Adrian Hawkes, director of strategy at Valpak, explores the problems that freeriders pose to the Packaging Waste Regulations
There are 9,000 companies in the UK currently complying with the Packaging Waste Regulations. The regulations require companies with a turnover of £2m which handle 50 tonnes of packaging waste to ensure that a proportion of it is recycled or recovered, according to targets set by government.
Every year, these companies collate their packaging data and pay a contribution towards ensuring that their packaging waste is recycled. This totalled an estimated £62m for the UK last year. These are the responsible companies which recognise that they have an obligation to invest in recycling, but it is suspected that there are many other companies who are not paying their way and avoiding their legal obligation.
However, last year only around 30 companies were prosecuted for failing to comply. The question this poses is clear: is this really representative of how many companies are failing to comply, or is this just the tip of the iceberg?Shifting the emphasis of enforcement
Figures for how many of these companies there are is hazy, due to the lack of clear data. However, Valpak continues to receive applications from companies which have had an obligation in past years, but have never before complied. Valpak believes that enforcement agencies should be concentrating on pursuing free-riders - companies that, either by accident or design, flout the regulations.
The agencies place considerable emphasis on ensuring that compliance schemes and their members are complying with the regulations. While Valpak welcomes measures to ensure the legislation is met, there should be a greater focus on companies which are not complying at all. Valpak has also been in discussions with government and environment minister Elliot Morley to discuss introducing standards to tighten the system and track down free-riders more effectively.Reaping the benefits
There are benefits to encouraging businesses to take responsibility for their packaging waste. Companies are increasingly expected to take responsibility for their environmental impact, and the Packaging Waste Regulations are a key part of producer responsibility. Also, consumers expect businesses to act in a responsible manner.
Another benefit is that the more companies that take on their fair share of this responsibility, the smaller the cost burden for everyone. To illustrate this point, currently the targets for registered businesses are higher than those for the country as a whole. This is done to compensate for those businesses who are either not obligated by the legislation (they are under the £2m, 50 tonne threshold) or those who are free-riding. This poses a substantial burden on businesses which are legitimately meeting their obligations. Concentrating on tracking down free-riders, rather than increasingly stringent auditing on those businesses which are already meeting their obligation, will help to narrow this gap and have a substantial benefit to UK business as a whole.Enforcing the regulations
There are a number of ways in which free-riders can be brought to book. The first is simply through education. Although the regulations were introduced in 1997, there are still believed to be some companies which are unaware that they may be obligated. Increased government funding or initiatives to spread this message would be welcome.
One of the greatest challenges is identifying those companies that are not currently meeting their obligations. There are a number of initiatives involving sharing of information between various government, agency and industry sources, through which target sectors and businesses can be identified. More sharing of information in order to highlight likely areas of industry where the regulations are not well understood or publicised is needed. Supply chain analysis to identify suppliers which may be avoiding their responsibility would also be helpful.
Finally, an incentive for companies to comply would be an increase in the consequences of prosecution for those companies found to be flouting the law. To date, the highest fine for failing to comply with the Packaging Waste Regulations has been to Pizza Express, which received a £75,000 fine on 10 May after being sentenced for failing to recover and recycle an estimated total of 1,676 tonnes of packaging waste for the year 2002. Fines such as this send a message to business that ignoring their responsibility will not be tolerated.