Kathy Zdravevski, Industry Policy Advisor (IPA) for the Automotive Dismantlers and Recyclers, the body repair and towing operator divisions of the Victorian Automotive Chamber of Commerce (VACC), tells Auto Recycling World more about her role, her take on the correlation between their sector and body repair, the challenges faced by the auto recycling industry in Australia, and government policy on EV recycling.
Earlier this year, you became Industry Policy Leader for the Automotive Dismantlers and Recyclers Division. How did this position come about, and what connections to the industry do you bring?
I commenced my position as an Industry Policy Advisor at VACC in January 2021, a position that provides strategic divisional management for the body repair and towing operator sector. This includes the formulation of policy responses to government and driving regulatory and legislative change on behalf of members. Policy advisors help create and implement policies in various industries or sectors. Policy cohesion between the body repair division and the automotive dismantlers and recyclers is paramount, particularly when communicating policy ideas to members, government officials, and consumers. Therefore, a requirement existed to have coherent messaging from both sectors. The automotive industry cannot afford compromised policy positions that weaken the position of one or both sectors. It’s about getting to a workable and equitable position. Therefore, as of August 2022, the position of leading the dismantlers and recyclers was a natural fit alongside my other two divisions, the body repair and towing operator division.
I look forward to working co-operatively and diligently with the industry, dedicating considerable time and energy to help chart the future for a sustainable and community-oriented dismantling and recycling industry with high standards.
A connection between those two divisions is in the treatment of written-off vehicles and how salvage stock is handled. There remain streamlined opportunities for both dismantlers, recyclers and body repairers. However, for now, these are often facilitated at the discretion of the insurer.
I am enthusiastic about the automotive industry; where prior to joining VACC, I spent 15 years working in the automotive insurance industry across multiple sectors. I am a skilled legal practitioner, with experience in dispute resolution and litigation, and detailed knowledge of insurance claim processes, particularly in motor vehicle insurance and how an automotive dismantler or recycler may come about an end-of-life vehicle. I can navigate multiple views and understandings of policy and advocacy with the intention to lead, inspire, and progress an agenda for systemic change. To advance the strategic policy agenda, I work to develop and mobilise strong internal and external networks. I hold a Bachelor of Business in Marketing and International Trade from Victoria University and a Master of Laws – Juris Doctor from Monash University.
With your experience in the body repair sector, how do you think these two parts of the automotive industry correlate? And how important do you think working closely with all aspects of the industry can help bring advantages to all involved?
Risk is present in all business activities. Understanding and managing risk is crucial and ensuring compliance between both sectors. Recycling motor vehicles is one of the oldest forms of recycling. For generations, businesses have existed to salvage the metal and spare parts in a vehicle that is no longer usable. End of Life vehicles are largely made of ferrous metal but also contain other materials that can be reused, recycled, or recovered. For example, vehicles that are no longer in operation can be valuable to body repairers for their second-hand parts. Body repairers often rely on vehicle recycling facilities to obtain functioning parts for reuse in the repair of accident-damaged motor vehicles. Automotive recycling sites are considered facilities that store combustible recyclable and waste materials. Dismantling a component, the vehicle, cleaning and storing recovered auto parts appropriately in a designated area is critical until they are transferred to the body repairer. Insurers often authorise recovered (or secondhand parts) for the use in repairs, and a dismantler/recycler cannot afford to damage, for example, a front door, a bumper bar, or a side mirror, in addition to ensuring the correct nuts and bolts remain on the part for ease of use upon its second chance of life. In addition, bumpers and plastics are susceptible to fire risk, and bumpers and other plastics are highly flammable and are a combustible waste.
VACC has been working on giving members in both industries a voice to both State and Federal Government on ways their issues can be tackled, promoting, and improving environmental best practice. It is practical to work closely with all aspects of the body repair and automotive dismantling sector as the advantages are obvious. Apart from the obvious, whereby both sectors store various volumes of recycled parts either waiting for transportation or use, the less obvious examples both industries must deal with and will benefit from if they work closely together on various policies, which includes, but is not limited to the following:
- Managing their high-risk business responsibilities
- Compliance to OH&S requirements
- Ensuring the business organises its site and facility to ensure compliance with broader environmental laws and regulations
- Treatment, management, and storage of recycled materials
- Managing noise, air and odour emitting from their business
- Emergency management procedures
- Managing records and general housekeeping
Regarding auto salvage in Australia, what are the challenges that vehicle recyclers face, and what do you think are the solutions to make the market more accessible to them? Is there a need to look at salvage classifications and repairable write-offs?
There are many challenges that vehicle recyclers face in Australia. VACC and industry is very clear on the classification of a Statutory Write Off (SWO), and a Repairable Write Off (RWO) as industrial waste. Yet there has been an alternate approach promoted by the motor vehicle insurers and salvage auction houses with how RWOs are classified and how they are handled, which results in salvage stock, that is (RWO) to be freely sold to anyone without permission as required by the Environmental Act, particularly in Victoria.
This approach by insurers and salvage auction houses differs from what the Environment Protection (EPA) Act in Victoria announces as law and has the potential to defeat the very purpose of the law before it has had a chance to meet its intended purpose. Laws in this area have not been built based on pricing models in the industry; they have been built to protect the environment and the broader community. This is a salient message and one which is understood by many leading industry stakeholders. However, unfortunately, not by all.
It is the approach of those entities that VACC has sought EPA intervention. However, the classification of written-off vehicles remains a systemic fault, yet to be overhauled, especially in Victoria. It is well known in the industry, and possibly government, that accident-damaged vehicles are often categorised by insurers (by their motor vehicle assessor) solely to maximise their salvage price, irrespective of the destination, use and final treatment of stock. For decades, this has been a fundamental issue in the misuse of industrial wastes emanating from the automotive industry. Everyone can understand the economics behind why an RWO is worth more than an SWO, given the fact an RWO can be potentially repaired and has fewer damaged parts or components than an SWO.
Australia remains the only developed country without an end-of-life vehicle (ELV) policy. An estimated 240,000 tonnes of plastic from ELVs are sent to landfill every year, of which Victorian ELV waste represents more than one-quarter (63,000 tonnes) nationally. Victoria is the only state that has introduced government-led and industry-supported guidelines that deal with the treatment of ELVs. Victoria is already ahead of the curve, but progress is slow. The Victorian Government’s 30-year infrastructure strategy, which incorporates a target of 50 per cent of all new vehicle sales being Zero and Low Emission Vehicles (ZLEV)s by 2030, puts pressure on the need to implement a comprehensive ELV scheme to manage the volume of internal combustion engine (ICE) vehicles coming off the road.
This is an economic and environmental imperative; if implemented effectively, it has the potential to be the gold standard in Australia. VACC has advised that the Victorian Government should take the national lead and work towards promoting a national ELV plan, with Victoria trialling a self-regulated ELV program. A trial of this nature has the potential to deliver intelligence on best practice for the proper disposal of ELVs. The next Victorian Government should also remove any ambiguity in the definition of an end-of-life or waste vehicle under the new Environmental Protection Act 2017 (Vic) to ensure waste vehicles are recycled in lawful places in Victoria and align with other state jurisdictions in Australia. This would include the insertion of a term within the Act and Regulations that statutory and repairable written-off motor vehicles are, for the purposes of the Act, defined as end-of-life motor vehicles. This will align with international standards as announced by the European Commission’s Waste Framework Directive. It is also timely for Government to take a leadership role in appointing and funding a government-led and industry-supported review of the current written-off vehicle process, with particular attention to addressing the weaknesses in Section 16 of the Road Safety Act 1986 (Vic) to explore the community, industry, legal and environmental impacts.
What is the current government policy regarding electric vehicles? Is recycling of these vehicles being considered and understood, or do you have a task ahead to raise awareness for the auto recycling sector?
Differing from the Victorian Government’s policy, the Federal Government’s target is that 89 per cent of new vehicles sold in Australia by 2030 will be electric. Adding to the momentum, the Australian Government released the National Electric Vehicle Strategy Consultation paper on 28 September 2022. The paper raises a range of questions and scenarios through which government, industry and local communities can work collectively on Australia transitioning to a zero emissions fleet.
Currently, the Zero Low Emission Vehicles (ZLEVs) that are transported to Australia are low in number and mainly at a price range that is not attractive to many motorists. This is a major limitation that will need to be overcome in Australia. Consequently, the strategy needs to find ways to attract ZLEVs. Put simply, if governments in other countries are incentivizing ZLEVs, or creating cheaper running cost regimes, then these markets will be more attractive to car buyers and auto manufacturers.
Until recently, there has been no consideration by state or federal governments when setting policy to transition the local market from ICE to ZLEV. This is despite VACC urging evidence-based arguments as to what the community can expect as we move forward with the transition. It’s remarkable that a developed country like Australia has little knowledge or a sense of urgency as to what to do with the estimated 20 million ICE vehicles that will ultimately be decommissioned. Given that government has been talking about ZLEVs for a while and recently released a National Electric Vehicle Strategy Consultation Paper, auto recyclers must create sustainable business models to deal with the evolving automotive dismantling and recycling sector, particularly around electric vehicles and safety. Whilst we are currently working in collaboration with the Federal Government on an ELV program, using product stewardship as the guiding principle, there is no guarantee that we will see such a program introduced in the immediate short term. The project is very promising; you would think at some stage, the government(s) and other community environmental advocates will wake up and realise the environmental catastrophe that is before them with end-of-life vehicles. However, common sense is not that common. We have provided a response to the government’s consultation paper and have ensured all sectors of the automotive industry are considered as part of our recommendations and advice.
As a policy advisor, what are your viewpoints on regulations and legislation? Do you think it is important that the vehicle recycling sector adheres to one of the two, and what advantages do you think it will bring to it in the long term?
The industry needs more regulation; that is the only way to control or measure the impact of automotive waste on the community and protect legitimate businesses. Government enforcement, support, training, and funding are also required in this area, as current governmental departments that are by law required to regulate the industry, at times, fall short of catching even the most obvious law breaching acts evident in the community given their slim resources and at times confined industry knowledge.
Legislation and regulation stop organised crime dead in its tracks by having every participant registered, paying tax and being subjected to shutdown orders if found to buy, sell or distribute industrial waste (an end-of-life vehicle and its components) through unlawful practices and processes. What we really need is for regulators and law enforcement agencies to step up. The only one that has shown any resolve is EPA Victoria. No one else. Talk is easy; actions are real.
We can reduce our tendency to send waste to landfill by proper systems, such as that designed by VACC and EPA Victoria. It’s a tough fight; other Australian states are far behind. Still, we are here for the long term, ensuring the dismantlers and recycling businesses remain sustainable and adapt to the ever-evolving automotive revolution.
To find out about the VACC, visit vacc.com.au
