A LAST-DITCH court bid by the tyre industry to avoid paying hefty levies failed this week, forcing them to stay with a recycling scheme they say will hit their bottom line so hard they might be forced to shed jobs.
On Monday, the North Gauteng High Court dismissed the SA Tyre Recycling Process Company (SATRP) board's application for leave to appeal against last month's ruling which compelled tyre makers, dealers and importers to pay levies to the Recycling and Development Initiative of South Africa (Redisa), the government's recently approved recycling scheme, while they await the approval of their own plan.
"This means manufacturers and importers need to pay a levy for every tyre produced and imported from October 1. So, if we imported 30000 for October, at 10kg per tyre, that would make it R2.30 multiplied by 300000kg, which comes out to R700000," SATRP board chairman Riaan van Niekerk said.
He said while the aim of Redisa was to create jobs through recycling waste tyres, the levies imposed could ultimately lead to job losses or a cut in production.
"If your turnover for the year is R10-million, you might be paying R8.4-million of that over in levies."
At least 80% of the country's manufacturers and importers who are members of the SATRP are opposed to Redisa, but were forced to join it last month.
Redisa chief executive Hermann Erdmann said he was pleased with the outcome.
"Since the original ruling on September 17, the tyre industry has, in the main, willingly complied with the law and the Redisa plan is being rolled out across the country.
"We welcome the judge's decision and see it as yet another positive step towards the practical solution of addressing South Africa's chronic waste tyre problem."
The revenue from the levy on new tyres was estimated to generate R650-million per annum for the implementation of the Redisa plan.
The levy would be used for disposing of waste tyres as well as for research into recycling, disposal and re-use, with the aim to create a new industry, Erdmann said.
Van Niekerk said they would continue to liaise with their legal team concerning their options.
"Obviously, this is a major blow but we are awaiting our lawyers to see what the next step will be."
Van Niekerk said the SATRP plan was still with the Environmental Affairs Department, awaiting approval to be gazetted for public comment before going to Environmental Affairs Minister Edna Molewa for her approval.
"We will continue to push for the plan to be approved and get our members back who were forced to join Redisa. It is frustrating for us because our plan is lying on someone's desk at the department," Van Niekerk said.
Meanwhile, the Johannesburg High Court will decide next week on an application by the Retail Motor Industry (RMI) to have the Redisa plan scrapped.
RMI national director Vishal Premlall said it had severe shortcomings and should be set aside.
