20,000 tonnes of recycling dumped in Victorian landfill during SKM ban

Adam Morton Environment editor
Photograph: Brenton Edwards/AFP/Getty Images

More than 20,000 tonnes of glass, paper and plastic was dumped in Victorian landfill while beleaguered waste company SKM Recycling was banned from accepting kerbside rubbish due to health and safety concerns.

Councils and environmentalists fear that figure could compound into hundreds of thousands of tonnes if the company is declared insolvent when taken to court this week or just stops operating, as its founder has threatened. SKM processes half of the recyclable rubbish collected from kerbside bins across the state.

A Victorian Parliamentary Budget Office report requested by the Greens estimates 21,402 tonnes of recyclable rubbish went to landfill over 10 weeks earlier this year when four SKM plants were ordered to shut by the Environment Protection Authority. It cost local councils about $1.7m in landfill levies.

It found councils across the state had taken a much bigger hit, $54m over 18 months, from the worldwide collapse in recyclable waste prices triggered by China last year introducing an effective ban on importing most rubbish.

Related: Victorian recycling firm warns of landfill crisis if it goes under

SKM blames China’s tougher waste contamination standards to what many consider an all but unachievable level for the stockpiles of waste at its recycling processing plants. The piles have been linked to several fires, leading to a crackdown by the EPA for licence breaches.

Six companies are taking SKM to court on Wednesday wanting either $4.3m in what they say are unpaid debts or to have the company declared insolvent. SKM’s founder, Giuseppe Italiano, reportedly told News Corp he would close the company and destroy its machinery.

Tim Read, the Victorian Greens’ acting leader, said the government must act quickly to give Victorians confidence that material they put in their recycling bin would not go to landfill.

“If SKM has taught us anything, it’s that we can’t rely on individual companies to do the right thing,” he said. “They must guarantee the jobs and the trucks keep going.”

Melbourne’s deputy mayor, Arron Wood, told the ABC he was aware of an investor who may rectify the situation, but did not name them. “Obviously, the best outcome is that SKM can secure an investor who is going to put some decent money into them and modernise their business model,” he said.

Coral Ross, the president of the Municipal Association of Victoria, said the parliamentary analysis showed the cost of the recycling crisis to consumers.

She said while the state government had dedicated $13m to help councils cover the increased costs last year, part of $135m in recycling spending on waste measures, it needed to go further. “It’s the ratepayers that are having to pay that extra amount of money,” Ross said.

She called on the government to bolster existing recycling capacity by keeping plants operating for longer hours and to waive the state’s landfill levy if recyclable waste did have to get dumped.

Related: Five Melbourne councils forced to dump recycling in landfill as Victoria crisis deepens

Both the association and the Greens want a container deposit scheme, under which people are paid for return bottles and cans. Victoria is the only state that does not either have or plan to introduce a container deposit scheme. Ross said a scheme would help remove crushed glass, a major contaminate, from the kerbside recycling stream.

Lily D’Ambrosio, Victoria’s environment minister, ruled out bailing out SKM. She said the government had been working with councils to look at alternatives for managing kerbside recycling if SKM stopped accepting waste.

“We know Victorians work hard to do the right thing when it comes to recycling so sending recyclable materials to landfill is always a last resort,” she said.

The opposition leader, Michael O’Brien, said the government had failed to properly regulate the sector and must take action. O’Brien and Read both called for the state government to use $500m raised through the landfill levy to fix the sector.

The challenges facing the Australian recycling industry were underlined earlier this month when Indonesia said it would return eight containers of waste to Australia. South-east Asian countries are increasingly warning they will not be a dumping ground for developed nations’ waste in the wake of China’s tougher rules.