UK plastics recycling industry under investigation for fraud and corruption

The plastics recycling industry is facing an investigation into suspected widespread abuse and fraud within the export system amid warnings the world is about to close the door on UK packaging waste, the Guardian has learned.

The Environment Agency (EA) has set up a team of investigators, including three retired police officers, in an attempt to deal with complaints that organised criminals and firms are abusing the system.

Six UK exporters of plastic waste have had their licences suspended or cancelled in the last three months, according to EA data. One firm has had 57 containers of plastic waste stopped at UK ports in the last three years due to concerns over contamination of waste.

Allegations that the agency is understood to be investigating include:

  • Exporters are falsely claiming for tens of thousands of tonnes of plastic waste which might not exist

  • UK plastic waste is not being recycled and is being left to leak into rivers and oceans

  • Illegal shipments of plastic waste are being routed to the Far East via the Netherlands

  • UK firms with serial offences of shipping contaminated waste are being allowed to continue exporting.

UK households and businesses used 11m tonnes of packaging last year, according to government figures. Two-thirds of our plastic packaging waste is exported by an export industry which was worth more than £50m last year.

The exporters make millions by charging retailers and manufacturers a fluctuating tonnage rate for plastic waste recovery notes – currently £60 a tonne. Retailers buy these plastic export recovery notes – Perns – to satisfy the government they are contributing something to recycling plastic packaging waste.

But the system – which was heavily criticised as open to fraud and abuse by the National Audit Office this summer – relies on companies making self-declarations about how much packaging they are exporting.

The Guardian understands information has been passed to the EA – the regulators – which shows huge discrepancies between the amount of packaging exports recorded by HM customs, compared to the amount UK exporters claim to have shipped.

The data, analysed by the Guardian, reveals British export firms claim to have shipped abroad 35,135 tonnes more plastic than HM Customs has recorded leaving the country.

One Guardian source with knowledge of the inquiry said: “In the last few months the customs figures on waste plastic are lower than the figures given to the Environment Agency by the exporters – suggesting more people are shipping stuff they claim is waste plastic in order to get the Pern price.

“Perns are running at around £60-70 a tonne, so that encourages all sorts of people to pursue the export market, and the question is whether the enforcement is strong enough to detect whether this is actually plastic waste being shipped out.”

At least 100 containers of plastic waste a day are shipped out from ports including Felixstowe and Southampton to Europe and the Far East. Insiders said EA staff have never visited any of the countries or sites where British waste plastic is exported for recycling.

Jacob Hayler, executive director of the Environmental Services Association (ESA), is one of many individuals who has raised the issue of the discrepancy in figures with the EA.

“We have flagged this and they are aware of it,” he said. ‘The agency and others are looking at how to improve enforcement … there is organised crime, and criminal gangs exploit the system, that does go on.”

The ongoing investigation into corruption in the plastics industry comes as the UK seeks new international markets for its plastic waste.

In January, China stopped accepting British plastic waste and exports shifted to Malaysia, Vietnam and Poland. But Malaysia and Vietnam have imposed temporary bans on imports and Poland is considering restrictions, a sign that countries are growing more wary amid evidence of high contamination rates.

Figures seen by the Guardian show UK exports to Turkey and the Netherlands soaring as a result. Several insiders told the Guardian the export market – which the UK relies on as it struggles to meet a target to reprocess more than half its plastic waste by 2020 – could dry up within weeks.

Phil Conran, director 360 Environmental and chair of the government’s advisory committee on packaging, said: “All these markets are effectively closing the door to the poor quality material and they are increasingly limited in what they will accept of the better quality material.

“At the moment material is still being collected and still going somewhere … but all the sense is that we have reached a tipping point and we simply are struggling to find markets for material that is being collected.”

The new markets have brought more fears of abuse within the system. According to packaging declarations made by companies, the UK exported 27,034 tonnes of waste plastic to Turkey in the first three months of this year compared to 12,022 tonnes in the first three months of 2017. Netherlands exports have risen by nearly 10,000 tonnes in the first six months of this year, compared to the same period in 2016; 38,207 tonnes in 2018 compared to 28,784 in 2016.

The EA has been passed allegations that export firms are using the Netherlands to effectively launder plastic waste – exploiting looser controls over shipments to Europe – before illegally moving it out to other countries in the Far East, where they might struggle to get approval under the UK licence system.

Addie van der Spapen, of Netherlands recycling firm Kunststof Recycling, said the country certainly did not have the capacity to reprocess increased amounts of plastic waste from the UK. “It won’t all get recycled. Europe is getting overflowed with the material from England, they are flooding Europe with their plastic,” he said.

The growing market in Turkey is also raising fears that more UK plastic waste will leak into the oceans.

One Guardian source said: “The concern about Turkey is more whether material is being stored to be recycled later, or not recycled at all and being burnt.”

An inquiry by the National Audit Office [pdf] earlier this year criticised the lack of rigour by the EA and the Government.

“The financial incentive for companies to fraudulently claim they have recycled plastic packaging is higher than for any other material,” they said.

“There is, therefore, a risk that some of it is not recycled under equivalent standards to the UK and is instead sent to landfill or contributes to pollution.”

Marie Fallon, of the Environment Agency, has confirmed to MPs an intelligence-led central investigations team has been set up to tackle corruption and fraud within the export system.

Fallon accepted the agency could have done better over the years in tackling abuses. In 2016-17 staff carried out fewer than 40 pc of 346 spot checks on companies it had planned. This year five export firms flagged as red rated for risk are still operating and 33 considered to be of medium risk are also still accredited to export waste.

Sandra Laville

This article first appeared on the Guardian

edie is part of the Guardian Environment Network 

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