liability for separate actions of economic entities:

i “On Amending Certain Laws of Ukraine on the Promotion of the Use of Household Waste as an Alternative Energy Source” No. 4835;
ii. “On Amendments to the Tax Code of Ukraine (regarding taxation of household waste disposal)” No. 4836;
iii “On Amendments to the Budget Code of Ukraine (regarding the Use of Certain Types of Environmental Tax)” No. 4837.

A similar business position applies, including the following draft laws registered with the Verkhovna Rada September 30, 2015:

i “On Amending Certain Legislative Acts of Ukraine in the Field of Waste Management in Prevention of the Negative Effects of Waste End-Product Consumption on the Environment” No.3198;
ii. “On Amendments to the Tax Code of Ukraine (Concerning Prevention of the Negative Impact of Waste of End-Product Consumption of Products on the Environment)” No. 3199.

2. As to the draft law No. 4835-d

It should be noted that business representatives also do not support the draft law “On Amendments to Some Laws of Ukraine on the Promotion of the Use of Household Waste as an Alternative Energy Source” No. 4835-d (hereinafter referred to as Project No. 4835-d), which was provided to the member companies of the Association in working order.

Thus, the project No. 4835-d, within the framework of the extended liability of the manufacturer (hereinafter – RVB), proposes, as an alternative option for reuse and material utilization of waste, introduction of the payment of environmental tax, which, as experts of the Association point out:

i In the case of application, it can lead to a rise in price of food products, since such a tax will be included in the price of the goods;
ii. It is not in line with the general principle of RVB, according to which producers are responsible for the utilization or processing of both the product itself and the packaging waste. At the same time, when introducing an environmental tax, the obligations of the producer will in fact be fulfilled from the moment of payment, rather than utilization or recycling of packaging waste.

3. Regarding the draft law No. 6602

The Association members advocate the rejection of the draft law “On Amendments to the Law of Ukraine” On Waste “registered in the Verkhovna Rada of Ukraine (regarding the implementation of the requirements of the EU directives in the field of waste management)” No. 6602 dated June 21, 2017 (hereinafter referred to as Project No. 6602) . After elaboration of the mentioned legislative initiative, representatives of the business had significant comments, therefore, the adoption of the project №6602, in their opinion, could lead to the following negative consequences:

i Will create an additional burden on business entities by introducing environmental tax and financial responsibility of producers, which, due to the lack of clear mechanisms for the implementation of certain provisions of Project No.6602, will not facilitate the resolution of existing waste management problems;
ii. It complicates the procedure for the creation and operation of RBI organizations due to inconsistency in the legal regulation of their status and activities, as well as the requirement to pay a bank guarantee as a precondition for the introduction of these organizations into the relevant register and the exercise of their functions.

Moreover, according to the experts of the member companies of the Association, declared in the explanatory note to the project №6602, the aim of implementing the provisions of the directives of the European Union (hereinafter – the EU) 1 on waste management and environmental protection in the national legislation is not achieved, since the provisions concerning the provision of a separate collection of household waste, the introduction of a hierarchy of waste management, as well as the functioning of the RWS systems, which are reflected in the project number 6602, are mostly declarative character.

4. Concerning the National Waste Management Strategy

Today, at the initiative of the Ministry of Economic Development and Trade of Ukraine, the Ministry of Ecology and Natural Resources of Ukraine and the Ministry of Regional Development, Construction and Housing and Communal Services of Ukraine, as well as with the participation of leading international experts of the European Bank for Reconstruction and Development and the German Federal Company “GIZ” the development and approval of the draft National Strategy for Waste Management (hereinafter – the Strategy), which is the result of many years of work on the approximation of U, is completed. the countries to the integrated solid waste management system (hereinafter referred to as SHW) reflects the best experience of the EU member states and is consistent with the provisions of the Association Agreement between Ukraine and the European Union, the European Atomic Energy Community and their member states , on the other hand (hereinafter – the Association Agreement).

The Association members appreciate and support the efforts of the Cabinet of Ministers of Ukraine in shaping the legislative and regulatory framework in the field of waste management in accordance with European standards, and hopes that the RBM, which is based on separate collection of solid waste, will continue to be defined in the Strategy as the main the method of household waste management in Ukraine.

5. Concerning draft law No. 4028

The Association member companies reaffirm their position (expressed in the letter of the Association # 363/2017/20 of April 11, 2017, attached) concerning the draft Law “On Packaging and Waste of Packaging” No. 4028 of February 5, 2016 (hereinafter – the project No. 4028), which was developed to fulfill the obligations provided for in Annex XXX of the Association Agreement.

Representatives of the Association support (taking into account the clarifications stated in the above-mentioned letter) project number 4028 as introducing the principle of RVB and will promote the attraction of additional sources of funding for the organization of separate collection of waste as secondary raw materials and control over the efficient and targeted use of financial resources.

Taking into account the foregoing, the member companies of the Association appeal to representatives of the Parliament with a request to contribute to the rejection of the draft laws № 4835, 4835-d, № 4836, № 4837, №3198, № 3199 and №6602 as those that do not solve the problem of waste management in Ukraine complex, and regulate the issue of waste management taking into account best European practices.

Representatives of the Association look forward to paying attention to these issues by the competent authorities and taking into account the position of the business community!

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