Packaging waste: Don’t pay the price for non-compliance

Under the Producer Responsibility Obligations (Packaging Waste) Regulations 2007, eligible businesses must, amongst other requirements, register with the Environment Agency and provide data to ensure that a proportion of their waste is recovered and recycled.

The regulations provide that a ‘producer’, which includes any business with an annual turnover of £2 million that has taken an active role in manufacturing, packing, selling or importing packaged goods for the UK market, and handled more than 50 tonnes of packaging materials in the previous year, must comply.

This includes manufacturers and major retailers, and also covers those issuing licences to other businesses such as retail or fast food franchises. Care needs to be taken to ensure that a group of companies takes into consideration the total amount of packaging handled along with the turnover of all subsidiaries. This can often be overlooked with fast growth businesses and franchises. The scope covers all commonly recycled materials including aluminium, glass, steel, paper, plastic and wood.

There are two ways for an obligated packaging producer to meet the requirements; firstly, to register with the Environment Agency’s National Packaging Waste Database (NPWD), which allows the electronic issuing of Packaging Recovery Notes (PRNs) under a ‘producer pays’ model. Alternatively, it can register with one of a number of a packaging compliance schemes, which purchase PRNs on their members’ behalf to ensure obligations are met. This must be done on or before 7^th April each year.

All too often we find some producers are unaware of this obligation or simply forget to register or submit their return. But forget at your peril.

Renewed focus on enforcement of packing non-compliance

In January 2019, the Environment Agency announced it will double the number of inspections it carries out on sites issuing PRNs. The focus of inspections will be to ensure that waste packaging is being recycled and recovered in line with the standards set out in the regulations, and that packaging is not being directed through illegal routes, the Agency said.

The EA will also seek to identify those packaging producers which are likely to be required to fund the recycling of their products under the obligations, but may not currently be paying in to the system.

This pledge comes after a number of notable instances in the past decade where businesses have been caught out for failing to register with the Environment Agency, with a number of court cases over the past 10 years in respect of breaches of this regulation.

However, despite the threat of unlimited fines on conviction, in practice the Environment Agency accepts Enforcement Undertakings where an appropriate offer has been made. This is reflected by the drop off in convictions, with the last one of note being reported in November 2015.

A donation to an environmental charity, coupled with a demonstrated commitment to addressing the underlying cause of the non-compliance plastic waste, can lead to an Enforcement Undertaking being accepted. There have been some notable companies that have availed themselves of this option over the years including olive oil company Filippo Berio (£250,000 donation), pharmaceutical giant Sandoz (£120,000 donation), organic baby food company HiPP UK Ltd (£415,000 donation) and drinks producer Gonzalez Byass (£120,000 donation).

Once a packaging producer is found to be in breach of the regulations, there will be a need to strengthen compliance processes to withstand any further scrutiny, especially if there are co-existing obligations under the WEEE regulations for example.

Looking forwards

Registration and reporting is a relatively simple measure but one which could prove vital for manufacturers, retailers and importers – particularly at a time when consumer interest in waste management is high and the risk of reputational damage therefore multiplied for any organisation perceived to be failing on its recycling obligations. We’re working with retailers in particular to remind them of their obligations and ensure the correct processes are in place to remove the risk of packaging non-compliance – it is important to remember, for example, that registering is an annual ongoing commitment and that all packaging is in scope.

It is also safe to assume that the compliance obligations under the packaging and waste regulations are almost certainly set to increase in the coming years; DEFRA’s consultation into reforming the UK packaging producer responsibility system and calls for a plastic packaging tax are clear indications of intent. You also only have to look at the expansion of the successful policy around plastic bags to see the potential for such developments. With change comes an increased threat of potential penalties – it has never been more important to manage your obligations effectively.

For further information, please visit our Regulatory and Compliance page.