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This publication is available at https://www.gov.uk/government/publications/packaging-producer-responsibility-monitoring-plan-2018/compliance-monitoring-and-enforcement-activity-in-2018
This report provides a statement on the actual monitoring done and successes during 2018.
1. Executive summary
The Environment Agency’s 2018 policy and monitoring targets were published in the 2018 monitoring plan. We set a minimum target of monitoring 116 persons during the 2018 calendar year. We monitored a total of 136 persons, which is 17% above the published target.
Using a risk based approach, we carried out compliance monitoring of packaging producers, compliance schemes, accredited reprocessors and accredited exporters. We completed site inspections via pre-arranged or unannounced visits.
Where we identified non-compliance, we followed our published enforcement policy and associated guidelines to determine the appropriate enforcement action. During 2018, we:
- imposed 32 suspensions on accredited reprocessors and exporters
- cancelled 2 exporter accreditations
- rejected 9 accreditation applications
We received a total of 23 enforcement undertakings (EUs) from packaging producers in 2018. This resulted in £421,991.49 in financial contributions to environmental charities. Since the introduction of civil sanctions for the packaging regulations in 2011, we have accepted 265 EUs. These have made financial contributions of £5,501,432.60 to environmental charities.
In 2018, the reported UK packaging recovery rate was 70.71%, of which 64.27% was reported as being recycled. These recovery and recycling rates exceed the EU directive targets of 60% recovery and 55% recycling. In summary:
the final 2018 UK total recovery obligation was 8,107,726 tonnes (an increase of 167,000 tonnes on the 2017 final UK obligation)
all UK schemes met their 2018 obligations (the UK scheme obligation was at 7,444,596 tonnes)
99.8% (464) of all UK direct registrants purchased their packaging recovery notes (PRNs) to offset the UK obligation (the UK direct registrant obligation was at 663,130 tonnes)
0.2% (1) direct registrant failed to buy all their PRNs (this equates to 51 tonnes of PRNs)
low levels of carry over PRNs issued into the 2019 obligation year (from 490,000 tonnes in 2017 to 354,000 tonnes in 2018 – a drop of 136,500 tonnes on the previous year’s carry over PRNs)
the year ended with the highest number of accredited plastic and paper exporters ever
We are responding positively to the changing and emerging risks around compliance. We have observed increasing levels of intent to mask and hide non-compliance. As a result we have refocused some of our resources into a dedicated national investigations team, specifically focused on producer responsibility. This team went live in January 2018, following a trial period of 12 months to fully evaluate the benefits of such a team.
This dedicated team has enabled us to increase our compliance checks and utilise various investigative tools to help ensure compliance and disrupt non-compliance. The team works closely with our national intelligence team and also our waste crime team. This ensures they have access to the latest information on operators and we are working as one organisation.
1.1 Compliance monitoring 2018 – companies monitored
|2018 target||2018 actual||Compliance with plan|
2.1 Performance in 2018
In 2018, the Environment Agency set a minimum target of monitoring 116 persons during the 2018 calendar year. In the 2018 calendar year we monitored a total of 136 persons, which represents an increase of 17% above the published target.
2.2 Monitoring of registered producers
We continued to monitor producers who are registered directly with us and those registered via compliance schemes.
Our monitoring programmes are inclusive with respect to the registration route. When we establish our national monitoring priorities or local monitoring programmes, we do not currently differentiate between:
- direct registrants
- those registered via compliance schemes
- those registered with different compliance schemes
At registration stage, we monitored the submitted information and data from all (around 7,000) registered producers. This included comparing data submissions with those from previous years. We reviewed and validated all direct registration applications to ensure national publication contains accurate data. Where necessary we sought explanations and corrections where we deemed submitted data to be inaccurate.
Following registration, area officers monitored 56 producers.
We prioritised auditing a company which was a direct registrant. They had reported handling 81,702 tonnes of packaging. This resulted in an obligation cost of about £3 million in terms of the purchase of evidence. With a turnover of £19 million, this would be an unusual amount of packaging. They had reported that they imported 17,000 tonnes of pallets which would be around 1.1 million pallets per year. They had not bought any evidence by early November and did not appear to be aware of the implication of the costs.
The audit identified they actually handled 217 tonnes of packaging – an error of 99.8%. This was due to decimal point errors, incorrect weights, misunderstanding the regulations and being unclear on the requirements to buy evidence. The audit and subsequent resubmission meant that they could now qualify as a small producer. This also reduced the pressure on wood PRNs by several thousand tonnes as well as the overall market.
2.4 Monitoring of unregistered producers (free riders and drop offs)
It’s not possible to determine the actual number of free riders. There are no readily available centralised records or information, which can easily identify who would have responsibilities under the packaging regulations. We continually review all our internal processes. In 2018 we adopted a new revised approach on free riders which we implemented. The main changes included:
- centrally managing the initial process and then escalating the free rider work to areas
- introducing a ‘one-team approach’ – the national Producer Responsibility Regulatory Services (PRRS) support the area teams to undertake any necessary free rider escalation – this includes serving notices and dealing with any subsequent investigation or enforcement action
- keeping central records of all free rider work to improve transparency
Where we investigated and identified an obligated producer as not being registered (‘free riding’) we considered our enforcement options. These were in line with our enforcement and prosecution policy. In certain cases, we accepted an enforcement undertaking.
Number of free riders investigated in 2018
We contacted 54 producers. This is the combined total under the old (pre-September) and new (post-September) process. We found:
- 10 were not obligated
- 5 were registered
- 8 were obligated and in the process of registering*
*We contacted them all under the new process, obligated and in the process of registering with schemes. Many appear to have past offences that we’re in the process of investigating. Some have indicated that they’re in the process of submitting enforcement undertaking offers.
After the registration deadline in April 2018, we had 476 businesses that failed to re-register without providing an explanation (drop offs). Initially we queried these with compliance schemes. Following additional information from schemes which explained which businesses no longer needed to register, the number reduced to 311. We then targeted businesses to bring them into compliance and/or confirm they were no longer a packaging producer. Through this work we resolved 302 of the businesses.
2.5 Monitoring of compliance schemes
In 2018 there were 26 approved packaging compliance schemes registered with the Environment Agency. We principally monitor scheme operators through:
- analysing data returns
- record keeping
We compare them with data we obtained from monitoring individual scheme members. Our aim is to check conditions of approval have been complied with and to identify and address any failures. We carried out desk top monitoring of all 26 compliance schemes throughout 2018. This was in addition to quarterly monitoring of all producer compliance schemes which also involved a discussion about their compliance position. During 2018, 5 compliance schemes were subjected to site based compliance monitoring which was below our target of 6.
In October 2018, we hosted a packaging scheme day. This was to build relationships and work collaboratively with schemes and other agencies. We wanted to help ensure compliance and address main issues facing the regime. We received positive feedback from this event.
2.6 Monitoring of accredited reprocessors and exporters
The Environment Agency accredits and monitors the activities of reprocessors and exporters of UK packaging waste. This activity involves an initial site inspection to determine the application and compliance monitoring activity during the period of accreditation. Accreditations have to be renewed each year.
We monitored (on a risk basis) sampling and inspection plans at the application stage of accreditation. This was to ensure they were robust and reliable. We carried this out via desk based monitoring and site visits.
Once accredited we monitored the application of all sampling and inspection plans both during site inspections and through desk top monitoring.
During 2018 we monitored a total of 75 operators for compliance via site inspections (against a target of 80). As a result of compliance assessments (both site based and desk based) we suspended 32 accreditations and cancelled 2 exporter accreditations. These decisions were made by PRRS and the area officers who worked closely together. We communicated these decisions to industry. This was to inform them:
- of reduced availability of evidence onto the market
- to send a deterrent message on the consequences of non-compliance
This shows we’re working towards our priority of reducing fraud as well as encouraging compliance. This enforcement activity has also helped to inform decisions on applications for accreditation.
In the summer of 2018, following increased media attention on exported plastics, West Midlands area targeted (using a risk based approach) a total of 7 plastic accredited exporters and reprocessors for compliance monitoring audits. This achieved:
- 2 operators being suspended
- 2 operators being cancelled
- 2 operators being refused for the 2019 accreditation year
One received a ‘minded to refuse’ letter.
Non-compliance issues included:
- packaging export recovery notes issued before overseas destination site had been approved and added to the exporter accreditation
- export of waste to sites not included in the exporter accreditation
- waste exported in contravention of transfrontier shipment of waste (TFS) requirements (waste exported was not green list waste)
- operator not following their accredited sampling and inspection plan
- PERN issued on non packaging waste
The enforcement powers available to the Environment Agency include sending warning letters, issuing formal cautions, prosecuting or accepting an enforcement undertaking. Under the packaging regulations we can exercise our enforcement powers when offences are committed by registered producers, unregistered producers, compliance scheme operators and accredited reprocessors and exporters.
During 2018 we concluded 23 enforcement undertaking offers.
3.1 Producer Responsibility Investigations (PRI) team
The PRI team have worked with PRRS and area teams to withdraw accreditation of 5 businesses. They were operating under the packaging system and illegally issuing evidence.
They have established links with the Intelligence and Illegal Waste Exports teams in the National Enforcement Service to ensure that they have access to the latest information on operators. They are working as ‘one organisation’.
The team are continually seeking to liaise with overseas competent authorities to help us corroborate whether sites are able or permitted to recycle plastic. We have built up strong relationships with Dutch, German and Polish authorities. We are currently actively engaging with Malaysian and Turkish authorities. We also have long standing working relationships with many of the far eastern authorities.
Furthermore, the team have identified areas of risk to the business such as the export of large tonnages to Turkey and the Netherlands and continued exports to Malaysia. The team are working with other teams in Producer Responsibility and Illegal Exports to develop our understanding of these export markets.
As a result of the work carried out on plastics the PRI, PRRS and area teams have gained experience. They now know what areas of a company’s operation are best to investigate and how best to identify offending. This best practice will be incorporated into training, guidance and templates for future audits and investigations.
Area officers and members of the PRI team worked together throughout the enforcement stage of a large exporter. By doing this the Environment Agency ensured the appropriate enforcement work was done. This included the formal inspections of a number of the returned containers. This work was led by the TFS investigation team with support from the area team. This joined up working is an excellent example of what it takes to ensure consistent and proportionate enforcement of companies who may be breaching the conditions of their accreditation.