Plastics industry at risk

By TOM CLARKE

Australian companies are moving offshore because of hazardous substances and new organisms legislation similar to legislation proposed in New Zealand, says a plastics industry leader.

The new chief executive of the Plastics Institute (PINZ), Alistair Rowe, says the HSNO legislation introduced by the National Government is a "real can of worms."

If it is introduced in its present form it will have a "drastic effect on any manufacturing industry with an imported content," he says.

He is concerned that the Environmental Risk Management Authority (ERMA), which has been given responsibility for setting up the HSNO legislation, appears determined to push it through in its current form without heeding amendments put forward by a committee made up of industry and political representation.

"In essence what it means is that anybody bringing any substance into the country, as opposed to a finished product, is required to notify that substance and have the substance, the method of treatment, labelling, packaging and a whole host of other elements, approved by ERMA," he says.

"At the moment it has something like 120,000 separate notifications in front of it, and it's going to be a bureaucratic nightmare."

Mr Rowe says the biggest risk is that New Zealand will get the same situation as occurred in Australia under similar laws, where companies found it too difficult, too time consuming and expensive, and left.

Many found it easier to move their manufacturing offshore.

Asked if New Zealand plastics manufacturers might face closure or have to move offshore to survive, he says:

"If some really innovative high-tech additive was developed that made existing technology redundant, and it needed to go through the hoops under this legislation, then yes, it could happen, especially for manufacturers that wanted to compete internationally."

Firms competing in world markets have to be very nimble to stay competitive, he says, and they cannot do that if they are bogged down in bureaucracy.

The industry is also being hurt by the low value of the New Zealand dollar, which is compounded by the fact that raw material prices, even in US dollar terms, have virtually doubled in the last six months. That has been caused by a shortage of materials arising from the doubling in the cost of the polymers used in the plastics industry because of oil industry manoeuvrings.

"The whole thing has snowballed a bit of late and our members are certainly having to approach their customers with price increases," he says.

"Having said that, the industry is in good heart despite the problems. Everybody is very busy and that's a good sign, but we keep hoping that it will get better."

The plastics industry, he says, has a commitment to environmental protection and product development. Several sophisticated new products have been developed in a joint venture with Auckland University and at least one of those is now coming on-stream.

The industry is a significant exporter, and in the last calendar year earned New Zealand more than $300 million, considerably more than the wine or bloodstock industries.