First Suppliers

A supplier who provides the first supply of beverages in Victoria in a suitable eligible container will need to enter into various agreements with VicReturn, the scheme coordinator.

The Circular Economy (Waste Reduction and Recycling) Act 2021 as well as the associated regulations highlights that If you are a first supplier there is a requirement for a supply agreement with the scheme coordinator, VicReturn.

From 1 November 2023, section 110 of the Act states that it will be an offence for a person who is a first supplier to supply a beverage in a container to any other person unless –

• a supply arrangement is in force between the person and the Scheme Coordinator in respect of a class of containers to which the container belongs; and
• an approval as a suitable eligible container is in force in respect of that class of containers.

Suppliers will need to enter into the following agreements:

1. First Supplier Supply Agreement
2. First Supplier Side Deed
3. Accession Deed Poll relating to the Common Disputes Deed

Suppliers should seek independent legal advice in relation to the terms of the Supply Arrangement, Supplier Side Deed and/or Accession Deed Poll.

This is not possible. The pro-forma copies of these documents have been approved by the State and are identical for all suppliers. You will not be able to negotiate departures to the terms of these documents.

The fixed pricing has been developed based on a considered methodology and includes the following information:

• historical supplier volumes and estimated growth in line with population growth
• historical and projected growth in redemptions through the network of return points
• historical and projected redemptions through material recovery facility operators (kerbside collections)
• network operator handling and processing fees per container and for each material type
• fixed costs including scheme coordinator and compliance fees

Any shortfall or excess in Scheme liquidity at the end of a pricing period carried forward and taken into account in determining the Scheme Contribution by Material Type in following pricing periods.

Please refer to Section 5 of the Scheme Payments and Contributions Methodology (SCPM) for further information.

The system is based on an arrears approach by using actual volumes of containers supplied and declared by each supplier to calculate the monthly invoice. Contributions are required to fund scheme operations in the following months.

The scheme costs by material type have been published by VicReturn and are available via our Pricing Guide.

VicReturn will also conduct six monthly reviews of pricing or as required in the event there are significant variations to what was forecasted.

There will be no separate container registration fee, this cost will be included in the scheme price per container material type.

Invoices will be issued monthly by the scheme coordinator to first suppliers once Victoria’s container deposit scheme commences. These invoices must be paid within 5 Business Days after the invoice is issued in accordance with the supply arrangement.

Small suppliers (that supply 300,000 or less containers per annum) can apply to move to quarterly invoices.

VicReturn is a not-for-profit and as such does not make a profit on the scheme.

The Supply Arrangement is an agreement between the supplier and VicReturn which requires the supplier to:

• Make contributions towards the cost of the management, administration and operation of the scheme;
• report on the volume of its supplies in Victoria; and
• provide access to independent auditors to verify the data it has provided to

Historical Data:

• The First Supplier must provide to the Scheme Coordinator a statement which specifies the number of Eligible Containers Supplied by the First Supplier in Victoria in the 12-month period immediately prior to the Scheme Commencement Date.
• This must be provided within 10 business days of the effective date of the supply arrangement.

Monthly Data:

• The First Supplier must provide monthly reporting data for the total number of eligible containers by material type supplied in Victoria for the previous month.

Annual Data:

• The First Supplier must provide an annual statutory declaration each year confirming the accuracy of the prior 12 months’ submissions at the end of each financial year.
• The first supplier must also provide the number of suitable eligible containers supplied in Victoria for the previous financial year, aggregated by State as well as aggregated by State and material type.

Supplier Contributions:

• Make contribution payments in line with invoicing requirements (within 5 business days).
• Pay penalty interest on any overdue amounts if required under the supply arrangement.

Access:

• Provide all required access and reasonable assistance if requested to an independent auditor that has been engaged by the Scheme Coordinator to review any applicable electronic systems or data provided by the first supplier in accordance with the supply arrangement.

Scheme Integrity

1. Fair Dealing

   The Scheme Coordinator must act fairly and must not unreasonably discriminate, against or in favour of any Scheme Participant in entering into or performing its obligations under or enforcing the terms of this Agreement or the other Scheme Agreements.

2. Fraud

   The Scheme Coordinator must take all reasonable steps to minimise and prevent fraud in connection with the Scheme. Each party must not provide any information that the party knows is false or misleading in a material particular.

3. Compliance

   The Scheme Coordinator and the First Supplier must comply with the Act, the Regulation and the Scheme Agreements

Invoicing

The scheme coordinator must provide a monthly invoice (or quarterly invoice for small suppliers at their request), which has either provided in the document or attached as supporting documentation, the calculations by material type for payment to the scheme coordinator.

Auditing

The Scheme Coordinator may engage an independent auditor to, at any time, audit (including a real-time audit of any applicable electronic systems for deliveries, supply chain logistics, payments, collections and verification) or review data provided by the First Supplier under this Agreement to determine if that First Supplier is complying with:

1. the Act and the Regulation; and
2. the terms of this Agreement.

Reporting

According to section 7.5 of the Supply Agreement, the Scheme Coordinator must prepare a report at the end of each financial year, within 60 Business Days of year end.

The following information must be included, as verified in accordance with the Scheme Coordinator Agreement:

1. the aggregate number of Suitable Eligible Containers for which Refund Amounts have been paid by Collection Point Operators or Network Operators at Refund Collection Points during that financial year;
2. the aggregate number of Suitable Eligible Containers for which Refund Amounts have been paid by the Scheme Coordinator to Material Recovery Facility Operators in the relevant financial year;
3. the aggregate number of Suitable Eligible Containers (by Material Type and in aggregate for all Material Types) Supplied in Victoria for that financial year;
4. the aggregate of the Network Fees (by Material Type and in aggregate for all Material Types) paid by the Scheme Coordinator to the Network Operators for that financial year;
5. the Scheme Contribution by Material Type for the current pricing period and the proposed Scheme Contribution by Material Type for the next pricing period;
6. the Service Fee for the financial year; and
7. the aggregate of the Administration Fee for the financial year.

The Supplier Side Deed:

• Grants the State rights to carry out an obligation under the Scheme Coordinator Agreement or the Supply Agreement which the Scheme Coordinator was obliged to but has failed to carry; and
• Facilitates the novation of the Supply Agreement to the State’s nominee in the event of termination or expiry of the Scheme Coordinator Agreement.

There is no need for suppliers to enter into any additional documents.

The supplier is obliged to continue to comply with the terms of the Supply Arrangement on its original terms irrespective of a novation to the State or its replacement scheme coordinator.

After the novation, the State or its replacement scheme coordinator is responsible for carrying out all of the original obligations of the scheme coordinator.

The Common Dispute Deed provides a process for determination of certain disputes that may involve first suppliers, the scheme coordinator, network operators and the state.

The intention of the Common Dispute Deed is to provide a process for the determination of a Common Dispute arising under one agreement and to bind related parties and the Scheme Coordinator under other agreements to the determination, without the need to have the dispute determined again and separately under those other agreements.

The Accession Deed Poll is a mechanism by which first suppliers become party to the Common Dispute Deed. First suppliers are required to provide the scheme coordinator with an executed Accession Deed Poll when entering a Supply Agreement.

The selection of First Suppliers to participate in the Victorian CDS Supplier Audit Program takes place towards the end of each quarter. The First Suppliers selected for an audit will be asked to assist with the audit in the subsequent quarter. Any First Supplier who is registered with the Victorian CDS has the possibility of being selected for an audit – based on a stratified sampling methodology.

If a First Supplier has been selected to be audited, a notification will be received by the First Supplier from the independent auditor appointed by VicReturn. It is essential for First Suppliers selected to participate in the audit program. This requirement is specified in Clause 7.4 of the Supply Arrangement that the First Supplier has agreed with VicReturn. These provisions empower VicReturn to inspect any records as relating to the First Supplier’s participation in the Victorian CDS.

A First Supplier’s participation in the audit program is important for demonstrating the integrity and the ongoing success of the Victorian CDS.

Here are some suggestions we can offer about preparing for the audit:

• Do not ignore the audit notification. If you have any concerns, let us know immediately either by email or by calling our customer support team.
• Check your account in the portal. Ensure the container volumes that you have reported in the portal are up-to-date and accurate.
• Plan ahead. Set aside some time to work with the independent auditor. The audit should not take long and it is important that you advise in advance of your availability so that we can work with you to successfully complete the audit.

First Suppliers wishing to exit the Scheme, please follow the steps below:

1. Make sure ALL the First Supplier monthly reporting and invoices are up to date. If there is no supply for any month, please enter “0” volumes.
2. Complete this form (link), signed by a company director or authorised person.

First Suppliers will need to declare, that they:

• Do not (or no longer) supply eligible containers in Victoria.
• Has no intention to supply eligible containers in the future in Victoria.
• All monthly volumes are reported.
• All invoices are paid.
• Date (month and year) of final supply of eligible containers in Victoria.
• Reason for exiting the Scheme.

3. Email this completed form to: [email protected]