Industry fought to limit its responsibility under this system. Furthermore, nearly two-thirds of local governments had already implemented systems for separation and collection of recyclable materials from household trash prior to the law's enactment. The legislation, modeled on the French deposit-return system, was designed to limit disruption of these existing systems including safeguarding the jobs of local government workers employed in waste management.

Initially, the law required only large companies to recover glass bottles and PET containers. As of April 2000, all paper and plastics packaging was included in the system and small and medium enterprises became responsible for their packaging. Steel, aluminum cans, and corrugated cardboard were not covered by the law because these materials have a positive value and were already recycled. Furthermore, refillable milk and beer bottles were exempted after industry documented that these containers are reused more than ten times on average as a result of existing programs. For example, three beer manufacturers that use the same bottles implemented their own deposit-return system. The deposits equal five yen per bottle and 200 yen per crate, which holds either 20 or 30 bottles. This deposit is reimbursed when the bottles or crates are returned.

The law requires each municipality to establish criteria and implement a program for source-separated collection of packaging waste in its jurisdiction. Most communities have introduced or expanded curbside recycling programs to meet these requirements. Once they have collected materials, municipalities must prepare them for market. This "intermediate treatment" can include washing collected bottles; removing contaminants, such as, caps and labels; and baling.

Furthermore, municipalities are responsible for the additional cost of this separate collection and processing. (Some municipalities have appealed to central government to persuade industry to share these costs, but so far the government has not required industry to do so.)

Residents are required to sort packaging waste according to the established criteria. In response to the law, the number of communities collecting materials for recycling, the types of materials collected, and the tonnage of collected

materials have expanded. For example, in 1997,⁴ 1,610 communities collected 292,775 tons of clear glass from residents. By 1999, the number of communities with collection programs had risen to 1,991 and the collected tonnage was 326,110. Table 2 and Chart 1 show the growth of curbside recycling programs in the first years the law was in effect.

The new recycling programs have proven difficult for some residents. For example, when

Nagoya implemented a new system for trash and recyclables on August 7, 2000, the city issued a 31-page booklet to explain the system. The system requires residents to deliver some recyclables to special collection stations weekly, put other materials in special bags the city collects twice a month, and deliver still other recyclables to retail outlets. Not surprisingly, in the first week after the new program began, an average of between 300 and 350 residents per day called a special hot line set up to answer questions on the new system.⁵

Industry is responsible for recycling wastes after local authorities collect them. Specific industry responsibilities include covering the cost for recycling collected materials; fulfilling recycling targets set by the government; making efforts to establish recycling plants; and eventually taking back and using all the collected materials from their products.

The recycling targets are set to equal the total capacity of the plants that are currently available for recycling processing in Japan. For example, the government estimated the available national capacity for PET recycling to be 73,000 tons in 2000. With municipal generation of PET at about 240,000 tons for the same year, the recycling rate corresponds to approximately 30%. The government determines the rates for each type of container/package for each industrial sector (e.g., food, soft drinks, pharmaceuticals, and cosmetics).⁶ Table 3 lists the collection goals for covered recyclables and actual collection and re-manufacturing data for fiscal year 2000.

The recycling targets will increase as recycling capacity is developed in the country. Numerous new recycling facilities have been announced and/or developed since the law was enacted. For example:

• Mitsui, Nippon Steel, and other partners developed Nishi-Nihon PET-Bottle Recycle Company, Ltd. The company's first PET processing facility began operating in July 1998, with an annual capacity of 8,000 tons.
• In December 2000, Teijin Limited, a leading Japanese manufacturer of synthetic fibers, announced plans to establish new recycling facilities and retrofit an existing factory to create a plant that will process around 30,000 tons of PET bottles per year. The company expects the new facility to be operational by 2002.

Many packaging producers, bottlers, and importers have chosen to assume their responsibilities under the Law for the Promotion of Sorted Collection and Recycling of Containers and Packaging through membership in a third party organization, the Japan Container and Package Recycling Association (JCPRA), a non-profit public foundation. Member businesses pay recycling fees to fund the Association. The fees are based on the amount of containers and packaging sold by each company in the previous year and the total capacity of the plants that are currently available for recycling processing in Japan.⁷ Table 4 presents the fees member businesses pay JCPRA.

As of 1999, more than 500 businesses had entered into contracts with JCPRA for recycling of their packages. These companies represent the largest packaging producers in the country. As the scope of the law expands and small and medium size enterprises enter the system, the Association may contract with more than 200,000 companies.

Under the current system, member companies consign their recycling obligation to the Association by paying the appropriate fees. Local governments may either deliver collected materials to recycling processors or request JCPRA to arrange for its recycling. JCPRA then contracts with private recycling businesses nationally through an open bid process for the processing of materials.

JCPRA's budget for fiscal year 2000 was approximately 28 billion yen. In Japan, where municipalities continue to pay for collection, municipal costs must be added to the JCPRA fees to arrive at the total cost of the system. According to calculations by the Allied Japanese Groups Working on the Issues of Environment, manufacturers cover less than one cent per bottle of the costs for recycling PET bottles, while municipalities' costs for collection and baling averages approximately 25 cents per PET bottle handled.⁸