In our opinion piece, “Hong Kong’s recycling industry needs more transparency to change for good”, recently published in the South China Morning Post, we wrote about the need for more transparency and accountability to change the local recycling industry for good. From the conversations we have had with hospitality businesses and stakeholders at our webinars and events, we know that there is a general consensus on the need to revamp the local recycling system in Hong Kong. The opinion piece is our appeal to the government and its various bureaux and funding bodies to increase the transparency and accountability of their policy implementation and enforcement, as well as project oversight.
The reason is simple: There exists a great number of innovators, entrepreneurs, and civil society organisations with both the passion for and solutions to improve the recycling and waste management systems, but they are being held back by the lack of information on the waste issue itself and the problem areas that remain to be addressed. Furthermore, the time that could be better be spent on the research and development of viable solutions and initiatives is often wasted on the time-consuming and bureaucratic processes of government funding application. Yet for the level of scrutiny that applicants are put through to justify their funding utilisation, there is, unfortunately, not a methodical analysis or measurement of project outcomes that is made publicly accessible. What happens is that individuals and organisations that want to drive systems change simply don’t know where to start.
The purpose of this article is to take a deep dive into the major problems with Hong Kong’s recycling industry, so that ingenuity and collaboration can be applied to where it is needed most.
Uncoordinated Recycling
In a city where a staggering 70% of waste is sent to the landfill, calls for upending the recycling industry have made little headway so far. According to an investigative report by local news media HK01, plastic contents collected in the recycling bins at nine out of 14 housing estates during the COVID-19 pandemic were sent to the landfills instead. And among the nine housing estates, five are actually previous award recipients under the Environment Protection Department’s (EPD) waste separation and collection scheme in 2019. From their interviews with cleaners at the housing estates, HK01’s journalists learnt that some sent the recyclables to the landfill as a last resort, as recyclers had not visited the housing estates for six months.
It is worth pointing out that local recyclers face great challenges, too. In an attempt to get a better grasp of the recycling industry in Hong Kong, GREEN Hospitality made a site visit to a local recycler with 60 years of history of operating in Hong Kong. As one of the first companies to put the tri-coloured recycling bins in schools, this recycler also partnered with Watsons Hong Kong to implement the “smart drinking bottles recycling machine”, and is a contractor of the Plastic Recycling Pilot Scheme in Sha Tin.
From our survey, we learnt from the recycler that due to a generally low public awareness of the proper procedures of waste separation, recyclers often find recycling bins filled with a mix of cleaned recyclables, unclean recyclables, and unrelated materials, such as food waste. Further adding to the problem is the lack of cooperation between the recyclers and housing estate management companies. For example, without the knowledge of the actual setting of the recycling process, housing estate management companies tend to be reluctant to cooperate with recyclers to set up a proper scheme in the collection of plastic recyclables. The lack of a central governance for the recycling process at housing estates subsequently makes it difficult for recyclers to communicate with different housing estate managers, which greatly deters the effectiveness of the recycling process.
If the government is serious about its waste reduction goal, then housing estates’ participation in the Source Separation of Domestic Waste Programme cannot be encouraged but it needs to be mandated. A clear policy, communicated through informational or training materials, must also be created to ensure recyclers and housing estate management are well-informed on recycling procedures. And the government has funding earmarked precisely for the creation of training or educational materials like this: the beverage carton recycling guidelines, commercial and industrial food waste handling training materials etc. are just some examples of such materials, funded by the Recycling Fund.
The Recycling Fund - Where is the Transparency and Accountability?
As we have highlighted in our previous article, the need for more information and transparency on the local recycling industry and, in particular, servicing recyclers, cannot be stressed enough.
In the Hong Kong government’s latest Waste Blueprint for Hong Kong 2035, it congratulated itself for having made “good progress” in carrying out 20 of the 21 key actions set in the 2013 blueprint, to reduce the per capita disposal rate of MSW from 1.27 kg per day in 2011 to 0.8 kg by 2022. The self-congratulatory statement was printed despite the fact that Hong Kong produced 1.47kg of MSW per capita per day in 2019.
Among the 20 key actions achieved was the setting up of the Recycling Fund, which was launched in 2015 with a budget of HK$1 billion to provide the recycling industry with funding support. From reading this year’s waste blueprint, we learnt that HK$600 million has been given out to support recycling projects and equipment procurement since 2015, benefiting 1,000 recycling enterprises, and the Fund has also distributed one-off subsidies to help the industry weather the difficult COVID times.
As we have mentioned in the SCMP article, while lists of funded projects as of February 2021 are accessible on the Recycling Fund’s website, there is no information regarding the recipients of the funding support (e.g., company type, legal entity, business registration number etc.).
Moreover, without clearly defined and applicable key performance indicators (KPIs), the lists pose a challenge to anyone who wishes to get a grasp of the type of recycling projects being funded and their expected project outcomes. Head over to the list of approved projects under the Industry Support Programme on the Recycling Fund’s website, and one will see a simple table (in PDF format) with the categories of “Successful Applicants”, “Project Summary”, “Approximated Approved Amount (HKD)”, “Type(s) of Recyclables”, and “Target Quantity Processed (tonnes)”. For projects such as the Vocational Training Council’s proposal to “develop and conduct an accredited training course for the practitioners in the recycling industry”, “Type(s) of Recyclables” and “Target Quantity Processed (tonnes)” do not serve as meaningful goal-setting metrics, but the project was given HK$410,000 of funding support regardless.
Similarly, the Hong Kong Environmental Protection and Recycle Industry Sustainable Development Association Limited, which received HK$15 million twice each for phase 1 and phase 2, and another HK$15 million for phase 3 of a project that aims to set up an economic incentive scheme to support mobile recyclers’ operating costs, does not indicate a target for the amount of wastepaper expected to be processed. Which is rather unconscionable, as this three-phase project is the one that received the most amount of funding per phase of project development and as a whole, out of all the 28 approved initiatives as of February 2021.
Among the list of 951 companies that received the one-off COVID relief subsidies of HK$120,000 each, some companies, like Dragon-I Recycling Trading Co., Cheong Hop, Chin Kee etc. do not have an official website, let alone publicly accessible company records. And while some, like 3 2 3 Limited, Champ Star Holdings Limited, Easy Joyce Limited etc. are registered in the Hong Kong business directory, little is known as to what services or products these companies provide. It is even harder to find out why these companies received the one-off subsidy at all, as, in the “Project Summary” column of the table, “To provide financial assistance on the operating costs in view of the COVID-19.” is the same and only statement provided for all 951 recipients. One can’t help but wonder how the auditing procedure was conducted with these companies, or if an auditing procedure even existed, when the Recycling Fund handed out the subsidy.
We are not saying that these companies are undeserving recipients. But just as the holistic positive impact generated by companies and organisations varies, so does the urgency of financial need of these companies and organisations. When distributing taxpayers’ money to help the recycling industry stay afloat in difficult times, government funding bodies have the obligation to exercise a certain level of due diligence, so as to ensure continuity of operations for companies and organisations that are making measurable positive impact. Unfortunately, if there was such a process of due diligence, it is not supported with publicly accessible information. And, with all the lists of funded projects bundled together as of February 2021, it is impossible to tell the effectiveness of projects that were funded at different stages since the Recycling Fund was launched in 2015.
We find this near-absence of transparency and accountability puzzling. Drawing upon our own experience in applying for government funding to support our capacity building and event management endeavours, we have been put through the arduous process of filling out an application document that ended up to be some 50 pages long, not including the additional 30 pages of supplementary documents and follow-up Q&A to justify our application. But for such a detailed level of scrutiny from the government, one would expect a methodical and meticulous measurement of project assessment and outcomes, as well as funding effectiveness (e.g., using metrics such as SROI), which should then be made publicly accessible, with the publication effectively communicated to stakeholders in society. Across major government funding institutions, however, no such practice seems to be in place. The question then, is why put applicants through such an onerous justification process in the first place? And secondly, how can we hold the government accountable for the spending of taxpayers’ money?
Here is a quick solution: since the applicants of approved projects with a span of more than 18 months are required to submit progress reports and a final report anyway, these records can and should then be made publicly accessible to promote knowledge exchange, and to shine light on the gaps that need to be filled in terms of enhancing the recycling industry. But more importantly, as we have stressed in the opinion piece, funding application procedures need to be streamlined to incentivise and better support innovation. If Hong Kong calls itself a smart city, we need to do better than this.
Good Initiatives that Need Better Communication for More Buy-ins
To be fair, there are good initiatives currently being tabled by the government. One of them is the Municipal Solid Waste (MSW) charging scheme based on the “polluter-pays” principle, which targets all types of “polluters”: households as well as the commercial and industrial sectors. As a response to the city’s increase in MSW generation, which far outpaced population growth in the past 30 years, the charging scheme proposes two charging modes: by designated garbage bags, and by weight. For the former, citizens will need to purchase the designated garbage bags, available in nine different sizes, and the fee is currently estimated at HK$0.11 per litre. Waste exceeding the capacity of these bags, collected by the Food and Environmental Hygiene Department (FEHD) or its contractors, will be affixed with a “designated label”, which will be set at a uniform rate of HK$11 each; such waste collected by private waste collectors, on the other hand, will be charged a “gate fee” at landfills or refuse transfer stations.
Following the same “polluter pays” principle, the government has also implemented Producers’ Responsibility Schemes (PRS). Just like the MSW charging scheme, PRSs rely on financial incentives for both producers and consumers in order to decrease the generation and/or increase the recycling rate of the type of waste they target. So far, there are currently three PRSs in place in Hong Kong. They target plastic bags, electrical and electronic equipment, and glass bottles (this PRS is, however, not yet fully implemented). The recent addition is the PRS on plastic beverage containers (PPRS), with the aim of regulating all pre-packaged beverages carried in sealed plastic containers, irrespective of the plastic materials used. At the beverage supplier level (mainly local beverage manufacturers and importers), a levy would be collected to fund the operation. At the consumer’s level, a rebate arrangement (currently set at HK$0.1) has been set up to encourage the public to return plastic beverage containers, supported by a system of Reverse Vending Machines (RVMs), currently under a one-year pilot scheme.
From our in-depth desktop research on solid waste and the impact of tourism in the East Asia Pacific Region, and the responsibilities of the hospitality industry in the MSW crisis in Hong Kong, we at GREEN Hospitality are familiar with the dire situation of the waste problem in Hong Kong and the larger Asian region, as well as the government initiatives that for years continue to fail to engage the public and the business sector, largely due to a lack of economic incentives, in addition to other factors such as land scarcity, rising rents, and the absence of a viable local market for low-value recycled materials.
We welcome the government’s reiteration of the MSW charging scheme (and its implementation of the PRSs), and we certainly hope that the bill will be passed this time around, but education and engagement efforts need to go beyond communication campaigns. For example, the Environmental and Conservation Fund (ECF)’s recent funding support for waste separation projects could be beneficial to the MSW charging scheme. But for this initiative to be truly effective, the ECF has the responsibility to measure and communicate the goals, details, and outcomes of the funded projects.
Transparency and accountability of government policies and funding schemes are essential to restoring public faith in the recycling industry. Likewise, cases of scalable solutions can further incentivise innovation and engage businesses to commit to the government’s waste reduction goals, not least by integrating sustainability into their business operation.
Collecting and Utilising Good Data to Tackle Waste Issues
At GREEN Hospitality, we understand a well-informed society is crucial to driving systems change. And that is why we at GREEN Hospitality do the work that we do, to fill the knowledge gap, raise awareness, encourage further research, and galvanise actions and sharing of good practices.
In the process of conducting our in-depth research on solid waste generation in East Asia Pacific and Hong Kong, we faced the challenge of a lack of recent and relevant data on waste generation by the hospitality and tourism industry in Hong Kong. And that really is one of the biggest reasons that, despite the huge amounts of government funding, innovative solutions struggle to take off, and the local recycling industry remains the dismal state that it has been for a long time.
We need to have a clear idea of the magnitude of the problem. That is why we kick-started the field research on food waste and packaging waste in the hospitality industry in Hong Kong earlier this year. Conducted in partnership with the ADM Capital Foundation’s initiative, “Eat Without Waste”, ORCA Asia, and Winnow, with the support of the HKU Knowledge Exchange Fund, our goal for this baseline study is to help various stakeholders within the hospitality industry improve their waste management practices and to encourage them to measure and reduce their waste. We will be releasing our research findings soon, so subscribe to our newsletter and stay tuned!
On the plastic waste front, one of our new projects will conduct a qualitative research on the different types of bioplastics currently on the market, and ultimately create a Responsible Procurement Database of alternative plastics to ensure sustainable procurement for stakeholders in the hospitality and F&B sector.
At GREEN Hospitality, we welcome funding and collaboration to support our current and upcoming research efforts to turn the hospitality industry into a catalyst for sustainability. Get in touch with us (hello@greenhospitality.io) if you would like to support our endeavours, whether as a partner, funder, or volunteer.