Southland disAbility Enterprises (SdE) general manager Hamish McMurdo is feeling confident a new recycling contract with the Invercargill City Council will provide job security for his organisaton’s workers beyond July 1.

When the Invercargill City Council (ICC), Gore District Council (GDC) and Southland District Council (SDC) formed WasteNet eight years ago, SdE was awarded a contract worth $1.13 million a year to process recycling materials from the three councils. 

But last year it became clear the three councils were struggling to find common ground on whether to renew the contract. WasteNet awarded SdE a temporary contract until June 30 this year while the three councils reviewed their recycling options.

Last month it was announced the current contract would come to an end on June 30 and each council would now pursue its own options.

Gore District Council has this week confirmed that it will collect only glass jars and bottles in its yellow recycling bins from June 29.

The Southland District Council has said it will pursue its alternative options but has yet to reveal what those will be.

The Invercargill City Council has also not yet confirmed its plans but SdE said last month it was looking forward to engaging with the ICC on terms and conditions for processing the city’s recycling and was “confident” of being able to finalise contractual arrangements for the period from July 1 onwards.

Mr McMurdo said that was still the organisation’s position.

“We feel that our relationship with ICC is strong. We remain confident that a contract is still on the cards for July 1, however this is still to be agreed. Financial viability is essential for all parties.’’ 

Two days before COVID-19 lock down in March, the Invercargill City Council decided to open independent contract negotiations with SdE.

Invercargill City Council interim group manager – infrastructure Jane Parfitt said staff were now working on a report presenting options for the city’s recycling after July 1.

It would be considered by Invercargill City councillors with public excluded, because of commercial sensitivity, she said.

Whether ICC continued its relationship with SdE could only be answered by the councillors once they had considered the report, she said.

“What we can say is that there is a good working relationship on day to day operations matters. Any impacts on budgets or on rates would be determined by the decisions made by elected members based on that report,’’ Ms Parfitt said.

ICC senior waste officer Donna Peterson said Invercargill City produces approximately 3000 tonnes of quality recyclables a year, although approximately 3400 tonnes of material is collected.

“This means that 15% of what we collect is contaminated or non-recyclables. This increases the cost to ratepayers, because of the amount of material which needs to go to landfill as a result. If people had disposed of contaminated items or non-recyclables properly, it would have saved $80,000 in the past financial year,’’ Ms Peterson said.

The annual cost of recycling in Invercargill City for the past three years has grown from $732,109 in the year ended June 2017 to $955,411 to the year ended June 2019.

Mr McMurdo declined to discuss finances with the Southland App but confirmed the potential Invercargill City Council contract would provide “a significant proportion of our revenue’’.

“To keep the people we have, we need recycling,’’ he said. 

SdE’s other revenue streams come from a business recycling service, a corporate packaging service, and a Tiwai plant respirator cleaning service.

“We anticipate having enough work for our employees, however we encourage all businesses in the region to support SdE with work with a realistic understanding that there will be fair market charges for our services,’’ Mr McMurdo said.

The international market for recycling has changed in the wake of the COVID-19 pandemic, but Mr McMurdo said processed materials were still being exported from Invercargill. 

SdE exports to several Asian markets, including South Korea, Malaysia, India, Vietnam, Thailand, India, Japan, Laos and Hong Kong.

During COVID-19 lock down, SdE staff could not manually process cardboard and paper, so those materials were sent to landfill.

Invercargill was not alone in making this decision. Territorial authorities throughout New Zealand made similar decisions to put household recycling into landfills, although glass recycling continued in most places, if it was clean.

The Bureau of International Recycling reported on April 17 that COVID-19 was having a mixed impact on international markets, with the non-ferrous and plastics sectors hardest hit.

Mr McMurdo said while not all export markets could be guaranteed right now, “at this stage, markets remain available for almost all products’’. 

“We have continued to ship product (processed prior to lockdown) over the Level 4 phase. Once we start processing again, we anticipate that this will continue. It is, however, fair to say that world shipping has been disrupted over this time and there are delays in shipping across a large number of markets,’’ Mr McMurdo said.

SdE exports by the container load and usually stockpiles processed materials until there is enough for two container loads to go at one time.

“We have been exporting all the way through. Exporting is an essential service. The last container went out [on May 7] to Hong Kong. But yes, the market has changed. Oil prices are quite low at the moment. If oil prices are low, then [demand for] plastics is low because it is cheaper to make new plastics,’’ Mr McMurdo said.

Mr McMurdo said SdE enjoyed a good relationship with its brokers, so had not had to keep large stockpiles around its yard.

“We are pretty boutique. We can sort to order,’’ he said.