East Waste terminates recycling contract with Victorian company SKM Recycling over China Sword
SIX Adelaide councils have terminated their recycling contracts as the full impact of China Sword begins to hit local government across South Australia.
SIX metropolitan Adelaide councils have terminated their recycling contracts as the full impact of China Sword begins to hit local government.
East Waste will tender for a new recycling processor after deciding to stop negotiating with a Victorian-based company, SKM Recycling.
SKM had been paying East Waste’s member councils – Campbelltown, Burnside, Prospect, Mitcham, Walkerville, Norwood, St Peters and Payneham and Adelaide Hills – $35 a tonne for their recycling.
The company was sending cardboard and paper from the waste to China until the country refused to accept material contaminated by glass, creating what has become known as China Sword.
The decision has created a huge backlog of recycling to build up within Australia – especially waste paper and plastics – with councils facing unexpected costs as they find alternative methods of disposal.
SKM has been forced to store unprocessed recycling in shipping containers at Wingfield as its two Victorian processing plants struggle to clear the material being received across the border.
The company has responded to the crisis by telling East Waste it would be charging its councils $60 a tonne to process their recycling - a demand which has been rejected.
A similar demand has been made by another recycling processor, Visy, to councils which it collects recycling for waste paper, including Tea Tree Gully.
East Waste chief executive Rob Gregory has written to chief executives of its seven councils seeking support to put their recycling out as a single tender for critical mass.
Mr Gregory said approximately 130,000 tonnes of kerbside recycling was processed through SKM, Visy and the Northern Adelaide Waste Management Authority (NAWMA) each year.
“East Waste member councils collectively are responsible for 20 per cent of these total tonnes,” he said.
“With the two largest material recovery facilities (MRFs) facing an unclear future, due to the uncertainty around current contracted tonnes, our collective tonnes are significant and can underpin and/or provide critical market share to any of the MRF operators.”
Campbelltown Council chief executive Paul Di Iulio has told elected members the best solution was to remain within East Waste and negotiate a new contract.
“All our recyclables were being taken by SKM, they were paying for the product,” he said.
“Now they are no longer prepared to pay. It has been decided they have breached the contract and it has been terminated.”
Mr Di Iulio said council chief executives were working together to find a solution to the recycling crisis created by China Sword.
“There are different opportunities out there and the new contract is about where we end up taking our recycling,” he said.
Mr Di Iulio – who is leading the East Waste tendering process after chairman Brian Cunningham stood aside because of a conflict of interest – told NorthEastern Weekly kerbside recycling would continue to be collected.
“It’s not going to change anything except where it goes in the short-term,” he said.
Mr Di Iulio said East Waste would negotiate a short-term contract for its recycling material until a longer-term deal could be finalised. It is illegal to take the material to landfills.