The Federal Court this week ruled in favour of beverage giants, striking out the Northern Territory’s new recycling scheme. Here’s what happened — and a possible way around the verdict for recycling advocates.

What was the decision, exactly?

The court decision to exempt certain beverage companies from The Environmental Protection (Beverage Containers and Plastic Bags) Act turned on the question of whether, as the Territory government maintained, the requirements imposed by the EPBC Act fit within certain exemptions of the Commonwealth’s Mutual Recognition Act. The Mutual Recognition Act established in 1992 the principle that goods produced in one Australian state or territory can be sold in other jurisdictions without having to comply with further requirements. In other words, Coca-Cola Amatil, Schweppes Australia and Lion Pty Ltd argued their products should not be subject to additional legislation — or cost 10¢ more — in the NT if they were produced or imported elsewhere.

The court rejected the Territory’s arguments that its legislation fell within the exemptions to the Mutual Recognition Act, pointing out the NT government’s requirements were not “directed to the handling of goods which are the subject of sale” (the beverages themselves), but to other goods (the empty containers).

The court declared that beverages in regulated containers produced in (or imported into) other participating jurisdictions can lawfully be sold without compliance with the EPBC Act’s requirements — the extra 10¢.

However, the court declined to declare the relevant sections invalid, as Justice John Griffiths noted that the relevant parts of the EPBC Act might lawfully apply to other goods sold in another jurisdiction and then sold in the Territory, or to locally produced goods. Instead, he suggested that “urgent consideration” be given as to “whether appropriate amendments should be made” in light of the decision.

So is the NT’s scheme dead?

Coca-Cola is seeking to move on swiftly from the case, with spokesman Alec Wagstaff describing container deposit schemes as a “green tax on consumers” and saying the decision “means that we can move on almost immediately to drop prices in the Northern Territory” and “work with the government to put in place alternate arrangements to improve recycling and reduce litter in the Northern Territory”.

For its part, the Territory government has indicated that it intends to appeal the decision, but it also has other avenues open to it. South Australia has had a container deposit scheme for decades (it is now set out in the Environment Protection Act 1993), which long predates and is permanently exempt from the Mutual Recognition Act.

As Griffiths noted, the NT could also seek an exemption, either by requesting that the Commonwealth add the EPBC Act to schedule 2 of the Mutual Recognition Act or by persuading all other states and territories to request that the Governor-General amend it. The Territory has previously circulated a Council of Australian Governments regulation impact statement on proposals for continuing its scheme, including the possibility of a permanent exemption; in the wake of the decision, Chief Minister Terry Hills has announced that his government will seek such an exemption.

Although the decision has been greeted with considerable disappointment by environmental groups, this setback could galvanise the movement for a national container deposit scheme — a proposal set to be considered at a COAG meeting in April, which is being championed by Greenpeace and GetUp.

Peter Fray

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