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CHILE
Chile: ARNEC Works with Government on Clean
Production Agreement and Producer Responsibility Legislation
The South American country of Chile is justifiably proud of the opportunities offered by the open nature of its economy – the country has a many free trade agreements with other nations as anywhere in the world. However, one of the industries which has suffered as result of this open door policy has undoubtedly been the retreading market. Unlike Brazil and Argentina,
Association, ARNEC, which is showing itself to be one of the retreading industry’s most politically active trade associations. The Secretariat of ARNEC, which has 13 retreader members accounting for around 65% of the retread market, operates under the leadership of Daniel Rojas Enos, who is working hard to try and redress the balance within the tyre
begins with what is called a “Consensual Diagnosis” phase, where the CPL and the industry in question define the aims of what they are trying to achieve. This phase has already been completed in the case of the retreading industry, and ARNEC is now negotiating with various Chilean agencies including the Transport Ministry, Environment Ministry, Health Ministry, Government Procurement Department, Customs and the Agency for Productive Development. Following this, there will be a two year implementation phase followed by a final period when individual companies will be able to apply to be certified according to the new voluntary standard. Sebastian Carvallo Albornoz, the APL Co-ordinator at CPL commented; “We believe in ARNEC as a good actor in the tyre industry. During the two years that we have worked them, we have seen that the Association can be a good innovator in the tyre industry.” Says Carvallo; “Of particular value in the development of an APL is the process of dialogue that the process creates between peers within the sector under discussion. It also validates the investment in the process and helps develops relationships between the industry and authoritative bodies. In addition the creation of an APL has a significantly positive impact on industry in terms of productivity, provides impetus for the absorption of Clean Technology and helps the sector in the process of understanding the legal context.”
This brings us neatly on to the second major issue for ARNEC, namely the fact that a new Producer Responsibility law is expected to be approved in Chile by the end of the year. ARNEC is working closely with the Chilean Environment Ministry exploring how producer responsibility schemes work in different countries.
According to Daniel Rojas, the Agency has looked at the systems in Spain (Signus) and Portugal (Valorpneus). ARNEC is anxious that the Portuguese system is given due attention because Valorpneus includes the
retreading industry as stakeholders. The Association is particularly concerned that any new producer responsibility system introduced in Chile would shut out the retread industry whilst incorporating tyre importers, whose interests may well be opposed to those of retreaders, for example by making sure retreadable casings introduced into the system by- pass the retread sector and are valorised in other ways, which would of course, be in the interest of the importers of budget new tyres.
Joost Meijer, who is a Technical advisor at the Environment Ministry agreed that the ministry may well want to see an increase in retreading throughout the whole model, with a view to lengthening the life cycle of tyres, and urged ARNEC to continue to emphasise environmental benefits in the hope that a quota for retreading might be incorporated into any producer responsibility system, regardless of whether the retreaders end up being defined as producers or not. Meijer agreed there would probably end up being a single agency in Chile but agreed there was a need to clarify the retreading sector’s role.
Said Meijer; “The prevailing political view is towards resource management and resource productivity, which means aiming for longer product life cycles. As such we can see the need for targets for retreading. ARNEC’s role in drawing the Ministry’s attention to the role of retreading has been vital.”
Meijer also agreed that there may well be the need for regional targets due to the demographics of Chile. Of particular importance here may well be the requirement for specific targets for mining tyres as these make up over a third of all tyre waste by weight (40,000 tonnes out of a total of 115,000 tonnes). According to Rojas this may well create opportunities for entrepreneurs in the regions.
At present only 6% of scrap tyre arisings in Chile are recycled – 5% are recycled by the Polambiente crumbing facility, the other 1% is used as TDF in the Melon cement factory.
Left to right; Dario Andreani, President of ARNEC, Daniel Rojas, General Manager of ARNEC and Sebastian Carvallo, Clean Products Co-ordinator at CPL sign the agreement for the creation of ARNEC’s Clean Procuction Agreement.
which have strong retreading cultures and/or import restrictions and tariffs designed to protect local industry, the Chilean retread market has fallen considerably over the course of the last few years. Michelin figures suggest the number of truck and bus retreads fell from 300,000 to 260,000 units between 2012 and 2014 with further falls expected this year. Over the same period, new tyre sales have increased from 630,000 to 700,000 units. This means the retread ratio has fallen from 47% to 37% over a relatively short space of time.
A key reason for this, of course, has been the influx of low quality Chinese truck tyres. This has been exacerbated by the fact that Chile is a completely open market. According to Jose Browne Lopez, Director of CINC, the Chilean Tyre Manufacturers Association, as much as 65% of the new truck tyres sold in the Chilean market are from China. Furthermore, in a market where a premium new tyre sells for the equivalent of USD 400, a Chinese budget tyre can be had for as little as 180 USD.
This is the market scenario faced by the Chilean Retreaders
market and to arrest the decline of the retreading sector. The Association has taken advantage of a number of developments within the political scenario in Chile to raise the profile of retreading at government level. The first of these has been the development of a Clean Production Agreement (APL) established between ARNEC and the Consejo Nacional de Produccion Limpia (CPL). The CPL is part of the Chilean Economic Ministry and its role is to improve industrial processes so they can be more sustainable and efficient.
In August there a new voluntary retreading standard was introduced in Chile via the National Standards Institute. However, ARNEC’s aim is to give this standard more weight through the creation of an APL. The government, says Rojas, will part fund those smaller plants who need help to bring them up to standard. Rojas says of his 13 members, 6 or 7 need help in some areas and he believes this agreement will help. Says Rojas; “An APL for the retreading sector would be a great opportunity for best practice.”
The development of and APL
16 Retreading Business