Finnish companies often take responsibility for the waste of foreign e-commerce
Finnish consumers spend annually over two billion euros on products bought from foreign online stores. Only some of these foreign distance sellers have fulfilled their producer responsibility obligations.
According to the Finnish Commerce Federation’s report (20 March 2024), cheap online stores outside the EU in particular have recently gained a foothold in digital shopping of Finnish consumers. The low prices of products are particularly attractive to buyers.
−The low prices of such products are based on the less restrictive regulation of online stores and online platforms outside the EU in comparison to Finnish commerce, or simply the fact that online stores and online platforms outside the EU do not care about complying with regulations because it is difficult to hold individual sellers accountable,” says Kari Luoto, Managing Director of the Finnish Commerce Federation.
When ordering a parcel from abroad, many people don’t think that at the end of its life cycle the waste management of a product always falls to someone else to pay.
Producer responsibility is a legal obligation for companies, which means that the party that places a product on the market in the country in question also takes care of its waste management. In this case, the consumer can recycle their product free of charge by, for example, taking the packaging waste to an ecopoint or used batteries to a collection point at a grocery store. In addition to domestic producers, producer responsibility also applies to foreign online retailers, i.e. remote retailers who sell their products directly to Finnish end users.
In Finland, the scope of producer responsibility includes packaging, electrical and electronic products, batteries, paper and paper products, tyres, vehicles, certain disposable plastic products and fishing gear containing plastic. Textiles and shoes, cosmetics and medicines will also be included within the scope of producer responsibility in the coming years. In Finland, producer responsibility is supervised by the ELY Centre for Pirkanmaa.
Freeriding companies are a problem
A foreign e-commerce seller that sells products to consumers has producer responsibility for at least packaging in Finland. The number of foreign distance sellers is not known exactly, but around the world there are probably thousands of online stores and marketplaces selling to Finnish customers. In 2022, 940,000 tonnes of packaging waste was generated in Finland alone, so the division of responsibility is not a small matter.
According to Tiina Vermaete, Senior Officer who supervises distance selling at the ELY Centre for Pirkanmaa, companies that neglect their producer responsibility obligation either act intentionally or do not have sufficient information on how to handle the obligation.
– Only about 600 foreign distance sellers have joined the producer communities of different sectors in Finland. This means there is a lot of work to be done to get companies to bear their responsibility. Many online stores, particularly smaller ones, simply don’t know what their obligations are. Sometimes, the administrator of an online store may intentionally escape their obligations,” says Vermaete
The waste management of the products of freeriding companies falls to be paid by companies that properly manage their producer responsibility – primarily Finnish companies. This creates an unfair competitive situation.
–The Finnish Commerce Federation strongly supports free trade and competition, which is also in the interests of consumers, but companies must have the same legal obligations regardless of the sales channel. In addition, sufficient official resources must be ensured for the supervision of fair competition and the provision of instructions and advice to companies,” says Luoto.
Managing foreign e-commerce through communication and cooperation
There are online stores delivering to Finland from all over the world, which is why reaching them is important, but also challenging work. The ELY Centre for Pirkanmaa invests in communications under the supervision of distance sellers. This year, the ELY Centre carried out a communications campaign on producer responsibility and also a campaign targeted at large foreign online marketplaces and distance sellers. Guidelines were also created for these parties to help foreign companies move forward in the management of producer responsibility.
Cross-border cooperation between authorities is also an important part of the supervision of distance sellers:
– If, despite our instructions, the distance seller does not fulfil its producer responsibility in Finland, we can send a request for official assistance to the authority in the country where the company is located. In the EU, distance sellers have been under producer responsibility since the beginning of 2023 at the latest. In future, cooperation with the authorities will certainly increase as operating models become established,” says Vermaete.
–It is important for every company operating in the Finnish market to take care of the producer responsibility regarding its products, as this is part of corporate responsibility and the promotion of the circular economy. We want to promote a level playing field for competition between companies operating in Finland and companies selling from outside Finnish borders,” says Luoto.
The ELY Centre for Pirkanmaa and the Finnish Commerce Federation will organise an English-language webinar for international distance sellers on 10 September, during which we will explain what producer responsibility is and how it can be managed in Finland. The webinar (webropolsurveys.com) is open to everyone.
Further information:
Tiina Vermaete, Senior Officer, ELY Centre for Pirkanmaa, tel. 0295 036 271, tiina.vermaete(at)ELY-keskus.fi
Kari Luoto, Managing Director, Finnish Commerce Federation, tel. +358 (0) 400 688 708, kari.luoto(at)kauppa.fi
Marja Ola, Chief Policy Adviser, the Finnish Commerce Federation, tel. +358 50 383 7711, marja.ola(at)kauppa.fi
