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Producer Responsibility Obligations (Packaging Waste) Regulations 1997 (As amended)

CHAPTER FOUR

MONITORING COMPLIANCE

This chapter discusses bringing the PRN and PERN system and the accreditation system for reprocessors and exporters into the Regulations; the monitoring of producers, compliance schemes, and reprocessors/exporters by the Agencies; business or operational plans and their contents; and sanctions against scheme operators.

Bringing the PRN and PERN into the Regulations

4.1 The present system of accreditation of reprocessors and exporters, and the issue, by them, of Packaging Waste Recovery Notes (PRNs) and Packaging Waste Export Recovery Notes (PERNs) is outside the Regulations, but is set down in guidance on evidence of compliance and accreditation provided by the Agencies in accordance with the provisions in section 94(4) of the Environment Act 1995. Industry, including the Advisory Committee on Packaging, has proposed that the packaging waste recovery system would be more credible, and the means of complying with legal obligations unambiguous, if the PRN and PERN system and the accreditation system were brought into the Regulations. The Government is minded to agree to this proposal.

4.2 Regulation 22 already sets down what returns a producer must provide to the Agency with which it is registered. It is clear from this that a producer is supposed to provide information about tonnes of packaging waste delivered to reprocessors, and the Guidance issued by the Agencies makes clear that, where PRNs and PERNs have been purchased, these should be retained for four years (the 'records') and copies returned (the 'returns') to the relevant Agency. If the PRN system were brought into the Regulations, then the records and returns would be required to be in the form of PRNs and/or PERNs.

4.3 Regulation 23 relates to the certificate of compliance. What has to be provided on the certificate of compliance is shown in Schedule 6. It is proposed that Schedule 6 to the Regulations should be expanded to include a requirement that the certificate of compliance should be accompanied by copies of PRNs and PERNs specifically. Such a change would be consistent with that in para. 4.2 above and would make it clear that evidence of compliance with recovery and recycling obligations under the Regulations would have to be in the form of PRNs and/or PERNs.

Alternative Evidence

4.4 In 2002, of the nearly 5 million tonnes or so of packaging waste recovery reported, alternative evidence was used to demonstrate only some 35,000 tonnes of this (31,000 t in 2001); otherwise, PRNs or PERNs were used. Given the very limited usage of the 'alternative evidence' option for demonstrating compliance (0.7%), the time may be right to simplify the process and remove the option of alternative evidence. To do so would provide complete clarity as to the method that is required to demonstrate compliance with recovery and recycling obligations under the Regulations and is likely to result in more efficient monitoring. If the PRN and PERN system is to be brought within the Regulations, it is also likely to be more appropriate, and simpler, if the Statutory Instrument does not also need to set out the more complex administrative requirements for alternative evidence. The Advisory Committee has recommended that the alternative evidence mechanism should be discontinued, and the Government does not envisage difficulties for obligated businesses or for reprocessors arising from such a change. However, we would welcome views on this point.

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 ?

Bringing the Accreditation system for reprocessors and exporters into the Regulations

4.5 At present, there is a voluntary system of accreditation of reprocessors to issue PRNs, and of exporters to issue PERNs. The accreditation system, like the PRN/PERN system, has hitherto been set down only in Agency guidance. It is considered that the whole system will be seen to be more robust and more credible if the accreditation system also were to form part of the statutory instrument which provides for the packaging waste recovery system in the UK. In addition, the Advisory Committee on Packaging has recommended that this should form part of the Regulations rather than remain in guidance. It is proposed, therefore, to provide in the body of the Regulations for accreditation of reprocessors and exporters .

4.6 The system of accreditation would continue to be voluntary inasmuch as reprocessors and exporters would not be required to be accredited. However, those not accredited would not be able to take part at all in the packaging waste recovery system, and would not be able to provide evidence of compliance with the Regulations.

4.7 The proposal is that if reprocessors and exporters wish to participate in the packaging waste recovery system and issue PRNs or PERNs they should be required to be accredited. Reprocessors and exporters would, as now, be required to provide a business plan to the relevant Agency for scrutiny in order to be accredited, and they would be required to adhere to their business plans and to the conditions of accreditation. Business plans are discussed further below. Reprocessors would, as now, continue to be accredited on a site basis. Broadly, accreditation would continue to depend, as now, on the reprocessor or exporter being able to show that it can provide the required system of documentation relating to the material delivered to the reprocessor, and can operate at an appropriate standard.

Conditions of Accreditation

4.8 In bringing accreditation into the Regulations, it is proposed that there should continue to be a number of conditions attached to accreditation for both reprocessors and exporters, and that they should be required to provide certain additional information to the relevant Agency upon application for accreditation. It should be noted that the procedures to be used for accreditation and monitoring are intended to be the same for reprocessors and exporters. As a condition of accreditation for exporters, the Agencies have always reserved the right to visit the overseas reprocessors receiving the exported packaging waste, with the costs of the inspection of overseas reprocessors to be borne by accredited exporters. This condition will be brought within the scope of the amending Regulations.

4.9 On the basis of the few instances where visits have been undertaken, the cost of such visits is approximately 2,000 per visit (a range of 400 - 4,250). In the first year of accreditation, five such visits were undertaken, but subsequently an average of one visit a year has been made.

4.10 The number of conditions of accreditation set down will be the minimum to be expected, but the relevant Agency may add further conditions of accreditation, following consultation with the relevant Government Department and the Advisory Committee. The Agencies will also be responsible, as now, for determining the format for PRNs and PERNs and for reprocessing logs.

4.11 The conditions of accreditation are set down below and incorporate the existing conditions.

(a) PRNs and PERNs shall relate to packaging waste received in a specified year and shall not be issued after 31 January in any year in respect of packaging waste received in the previous year;

(b) all PRNs and PERNs which have not been issued before 1 ^st February of the year following that in which the packaging waste to which they relate was received, shall be returned to the Environment Agency before 15 February.

(c) PRNs shall be issued for no more than the total amount of packaging waste which is received for reprocessing on the site of an accredited reprocessor for the year for which he is accredited;

(d) PERNs shall be issued for no more than the total amount of packaging waste which an accredited exporter received for export for reprocessing in the year for which he is accredited;

(e) PRNs and PERNs shall remain the property of the Environment Agency at all times and shall be returned to the Agency on demand;

(f) a PRN or PERN shall not be issued for a quantity of packaging waste which weighs less than 1 tonne, or any weight other than a multiple of 1 tonne, but may otherwise be issued for any quantity of packaging waste;

(g) duplicate copies of all PRNs and PERNs issued shall be retained and made available for inspection by the Environment Agency at all reasonable times;

(h) PRNs and PERNs shall only be issued to producers or scheme operators, or to the representatives of producers or scheme operators;

(i) substitute PRNs or PERNs shall be issued on request to the holder of original PRNs or PERNs in exchange for those originals, provided that the value of the substitute PRNs or PERNs so issued remains equal to those exchanged and that no substitutes are issued after 31 January in any year which relate to packaging waste which was received for reprocessing in the previous year;

(j) records shall be maintained for each quarter year on a form made available for the purpose by the Environment Agency and shall be retained for at least 4 years after the end of the year in which the record is made;

(k) reports shall be provided to the Environment Agency before the 21 ^st of April, July, October and February in respect of the previous quarter year on -

(i) the tonnage of packaging waste received for reprocessing in that quarter;

(ii) the tonnage of packaging waste reprocessed in the that quarter; and

(iii) the number of PRNs or PERNs issued in that quarter together with copies of those documents.

(l) a report shall be provided to the Environment Agency before 28 February in each year which sets out-

(i) the totals of the information provided in the quarterly reports which relate to the whole of the previous year;

(ii) the amount of revenue received in the previous year from the sale of PRNs or PERNs and a statement of what it has been spent on;

(m) a report from an independent auditor which demonstrates that the PRNs or PERNs issued by the reprocessor or exporter in the previous year are consistent with the tonnage of packaging waste received for that year, shall be provided to the Environment Agency before 28 February in the following year;

(n) in deciding the way in which to spend any revenues resulting from the sale of PRNs or PERNs the reprocessor or exporter must have regard to guidance published by the Secretary of State (e.g. in the User`s Guide);

(o) take reasonable steps to implement the business plan referred to in regulation 21B;

(p) undertake sampling and inspection of packaging waste received, in accordance with a plan approved by the Environment Agency; and

(q) such other conditions as the Environment Agency may specify in the notification of a grant of accreditation.

Submission of Business Plans by Reprocessors and Exporters

4.12 The Advisory Committee on Packaging attaches considerable importance to the production of nationally consistent business plans as a means of providing a consistent format for regulators to review, and as a means of providing them with a strategic tool to assess the UK's progress towards meeting targets. In this, the ACP represents the views of a large number of businesses. The ACP has put forward recommendations on what business plans should be seen to contain (see ACP recommendations in Appendix 1) and these are summarised in the box below.

4.13 Currently, requests for information from reprocessors, are geared more towards providing evidence that the organisation is a bona fide reprocessor with the necessary facilities, experience and technical expertise to operate to proper standards, as well as the ability to maintain proper records of input and output of material; it is not geared towards providing a comprehensive list of definitive action plans for which the reprocessor will in future need to account. Currently, there is no consistent structure requested, and no formal subsequent audit taken. At the end of an obligation year, reprocessors are required to provide to the Agency, as a condition of accreditation, the amount of their PRN revenue and the proportion spent on increasing reprocessing capacity, expanding collection and sorting systems and developing markets for recyclate. While the Agencies currently compile this information, they are not required to carry out any more formal audit of this information.

4.14 The Government considers it desirable that reprocessors and exporters should indeed spend their PRN and PERN revenue on the categories of spend proposed by the Advisory Committee, since without further investment of funds in some of these areas in particular, it will be difficult for producers (and schemes on their behalf) to meet obligations and there will be a risk that targets will not be met. The Government will convey its views on these matters more fully in the formal guidance note that it issues (the User's Guide) in respect of the Regulations ²¹. However, although the Government can, and believes it to be useful to, require reprocessors and exporters to have business plans and to adhere to them, and it can require them to address certain points, it considers that it would be inappropriate to require reprocessors and exporters to spend their income on specific areas. This is, however, a matter on which compliance schemes (and individual compliers) can take action. If they wish to, they can negotiate a contract in which they can require certain spend from reprocessors with which they are contracting for PRNs or PERNs.

ACP Proposals

4.15 The ACP's proposals would expand on the present regime, which requires certain information about the company including environmental licenses in place, business plans and technical information on plant operations. The Government agrees that it would be beneficial for all concerned to be clear as to what business plans are intended to contain, and what the regulators will expect to see when scrutinising them. The Government therefore takes the view that reprocessors and exporters should be encouraged to draw up business plans that are set out as recommended by the ACP and address the headings set down in the box above.

4.16 Holding PRNs from the previous or earlier years is not allowed under the current system, except in respect of PRNs or PERNs used by that business or scheme to discharge its own obligation or those of its members; but it would appear that some businesses are nevertheless continuing to offer 'old' PRNs for sale, and others to buy them. The Government therefore feels it necessary to take steps to make the holding of the previous or earlier years' PRNs/PERNs an offence except in the circumstances described above.

4.17 It is also proposed that, where the relevant Agency is not satisfied that an accredited reprocessor or exporter is adhering to the conditions of accreditation, the Agency may suspend accreditation for a period of time, eg. for technical breaches such as issuing PRNs for more packaging waste than they have received, remove accreditation and prosecute for offences. It is also proposed that the reprocessors and exporters seeking accreditation should agree that, within the scope of the definition of "recycling" in the Regulations, reprocessors carrying out recycling in the various materials will be taken to be as set out in the Agency's guidance.

4.18 There are a number of matters proposed above in relation to accreditation. In summary, we would welcome views on the following points -

Question 22:

(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, what would the difficulties be ? Do you see additional costs for businesses arising as a result of this proposal ?

(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 ? Do you see additional costs here ?

(vii) What would your alternative suggestion be ?

Accreditation Fee

4.19 There will be a fee for the accreditation and monitoring of reprocessors and exporters. Although reprocessors and exporters need to be accredited in order to provide evidence of compliance to producers who have obligations under the Regulations, reprocessors and exporters benefit directly from being able to participate in the packaging waste recovery system and issue PRNs and PERNs. Since both producers and reprocessors benefit from the latter being accredited, it might be appropriate for producers and reprocessors/exporters to share the fee costs. The fee charged would, as with other costs under these Regulations, be a fee payable to the relevant Agency and it would be set at a level which would enable the Agencies to recover the costs they incur in carrying out the accreditation and monitoring of reprocessors and exporters.

4.20. Chapter Six discusses the actual costs incurred by the Agencies in carrying out accreditation and monitoring and shows the likely fee level to be charged. The full costs of accreditation based on current levels of activity (which might change) are estimated to be 2,140 per site. If this were the fee, and the costs were shared between producers (individuals and scheme members) and reprocessors/exporters, the break-down of costs per site would be 880 for a reprocessor or exporter, 790 for an individually registered producer and 560 for a producer that is a member of a scheme. Evidently, if the fee were payable by reprocessors/exporters only, the costs would be 2,140 per site.

Q23: Do you think that the costs of accrediting and monitoring reprocessors and exporters should be carried by these businesses themselves or shared between, on the one hand, the reprocessors/ exporters and on the other, the producers ?

Scheme and producer business plans

4.21 As noted above, operational or compliance plans serve to provide the first indication to a regulator that a business or scheme may not be going to discharge its producer responsibility obligations. It is therefore important that there should be complete clarity about the purpose of the business plan required from producers and schemes, and what plans are intended to contain so that it is clear what the regulators will, as a minimum, expect to see when scrutinising a plan. The Agencies need to be able to reject plans if these are unsatisfactory, and to take action if the scheme or business does not operate in accordance with its plan.

4.22 There has been good progress to date under the PRN system in increasing the levels of packaging waste recovery and recycling in the UK. Nevertheless, the ACP has noted in its advice to Ministers that the UK now needs to lift its performance to a different level because, in order to meet the revised targets to be set down in the new packaging Directive, around 1.3 million tonnes of additional material will have to be extracted from the waste stream, and a significant amount of this will have to come from the household waste stream, certainly in glass, aluminium and steel. There will be five years to achieve this. The business plan proposals from the Advisory Committee are intended to reinforce the present system ahead of the critical next stage.

4.23 The Regulations already require an operational plan from a compliance scheme, and a compliance plan from producers with financial turnover in excess of 5,000,000; annual updating of plans is also already required. The Regulations provide that the Agencies will not grant registration unless "satisfied as to the contents of the operational plan", and that registration " shall be refused " (regulation 12(5)(c)) if the Agency is not satisfied. There is therefore provision already in place for registration to be refused if plans are not satisfactory.

4.24 The main difficulty in this regard has been the absence of a clear indication of what "satisfactory" is supposed to mean and what the Agencies are expected to identify in a plan for that plan to be deemed satisfactory.

4.25 Currently, compliance schemes are already required to provide some detail in their operational plan (paragraph 11 in Part IV of Schedule 4 to the Regulations), including -

• evidence that sufficient financial and technical expertise is available to discharge its members' obligations

• evidence that the business has taken account of existing Waste Strategies ²²;

• names of the reprocessors it intends to use

• names of waste collection and disposal authorities involved

• proportions of "own waste", commercial/industrial and household packaging waste it is intended to recover;

• tonnage per annum for the present year and the next two years, by material.

4.26 The Advisory Committee has made suggestions for ways in which operational and compliance plans can be improved by proposing specific headings to be adhered to in the plan. The proposals from the ACP are shown in Appendix 1.

4.27 The overall objective of the business plans is to provide a detailed plan of action, within the framework of a "market" system, for meeting specified targets, and injecting the wherewithal for growth in recovery/recycling over a specified time frame. They should provide appropriate levels of detail and the intention is that they should be additive so that, taken together, in aggregate they provide the major part of the plan for the UK as a whole, or at least a good indication of whether or not the UK is on course to meet targets. Thus, the Advisory Committee has indicated that the business plan is the best means through which to translate strategy into individual actions producing growth.

4.28 In terms of requiring plans to have a specific content, however, the Government proposes that scheme and producer business plans should be guided by the ACP proposals in full, but should be required only to provide information under the headings addressed in the ACP advice (some of which are already required) i.e. those in bold type below.

i. The recovery and recycling obligations, by material, and forecast obligations for following two years;

ii. Planned purchase of evidence of compliance in the first year;

e.g. Planned monthly purchases of PRNs and PERNs;

planned monthly acquisition of materials, if any, and the planned sale of materials; planned receipt of evidence for these materials, annual forecast of aggregated evidence;

iii. Three-year forecast of acquisition of evidence (first year plus following two);two);

e.g. Forecast of (a) contractual commitments and (b) spot purchases. Forecasts relating to projects (forecast of funds applied, time-scales, possible constraints;

iv. planned application of funds;

e.g. Application of funds to collection, reprocessing capacity, price support, communications, market development, strategic development;

v. Details of contracts with reprocessors, material suppliers.

Q24: Do you agree with the proposals for inclusion in producers' and schemes' business plans, shown above ?

Agency monitoring resources

4.29 For business plans to play a role in the packaging waste recovery system, and provide the detailed operational aspects of the strategy for increasing packaging waste recycling, they must be given proper attention, which is consistent amongst all the UK's monitoring and enforcement authorities.

4.30 The auditing of the business plans submitted by 21 compliance schemes (17 with the Environment Agency, 4 with SEPA) and by 613 producers with financial turnover in excess of 5,000,000 (520 with the Agency and 93 with SEPA) is a significant task. There will also be the scrutiny of the plans of reprocessors and exporters. Consideration needs to be given to the resources necessary. The Agencies are essentially regulatory bodies policing the current implementation of the system to achieve increased recycling, rather than strategically orientated to address future commercial/technical plans. Chapter Six discusses the cost implications of changes relating to business plans from producers and schemes and the accreditation of reprocessors and exporters.

Mid year returns and monitoring compliance with the business plan

4.31 Discussions in the ACP Task Forces have revealed that there is a strong feeling that quarterly reporting on progress with operational/compliance plans is desirable if non-compliance is to be avoided and the Directive targets met. The Committee notes that compliance and operational plans are the foundation upon which compliance with the majority of the national obligation is likely to be based and they suggest that compliance schemes and individual compliers returning compliance plans should report quarterly on proportion of obligation discharged and number of PRNs/PERNs acquired. For this to make sense, such returns would need to be monitored by the relevant Agency, and the Agencies would clearly need to be able to take appropriate action if there are clear signs that plans are not being followed.

4.32 The Government is conscious that a cost is involved in requiring quarterly returns from producers and schemes, both in terms of the business providing the return, and in terms of the additional Agency fee costs involved with checking returns against plans and taking remedial action if necessary. The main purpose of these returns would be to see that producers and schemes are adhering to their plans, and that the UK is on course to meet the necessary targets. However, a certain amount of information is already available from reprocessor returns each quarter and this allows the Agencies to assess progress against targets. Requiring a return at the end of each quarter from producers too would seem to bring little in the way of environmental benefit and it is not clear what real purpose such returns would serve if there were not an accompanying requirement to discharge a certain amount of compliance each quarter.

4.33 The UK system is a market system, and to require a certain amount of compliance to be discharged each quarter might result in businesses not being able to benefit from, e.g. lower prices at particular times. Provided that a business has a business plan which has taken a conscious decision about when to purchase its full complement of evidence, the Government does not believe that quarterly discharge of compliance should be required. Equally, however, the Government is not convinced that quarterly returns from producers and schemes would add much to the effectiveness of the system. If returns were considered to have a benefit, this might be at the half-year or third quarter point when it might be expected that a certain proportion of the year's national obligation had been discharged. The Agencies would be in a position to judge whether the UK was on course that year to meet the targets and would be able to follow up with those under-performing, e.g. to see whether there were particular difficulties being encountered. There would be additional costs associated with collecting and collating half yearly or third quarter compliance reports in the region of 64 for each direct registration and an average of 2 for each scheme member (on the assumption that schemes would return one report with costs spread between all members). The cost of chasing up producers who failed to supply a report would amount to some 130. Returns at the end of the year are already provided by producers and schemes in the certificate of compliance

4.34 The Government is therefore not inclined to propose quarterly reporting, but has not ruled it out at this stage and would welcome views from stakeholders.

Q25 (i): Do you think that schemes and producers should report during the year as well as at the end of the year ?

(ii): If so, do think these returns should be made 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 ? (i.e. once in addition to the end of year returns)

• other ?

4.35 If there were to be quarterly reporting, there is also a question as to whether all producers currently providing compliance plans (i.e. schemes and those with turnover in excess of 5million) should report, or whether reporting should be restricted to schemes and to individually registering businesses with significant tonnage obligations. This might be, for example, a recovery obligation of 500 tonnes or more, and if so, this would mean that around 100 individually registering producers would have to report quarterly, and these businesses would represent, together, some 263,000 tonnes of obligation (5.4% of the national obligation mid 2003).

Q26: If there were quarterly or other in-year reporting, do you think schemes and producers with turnover above 5million should report, or schemes but also producers with tonnage recovery obligations of 500 tonnes or more ?

4.36 If there were quarterly reporting, it would be important for those required to report to actually do so, but applying a criminal offence to a failure to adhere to, e.g. a half yearly reporting requirement, would seem to be disproportionate. However, since the relevant Agency will incur additional costs if it has to chase up the reports from producers and schemes, it is proposed that there should be an additional cost recovery fee element if the producer or scheme fails to provide the required quarterly report, assessed on the basis of the costs incurred by the relevant Agency for this activity. Producers and schemes are also to adhere to their plan (subject to formally submitting an amended plan) and it is, again, considered inappropriate to attach a criminal offence to a failure to adhere to the plan: producers already face criminal offences if they fail to deliver the necessary recovery and recycling.

4.37 At the same time, the Government would want to ensure that the relevant Agency can recover any additional costs they might incur if producers and schemes fail to report as necessary, or adhere to their plan and have to submit a revised plan for scrutiny. If there were to be in-year reporting, it is considered that the system might work as follows -

• If at the end of [each] [the second] [the third] quarter the scheme or producer is found by the relevant Agency to have failed to report on compliance discharged so far, the relevant Agency will follow this up and will charge a fee to cover the costs of doing so;

• If a producer or scheme is found to be failing to comply with its plan, it will be (i) required to revise its plan;

(ii) have this scrutinised by the relevant Agency; and

(iii) pay the additional charges connected with the Agency's scrutiny activity;

4.38 A move to in-year reporting and the monitoring of these returns will therefore clearly involve additional costs for the Agencies which would need to be reflected in the Agencies' fees. Actual fee costs are discussed in Chapter Six.

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 ?

Sanctions against scheme operators

4.39 Extensive representations from business over the past couple of years suggest that it is insufficient to have a situation in which, if there has been a clear breach of the Regulations by a scheme, action against the scheme concerned may occur, but will not necessarily occur. It would also appear to be inequitable to have the possibility of de-registration of a scheme but no action against the operator on the one hand, as against enforcement action against an individual business on the other. It is also the case that some 87% of the UK obligation is to be carried out by schemes, yet scheme operators face no penalty but individually registering businesses do.

4.40 At present, the Regulations work on the basis that businesses, who choose to register individually with an Agency rather than join a scheme, may be subject to prosecution if they fail to comply with the requirements in the Regulations. Where a business joins a registered compliance scheme they are, under regulation 4, exempt from their producer responsibility obligations because these are then taken on by the scheme of which they are a member. Under current arrangements, neither the "scheme" nor the scheme operator specifically is subject to any penalty if it fails to meet its members' obligations, although the scheme is subject to de-registration.

4.41 The UK is about to start out on the next 5 year phase of packaging recovery and will have to raise its game considerably, as the Advisory Committee chairman has noted in his letter to the Minister for the Environment of 10 June; and much more packaging waste will have to be extracted from the household waste stream. It is therefore possible that producers and schemes will report difficulties in meeting targets and so it is for consideration whether a scheme operator should, like an individually registered producer, face the possibility of sanctions if it should fail to meet the aggregate obligations that its members would have had but for their membership of the scheme. Such a change might involve the inclusion of the necessary requirement in the Regulations, e.g. "a scheme operator is required to take reasonable steps to carry out the recovery and recycling obligations which the members of their scheme would have had but for their membership of the scheme" or similar wording.

4. 42 The UK has targets to meet under the Packaging Waste Directive. The UK's approach to meeting the Directive targets is made clear in regulation 3(6) - "the recovery and recycling obligations of producers are to enable the United Kingdom to attain the recovery and recycling targets for Member States set out in article 6(1) of Directive 94/62/EC ….". On the whole, therefore, in a statutory regime, which includes criminal offences and penalties for producers, the Government does not see that the schemes responsible for carrying out the majority of the combined UK obligations should be able to take on legal obligations of producers without facing any sanction if they fail to discharge these obligations. The Government is therefore minded to change the Regulations so that scheme operators are also subject to the same penalties as individually registered producers in relation to the recovery and recycling obligations.

Q28: Do you agree that compliance scheme operators should, like producers, face a criminal offence and penalty if they fail to discharge the aggregate of the recovery and recycling obligations that their members would have had but for their membership of the scheme ?

Scheme data monitoring plans

4.43 Under the Regulations, compliance schemes are obligated to provide aggregated data from all their members to the relevant Agency. They are required to ensure that this data is as accurate as reasonably possible. The Government has proposed that there should be data accuracy standards imposed on scheme members as there are on producers. Compliance schemes already have to ensure that the aggregated data they supply to the relevant Agency is as accurate as reasonably possible, but it is not always evident that checking this is done comprehensively. Schemes are already required to provide an operational plan to the relevant Agency and it may be appropriate to include in these plans a reference to the specific arrangements that the scheme proposes to monitor their members' data submissions. The Government would be grateful for stakeholders' views on this proposal.

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

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