Paper chase fails to uncover fraud

The Government investigation into a scandal surrounding the misuse of Packaging Waste Recovery Notes (PRNs) has failed to uncover any deliberate fraud but has found that sloppy administration was rife within some sections of the industry.

The investigation was ordered by Ministers to look into allegations of inappropriate issuing of paper Packaging Waste Recovery Notes (PRNs) and, in particular, paper Packaging Waste Export Recovery Notes (PERNs) between 2002 and 2005.

The investigation, carried out by external auditors, concluded that while there was not enough evidence to launch criminal proceedings, a number of exporters were guilty of ‘inappropriate practices’ which had made it impossible to track the actual amount of packaging waste being shipped out of the UK.

The evidence tended to suggest more waste was being exported in recent years than legally should have been.

However, the Government does not propose adjusting the tonnages of paper packaging waste to be reprocessed or exported in the future, saying it is impossible to judge the scale of the problem and therefore work out the tonnage to be deducted to rectify the situation.

This will be seen as an opt out by some, as it could be seen as the Government turning a blind eye to past sins because it does not want to deal with the extra paper waste which would then need to be recycled, incinerated or landfilled in this country.

Exports of paper packaging waste for recycling have risen from 177,439 tonnes in 2001 to more than 1.1million tonnes last year according to data provided to the Environment Agencies by paper packaging waste exporters.

The investigators’ report recommends that exporters should not take the word of their suppliers that a particular consignment is actually packaging waste.

It also says more must be done to ensure that shipments of packaging waste carry the correct coding – at the moment the export records of HM Revenue & Customs differ wildly from those of the Environment Agency due to sloppy labelling on the part of freight forwarding companies.

The report also pointed out that paper packaging waste is, by and large, a dry waste but it is not uncommon for shipments to exceed the agreed moisture content and when the overseas customer makes a claim it is important that any adjustment in price is also reflected in the number of PERNs issued by the exporter – something which rarely happens at the moment.

The Government says it expects the paper industry and, in particular, the agencies to take on board the recommendations in the report, enabling them to carry out a more robust enforcement of exporters and reprocessors of paper packaging waste.

It also plans to develop a voluntary protocol similar to those that exist for the wood and plastic waste sectors, which underwent a similar investigation in 2003 and 2004.

The auditors’ report can be found on the Defra website.

Sam Bond

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