Hunter residents have a right to know exactly where their plastic waste is ending up, NSW Shadow Minister for the Environment Kate Washington said.
The comment comes after it emerged that the plastic waste collected kerbside from yellow-lidded bins at Hunter homes was not going where waste officials thought it was going.
The discovery comes amid global concern about Western countries using the Third World as a garbage tip and a worsening worldwide plastic pollution epidemic.
Hunter Resource Recovery, which handles waste for Cessnock, Lake Macquarie, Maitland and Singleton councils, had believed the region's plastic waste was being sent to Malaysia for legal recycling.
It said last month that plastic collected from the Hunter council areas was sorted at Gateshead and sent to a company called Polytrade.
"The product is then exported to Malaysia and recycled. Polytrade has two licenced and approved facilities that operate in Malaysia," a Hunter Resource Recovery spokesman said at the time.
But last Friday, Polytrade told the Newcastle Herald that it had "not exported plastics to Malaysia since October 2018".
Solo Resource Recovery is the waste contractor for Hunter Resource Recovery and Newcastle council. Solo is responsible for collecting plastic waste from many Hunter homes.
A Newcastle council spokesperson said: "The plastics go to Solo. What they do with it depends on their own operations and market forces".
Solo said it subcontracts the processing and marketing of the plastic waste to Polytrade.
Solo's managing director Rob Richards said Hunter Resource Recovery was "inadvertently misled" into believing that plastic waste collected from Hunter homes was going to Malaysia for recycling.
Mr Richards said the "misunderstanding" occurred due to Malaysia putting in place a temporary ban on plastic waste imports.
"Polytrade has not sent any plastics to Malaysia while ever that ban is in place," Mr Richards said.
"In June this year, our understanding was that the plastic market in Malaysia was opening up again. Having checked with Polytrade apparently the market hasn't opened up."
In response to the question of why it thought Hunter plastic waste was going to Malaysia, a Hunter Resource Recovery statement said it received "monthly reports" from Solo Resource Recovery under the terms of its contract with the waste company.
Mr Richards said there was an error in the reports that caused the confusion.
Asked where the Hunter's plastic waste was going, Mr Richards said: "A mix of places including Taiwan, Hong Kong and Turkey, other long-standing export traders and Hallam and Campbellfield processing facilities in Victoria".
"You can be assured the materials are not going to landfill."
Greenpeace said only 9 per cent of plastic waste was recycled worldwide, 12 per cent was incinerated and 79 per cent was dumped in landfills or the natural environment.
It refers to this broken system as the "recycling myth" and said Malaysia was "the eighth-worst country worldwide for plastic waste".
Greenpeace Malaysia spokeswoman Yvonne Nathan said Malaysia and other countries should "not be used as a dumping ground".
"Developed countries should stop putting their responsibility onto other countries for their own plastics problem."
Mr Richards said there were "rogue operators and terrible practices" from a "very small element".
"The reputable operators like Polytrade aren't doing that. You can't build a reputation and get away with that and you wouldn't want to."
He said smaller nations had been inundated with plastic waste since the so-called China Sword, which refers to the Chinese government's ban on imports of plastic waste from January last year.
Polytrade said it had exported plastics to Malaysia "over a long period of time" before the ban.
"The recycling industry is facing unprecedented challenges, including from state law changes and China Sword," a Polytrade spokesperson said.
"Polytrade is heavily investing in additional processing facilities in Australia, including at Hallam and Campbellfield in Victoria.
"Polytrade has been forging relationships with other processors, including overseas, to produce high quality materials with inherent demand in the wake of China Sword."
As well as Malaysia, Greenpeace said plastic waste from Western countries had been shipped to places such as Indonesia, Thailand, Vietnam, Turkey and India.
"Once one country regulates plastic waste imports, it floods into the next unregulated destination. When that country regulates, the exports move to the next one," it said.
It said illegal operations had led to discarded plastic being burnt and dumped in the natural environment, poorly regulated landfills and neighbourhoods.
Some governments have shut down some illegal factories, amid public outrage and concerns about human health and the environment. This has reportedly led the problem to be shifted elsewhere to countries such as Cambodia, Laos, Ghana, Ethiopia, Kenya and Senegal.
Polytrade said it works with facilities and third parties with "relevant government approvals".
"Polytrade operates a number of recycling facilities in Australia and has long standing affiliations with third party local export traders and international processors."
Ms Washington said the Hunter had a global responsibility to ensure its plastic waste was being recycled ethically.
Total Environment Centre waste campaigner Lisa Wriley said the production chain of recycled plastic "should be transparent so we know where the waste goes".
"It's like any production chain and wanting to know whether it's ethical or fair."