Four years after the enactment of the REP Law, and when the recycling goals for the packaging sector are already known, one of the most complex to implement due to the volume and massiveness of its products, Rafael Palacios, director of policies Sofofa's public institutions, analyzes with Country Circular the challenges that now come for its definitive implementation. This in a complex economic scenario due to the crisis generated by the coronavirus pandemic, and also marked by the climatic emergency that -although less visible today- remains the main challenge for the coming years.

The REP Law, he affirms, is not only positive, but it is also a good example of a public policy built largely through consensus and dialogues between the public sector, the private sector and civil society, which if Although it has been delayed in its implementation, the same time invested in the drafting of the decrees ensures its long-term stability.

And in this he gives merit to the Ministry of the Environment, which “has managed to carry this out with its tensions - because obviously there always will be - and its interests met. Hopefully the long-term climate strategy has the same methodology, that it is participatory and that the private sector is involved, because ultimately they are the ones called to make the transformations. ”

“As the REP Law is such a relevant public policy, that it is destined to change a large part of the business models - or modify them - of the main industries of the country, I think it has been an example of how a public policy of this nature should be approached . Sure, I wish we would have taken less time, but these types of policies take time, "he says.

Along the way, it has also had an interesting turn towards the circular economy, beyond recycling. Is the implementation of the law taking another turn?

In fact, when Guillermo González came to take charge of the Waste Office, he changed its name to the Circular Economy Office. Indeed, he has a much broader vision, we are working on the Circular Economy Roadmap, we are working on an organic waste policy ... The issue today is much broader than REP, notwithstanding that this is a super platform important to get this going. So clearly today it has that, at the beginning the REP Law had a much more limited scope perhaps, which had to do with the responsibility of waste in certain materials, and today we are working on several fronts. That is good.

Regarding the decree of containers and packaging, which affects consumer products. How do you evaluate the greater gradualness that was finally defined for its implementation, which was a request from the industry and the municipalities, to guarantee its operation?

Yes, with the preliminary draft the industry was a little surprised with the ambition of the goals, and it was tried to make the authority aware that this ambition could lead to failure. Basically, they were setting the same goals as Europe, having worked more than 20 years in some of these countries, with very resounding failures in some systems. We were made to see that politically there was no option to change the final goals, so the “second best” was to review well how we are going to achieve those goals, because the first part is the most complicated, which is the installation of management systems and where to invest in infrastructure, in logistics systems, the most difficult changes and those that represent greater inertia afterwards. One could anticipate, in an optimistic scenario, that the changes are incremental, so it is to accelerate more. In this sense, we highly value that the proposal of the industry has been taken in the decree of goals, where indeed a more gradual curve was made in meeting the goals. Now that had a trade-off too.

In what sense?

In that many more clean points were incorporated in the decree, in which we do not have very good experiences because they are expensive, they are difficult to maintain, and now the obligations that existed were greatly expanded. But the decree also has other good things, not only the issue of goals. We highly appreciate the elimination of the ministry's authority to decree the territories assigned to the integrated management systems. In this, I have to admit that Guillermo was always reasoning with us, in the sense that management systems had to be given the greatest possible freedom to establish themselves, because the realities of each territory and region are so diverse that any normative formula that it was uniform, it was very likely to be a disaster to some extent. It is very different to make a management system in the Metropolitan Region than in Puerto Williams or Parinacota, because Chile is a country that has a gigantic logistical challenge compared to countries like Germany or Belgium. So, it was always said that in order not to limit the efficiencies with which the systems should be deployed, they had to be left to organize. And that happened, and that is also highly valued.

"Today there is a significant percentage of the activity detained, and the more time we give ourselves to be able to start well with the REP Law, I think it is better, because -in short- we are all aligned for this to result"

Do you think that guarantees an effective deployment in the territory? Because obviously the first trend is going to be to focus on Santiago, where the collection and recovery capacity is

If you doubt, in Santiago there are economies of scale to start. But nothing guarantees success by itself. This helps, and also the fact that the compensation of the goals has been made more flexible, because in Chile we have, for example, a fairly powerful installed capacity in the area of ​​glass recycling, but not in plastics. So this ability to compensate, which ranged from two years to four, also provides flexibility. More now in the situation we are in, with the investments stopped, with the SEIA and the citizen participation stopped ... Today there is a significant percentage of the activity stopped, and the more time we give ourselves to be able to leave well I think it is better, because - Ultimately - we are all aligned for this to happen.

Let's talk about implementation once the decree is published, because there are still some challenges. The first is the constitution of management systems, where for now there is one domiciliary and two for the industrial sector. How are they going to begin to be formally established, and what do you see as the ideal scenario in terms of one, or several?

I do not have a position, here are very good arguments to point out that the best option in terms of efficiency is to have a single management system for all the efficiencies and economies of scale that this can accumulate. I tend to think that this is correct, but on the other hand there are smaller realities like that of some regions or more insular areas, where one tends to think that small systems should be installed. I think a good analogy is the central electrical system: until recently it was from Tal Tal to Chiloé, and then the interconnection with the north was made, and we have individual systems in Punta Arenas, Coyhaique and insular Chile. So maybe the central south area is encompassed through a single management system, and there are probably going to be economies of scale that justify it, but that does not necessarily mean that the same system has to go north.

Is that a discussion that is already taking place in the Sofofa?

No. We have an industrial waste management system, because with the domiciliary they are different natures. The first, as intelligently stated in the decree of goals, will be built on the existing contractual system and a monitoring system will be generated to verify that what is done today meets the goals. On the other hand, in the domicile it is necessary to set up logistical systems, or make the links with the municipalities to establish them in the different territories. Today it seems sensible that they are independent systems. Why does AB Chile react by going to the industrial also with its own system? Very simple, it is because they are the same companies, and that allows them to meet only once. But in theory it makes sense that they are different systems, and that waste management systems are on the wing of organizations such as Sofofa, more transversal organizations than a group of companies, because that somehow generates some transaction costs that can be high in the long term, or it could generate some mistrust.

Sofofa is thinking of setting up a home system?

No, not yet. First we want to start with what we are doing, which is already well advanced. The procedure is being done before the National Economic Prosecutor's Office, and once we have that set up we will see if we are going to participate or not in the home system.

“There are several by-products that are classified as waste today and as such have to be disposed of, and cannot be reused. There are regulatory problems of different kinds that prevent progress in the circular economy (...) Our proposal is to carry out a waste classification regulation so that many by-products can be reused. There are a lot of organic or inorganic waste that with R & D s can be turned into inputs for other industries "

The legal model of the management system will also be important when carrying out these procedures, to minimize the risks of free competition. How is that going to be guarded?

It is a topic that has been discussed quite a bit. The legal model that was basically chosen is that of a non-profit corporation, but I don't see it as complex. We opened a new line of business which is the Sofofa Hub where precisely - and this is the unit that is hosting this project - we bring together competitors for collaborative projects. Sofofa himself, which is a union association, gathers competitors to face other challenges. I don't see that it is that complex in terms of information sharing. Today in companies there are protocols, people have been trained, so I do not consider it a very high risk to the extent that this is effectively managed properly, and that is being done well. I know that AB Chile is doing it that way, and we are doing it that way.

To meet the goals and implement the management systems successfully, investment in R&D in the field of waste recovery, in improving packaging, in a viable use of by-products appears to be highly relevant… What is being worked on in this ?

I totally agree with what you point out, and we are indeed beginning to work on this issue. Jorge Cáceres, the director of the Sofofa Environment and Energy Center, is carrying out a project to make a proposal for a declassification of waste regulation, which we are going to propose in this week's strategic committee to constitute a technical sub-table precisely for those effects. There are some very interesting projects that have been carried out, and we are working with several companies to be able to present this key regulation, we want to move fast.

What is the objective of that regulation?

What happens is that there are several by-products that today are classified as waste and as such have to be disposed of, and cannot be reused as inputs for other production processes. There are regulatory problems, there are transportation problems, problems of different kinds that prevent what would be possible today to advance in the circular economy, cannot be done. Because there are doubts, because the health authority sometimes authorizes and sometimes not, because it is not regulated. Our proposal is to carry out a waste classification regulation so that many by-products can be reused. There are a lot of organic or inorganic waste that with R&D one incorporates biotechnology processes and can be transformed into inputs for other industries.

There's a lot of talk about consumer responsibility for recycling, but there's also an industry responsibility to deliver reusable, easy-to-recycle products, to change material. What capacity, or what will, is there to advance in this line?

It is a good point, I believe that there is more will than capacity, because the latter involves large investments and articulating lines of production processes. There is a provision, we are working on the last stage of an eco-labeling project that has been very successful, with many companies that have joined, which starts by giving the consumer information on what packaging is actually recyclable, or if it contains recycled material . I think that more than the reuse of packaging, it is more feasible to reuse materials through the REP, that's what we bet on. It is not that companies do not have the ability to reuse the materiality of their own products, in fact they do, the issue is that you have to generate a market because today it has zero cost to throw it away. Returning this material to the producer has a logistical, collection and treatment cost, and therefore is much more expensive than throwing it away. There is the great test. It works well on paper and cardboard a long time ago, and glass largely. There are much bigger challenges such as in plastic, where in fact more R&D has to be put in because there are plastics such as PET that are easily recyclable, but others that are not. And there it is necessary to make reconversions, and incorporate more technology.

“We will continue to raise the need for a reform to the SEIA because it is unable to adequately combine the highest environmental standard with the security that investors need. It presents a great opportunity for all companies to invest in circular economy and climate change, clearly investments are going to have to be focused on solving the seriousness of these problems and not on others, and these types of investments should also have more processing. agile in the environmental assessment process ”.

One of the intentions of the Ministry of the Environment is to reach a point where it is not so cheap to dispose of garbage in sanitary landfills to promote recycling and the circular economy. How do you evaluate that possibility?

It is in the process that the ministry is doing for the creation of the Circular Economy Roadmap that the enabling conditions for the REP are being seen, and in this sense it is necessary to bet not only that the final disposal of waste becomes more expensive , but to incorporate the appropriate market instruments for it. Today, so to speak, there are elements that are distorting the creation of this market, so we must be very careful because it is not reaching and saying we are going to charge so much more, because you could raise it but later it cannot be audited, or because it is politically unfeasible. charge the 45% most vulnerable in Chile a fine for throwing out the trash. It is not arriving and making it more expensive, it is more complicated than that, and that is precisely what we are going to discuss in this process of the road map.

What regulatory aspects are still pending for the implementation of the REP, and how is this being worked on?

In this process of building the road map, there are several discussions that will take place, such as the incorporation of waste to energy, the market instruments for the final disposal of waste, four or five topics that are necessary for the REP, but also for the National Organic Waste Policy. There are many tools that are still pending, and where all of them are being concentrated and focused is in this instance, progress is being made there. And in parallel there is also the Pact for Plastics, there are many initiatives in the field of plastics that are moving. We also in the Pacific Alliance, where a working group was formed by a call from the four presidents of the countries that make up this body and we are managing some tables regarding plastics.

Are you thinking of creating a regional alliance to boost waste markets?

There is another pending issue, which is the regulation of the transboundary movement of waste. That was in the Comptroller's Office, he retired, and it has taken a long time. We believe that it is super important too, since it is indeed necessary to generate economies of scale and establish hubs, because -for example- there are some recyclable materials in which we may never be able to put a plant in Chile and everything is going to Other countries, we have the issue of batteries. At bottom, they are expensive investments and it is extremely important that at the regional level these wastes can be freely transported in order to carry out their recovery and subsequent reincorporation into the economy.

This entire process of the full implementation of the REP Law will require significant investments, which amount to US $ 2.340 billion. In a scenario of falling investment and a high degree of uncertainty, will this affect its implementation?

I think this can definitely affect the implementation, here are several things that may be playing against it. The scenario we are facing is quite complex, the investments are undoubtedly quite paralyzed, and therefore I think it could affect it in terms of acceleration or implementation speed. Now, looking at the good side, we are discussing in Sofofa - and many people are thinking it - that we are going to have to concentrate all our efforts the day after, once the health crisis is over, on the economic reactivation. That is going to be the big issue, because we are going to have several months with depressed growth and that is going to have a strong impact on people's employment, investments, wages and income. So, we are going to have to focus a lot on investment and economic reactivation, and clearly we have two gigantic challenges that at the same time are going to allow us to channel those investments: on the one hand it is the circular economy and on the other, climate change. So, in order to build a cleaner, more sustainable and more resilient productive matrix, investments clearly have to be concentrated there.

Do you agree with the view that this revival has to be green, or what may happen is that the environmental issue is left out for a time in search of a faster recovery in the economy?

No, I believe in the former. But without confusing two things, today the Environmental Impact Assessment System (SEIA) is not green, it is simply bureaucratic. We will continue to raise the need for a reform to the SEIA because we believe that today it is not capable of adequately reconciling the highest environmental standard with the security that investors need. I do believe that there is a great opportunity for all companies to invest in this, clearly investments are going to have to be oriented towards solving the seriousness of these problems and not others, and that type of investment should also have a more agile processing. -we hope- in the environmental assessment process. Ultimately, I think there should be no contradictions in this. Unsustainable investments today will not have financing, they will not have community support, there are several variables that combine to channel investments to this type of project.