You are the VP of State Government Affairs at RILA. What are the biggest legislative challenges facing retailers at the state and local level today?The retail industry always faces both opportunities and challenges as it relates to state and local governments. The extremely quick pace of business at the state level, in comparison with our slower federal government, often translates into attention given to issues du jour that often get passed over at the federal level due to lack of interest, political will, or simply time. What often happens, at the state level in particular, is that advocates for particular issues do not always take the time necessary to truly vet harmful unintended consequences and are left with well-intentioned legislation that ends up being poorly applied. The result of such a speedy legislative process is that businesses such as retailers often suffer under burdensome mandates that do not take into account the efficiency and the flexibility necessary for productive investment and growth. The opportunity to educate policy makers on these types of issues is one which the retail industry takes seriously and has proven beneficial in many instances.
Do state and local governments tend to approach environmental legislation differently than the federal government?State and local governments usually take more ambitious stances on hot-button issues than the federal government. Environmental issues are certainly a prime example of states exercising their legislative independence and paving the way for federal action in a given arena. This often leads to the introduction of relatively extreme legislation. For a large regional or national retailer, this can create an unworkable patchwork of laws and regulations that prove impossible from a compliance point of view. This aggressive approach to state and local legislation often forces federal action, which is why it is crucial to track legislation and advocate for the retail industry at the state and local level to correctly set the stage for future federal activity.
What environmental issue do you encounter most frequently when advocating for retailers’ issues at the state level? Product stewardship is an issue that comes up again and again at the state and local level. Some products have an environmental impact when disposed of improperly. In recent years, legislation at the state level has been introduced to mandate retailers to participate in programs designed to collect and dispose of a variety of products, including electronics equipment such as cathode ray tubes (CRTs), compact florescent lamps (CFLs), paint, mercury thermostats, cellular telephones and plastic bags. Other legislation contemplates charging consumers what is known as an “advanced recovery fee” (ARF) – an additional fee paid at the point of sale – to pay for the collection of these items. Mandated programs, in general, create problems for retailers. Retailers need the flexibility to institute efficient, cost-effective programs that satisfy an actual customer demand and work well within their individual business plans and supply chains; one-size-fits-all solutions are not palatable. Instead, retailers advocate for programs that encourage extended producer responsibility (EPR) which, in general terms, places the responsibility of the life cycle management of a product with the producer of that product. The EPR concept does not exempt retailers from the responsibility of managing the life cycle of many of their own brands of products, a growing trend in the retail industry.
How has the product stewardship issue evolved from a legislative standpoint?In the beginning, there were electronics… eWaste has by far seen most of the state product stewardship action over the past decade. The legislative battle has resulted in several states adopting legislation that creates electronic waste recycling programs. In most of those states the cost burden falls to the manufacturer of the product and ultimately to the consumer who pays an increased cost for the product. In one failed experiment, California chose to single itself out and charge consumers an Advanced Recovery Fee (ARF) when purchasing a covered electronic product. This system has since proven to be an inefficient method of collection and also quite cumbersome to the state in terms of allocated money and resources.
Several states are considering product stewardship framework legislation that seeks to shift authority over product recycling programs from the legislature to the relevant agency in each state. The legislation would set up a framework for how a product stewardship organization would be funded and function and leave it up to the relevant agency to decide which products would be included in such a program. This new initiative is being promoted by the Progressive Policy Institute and represents the granting of significant authority over stewardship programs to state regulators. RILA is working with the relevant state retail associations to develop a strategy to guarantee flexibility for retailers and manufacturers in implementing these programs.
As states address their devastating budget shortfalls and lack of adequate reserves, they will inevitably search for programs to cut rather than taxes to increase. They may look for new funding streams or avenues to either directly shift the cost of publicly financed recycling programs for specific products, or to shift responsibility for managing such programs. Mandatory product recycling programs or collection fees may join the other “low hanging fruit” as states across the country continue their budget debates. Retailers must be prepared to participate in these dialogues to avoid cumbersome and potentially unworkable mandated recycling programs.RILA supports environmentally friendly product stewardship policies and urges federal and state policymakers to support approaches that provide incentives – not mandates – for retailers to develop product stewardship or recycling programs. We also support a national product stewardship plan that would preempt conflicting and contradictory state laws. RILA opposes any efforts to impose recycling fees at the point of sale, as well as proposals that would force retailers to collect and/or dispose of used consumer products.
How can retailers become proactively involved with the product stewardship issue?RILA believes that the responsibility for the proper disposal of environmentally sensitive products naturally resides with the owner or manufacturer of the product. However, many RILA members have voluntarily developed recycling programs for their customers. Such private sector initiatives should not only be permitted, but also encouraged through public policy. Government policies should not mandate that retailers collect and/or dispose of used products, nor should governments force retailers to charge consumers additional fees to fund recycling programs. In cases where product recycling mandates are imposed, the mandate should apply equally to online and traditional brick-and-mortar retailers. Finally, a uniform national standard is strongly preferable to a patchwork of conflicting laws in different jurisdictions.
What other environmental issues are emerging in state and local legislation?A quick list of environmental issues that directly affect retailers emerging at state and local levels of government must include climate control, specifically cap and trade, green building, plastic bag recycling mandates, packaging reduction mandates, bottle bills, renewable energy mandates, and energy incentives.
What are the biggest misconceptions you encounter about the retail industry’s practices and business model?Because retailers are so ubiquitous, legislators and the general public often perceive retail locations as a natural drop-off spot for consumer waste. However, retailers often do not have the capacity to collect, nor the established procedures for properly handling consumer waste. The development of such procedures can be costly and compliance can be extremely complicated. Another common misconception is that it is simple for retailers to stop selling certain products. However, when certain products are banned and expected to be removed from shelves in a very short period of time, the disposal of already-accumulated inventory can be extremely costly and legally complex, not to mention wasteful.
Overall the biggest misconception I encounter is of the retail industry in general. Retailers primary goal is responding to the demands of their customers. From providing safe and sustainable goods for purchase to providing a pleasant shopping experience where customers feel they are getting as much bang for their buck as possible. Many policy makers and activists attempt to position retailers as greedy businesses only concerned with the bottom line. The truth is a retailer’s success is directly related to their relationship with consumers and the consumer’s acceptance of the retailer’s brand as a positive experience. Maintaining this relationship is paramount for a retailer.
Who do you feel is today’s most influential public figure regarding environmental issues?For better or worse, the most influential group on environmental issues is Hollywood. Governing the environment is possibly the most complex and intricate public policy arena besides health care that policy makers are confronted with. Reducing the argument to sound bites carried over public service announcements from famous Hollywood actors adds little or nothing to the pursuit of common sense policies that seek to conserve our planet’s resources and maintain our economy’s ability to function.
How do you see government approaches to environmental legislation changing over the next five years? The next 10?The momentum for grandiose change to government’s approach to the environment by way of public policy has certainly taken somewhat of a back seat to the current economic hardships. Although completely and intricately related, the general public has yet to truly combine the path towards a successful and renewed economy with the concept of environmental stewardship. While a health economy is viewed as a necessity, I believe the general public still views a healthy environment as a bit of a luxury. As the years progress and the economic outlook begins to brighten, my hope is that of the many lessons learned, a primary one will be that the goals of a sustainable world, a sustainable economy and individual well-being are one in the same.