Fairness and equity in material sales
CDS Vic ensures product stewardship by those who own, manufacture, and sell suitable eligible drink containers in Victoria.
The material collected through CDS Vic must be offered and sold to the market in a manner that ensures that all market participants have equal and fair access to purchase the materials on commercial terms.
Material flows through CDS Vic
Containers are collected through collection points including reverse vending machines, and over-the-counter facilities such as retail stores, and depots. The containers are separated by material type at sorting facilities and then sold to the market.
The material collected through CDS Vic is clean, food grade, with very low contamination rates. It can be readily recycled into high-quality products.
Zone Operators sell the collected materials to be recycled. Zone Operators have an obligation to ensure that all the material they collect and then sell is recycled. Disposal of material collected through CDS Vic to landfill is prohibited without an exemption from the Minister.
Material sales process
Each Zone Operator is required to establish a material sales process.
Zone Operators own the containers collected through CDS Vic and are required to sell all materials through their material sales process. Zone Operators are responsible for the quality and management of collected materials.
The material sales process is based on 4 guiding principles:
- Transparent – sales are visible to government, and industry is aware of the requirements.
- Accessible – the sale process is inclusive and open to a range of interested buyers.
- Circular – collected containers are recycled for use in high-value materials and products.
- Efficient and cost-effective – sale processes avoid restrictive, onerous, and duplicative processes.
Purchasing materials
Third-party buyer registration
Materials collected through refund collection points may only be sold to registered third-party buyers. Buyers must register with each Zone Operator to enable them to purchase materials from that Operator. Buyers may register at any time. The Zone Operator is required to conduct due diligence on potential buyers. Zone Operators will maintain a register of third-party buyers.
Zone Operators are expected to publish criteria for the registration of buyers.
Registered third-party buyers must hold all current authorisations required to fulfil their obligations to recycle materials, including any required environmental and export licences. They must not be in breach of environment protection, work, health, or safety laws in the buyer’s Australian jurisdiction.
Methods of sale
Multiple methods of sale provide flexibility and cost-effectiveness, minimising the risk of material stockpiles.
The Zone Operator will decide the methods that it will use for material sales based on the material type and amount and market dynamics.
CDS Vic permits the following 4 methods of sale:
- Commodity trading desk leveraging existing sales mechanisms used by the recycling industry to trade commodities.
- Online auction platform encouraging best prices based on current market conditions.
- Private ad hoc sales providing a fallback option. Flexible and typically non-recurring with a maximum contract duration of 6 months.
- Long-term sale agreement (12 months or more) creating certainty for buyers and supporting investment in recycling infrastructure.
An open tender process must be conducted for any long-term sale agreements. The terms and conditions and timing of the tender must be published on a tender website.
Unsuccessful tenderers will be provided with a reasonable opportunity to be debriefed.
The Zone Operator must maintain sales records.
Buyer notification and bidding
Zone Operators must ensure that information about the sale or potential offer for sale of suitable eligible containers to a buyer remains confidential.
When information about a sale or offer for sale is provided to the market, it must be provided in a way that ensures all participants in the market have the same information or access to information.
Zone operators will be required to implement auditable ethical wall systems and procedures to ensure that information about material sales is maintained as confidential by their material sales teams to prevent anti-competitive behaviour.
Transparency
Information about sales
Aggregated and de-identified information about material sales will be published annually. This information will include:
- material type and tonnage
- destination of sales
- circular economy outcomes.
Accountability
Zone Operators must ensure that their sales process and records are auditable by Recycling Victoria and must make their third-party buyer registration systems available to Recycling Victoria upon request.
Zone Operators are required to report regularly to Recycling Victoria about material sales under CDS Vic. They are also required to undertake audits in relation to their material sales process.
Zone Operators must ensure appropriate processes are in place to enable effective complaints handling.
Recycling Victoria has a regulatory role regarding the integrity of the material sales process.
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