CDA as lead agency on cooperative development

Policy changes to RA 9003

Section 2 of Republic Act No. 9003 is amended to strengthen State policy by institutionalizing extended producer responsibility as a practical approach to efficient waste management, focusing on waste reduction, recovery and recycling, and development of environment-friendly products tied to sustainable consumption and production, circular economy, and producers’ full responsibility throughout the life cycle of their products (Section 2).
Section 3 of Republic Act No. 9003 is amended by adding and defining key EPR concepts used in the Act (Section 3).

Key definitions for EPR

Circular economy is defined as an economic model that creates value by extending product lifespan, relocating “end-of-supply-chain” ways back to the beginning, efficiently utilizing resources through continual use, and retaining the highest utility and value of products, components, and materials, through sharing, leasing, reuse, repair, refurbishment, and recycling in an almost closed loop (Section 3(d-1)).
Extended producer responsibility (EPR) is defined as an environmental policy approach requiring producers to be environmentally responsible throughout the life cycle of a product, especially its post-consumer or end-of-life stage (Section 3(m-1)).
High recyclability is defined as a condition where the value for recovery and reprocessing of a product is high due to design, composition, content, and density, among other factors (Section 3(p-1)).
High retrievability is defined as a condition where, after use of a product, a significant volume of its waste can be recovered and properly recycled, processed, or disposed of because of its high value for recovery, recycling, or reprocessing (Section 3(p-2)).
Importer is defined as a natural or juridical person engaged in bringing consumer goods into the Philippines intended to be sold, whether in original packaging or repackaged for distribution to the general public (Section 3(p-3)).
Large enterprises are defined by reference to total assets (including those arising from loans but excluding land where the office, plant and equipment are situated) exceeding those of medium enterprises under Republic Act No. 9501 (Section 3(p-4)).
Obliged enterprises are defined as product producers required to implement an EPR program under this Act (Section 3(s-1)).
Plastic is defined as a synthetic material made from organic polymers such as PET, HDPE, LDPE, polypropylene, polystyrene, PVC, and nylon that can be processed to form solid objects of various shapes (Section 3(v-1)).
Plastic neutrality is defined as a system or outcome where, for every amount of plastic product footprint created, an equivalent amount is recovered or removed from the environment by product producers through an efficient waste management system (Section 3(v-2)).
Plastic packaging is defined as polymer materials designed to protect a product from environmental factors or carry goods for transportation, distribution, and sale, including service necessities, more particularly described under Section 44-C (Section 3(v-3)).
Product footprint is defined as a measure of the amount of goods produced, imported, distributed or supplied by a product producer, and deemed to cause damage to the environment (Section 3(w-1)).
Product producer includes (1) the brand owner selling or supplying a commodity under a brand/label/identity using a product it produced or a material supplied by another manufacturer/supplier; and (2) a product manufacturer or importer supplying commodities for general consumer use or distributing the same as a branded product. For purposes of Article 2 of Chapter III-A, where commodities are manufactured, assembled, or processed by a product manufacturer for another obliged enterprise that affixes its own brand name, the latter is deemed the manufacturer (Section 3(w-2)).
Sustainable consumption and production is defined as use of services and related products that respond to basic needs and bring a better quality of life while minimizing use of natural resources and toxic materials and minimizing emission of wastes and pollutants over the life cycle of the service or product so as not to jeopardize the needs of future generations (Section 3(qq-1)).
Section 4 of Republic Act No. 9003 is amended by changing the composition and appointment of the National Solid Waste Management Commission (Section 4).

Commission and National Ecology Center roles

The National Solid Waste Management Commission (NSWMC) is established under the Office of the President, with eight (8) members from the government sector and five (5) members from the private sector (Section 4).
The government sector representatives are ex officio heads of DENR, DILG, DOST, DOH, DTI, DA, MMDA, and the Union of Local Authorities of the Philippines (Section 4).
The private sector representatives include (a) three (3) NGO representatives, (b) one (1) representative from recycling/composting/resource recovery and processing industry, and (c) one (1) representative from manufacturing/packaging/obliged enterprises (Section 4).
Private sector representatives are appointed by the President for a term of three (3) years (Section 4).
A National Ecology Center (NEC) is established under the Commission to provide technical expertise, information, training, and networking services, with the NSWMC providing direct supervision (Section 5).
The NEC performs functions including: facilitating training/education; establishing and managing a solid waste information database (including semi-annual plastic recovery rate updates); promoting a recycling market through a national network; maintaining an EPR Registry; monitoring and evaluating compliance of obliged enterprises and PROs; developing and maintaining a reliable, secure, transparent, accessible database; receiving sampling/assessment reports and complaints and acting on them; providing expert assistance for pilot modeling; developing and disseminating model waste minimization and reduction auditing procedures; and within one (1) year after effectivity, assessing volumes/footprints of other wastes for potential priority inclusion in the EPR scheme (Section 5).
The NEC is headed by the Assistant Director of the Bureau in his/her ex officio capacity and must submit reports for NSWMC monthly meetings; NEC reports are consolidated by the NSWMC Secretariat for submission to the NSWMC (Section 5).
The NEC maintains a multi-sectoral, multi-disciplinary pool of experts screened according to qualifications set by the Commission (Section 5).

National framework and plastic EPR scope

Within three (3) months from the effectivity of the Extended Producer Responsibility Act of 2022, the Department, in consultation with the NSWMC, formulates a national EPR framework for all types of product wastes (Section 44-A).
The framework includes components for reduction of non-environment friendly products through strategies such as reusable product adoption/redesign for reusability/recyclability/retrievability; inclusion of recycled content; appropriate product refilling systems; viable reduction-rate plans; information/education campaigns; and product labeling for proper disposal (Section 44-A(a)).
The framework includes product waste recovery programs to prevent leakage to the environment through strategies including redemption/buy-back/offsetting or other methods achieving high retrievability/recyclability/resource recovery; diverting recovered waste to value chains via recycling and sustainable methods; transporting recovered waste to composting/recycling/diversion/disposal sites; cleanup of waste leaked to coastal areas/roads/other sites; establishment of viable large-scale diversion/disposal facilities; and partnerships with LGUs/communities/informal waste sectors (Section 44-A(b)).
The plastic EPR obligations apply to product producers defined as large enterprises that generate plastic packaging waste (Section 44-B).
Micro, small and medium enterprises under Republic Act No. 9501 are not covered by the plastic EPR obligation (Section 44-B).
Enterprises are treated as obliged enterprises if the total value of assets of all enterprises carrying the same brand, label or trademark exceeds that of medium enterprises under Republic Act No. 9501 (Section 44-B).
Micro, small and medium enterprises are encouraged to practice EPR voluntarily or participate in a network of obliged enterprises or PROs (Section 44-B).
Plastic packaging covered by EPR includes: (a) sachets, labels, laminates and other flexible plastic packaging (single-layer or multi-layer); (b) rigid plastic packaging containers for beverages/food/home/personal care/cosmetics including coverings/caps/lids and related promotional items like cutlery/plates/drinking straws/sticks/tarps/signage/labels; (c) plastic bags including single-use bags provided/utilized at point of sale; and (d) polystyrene (Section 44-C).
The plastic packaging EPR program is intended to achieve efficient plastic packaging waste management, reduced production/importation/supply/use of plastic packaging deemed low in reusability, recyclability or retrievability, and plastic neutrality through efficient recovery/diversion schemes (Section 44-D).

Obligations, registration, and compliance

Obliged enterprises must, within six (6) months from effectivity of the Extended Producer Responsibility Act of 2022, establish or phase-in EPR programs for plastic packaging (Section 44-D).
EPR programs may include reduction and recovery activities under Section 44-A(a) and Section 44-A(b), but must be submitted to the NSWMC through the Department (Section 44-D).
Obliged enterprises must institute an EPR program either individually or collectively, with or without a PRO (Section 44-D).
An obliged enterprise or a PRO must register its EPR program with the NSWMC, through the Department (Section 44-E).
EPR registration must include: obliged enterprise/PRO and responsible person contact information; specific plastic packaging material types under Section 44-C and product brands; implementation modality (individual, collective, or through a PRO); verifiable volume or weight of plastic packaging brought into the market within a specified period; target recovery/reuse/recycling volume/weight; other EPR programs such as redesign for reuse/recyclability; labeling to facilitate recovery/reuse/recycling/proper disposal; implementation status; and compliance status (Section 44-E(a)-(i)).
As initial compliance, obliged enterprises or PROs must submit and register their EPR program within six (6) months from effectivity (Section 44-E).
The Department through the Environmental Management Bureau, in coordination with the NSWMC, monitors and evaluates compliance of obliged enterprises or their PROs with their EPR programs (Section 44-E).
Obliged enterprises or their PROs must submit annual compliance reports (Section 44-E).
Recovery and offsetting to achieve plastic neutrality are phased through compliance periods, where obliged enterprises must recover or offset their rigid or flexible plastic packaging footprint (Section 44-F).
Recovery targets for the plastic product footprint generated during the immediately preceding year are: December 31, 2023 – 20%; December 31, 2024 – 40%; December 31, 2025 – 50%; December 31, 2026 – 60%; December 31, 2027 – 70%; and December 31, 2028 and every year thereafter – 80% (Section 44-F).
Obliged enterprises must submit their compliance report with appropriate documentation to the Department (Section 44-F).

Audits, transparency, and PRO system

Obliged enterprises or their PROs must establish and implement an auditing system to monitor and assess compliance performance with the Act and their EPR programs (Section 44-G).
Obliged enterprises or PROs must engage an independent third-party auditor to certify the veracity of reported plastic product footprint generation, recovery, and EPR program compliance, using uniform standards established by the Department (Section 44-G).
Audited reports must be submitted by the obliged enterprise or PRO to the Department (Section 44-G).
Certified reports on plastic product footprint generated and recovered must be made available to the public through the Department’s website, except for any record/report/information or particular portion deemed confidential by the Department when public disclosure would divulge trade secrets, production or sales figures, or unique methods/processes that would adversely affect competitive position (Section 44-G).
Obliged enterprises may voluntarily organize themselves to form or authorize a PRO to implement their EPR program (Section 44-H).
The Department, in consultation with the NSWMC and obliged enterprises or PROs, must establish a system/parameters making the PRO sustainable and compliant, including standards and rules/guidelines for organizational structure and leadership; membership requirements; duties and responsibilities; standards toward plastic neutrality; reporting/verification/auditing of waste footprint generation/recovery/diversion; and data collection/database maintenance (Section 44-H(a)-(f)).
PRO duties and responsibilities include cooperation with other stakeholders, waste management entities, distributors, retailers, grocery and store owners, junkshop operators, and individuals/entities in the informal sector involved in waste management (Section 44-H(c)(3)).

Fines, penalties, and enforcement forum

Any obliged enterprise that fails to register under Section 44-E or fails to comply with Section 44-F is imposed with fines depending on the offense number (Section 49(g)).
For the first offense, the fine is not less than PHP 5,000,000.00 but not exceeding PHP 10,000,000.00 (Section 49(g)(1)).
For the second offense, the fine is not less than PHP 10,000,000.00 but not exceeding PHP 15,000,000.00 (Section 49(g)(2)).
For the third offense, the fine is not less than PHP 15,000,000.00 but not exceeding PHP 20,000,000.00, and there is automatic suspension of business permit until the law’s requirement is complied with (Section 49(g)(3)).
If targets under Section 44-F are not met, the obliged enterprise must pay either the same fines above or a fine twice the cost of recovery and diversion of the footprint or its shortfall, whichever is higher (Section 49(g)).
The penalty is imposed whether the noncompliance results from failure to register, falsification of documents, misdeclaration of generated or recovered footprint, employment of schemes to maliciously evade extended producer responsibility, or tampering with compliance provisions for Section 44-F (Section 49(g)).
The Pollution Adjudication Board of the Department hears and adjudicates cases of violations or offenses under this section and imposes appropriate fines (Section 49(g)).

Incentives, appropriations, and rules

Rewards and recognitions, monetary or otherwise, are provided to individuals, private organizations and entities, obliged enterprises, and PROs (including NGOs) that undertake outstanding and innovative projects/technologies/processes/techniques/activities in reuse, recycling, and reduction, sourced from the Fund created under Republic Act No. 9003 (Section 45(a) as amended by Section 7).
An incentive scheme encourages LGUs, enterprises, and private entities (including obliged enterprises, PROs, and NGOs) to develop or undertake effective solid waste management, including plastic footprint recovery and diversion, or actively participate in programs promoting this objective (Section 45(b)(1) as amended by Section 7).
Obliged enterprises or PROs acting on their behalf, and other registered business enterprises may apply for fiscal incentives following the approval process under Title XIII (Tax Incentives) of the National Internal Revenue Code of 1997, as amended, for eligible activities, subject to standard processes in identification of qualified activities under the Strategic Investment Priority Plan (SIPP) (Section 45(b)(1)(a) as amended by Section 7).
EPR expenses of obliged enterprises, PROs, and private enterprises are considered necessary expenses deductible from gross income subject to substantiation requirements for necessary business expenses deductible from gross annual income under Section 34(A)(1) of the National Internal Revenue Code of 1997, as amended (Section 45(b)(1)(b) as amended by Section 7).
The necessary sum for effective implementation is charged against appropriations for DENR under the General Appropriations Act, while obliged enterprises and their PROs are responsible for funds needed to operationalize and maintain their EPR programs in compliance with the Act and its implementing rules and regulations (Section 10).
The DENR, in consultation with relevant agencies, representatives from obliged enterprises, and other stakeholders, must formulate implementing rules and regulations within 90 days from effectivity (Section 11).

Oversight, review, and final provisions

A Joint Congressional Oversight Committee is created to monitor implementation and oversee functions of implementing agencies, composed of five (5) Senators and five (5) Representatives appointed by the Senate President and Speaker of the House, respectively, and co-chaired by specified committee chairpersons: Senate Committee on Environment, Natural Resources and Climate Change and House Committee on Ecology (Section 60 as amended by Section 12).
Congress must review accomplishments, impact, implementing agency performance, and obliged enterprise compliance within five (5) years after effectivity or as the need arises to determine the necessity of remedial legislation mandating more stringent footprint recovery targets, higher incentives, or phase-out of certain types of single-use plastic packaging (Section 9).
Within one (1) year after effectivity, the NEC must identify, review, and update the list of non-environmentally acceptable products and plastic packaging materials for phase-out, especially those highly unnecessary or replaceable, or those that cannot be efficiently reused, recovered, or recycled, consistent with the Act (Section 9).
If any portion or provision of the Act is declared unconstitutional, the remainder remains in force and effect (Section 13).
Any law, presidential decree or issuance, executive order, letter of instruction, rule or regulation inconsistent or contrary to the Act is repealed or modified accordingly (Section 14).