To address the challenge of increasing waste generation, the Ministry of Environment (the “MOE”) has recently strengthened regulations governing the processing and recycling of waste.  The Act on the Promotion of Saving and Recycling of Resources (the “Act”) requires businesses to comply with standards for packaging quality, product-to-packaging ratio, number of packing (Article 9), and “separate discharge” mark showing waste that should be sorted for recycling (Article 14).  The Act also requires packaging materials manufactured or imported, or products sold using such materials, on or after December 25, 2019, to meet the packaging quality/structure standards.  Moreover, manufacturers or importers of such items must indicate recyclability grade on the items’ labels (the “Packaging Recyclability Grade and Labeling System”).  However, to provide sufficient time for industries to transition to these new standards, the Packaging Recyclability Grade and Labeling System provided a nine-month grace period until September 24, 2020. 

We recommend checking the following to ensure that your company is compliant with the Packaging Recyclability Grade and Labeling System.  Particularly companies that import products may want to discuss the new requirements with their overseas manufacturer or supplier since the packaging quality or labeling of imported products may need to be changed depending on their recyclability grade.

• First, you need to confirm whether your company is considered a “Producer Obligated to Recycle” or an entity subject to the Packaging Recyclability Grade and Labeling System.  Producers Obligated to Recycle are businesses that have an Extended Producer Responsibility under Article 16 (1) of the Act.  More specifically, they are businesses that (i) manufacture or import (including sellers of products that use) packaging materials set forth in Article 18 of the Enforcement Decree of the Act (e.g., carton, glass bottle, metal can and synthetic resin materials), and (ii) are of a certain business type and size specified for the kind of packaging materials they use (e.g., among beverage importers that use synthetic resin packaging materials, those that imported KRW 300 million worth of packaging materials and imported at least 1 ton of products/packaging materials in the preceding year would constitute Producers Obligated to Recycle). 

• Producers Obligated to Recycle must self-evaluate the quality and structure of the packaging materials (and the products that use such materials) that they intend to manufacture, import or sell, and report the results to the Korea Environment Corporation (the “KEC”) for a final assessment.  Based on the ease of recycling, the KEC will classify packaging materials into one of four recyclability grades: best, good, normal and difficult.  Moreover, PVC packaging materials, colored PET bottles and PET bottles with labels attached with general adhesives that are not easily detachable are, in principle, prohibited.  (See MOE Notification No. 2019-244 (Standards for Quality and Structure of Packaging Materials).)

• Within six months of receiving the recyclability grade from the KEC, Producers Obligated to Recycle must indicate the grade on the exterior of the packaging material in accordance with MOE Notification No. 2020-39 (Labeling Standards for Quality and Structure Grade of Packaging Materials).
  
  <Illustration: In the event that a quality and structure grade of packaging materials is labeled below a “separate discharge” mark>

  

   

Violations of the Act, such as not or fraudulently performing self-evaluation of the quality and structure of packaging materials, or not or fraudulently labeling the recyclability grade on the exterior of the packaging, are punishable by an administrative fine not exceeding KRW 3 million (Article 41 (1) 2-2 and 2-3 of the Act).  Moreover, an entity that manufactures, imports or sells packaging materials (or products that use such materials) that do not satisfy quality and structure standards may be issued a corrective order that requires the entity to comply with the applicable standards within one year.  If the entity fails to comply within the given period, the manufacture, import or sale of the packaging materials (or products that use such materials) may be suspended, and the entity’s executives may be subject to imprisonment of up to one year or a criminal fine not exceeding KRW 10 million upon failure to comply with such suspension (Article 39-2, Item 1 of the Act). 

We once again advise that you check whether there are any issues with complying with the Packaging Recyclability Grade and Labeling System.