What is the Australian Packaging Covenant Organisation (APCO)?

The Australian Packaging Covenant Organisation (APCO) is a not-for-profit organisation leading the development of a circular economy for packaging in Australia. It administers a co-regulatory stewardship framework to help businesses design, collect, and recover packaging materials.

Historically, managing the thousands of tonnes of cardboard, glass, and plastic used to ship goods to Australian consumers fell entirely to local councils and taxpayers. As the environmental and economic costs of this linear waste model grew, Australian state and federal governments established a framework that shifts the responsibility back onto the businesses that profit from placing these materials on the market.

Unlike the mandatory taxation models used in some European countries, the Australian approach operates as a co-regulatory stewardship system. Brands, manufacturers, and retailers sign a formal covenant, agreeing to assess their packaging footprint and implement sustainable design principles. For merchants operating in the Australian market, understanding and engaging with this organisation is critical for maintaining market access, meeting aggressive national targets, and avoiding potential enforcement actions from state environment protection agencies.

What the Australian Packaging Covenant Organisation actually means

APCO operates as the designated administrative body responsible for delivering Australia's national environmental packaging goals. It acts as the bridge between government regulators and private enterprise. When an obligated business joins the organisation, it becomes a signatory to a specific set of rules designed to keep packaging materials out of landfill and retain the maximum value of the materials within the local economy.

"The Australian Packaging Covenant Organisation (APCO) is a not-for-profit organisation leading the development of a circular economy for packaging in Australia."

To facilitate this transition, the organisation provides members with the Sustainable Packaging Guidelines (SPGs), which are a comprehensive, publicly available resource used to assist in the sustainable design and manufacture of packaging in Australia. Members use these guidelines to integrate 10 key sustainable packaging principles into their operations. This involves auditing their packaging designs, ensuring they use less material, incorporating recycled content, and choosing materials that local kerbside collection systems can process easily.

The organisation also manages public-facing initiatives like the Australasian Recycling Label (ARL) Program, which provides consumers with easy-to-understand, on-pack recycling information. By applying this label, brands remove confusion, save time, and reduce recycling contamination at the household level.

Does this apply to me?

If your business is a brand owner, importer, or retailer selling packaged goods in Australia, you may be legally obligated to participate in the covenant. The regulatory framework typically captures businesses that exceed specific financial turnover thresholds, requiring them to either become a signatory to the organisation or face direct regulation by state and territory governments under the National Environment Protection Measure.

If you are an international merchant exporting goods directly to Australian households, or a domestic wholesaler distributing electronics, clothing, or food, you must assess your liability based on your annual revenue and your position in the supply chain. Businesses that join the organisation must submit annual reports detailing their progress against their specific action plans and pay an annual membership fee based on their size.

While small to medium-sized enterprises might fall below the strict reporting thresholds, the organisation actively encourages voluntary participation. It has introduced the SME ARL Campaign, which is a new program designed to support small to medium-sized enterprises to make the switch to using the Australasian Recycling Label. Through the ARL Marketplace, small businesses can access free learning resources and eligible packaging suppliers can showcase their products in a sustainable packaging directory.

Key targets and frameworks

The organisation drives progress through a series of specific, time-bound targets and structured guidelines that signatory businesses are expected to meet.

Common misconceptions about the Australian Packaging Covenant Organisation

Membership is entirely optional. While the covenant operates as a co-regulatory framework rather than a direct tax, participation is not simply a voluntary green initiative for large companies. If an obligated brand owner refuses to become a signatory to the organisation, their compliance details are referred to state and territory governments, who can enforce strict regulatory requirements and issue heavy financial penalties under national environmental protection laws.

The organisation collects my packaging waste. The covenant organisation is an administrative and strategic body, not a waste management or logistics company. It does not operate recycling trucks or sorting facilities. Instead, it provides the framework, data, and targets that ensure the packaging you design is capable of being processed by the existing municipal waste recovery networks already operating across Australia.

The recycling label can be used by anyone. You cannot simply download the Australasian Recycling Label from the internet and print it on your boxes. To use the label, a business must be an active member of the organisation and must assess each specific packaging component through a verified software tool. This ensures the label accurately reflects the actual recycling infrastructure available to Australian consumers.

Soft plastics are banned under the covenant. The organisation does not outright ban soft plastics or specific resins; rather, it sets aggressive targets to ensure all materials are recyclable, reusable, or compostable by 2025. If a merchant uses soft plastics, they must follow the organisation's guidelines to ensure those plastics use appropriate polymers and clearly instruct the consumer on how to dispose of them through specialised drop-off programs if kerbside collection is not available.

5 examples of covenant engagement

1. Auditing packaging design A domestic food manufacturer reviews its current plastic trays against the Sustainable Packaging Guidelines. By applying the 10 key principles, the manufacturer redesigns the tray to eliminate carbon black pigments, ensuring the material can be recognised by optical sorters in Australian recycling facilities.

2. Adopting the ARL for a small business A medium-sized enterprise joins the SME ARL Campaign to improve its environmental branding. It uses the provided software to assess its cardboard shipping boxes and successfully prints the Australasian Recycling Label on the outside, removing consumer confusion about whether the packaging tape needs to be separated.

3. Submitting an annual action plan An international electronics importer registers as a brand owner signatory. To maintain compliance, the importer submits a detailed annual report to the organisation outlining the exact tonnages of expanded polystyrene foam it replaced with moulded pulp over the previous 12 months.

4. Educating consumers on complex materials A snack brand uses flexible plastic pouches. Because these items are less widely accepted by standard kerbside bins, the brand uses the organisation's approved labelling to instruct consumers to check locally to determine whether their council area accepts that packaging item.

5. Working towards national targets A major supermarket chain overhauls its private-label packaging portfolio to eliminate non-recyclable plastic films, aligning its procurement strategy with the mandate that 100 per cent of packaging is recyclable, reusable, or compostable by 2025.

Terms related to the Australian Packaging Covenant Organisation

Frequently asked questions

What is the main purpose of the organisation?

The organisation exists to lead the development of a circular economy for packaging within Australia. It works with governments and businesses to provide the administrative framework, the strategic guidelines, and the reporting mechanisms that help merchants reduce their packaging footprint and keep valuable materials out of local landfills.

Are the National Packaging Targets mandatory?

The National Packaging Targets, established in 2018, serve as the definitive sustainable pathway for managing Australia's packaging waste. While the targets themselves - such as making 100 per cent of packaging recyclable, reusable, or compostable by 2025 - are strategic goals, the co-regulatory framework means that businesses failing to take reasonable action to meet them can face regulatory scrutiny and penalties from state governments.

What is the Australasian Recycling Label?

The label is a standardised, evidence-based system that provides consumers with easy-to-understand, on-pack recycling information. It removes confusion by telling the buyer exactly which bin each separate component of a package belongs in, reducing contamination in the municipal recycling streams.

Can small businesses participate in the scheme?

Yes. While large corporations are legally obligated to participate based on their financial turnover, small to medium-sized enterprises can engage voluntarily. The SME ARL Campaign provides smaller merchants with a dedicated hub to access free learning resources and implement sustainable design practices without carrying the heavy administrative burden of larger signatories,.

What are the Sustainable Packaging Guidelines?

The Sustainable Packaging Guidelines are the central design resource used within the co-regulatory framework. They help Australian organisations integrate 10 specific sustainable principles into their operations, ensuring new packaging is designed to use fewer resources and is fully compatible with local recycling infrastructure.```

Sources:

• Frequently Asked Questions - APCO
• Extended Producer Responsibility (EPR) Around The World - BSI
• apco.org.au
• The Australasian Recycling Label Program for Small-to-Medium Enterprises - APCO
• Australasian Recycling Label Program - APCO