“The intention of the law is to create a circular economy, but the burden is being placed on the part of the supply chain that does not have a direct impact, like consumers, retailers and manufacturers do. Distributors have little to no control over decisions to design, reduce, reuse, or recycle a product. Therefore, state offi cials should not regulate or tax at the wholesaler-distributor level of the supply chain.”
— Lauren Williams Vice President of Government Relations NAW
delegating essential regulatory authority to a private, third- party organization,” Williams said. Specifi cally, NAW’s lawsuit states the Oregon EPR is unconstitutional because it: • Delegates control over the EPR program, including the setting of fees wholesaler-distributors must pay to a private, third-party group (the Circular Action Alliance, or CAA), with a fi nancial interest in the program without clear rules or oversight
• Unfairly targets out-of-state producers, disrupts national markets, and tries to control business outside Oregon, violating the U.S. Constitution’s limits on state regulation of interstate commerce
• Mandates producers sign contracts with a single approved private organization (CAA), giving up their economic freedom and due process rights
• Subjects producers to fees and rules set by CAA without a real chance to object or appeal or to expect transparency in the process. “While NAW supports the goal of a circular economy,
the Oregon EPR law as enacted is unconstitutional, creates new mandates, inhibits interstate commerce, and fails at its primary goal of encouraging circularity,” Eric Hoplin, NAW president and CEO, said in a statement announcing the lawsuit.
Don’t Wait for a Fee Notice
Asked what distributors can be doing now to educate their state offi cials about the impact of EPR laws, Williams recommended sharing with them how the law impacts the industry. One key talking point she suggested is how the law shifts the burden away from key decision-makers onto distributors by enacting mandates and fi nes. “The intention of the law is to create a circular economy, but the burden is being placed on the part of the supply chain that does not have a direct impact, like consumers,
28 FEDA News & Views
retailers and manufacturers do,” Williams says. “Distributors have little to no control over decisions to design, reduce, reuse, or recycle a product. Therefore, state offi cials should not regulate or tax at the wholesaler-distributor level of the supply chain.” During a recent presentation to the FEDA Legislative and Regulatory Affairs Council, Brian Wild, vice president of government relations at NAW, cautioned dealers not to underestimate the complexity or potential cost of new EPR laws. Using Oregon as the fi rst case study, he outlined how the state now requires companies to register, report their packaging materials and pay fees determined by a PRO that operates with little transparency or recourse. “There’s no way to calculate your own fee, no appeals
process and the costs can be substantial,” Wild warned. “We talked to one company whose annual EPR bill for Oregon alone was in the hundreds of thousands of dollars.” While large retailers and producers may have helped shape some of the legislation, Wild said distributors are now left to absorb the impact, especially in packaging- heavy sectors like foodservice. NAW is actively exploring further legal challenges at both the state and federal level, arguing that delegating tax authority to a private organization may be unconstitutional. “If you sell into Oregon, register now,” Wild advised. “But we are not sitting still. We’re working hard to stop this before it spreads further.”
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