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The industry funding organizations used to provide, or to fund, waste diversion can have anti-competitive effects. There is a natural tendency for large companies with market power to use that power to design waste diversion programs and organizations in their own interest and to create obstacles for their competitors. The curious mixture of public and private power that industry funding organizations enjoy can leave those competitors with few remedies, other than (perhaps) a complaint to the Competition Bureau. The anti-competitive effects of a proposed waste diversion plan were discussed in Ontario when the used oil Industry Stewardship Plan was proposed a decade ago. The plan was rejected. Here is a very interesting letter from the Competition Bureau to Waste Diversion Ontario about the anti-competitive aspects of the used oil ISP. For example, the generators of used oil seem to have designed  the ISP to make it harder for SafetyKleen to compete with them:

…The generators of used motor oil are also competitors with one of the end-users of used motor oil. SafetyKleen, which collects and re-refines motor oil also competes in the Ontario market for clean motor oil as its re-refined product is a competitive substitute for new motor oil. This factor would remain somewhat benign but for the fact that the administrators of the proposed plan include the large generators but exclude SafetyKleen from the board of directors of the overseeing authority of the Plan. Arguably it is in the plan administrators’ collective interest to see that used motor oil is disposed of in an acceptable way. However it is arguable that it is also in their interests to try to prevent re-refined product from entering the market in direct competition with their products.

We are aware of the fact that the OUOMA has decided to prohibit SafetyKleen from membership on its board as it argues that SafetyKleen would be in a conflict of interest given that it is an end-user of used motor oil. In my opinion, this is no less of a conflict than the other members of OUOMA who compete in the sale of new motor oil and would no doubt benefit by restricting the access SafetyKleen or any other re-refiner has to used motor oil which it could re-refine and market in direct competition to these companies. It is with this in mind that consideration should be given to allowing all members of the market equitable access to both the plan and its governance….

Here also is the Bureau’s comments to CCME (the Canadian Council of Ministers of the Environment) about extended producer responsibility programs generally. Similar issues are raised by the proposed Industry Stewardship Plans now being considered by Waste Diversion Ontario.

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