The federal government has called on one of Australia’s biggest retailers, Kmart Group, to support an industry-led textile recycling scheme, or risk regulation.
Spearheaded by the Australian Fashion Council (AFC), the Seamless initiative is designed to tackle clothing waste through a levy system to increase the number of garments being resold, repaired, reworn and recycled.
Although it was launched in June, the Wesfarmers-owned Kmart Group, which includes Kmart and Target stores, has not signed up to it.
“I encourage the Kmart Group to join with brands like Big W, David Jones and The Iconic to take responsibility for the huge amounts of textile waste they send to landfill,” the environment minister, Tanya Plibersek, told Guardian Australia.
“The alternative to this program isn’t a weaker scheme with a lower levy, it’s government regulation.”
Designed to tackle the 200,000 tonnes of clothing waste Australians send to landfill every year, the circularity scheme is the product of a $1m grant from the federal government awarded to the AFC in 2021.
It imposes a 4 cent levy on every garment sold, to be paid by brands that choose to participate, mirroring an example set by the EU. The levy will fund research into sustainability for the industry and establish the infrastructure for textile recycling.
According to four sources close to the scheme, Kmart’s opposition came after an 18-month consultation process with the AFC.
Shortly before the scheme’s launch on 7 June, Kmart Group asked the environment minister to cancel the scheme’s impending announcement, the sources said.
The discount retailer requested a six-month delay so it could create its own report on the matter and wanted the voluntary levy imposed by the scheme to be reduced or calculated based on a garment’s value instead of the number of units sold, according to the sources.
Kmart also lobbied other companies, including Country Road Group, to withdraw support for the scheme, the sources said. The Country Road Group declined to comment.
A Kmart Group spokesperson said the retailer would welcome a regulated scheme which it believed would ensure monies raised are spent on recycling clothes rather than funding roles.
“Kmart Group supports the introduction of a regulated extended product responsibility scheme. A voluntary scheme has not delivered the participation from both Australian and international retailers needed to fund the real operational costs of sortation and recycling, as well as the investment required to build this infrastructure at scale onshore,” the spokesperson said.
“The limited clothing sortation and recycling infrastructure remains the major roadblock to reducing clothing waste in Australia.”
The government has repeatedly flagged that the industry has 12 months to sign up or else face direct regulation.
Foundation members include Cotton On, Big W, David Jones, Lorna Jane, Rip Curl, R.M. Williams, Sussan and The Iconic, which all pledged an initial investment of $100,000 and will play a part in the 12-month transition phase.
Dozens of other businesses have also expressed interest in participating.
The chair of the Seamless transition advisory group, Rosanna Iacono, said the scheme had been created with “input from some of Australia’s largest and most influential clothing producers, but also with the participation of recyclers, charities, peak bodies, government regulators, academia and advanced innovation players”.
The scheme’s architects are hopeful that more than half the industry will participate, which would create a $36m annual fund to go towards diverting 120,000 tonnes of textiles from landfill by 2027.
Kmart and Target bring in an estimated 20% of all garments imported to Australia according to modelling done by the AFC. In August, they reported annual revenue of $10.6bn, while parent company Wesfarmers, which also owns hardware chain Bunnings, reported revenue of $43.6bn.
Every year, 1.42bn items of clothing arrive in Australia and approximately two-thirds are thrown away. Just 7,000 tonnes of textiles are downcycled, whereby products are broken down, into insulation, pellets or board.
• This story was amended on 16 November 2023 to clarify that one of the companies lobbied by Kmart was Country Road Group, not Country Road the brand. Also, text was added to include the full context of Kmart’s response in which it said it would support regulation.
