« Previous | Contents | Next »
Listen
Producer Responsibility Obligations (Packaging Waste) Regulations 1997 (As amended)
CHAPTER ONE
Introduction
1.1. This consultation paper outlines options for changes to the Producer Responsibility Obligations (Packaging Waste) Regulations 1997 (as amended) and the parallel statutory instruments in the devolved Administrations
1. It discusses business recovery and recycling target scenarios for 2004-2008 and other changes intended to improve the working of the system. Chapter 6 discusses the Agencies' fee.
1.2.
This consultation paper covers Great Britain and a separate consultation will be held in Northern Ireland. As environmental matters in Scotland, Wales (and Northern Ireland) are devolved, it is intended that each devolved administration will make Regulations, signed by the relevant Minister, to implement any changes resulting from this consultation.
1.3
Appendix 5 contains draft Regulatory Impact Assessments.
1.4 This consultation paper seeks views on the options and issues presented and on the estimates of costs and benefits in the associated Regulatory Impact Assessments (see
Appendix 5).
Written comments should be sent to the following addresses by 31 October 2003 -
England Mr. Andrew Bryson
Defra, Producer Responsibility Unit, Zone 7/F8
Ashdown House, 123 Victoria Street, London SW1E 6DE
fax 020 7944 6409 email:
andrew.bryson@defra.gsi.gov.uk
Scotland Mr. Gary Gray,
Scottish Executive, Mail point 11,
Victoria Quay, Edinburgh EH6 6QQ
Fax 0131 244 0363 email:
waste.team@scotland.gov.uk
Wales Mr. Richard Bernhardt,
Environmental Protection Division 3,
Welsh Assembly Government,
Cathays Park, Cardiff CF10 3 NQ
Fax 02920 823 658 email:
environmental.protection.division@wales.gsi.gov.uk
1.5 This consultation paper considers a number of issues on which there might be changes made to the Producer Responsibility Obligations (Packaging Waste) Regulations 1997 (as amended) and the parallel statutory instruments in the devolved administrations (together henceforth "the Regulations"), and to matters currently outside the Regulations, namely the system of accreditation of reprocessors and the issue by accredited reprocessors of Packaging Waste Recovery Notes (PRNs) and by accredited exporters of Packaging Waste Export Recovery Notes (PERNs). Some changes discussed in the consultation paper follow from an assessment of the performance of the UK system in the period 1998-2001 against the first Packaging Waste Directive targets, and the Government's view as to whether any corrective action is indicated to improve the functioning of, and confidence in, the UK system in light of approaching new, higher targets. While the Government believes that the present UK system, broadly, can deliver the required results provided that those with legal obligations carry these out, it also believes that there are areas in which changes may contribute to a more efficient and effective system, and to greater confidence in the ability of the system to deliver the next Directive targets
Recommendations from the Advisory Committee on Packaging
1.6 A number of the changes discussed are based on the recommendations to Government from the Advisory Committee on Packaging (ACP) which are set out in Appendix 1
2. The ACP, which represents producers and schemes with obligations to discharge under the Regulations, and reprocessors, has grouped its proposals under the headings of
DeMinimis,
Targets and Infrastructure,
Enforcement and
Data. Their proposals to revise the
data form are shown in
Appendix 1 with the ACP report, but these do not involve any change to regulations. Work has now been set in hand to take forward the ACP proposal that data provision should be on-line. A scoping study will shortly be looking at what stakeholders want to see in an on-line data system and will identify the costs of this. This work will probably report to the Advisory Committee in early 2004 and
no specific changes related to this recommendation are being included in this paper. However, in Chapter Six, there are questions put to stakeholders about how to fund an on-line system which would marry up with the system that the Environment Agency is already developing for hazardous waste reporting. On other data issues, the ACP has made recommendations for a late registration fee and for the simplification of mid-year requirements for groups . The question of quarterly returns is discussed in the paper and the views of stakeholders are invited.
1.7 The ACP also discussed the issue of upstream and downstream provision of data, and although they recommended that there should be an obligation on businesses to provide data upstream and downstream, they also recommended that more work should be done first, to investigate the implications of such a change. The Government has consulted previously on whether businesses should be required to provide data to customers and suppliers and vice versa, and the industry response generally was against there being a legal requirement for this. The Government is inclined to agree that this is not something that should be included in a statutory instrument. There are other ways of producing data for customers and suppliers: there might be agreement amongst certain sectors to produce a Ready Reckoner (which would have to be approved by the Agencies); there might be a Voluntary Agreement between certain sectors to provide data to co-signatories of the agreement; there might be agreement to fund the development of a data-base, or data-bases, for certain sectors. There is also the possibility of certain sectors developing protocols (e.g. there is a protocol on the accepted weight for the raw material manufacturing and conversion of volume (m3) of timber, the conventional means of setting timber to weight for the purposes of the packaging Regulations) with the Agencies for accepted tonnages and this could be done by more trade associations. The Government does not propose to take action to require businesses to provide data up and down stream and this issue is not discussed further in this paper.
1.8 The ACP also recommended that a 'lock' system be introduced for annual data calculation for smaller businesses. This would be a system which, after a business has registered and provided data for one or more years, would allow that business to lock its packaging data to its turnover. For example, if it had 500 tonnes for a turnover of £2.4m and the turnover rose by 1% in the following year, then the data to be provided would be the first year's data increased by 1%. After 3 years, the business would again need to provide a full data return based on the previous year's packaging handled.
1.9 The Government is keen to reduce the data burden on smaller obligated businesses. It has therefore had some work done to look at the possibilities for doing so. The 'lock' system is one possibility, but there may be others. For example, there is a suggestion that an approach which included raising the tonnage threshold while lowering the turnover threshold (e.g. to £1.5 million) might actually bring in additional tonnage while only obligating a small number of additional businesses. This conclusion was reached after some work had been done on the basis of a relatively small sample. The Government does not believe that this work has gone sufficiently far to be able to underpin a proposal for change at this stage, and work needs to be taken further. This will now be done, using a much wider sample of businesses so that the Government can identify whether any such changes would nevertheless still allow the system to deliver the Directive targets. For the present, however, there are no proposals for a 'lock' or other system in the present paper.
1.10 The majority of the ACP's recommendations on
Enforcement are discussed in this consultation paper. One change proposed with a view to allowing the regulators to avoid having recourse only to the "nuclear" option of scheme de-registration, is that scheme operators should be liable to criminal sanctions in the same way producers are. This, and a number of other proposals have been affected by the incidence of significant non-compliance in the year the first Directive targets were to be met and industry has shown a real concern to ensure that the system is geared up to prevent a repeat of non-compliance with the next Directive targets. The Committee also recommends that all businesses should be members of schemes. However, the Government does not propose to take forward this recommendation. The preference is to have a choice available to business and there seem likely to be legal difficulties associated with compulsion to join a scheme. Nor does the Government think it appropriate to include a "fit and proper person" test in the accreditation procedures for reprocessors and exporters, as recommended by the ACP. A number of reprocessors are already licensed under the Waste Management Licensing Regulations and where this is the case, a fit and proper person test is already included. Where such businesses are registered as exempt, it has been deemed that a fit and proper person test is unnecessary. It appears to the Government that it would be disproportionate to apply this test in the accreditation procedures too. This matter is not discussed further in this paper.
1.11 On
targets, although final agreement on the new Directive has yet to be reached, we can be virtually certain that the Directive will set targets to be met in 2008. Clearly, the Government has to consider what approach is the one that will allow it to be confident that the UK will meet the targets to the deadline. Around 1,300,000 tonnes of extra material will have to be collected and recycled between now and 2008. The Advisory Committee has emphasised that an urgent start needs to be made towards achieving the Directive level in 2008 because of the need to move from the present position, where there is one minimum recycling target for all materials (19%) within a recovery obligation, and the freedom to discharge the residual recovery in any material, to a situation in which significant, differentiated, set levels of recycling have to be achieved in each material. The Committee recommended to Ministers a set of targets proposals which show the sort of approach that they envisage being necessary in the years from 2004 up to the Directive deadline. First, they recommend that an urgent start be made given the levels of uplift needed, particularly in some of the materials; second, they recommend interim material-specific targets to be set with effect from 2004; third, they consider that increases should be in as straight a line as possible. They recognise, however, that different data may underlie the assessment of targets, and that obligations on leased and internal supply packaging would help keep targets down by increasing the level of obligated tonnage. Because of the additional tonnage that would be obligated under the proposals on leased and internal supply packaging, the Government's target scenarios are different to those put forward by the ACP.
1.12 The Government agrees that the long term approach recommended by the Advisory Committee is likely to be the most cost-effective and least burdensome approach. There needs to be time allowed for the Packaging Waste Recovery Note system to adjust to the new material-specific approach; this cannot be left until the deadline year, nor, unless extremely high year-on-year increases are to be required, can it be delayed. This is because the market system, while it has resulted in high levels of, say, wood and paper recycling, has not produced the same levels in, say, aluminium and glass.
1.13 There is also a need for some central assessment of the levels of recycling needed between now and 2008 for Directive targets to be met so that, in the intervening years individual compliers and compliance schemes can all plan, on the same basis, to set the necessary infrastructure in place. The UK system does not have a national, centralised compliance body such as, for example, the DSD in Germany which might manage planning for industry (but would probably be much more costly at the same time). consequently, therefore, if all obligated businesses (and there are some 12,000) and schemes (17) are to pull together in the same direction, signposting of the year-on-year increases that will deliver the required amount of recycling in the deadline year will be crucial for the purposes of forward planning. Finally, industry has made clear to the Government that, while the targets will be challenging under any circumstances, they will be more easily achieved if targets are provided ahead of time for at least the next three years, but preferably for the whole period. The Government accepts industry's views on this and Chapter Two sets down some business target scenarios to show the kind of year-on-year increases that would be needed to deliver the Directive targets, as far as we know them at time of writing.
1.14 On
Infrastructure, the Committee has focused on proposals which, while significant in terms of the development of the system, cannot be addressed in the packaging Regulations, and they are not discussed further in this paper.
1.15 On
de minimis, the ACP has suggested no change at present to the de minimis thresholds but does recommend further work to look at options to capture more de minimis tonnage. This work will be taken forward with the work looking at easing the data burden for smaller businesses. Proposals on internal supply and leased packaging are included in the paper as recommended, and are discussed in Chapter Five.
Other Developments
1.16 In June 2003, the European Commission issued a communication
3 following recent European Court of Justice judgments on the circumstances under which incineration of waste constitutes an energy recovery or a waste disposal operation. Under the terms of this communication, municipal waste incinerators and clinical waste incinerators are considered to be primarily undertaking waste disposal operations and can no longer be recognised as reprocessing (i.e. recovery) operations for the purposes of the packaging Directive and the Regulations. Thus, sites of this kind which currently issue evidence of compliance (e.g. in the form of PRNs) may no longer be permitted to do so. However, certain waste operations continue to be energy recovery operations (EfW) for the purposes of the packaging Regulations and will therefore continue to be recognised as such and be able to issue evidence of compliance. These are likely to include sites burning refuse derived fuel (RDF) and sites burning selected packaging wastes (on their own, with other fuels, or co-incinerated with other wastes) with recovery of energy for heating and/or power.
1.17 In the UK, the amount of energy recovery is relatively small (some 584,000 tonnes in 2002) compared to other Member States. However, in light of the above-mentioned communication from the Commission, it is possible that the MSW and clinical incineration tonnages of recovery (in 2002 that was some 533,000 tonnes) would no longer count towards the targets, and an additional 533,000 tonnes or so of recycling (including composting) would need to be carried out (unless there is an increase in RDF or EfW up to the amount that would allow us to meet the overall recovery and overall recycling targets).
1.18 There need be no change to the use of energy recovery to meet part of the recovery obligation in the Regulations for the present, and current practices should continue until the Government has obtained clarification about the implications of the Commission's statement. However, it would be prudent when planning future years' compliance to place as little reliance on MSW and clinical incineration with energy recovery as possible. In the targets exemplifications in this paper, some energy recovery is still used and where this is so, the amount envisaged each year is shown so that businesses can identify the tonnage of recycling capacity that might need to be found to replace energy recovery.
Agency Fees
1.19 Agency fees are discussed in Chapter Six. Some of the proposals in this consultation paper will mean a change to the Agency fee. However, it should be noted that there would need to be changes to the Agency fee in any case because at present, the Agencies are not covering their costs. Thus, the increase in the Agency fee is not a function only of changes to the Regulations; the Agencies have had to spread their fee income more thinly than they would have liked, and the level of monitoring has had therefore to be lower than is envisaged in the ACP's recommendations. Industry, including the Advisory Committee, has recommended that the Agencies should ensure that adequate levels of resource and expertise are available and that they should indicate what impact this would have on the fee. Consequently, the impact of the various proposals, together with an option which involves greater levels of monitoring, are discussed in Chapter Six
4.
Simplification of the Regulations
1.20 It continues to be one of the Government's aims to simplify the Regulations where possible and in particular the data provision requirement. Proposals are not yet fully developed, however, and are not included at this stage. The further work will be shared with the ACP so that proposals can be developed in due course. See also paragraph 1.9 above.
Improving compliance and developing a more effective systema more effective system
1.21 Overall, a 'package' of measures to improve the compliance system is put forward, the central plank of which is the proposal for sanctions to apply to compliance scheme operators. This is accompanied by some changes to what needs to be addressed in compliance plans, so that obligated businesses make clear what they propose to do, but are also given clear information about what the money they spend on PRNs and PERNs is being used for. There are suggestions for additional monitoring by the Agencies which would enable, for example, more action to be taken to identify free-riders (and there would be additional fee costs to cover this); and there are some changes proposed to tighten up data provision and accuracy since it is the reported data that underpins the calculation of the national obligation. Bringing the PRN system and the accreditation of reprocessors into the Regulations is also designed to ensure that there is no ambiguity about what is required to demonstrate compliance with obligations. Overall, the Government feels that the benefits of this package of measures, together with others that accompany it, justify the additional costs that will be incurred.
1.22 The paper also takes account of the ACP's proposals which are intended to allow the UK to raise its game and lift its level of recycling to meet higher targets. Their proposals, too, are intended to make the system work more effectively. A number of the proposals aim to remove ambiguity or data complexity, for example, the removal of 'special producers' and the concomitant reduction in the number of data forms and improvement in data; simplification of mid-year requirements; removal of optional tables from the data form, and inclusion of ACP proposals to assist industry's understanding. There is also a discussion of a possible change to the end of year arrangements for PRN and PERN issue.
1.23 Some of the proposals in the paper can be described as clarifications, even though in some cases this involves bringing a provision into the Regulations. This is the case with bringing the PRN and PERN system and the accreditation of reprocessors and exporters into the Regulations as advised by the ACP. Bringing these matters into the Regulations means that their status as a part of the UK packaging waste recovery system is clarified. However, the PRN and PERN system will operate largely as before, as will the accreditation system. The main impact is the proposed removal of the option of alternative evidence, and the Government will be interested to hear industry's views on this.
1.24 At the same time, the benefits in terms of the positive impact on the ability of schemes to gear funding, and the lack of ambiguity in terms of what is needed to demonstrate compliance, for example, is expected to be significant. Other clarifications are: annual registration and clarification of some of the related provisions, and where responsibility lies for scheme members' data accuracy.
1.25 There are also proposals which are designed to make the system fairer - these include the introduction of a different approach to the Agency fee so that those who are late registering through a scheme, or who need to resubmit data, for example, will be the ones to pay the associated costs incurred by the Agencies, while those who provide the necessary data on time will be paying less. The proposed changes to group registration are also designed to set a fairer system in place; at present, to some extent, individual registrations could be said to be subsidising groups of companies and the proposed changes will remove this, while also ensuring that the Agencies' monitoring costs are covered.
1.26 There are also provisions to tighten up data provision and accuracy. Accurate data is important for all producers because the data underlies the information we have about progress towards targets, and it informs the setting of targets. It is equally important, as the ACP's recommendations make clear, to ensure that monitoring can be carried out on a consistent basis, and for compliance schemes to face the same penalties for non-compliance as producers do. There are therefore additional offences proposed. Provisions to 'tighten up' include: introduction of a 'signing off' requirement for the data form; requiring reprocessors and exporters to have and adhere to business plans; allowing the regulators to pursue scheme members for inaccurate data.
1.27 There are also provisions to increase the amount of packaging that is obligated. Thus, there are changes proposed to ensure that additional tonnages of leased and internal supply packaging will be obligated. This may amount in total to some 670,000 tonnes (UK figure).
Notification of changes to the European Commission
1.28 It should be noted that the Government is required to notify draft amending Regulations to the European Commission. This does not mean that, if the consultation comments point in a different direction, changes cannot be made. Draft Regulations will be notified to the Commission around the same time the consultation paper is published.
Summary of Issues for Consultation
The changes put forward in the consultation paper include -
i. that legal responsibility should be placed on compliance scheme operators for the recovery and recycling obligations of their members;
ii. that the system of approval of schemes by the relevant Minister should be set down in statute, and there should be circumstances in which approval needs to be renewed (
e.g. where the operator has faced enforcement action or the scheme is not going to comply);
iii. that the system for the accreditation of reprocessors to issue PRNs (and exporters to issue PERNs) should be set down in statute and brought within the Regulations; and the PRN and PERN should also be set down in statute;
iv. that some changes should be made to the data form to simplify this and clarify tables; that a Director of a business should sign off the data form; and that the Agencies should be able to pursue scheme members for inaccurate data;
v. that changes should be made to ensure that pack/filling and selling obligations are picked up on leased and internal supply packaging;
vi. that changes should be made to the registration fee structure so that costs additional to those for handling routine registration and data provision should be charged to those who cause the Agency to incur the extra costs;
vii. that the date for submission of compliance plans should be 31 January instead of 30 June to allow the Agency to scrutinise these ahead of registration;
viii. that registration options for groups of companies should remain as now, but be accompanied by a fee premium per subsidiary business to cover monitoring costs and arrive at better data;
ix. that there should be annual registration;
x. that the 'special producer' provisions should be removed from the Regulations to simplify the Regulations and improve data submission.
xi that there should be a new, compulsory table to require information on reusable packaging; and that there might be agreed percentages for the amount of certain reusables which are deemed to be on their first trip to aid data provision;
xii. that schemes should have specific arrangements in place to monitor members' data and should include these in their operational plan;
xiii. that the Agencies should undertake an increased level of monitoring.
List of Questions in the Consultation Paper
Q1: Do you agree that targets should be set for the full period 2004-2008 ? If not, why not ?
Q2: Do you think there should be -
a. one material-specific recycling target for aluminium and one material-specific recycling target for steel, which together achieve 50% for metals ?
b. a target of 50% for steel and a target of 50% for aluminium ?
c. a "metals" target - which could be met by recycling either steel or aluminium ?
Q3: Do you think it would be helpful in terms of supporting investment to have targets unchanged for two or three years (depending on the Directive deadline), followed by a review to take account of any changes in the underlying data ? If not, why not ? What would you suggest instead ?
Q4: (i) What do you think of the proposed 60% wood packaging waste recycling target for 2008 ?
Q5: Targets - views are invited on the target scenarios shown in Chapter Two.
Q6: Given the possible difficulties for businesses who were members of a scheme that had had its approval withdrawn, should withdrawal of approval only take effect at the end of a year for example ? are there other options ?
Q7: Views are therefore sought on whether the requirement of Regulation 12(4) for a compliance scheme to obtain Ministers' approval should be retained or repealed. In particular:-
(i) Do you agree that the approval process should be retained ?
(ii) If so, do you agree with the regime proposed in paragraph 3.22 (i), (ii) and (iii) ?
(iii ) Are there additional benefits or safeguards which Ministers' approval could secure ?
(iv) Could the Agencies determine those matters instead ?
(v) Do you think the approval process should be repealed ?
(vi) Should the Regulations lay down any standards or requirements for the setting up of a scheme or its operation?
(vii) If so, what do you think these should be.
(viii) Should Ministers retain a power of strategic intervention or should they not be involved in the approvals process at all (this would not affect their appellate function).
Q8: Do you see any difficulties connected with the proposal to give schemes 2 months rather than 6 to decide whether or not to appeal ?
Q9: Do you see any difficulties associated with the proposed change of date ? (for submission of compliance plans)
Q10: Do you agree that the registration options for groups of companies should remain as now, but should be accompanied by a fee premium per subsidiary business to cover monitoring costs ? Do you think the alternative approach described in paragraph 3.18- 3.20 has merit?
Q11: Do you agree that the mid-year change provisions need simplification ? Do you think that the proposal in paragraph 3.34 is appropriate ? Do you have alternative suggestions for simplifying this?
Q12: Do you agree that the 'special producer' provisions should be removed from the Regulations ? If not, why not ?
Q13: Do you agree that the Agencies' fee should be calculated as proposed to enable additional costs to be borne by those who cause the Agencies to incur them ?
Q14: Do you see any difficulties associated with a change to annual registration ?
Q15: If the UK Regulations were to include one target for "metals" as opposed to separate targets for aluminium and steel, do you think that producers should still provide data on both steel and aluminium separately or should producers just provide figures for "metals" combined ?
Q16: The Government wishes to gauge interest from industry on the possible introduction of an on-line data system. Do you have any comments on this issue?
Q17: (i) Do you see any difficulties connected with the proposed new, compulsory table to require information on reusable packaging?
(ii) Do you think it would be helpful to obligated parties to set down some agreed percentages for the amount of certain reusables which are deemed to be on their first trip ?
Q18: (i) Do you think that having a senior Director sign off the data form might be beneficial ?
Q19: Do you think that the offence of knowingly or recklessly providing false or misleading information to an Agency should be expanded to include furnishing such information to a compliance scheme operator?
Q20: Do you agree that the PRN and PERN system should be brought into the Regulations ? If not, why not ?
Q21: Do you think there would be any difficulties connected with removing the option of alternative evidence ? If so, what would they be ?
Q22: (i) Do you agree that the accreditation system for reprocessors and exporters should be brought into the Regulations and given a statutory basis ?
(ii) If not, why not ?
(iii) Do you agree with the proposed conditions of accreditation ?
(iv) If not, why not ? what would you propose instead (or as well?)
(v) Do you agree that reprocessors and exporters seeking accreditation should be required to submit business plans, to adhere to them and to ensure that they provide information under the headings recommended by the ACP ?
(vi) If not, why not ?
(vii) What would your alternative suggestion be ?
Q23: Do you think that the costs of accrediting and monitoring reprocessors and exporters should be carried by these businesses themselves ?
Q24: Do you agree with the proposals for inclusion in producers' and schemes' business plans, shown above ?
Q25 (i): Do you think that schemes and producers should report half yearly, i.e. at the end of the second quarter, on their compliance achieved ? If not, why not ?
(ii): If you do think returns would be beneficial, do you think these should be at the end of each quarter (i.e. 3 times a year in addition to the end of year returns) ? the second quarter ? (i.e. once in addition to the end of year returns). the third quarter ? (once in addition to the end of year returns)
Q26: If there were quarterly or other in-year reporting, do you think schemes and producers with turnover above £5million should report, or schemes and producers with tonnage obligations in excess of 500 tonnes or more ?
Q27: Do you think producers and schemes (i) should or (ii) should not face criminal offences if they do not report as required ? Do you agree that, where schemes or producers incur extra costs in relation to mid-year reporting, they should have to pay the relevant additional cost-recovery fee ? If not, why not ?
Q28: Do you agree that compliance scheme operators should, like producers, face criminal offences and penalties if they fail to discharge the aggregate of the obligations that their members would have had but for their membership of the scheme ?
Q29: Do you agree that it is important for schemes to have specific arrangements in place to monitor members' data ? Do you think that schemes should have to show the relevant Agency what plans they have to monitor their members' data ?
Q30: Do you agree that we should amend the Regulations as proposed, so that a business is obligated if it "owns
or leases" packaging as a result of which an additional tonnage would be included in the 'obligated tonnage' total ?
Q31 (i) : Do you agree that we should amend the Regulations as proposed, so that a business using internal supply packaging is deemed to carry out the pack/filling and selling obligations and thus add a significant tonnage of obligated packaging to the total ?
(ii) Where do you think the line should be drawn in interpreting "internal supply" ? Should movement between premises or sites be included ? and all packaging used in the production chain, even in the same factory, etc. ?
Q32: Would you think this a reasonable way to fund a new on-line system? Would you be prepared to see the registration fee increased by £80-100 per annum for 3 years to achieve this?
Q33:Do you agree that the Agencies should undertake the increased level of monitoring outlined in (a), (b) and (c) in paragraph 6.32 ? If not why not?
Q34: The Government would welcome comments on the assessed fee levels set out above.
Q35: Do you think that the process would be simpler if the possibility of end-of-year carry-over of evidence were removed ? If not, why not ?
Would there be particular problems for
a) reprocessors themselves
b) compliance schemes ?
c) others ?
« Previous | Contents | Next »