The photo above shows a warehouse in Derrimut, in Melbourne’s North, containing 10,000 tonnes of mainly plastic from Victorian and Tasmanian recycling bins. Carly Whitington, a spokesperson for Marwood Construction, the owner of the warehouse, told the Sunday Tasmanian last December there were 10,000 tonnes of mainly plastic in this warehouse that the now-defunct company SKM Recycling had put there two years before (‘Recycling debacle leaves shed of shame’, 22 December 2019).
Ms Whitington told The Age newspaper on 8 August 2019 that she represents companies that own six warehouses with similar amounts of recyclables stockpiled by SKM Recycling and one is twice the size of the Derrimut warehouse. I estimate that SKM stockpiled 60,000 tonnes of recyclables, mainly plastics but with a little paper and aluminium as well.
We know that some of this stockpiled plastic came from Tasmanian households because SKM Recycling had contracts with 12 southern Tasmanian councils as well as 33 Victorian councils. There is no reason why recyclables from Tasmania and Victoria would have been dealt with differently. Once SKM started operating in Tasmania plastic was not processed here but was taken to Victoria. For the two years up to August 2019 plastics were stockpiled.
Like me, you have probably been washing your plastic milk bottles and other containers, taking the lids off them, and putting them in your recycling bin, thinking they were being recycled, only to find out they just went into warehouses.
Think this story can’t get more depressing? The Derrimut shed owner confirmed to me by email on 5 February 2020 that all of the plastic in his warehouse and others in Melbourne have now been sent to landfill. It cost him $1.8 million, mainly in landfill fees.
This perverse outcome has happened because the warehouse owners were left responsible for the stockpiles after SKM Recycling was declared insolvent. Cleanaway Waste Management took ownership of SKM in October 2019 but the court found it had no legal responsibility for the stockpiles.
Cleanaway is a reputable company and since it took over SKM in October 2019 it has presumably been recycling all materials it collects. But there seems no way of guaranteeing that if circumstances change, our recyclables, plastics in particular, will not again be sent to landfill. The problem with recycling plastic containers is that they are low value, there is a lot of them, contamination adds to the cost of processing and markets have proven to be volatile.
The warning signs were there for Tasmanian councils to see, but they didn’t publicly question what was happening to our recyclables. Councils need to learn from SKM’s failure. SKM took over recycling in southern Tasmania in 2014 as they offered our councils a lower price. People in the waste management industry told me at the time that SKM was cutting costs by sending some recyclables to Melbourne for sorting and recycling. From later media reports we discovered that SKM had been shredding plastics and sending them to China rather than recycling them. Our councils never acknowledged this.
Following the January 2017 decision by the Chinese government to lower contamination limits, SKM lost its preferred market and presumably could not find a local market to take plastics so resorted to stockpiling. No-one in Tasmania noticed. Victorians started to notice the stockpiling problem when there was a major fire at SKM’s Coolaroo facility (northern Melbourne) in July 2018. Massive piles of plastic and paper burnt for weeks, causing the evacuation of 100 nearby residents which led to a $1.2 million compensation payout. Tasmanian plastics were probably burning but our councils didn’t notice.
Media reports and announcements by the EPA confirm other fires occurred at SKM’s Coolaroo site in July and Geelong site in October 2018. On 15 February 2019 came the first forced closure by the Victorian Environment Protection Agency (EPA) of SKM’s Laverton North and Coolaroo facilities because of stockpiles of plastics and contaminated glass causing a fire hazard. We can assume that SKM was only able to reopen by moving stockpiles to leased storage facilities.
On 11 July 2019 SKM’s Laverton North site was closed by the EPA, again due to the excessive amount of stockpiled waste. This was to be the end for SKM in Victoria. SKM was unable to pay $5 million in bills and was declared insolvent by the Supreme Court of Victoria on 2 August 2019.
After SKM was declared insolvent and stopped operating in Victoria, councils there paid to have household recycling collected and sent to landfill during August and September 2019. However, SKM in southern Tasmania continued to collect the contents of our recycling bins. Glass and steel were recycled locally. I am confident of this as I have spoken with one business who receives the glass, and steel is very high value and would never have been dumped. Plastics, paper and aluminium were stockpiled at its Derwent Park facility. I know this because I visited the site numerous times and was photographed there by The Australian newspaper.
While a crisis unfolded in Victoria, there seemed to be no major problem with recycling in southern Tasmania. All kerbside collection continued uninterrupted. At the end of September 2019 Glenorchy Mayor, Kristy Johnston, told the Mercury that the new owners, Cleanaway, would start taking the stockpiled materials to Melbourne for recycling.
But for two years before August 2019 our plastics were not recycled and most have now been dumped into landfill and some were burnt. Tasmanian plastics contributed to the stockpiles that ultimately led to SKM being closed by the Victorian EPA. Our councils need to acknowledge how our recycling system failed and stop it happening again. Until they do we cannot trust our recycling system.
Councils need to learn from SKM’s collapse:
• Over the two-year period that plastics were being stockpiled, ratepayers paid a recycling fee but their plastics, at least, have not been recycled. Should we have our recycling fee refunded?
• I don’t know if councils knew about the stockpiling or not, but they probably should have. Dr Trevor Thornton of Deakin University told the ABC recently that plastic recycling should be tracked so that regulators know who is responsible for illegal dumping or stockpiling. I think this is even more important when waste is transported across state boundaries. This way, councils would know what happens to their recyclables and should be required to annually report to ratepayers on the end use of what went into their recycling bins.
• A vital lesson for our councils is that SKM was exporting to Melbourne and then stockpiling waste plastic because it could not profitably recycle it. Waste plastic containers have a low value and we need to focus on identifying recycled products that have a profitable market.
• We must question the capacity of councils to independently regulate waste-management businesses when they also deal with the political fallout. The Glenorchy Mayor clearly did not want to acknowledge that there was a problem and still has not. Perhaps we need an independent waste authority to monitor and report on kerbside recycling.
• Our councils are missing opportunities that the crisis presents. In response to SKM’s collapse, some Victorian councils have introduced a fourth bin, for glass, to reduce contamination of paper and cardboard.