Highlights from the Green Customs Global Conference
12th October 2022
Environmental concerns are at the centre of many policies which impact on trade, and which Customs administrations consequently have to implement. Some of those policies are already into force, while others are under negotiation at the regional and international levels. To stimulate discussions on how to improve the implementation of existing policies, and provide an overview of the ongoing discussions and initiatives that aim to make the supply chain sustainable, and “green”, where possible, the WCO Secretariat organized the “Green Customs Global Conference” on 27 and 28 June 2022. This article provides an overview of what was said during the event. Interested readers will find a detailed report of the Conference on the WCO website.
The first panel looked at the concept of the circular economy and the key challenges companies faced when operating a circular supply chain – in other words, when moving goods and materials as part of either a re-use, refurbish, remanufacture or recycle loop. Among the obstacles mentioned were the lack of harmonization and alignment of regulatory rules for consumers, Customs regulations and waste management regulations. Speakers highlighted the importance of international definitions, especially when it came to waste. They argued that waste should be defined as a resource to facilitate a circular economy, and that the legal framework should allow a distinction to be made between products/materials that could be reused, repaired, repurposed or refurbished, and those that should actually be recycled/disposed of. They also noted the need to facilitate the flows of goods entering the re-use, refurbish, remanufacture or recycle loop, and to remove existing restrictions on trade in such goods.
Discussions also touched on the taxation of carbon emissions. Participants learned about the initiative launched by a member of the automotive industry to measure the CO2 emissions of products and their constituent parts, and to track this information though the entire value chain.
The first panel also highlighted the need for policy makers to understand the role of Customs in implementing environmental policies, especially during a side session focusing on the timber trade, in which emerging legislation to control deforestation was compared, and the role allocated to Customs in each legal framework was also explained.
The second panel looked more deeply into the cross-border movement of waste. The complexity of the waste trade market was examined, as well as the myriad ways in which rules could be flouted. One speaker explained that the illegal trade in plastic waste was facilitated by the serious lack of transparency and accountability that operated in the sector. Against this background, it was recommended that firm deterrent penalties be put in place for false declarations of HS codes, and that strong cooperation be promoted between Customs agencies and environmental agencies, including joint training events on risk profiling and the actions to take following a seizure, as well as robust collaboration with NGOs, including on training and the sharing of information. Two Customs administrations shared their experiences in fighting illicit trade, highlighting the challenges of risk profiling and the importance of developing sound implementation plans with all stakeholders, understanding their respective functions and responsibilities. The floor was also given to a manufacturer who shared detailed information on the challenges of operating a remanufacturing programme for ICT components.
One question that came up repeatedly throughout the Conference was how to ensure that classes of goods of importance to environmental policy were identified in the Harmonized System (HS) – not only environmentally harmful goods that fell under multilateral environmental agreements (MEAs), but also environmentally preferable goods or goods which were traded under a circular production model. The idea was that more granular HS codes would help design and implement policies. The third panel looked specifically at this issue, with many speakers arguing in favour of the benefits of creating specific HS codes for some commodities. The WCO Secretariat took this opportunity to explain the principles governing the creation or amendment of a provision in the HS, and how to submit a sound proposal for this. The Secretariat also issued a call for action, explaining to participants that they needed to come up with proposals urgently if they were to be examined and included in the next edition of the HS, which was to be finalized by June 2024. Participants were also informed that the WCO Secretariat would be organizing a symposium on “Greening the HS” in the second half of this year to discuss these issues in depth.
The fourth panel looked at various topics, including Customs challenges in implementing MEAs and the work done under the Green Customs Initiative, the concept of a digital product passport, additional practical actions which could be taken by Customs to contribute to climate change mitigation, and the state of play of research projects aiming at enhancing the capacity of Customs to differentiate sustainable and non-sustainable products.
“It is important to show that Customs cares, but it is equally important for traders, policy makers and NGOs to realize we cannot do it all,” declared one Customs representative. “Because we looked at goods for fiscal aspects, we were asked to look at other aspects, but are not always the best placed to do the job. We are a general doctor. We sometimes need specialists to intervene to find cures,” explained another.
To conclude, the WCO Secretariat hopes that the Conference has enabled participants, whether Customs officers, traders, manufacturers, activists or policy makers, to better understand the challenges and realities they each face and, potentially, to identify ways to move forward through cooperation.