Are businesses aware that packaging producers must comply with the Producer Responsibility Obligations (Packaging Waste) Regulations 1997?
Many businesses don’t realise that they qualify as a producer and could be exposing themselves to hefty penalties for non-compliance. Producers can be packaging manufacturers, importers of packaged goods or even sellers of packaged goods.
If your business handles more than 50 tonnes of packaging annually and has an annual turnover of over £2 million, it qualifies as a packaging producer and must register with the Environmental Agency (EA) or with a packaging compliance scheme by 7 April each year.
Packaging producers are obligated to (a) register; (b) recover and recycle a calculated tonnage of packaging each year and (c) report their efforts to the EA. In practice the recovery and recycling obligation is met by the company purchasing Packaging Recovery Notes (PRN’s).
PRN’s are evidence that a certain amount of packaging material has been recovered/recycled, and the amount a company must purchase depends upon the amount of packaging their business handles each year.
More than six million out of ten million tonnes of waste packaging is recovered for recycling in the UK annually; benefiting the environment, and helping the UK meet recycling targets.
DEFRA and the EA have suffered criticism for insufficiently publicising the packaging waste regulations; many packaging producers remain unaware of their obligations even though they have been in force since 1997. Despite this, businesses should be in no doubt that any offences can result in hefty criminal and civil penalties.
Even a simple failure to register can result in heavy fines; one business, unaware of its obligations, was fined over £50,000 for failure to comply with the regulations.
Although awareness of the legislation is poor, the EA continues to aggressively pursue businesses that fail to comply.
In addition to criminal prosecution, since 2011 the EA has used civil penalties for businesses that commit this type of environmental offence. Enforcement undertakings are voluntary offers by companies to make donations to rectify environmental damage caused by their non-compliance with regulations.
Rather than facing prosecution, a company may offer to enter into a formal enforcement undertaking. Companies are generally willing to do so in order to avoid the adverse publicity associated with criminal prosecution. Packaging producers represented 99 of 109 enforcement undertakings made in the eighteen months following their implementation.
Although they are seen as a less serious form of punishment, enforcement undertakings can still entail considerable expense.
In the case of packaging waste there is usually no identifiable environmental harm so rectification takes the form of donations to charities. The size of the donation is based on the cost of packaging recovery notes which should have been purchased, and registration fees which should have been paid, for the period of non-compliance. Businesses that are pro-active and self-report violations pay an additional 10% penalty on top of this figure, but if the EA finds the company is in breach so the offer is reactive, they pay an additional 30%.
In conclusion, criminal prosecutions under the packaging waste regulations can result in very large fines for companies who have been unwittingly breaching the regulations due to lack of publicity. Although avoiding criminal prosecution is appealing, the expense of an enforcement undertaking can still be a heavy burden, and the practical steps needed to agree an enforcement undertaking can be complex.