Regulatory Roundup: What Paper Merchants Should Know
Industry Insights | Annabel Steele | March 09, 2021
U.S. lawmakers are currently embroiled in a debate over the federal minimum wage and whether it should be increased. The outcome of that debate could change how companies are required to compensate their employees and could send ripple effects throughout industries. But the minimum wage debate isn’t the only thing paper merchants should keep an eye on.
There are a few other general workplace regulations paper merchants should monitor in the coming months. This includes labor regulations, health and safety regulations and transportation regulations, among others. Health and safety may be of particular importance as the United States looks to emerge from the coronavirus pandemic.
Those regulations apply to all companies in the country, not just paper merchants. But there are some regulations more specific to the paper industry that merchants should watch out for, say Phil Riebel of Two Sides North America and Alain Villemure of Lecta North America.
“The most discussed issue now is Extended Producer Responsibility (EPR), which may seriously affect the U.S. paper industry at a cost of $1.2 billion annually,” Riebel says.
The Organization for Economic Cooperation and Development (OECD) defines EPR as a “policy approach under which producers are given a significant responsibility — financial and/or physical — for the treatment or disposal of post-consumer products.” In other words, paper merchants could bear the costs of the responsible disposal of their products.
“There’s already a few of those initiatives on the table in different states in the United States, different provinces in Canada and even in some countries in Europe,” Villemure says. He cautions that the EPR initiatives currently in place in the United States are projects, not final regulations, but advises paper merchants to keep an eye on the situation nonetheless.
In addition to EPR, paper merchants should be aware of the China National Sword policy, Villemure says. The policy, enacted in 2017, bans a majority of paper waste imports into China. The policy has already caused the price of pulp to increase and forced paper manufacturers to increase the costs of their products to cover the changing freight costs, but Villemure warns that more consequences could be coming.
“A lot of containers coming from Asia with goods return to Asia with waste paper, but waste paper going to China is now completely banned,” Villemure explains. “So some of it is now going to other Asian countries that have accepted that waste. But will they accept it forever? Eventually they will probably put in place similar regulations as in China.”
Another situation for paper merchants to monitor is unfolding now in Canada, where some telecommunications companies are trying to phase out the delivery of paper statements. In some instances, the telecommunications firms simply stopped sending paper statements without notifying consumers or obtaining their consent first, relying on the assumption that consumers would not complain about the lack of paper statements. When that approach was challenged, the Canada Radio-television and Telecommunications Commission (CRTC) took up the matter. The agency is currently assessing whether the telecommunications companies are obligated to send paper statements, or if they are entitled to move to digital statements moving forward.
Many U.S. service providers are also switching their customers automatically from paper statements to online options, often without offering a choice to consumers. This is typically done as a cost-saving measure, but since the beginning of the pandemic, companies have been also using an unreliable postal service as an excuse to go paperless. Riebel contrasts consumer protection efforts in certain European countries with the United States, pointing out that Europe often has protections that “oblige service providers to make bills and statements available on paper — often as a default.” By contrast, “the United States has less consumer protection laws for this, and many of the laws are in need of a serious update because they were written before the digital revolution,” Riebel says.
According to Villemure, one of the most important areas for paper merchants to monitor is sustainability. In recent years, much of the move towards sustainability in the United States has come from corporations themselves; big companies like Walmart and McDonald’s have announced sustainability initiatives, and some, like Google and FedEx, have even set ambitious greenhouse gas emissions targets for themselves over the next decade or so. But with the transition to the Biden administration, it is likely that more regulations will come from the federal government compelling companies to prioritize sustainability and climate-friendly practices.
In order to get ahead of the curve, paper merchants should align themselves with sustainability-minded suppliers, Villemure says. It’s also important to ensure these suppliers “have the awareness about and the scale to respond to these changes in regulation,” Villemure adds.
Riebel points out that embracing sustainability could also come with its own benefits for paper merchants.
“Carbon emissions will be more closely monitored and companies with low emissions will benefit over those using a high level of fossil fuels,” he says.
With the regulatory landscape poised to change over the next few years, Villemure has a key piece of advice for paper merchants looking to stay informed.
“Rely on your association to decrypt all these regulations,” he says.