House of Commons - Environment, Transport and Regional Affairs

Select Committee on Environment, Transport and Regional Affairs Sixth Report

ROLES AND RESPONSIBILITIES

Manufacturing and the retail sector

149. In the second half of our Report we will examine the potential for groups, individuals and institutions to move towards more sustainable resource management. The first of these groups is manufacturers which, together with the retail sector, is responsible for a high percentage of domestic waste.

150. Packaging of food and other items was a source of specific concern to several witnesses. Ian Avery of Hampshire County Council told us that:

"People quote packaging as a reason for waste volumes increasing. The public see themselves as being caught in this process ... They have the packaging they are given and they are victims. They feel they have got very little control over the process".[287]

These sentiments were repeated to us during our discussion with community representatives in Liverpool, and in written evidence from the London Borough of Hounslow.[288]

151. The British Retail Consortium appeared before us, as did the Industry Council for Packaging and the Environment (Incpen). Both said that the sector is continually working to reduce its resource consumption by improving its packaging and distribution systems. Recent initiatives have included the introduction of re-usable transit packaging, such as crates and pallets, to enable 'product specific' packaging to be reduced, and the move towards regionalised distribution centres in order to cut down the distance over which goods must be transported in order to reach the shops.[289] They told us that it is in the sector's interests to cut down on waste for commercial, and also social, reasons, but that packaging is necessary and the quest to avoid and reduce waste can involve difficult choices.[290] As an example, the witnesses cited the experience of two chains-Boots and Safeway-with carrier bags. Both retailers had switched to the use of recycled plastics in their carrier bags but had discovered that the bags were then less able to bear heavy loads unless the plastic was made thicker. Nicola Ellen therefore argued that by taking out the recycled content of the bags, "we could reduce the thickness ... we saved in the region [of] 840 tonnes of plastic and therefore resources per annum".[291] However, Ms Ellen then conceded that the cost reduction achieved by the return to new plastic bags had been a key factor in making this decision, adding that the need to provide "value to the consumer" required companies "to manage the business efficiently".[292]

152. We asked the British Retail Consortium why there is not more re-usable packaging for food, since food packaging forms the largest proportion of domestic wastes: we were told that re-usable packaging has never been used for food, partly because legislation does not permit previously used or recycled materials to come directly into contact with food for reasons of hygiene.[293] However, Ms Ellen agreed that re-usable/returnable packaging has been used for drinks, for example, the traditional milk bottle. Asked why supermarkets did not use such packaging, she said that the "practicalities become quite complex" because supermarkets stock so many different products; extra space within the shop would be needed for storage of returned packaging; means would have to be found then to send the packaging back to the food producers; and there would be a "health and safety implication" if people should bring the packaging back unwashed, handle it and then handle loose produce.[294] It ought to be feasible to find a solution to this problem. Ultimately, Ms Ellen suggested, the question comes down to customer choice: where returnable systems have been put in place, the customer "does not necessarily bring back that packaging".[295]

153. We discussed the latter point with the community representatives in Liverpool. They told us that packaging is a source of frustration and that they would welcome the re-instatement of deposit-and-return systems for products such as fizzy drinks; they also wanted to see a greater use of re-usable materials such as glass for foods like yoghurt, which are packaged in this way elsewhere in Europe. One representative expressed anger at the supermarkets' argument of consumer choice, saying that she, for one, had never been asked what she would like.[296]

154. Although manufacturers genuinely may be trying to reduce waste, the public clearly has yet to be convinced that the packaging they receive with their purchases represents the Best Practicable Environmental Option. The sector might wish to reconsider its use of the 'customer choice' argument: we were told that the ready availability of plastic carrier bags at checkouts represents such a choice, yet we have not seen an equal provision of paper carrier bags which would really allow customers to choose. In addition we are not aware of any recent attempts by supermarkets or manufacturers to try out a 'deposit-and-return' system for packaging on the type of products mentioned above.

155. The retail sector has a good record for innovation and consultation with the public-these are after all key to its continuing success-but it would appear to have yet to identify with the public's concerns about waste. We recommend that retailers and manufacturers initiate discussions with individuals and communities, perhaps through the Local Agenda 21 framework, in order to explain the environmental impacts of their activities and to determine how those impacts may be reduced. We would also urge these organisations to run trial deposit-and-return schemes for their product packaging, with a view to extending them if proven successful. Supermarkets developing home delivery systems should consider incorporating the collection of waste and returnable packaging into their schemes.

PRODUCER RESPONSIBILITY (THE PACKAGING REGULATIONS)

156. Earlier in our Report, we noted that the European Commission has introduced 'Producer Responsibility' legislation to require manufacturers to take responsibility for their products throughout their life cycle. The first waste stream to be covered by this legislation is packaging, and the Commission's Directive has been implemented into British law by the Producer Responsibility Obligations (Packaging Waste) Regulations 1997 which came into effect in January this year.[297]

157. The Regulations aim to put the 'polluter pays' principle into practice by ensuring that companies which handle substantial quantities of packaging take responsibility for the environmental costs of its disposal at the end of its useful life. Within this specification, the Regulations cover those who create the packaging, but also those who use it on products and those who sell it, with products, to the final user or consumer. A 'substantial' quantity of packaging is currently taken to be more than 50 tonnes of packaging material in a year: companies must also have a turnover of £5 million a year to be covered by the Regulations, although this will drop to £1 million in the year 2000.[298] Those meeting these criteria are required to register, either directly with the Environment Agency, or with an approved compliance scheme such as Valpak or Glaspak.[299]

158. From January 1999 these companies will be required to present to the Agency evidence that they have recovered or recycled a certain percentage of the packaging they have handled during the course of the previous year (although compliance schemes will carry out this task for companies which are their members). This recovery or recycling will normally be effected by passing the packaging to a reprocessor, who will issue a receipt which the company may use as evidence of compliance with the law. The Agency has developed a standardised receipt, known as a Packaging Waste Recovery Note, or PRN. These standardised receipts may only be issued by reprocessors who have been accredited by the Environment Agency for their reliability in record keeping, their access to end markets for the materials they receive, and their performance in carrying out the necessary recovery procedures.

Accreditation

159. Reprocessors do not have to be accredited in order to take part in the scheme, and companies therefore do not have to use reprocessors who have been accredited. However, the guidance issued by the Agency emphasises the benefits of using an accredited reprocessor, including the ability "to confirm ... with greater confidence, that the packaging waste ... has been recovered or recycled", and, for the Agency, the greater ability to deter fraud by comparing the reprocessor's claims with the processing facility's known capacity. The use of the PRN- which can only be issued by accredited reprocessors-is said "To provide a means of establishing consistency on ... the provision of documentary evidence".[300]

160. The Agency's preference for companies to use accredited reprocessors is made even more explicit in its Registration Pack:

"The benefit of using an accredited reprocessor is that their evidence of recycling and recovery will usually be accepted by the Environment Agency".[301]

The implication, clearly, is that companies using non-accredited reprocessors are taking a risk over their ability to demonstrate their compliance at the end of the year.

161. Two allegations have been made in respect of the accreditation system: firstly, that the Agency has been slow to process applications for accredited status, and secondly that some companies have been told they are not eligible for accreditation. In both instances, it would appear that those operations which have succeeded in gaining accreditation have also gained a market advantage as companies with obligations from January this year have elected to be safe rather than sorry.

162. On the first count, the Environmental News and Data Service (ENDS) reported in February that the Agency had only accredited 48 reprocessing facilities at the time when the Regulations came into force at the beginning of this year; the number had risen to 104, with 61 applications outstanding, in mid-February.[302] When the Agency appeared before us for the second time on 31^st March, the Head of Waste Management, Caroline John, told us that only 40 applications were then outstanding, all of which had been submitted within the previous three months. She rejected the suggestion that three months might be considered a significant delay, arguing that "it does not prevent [applicants] continuing their business";[303] however, evidence we have received suggests that companies' inability to issue PRNs, because they are not accredited, has done exactly that.

163. Both the Independent Waste Paper Processors Association and Houghton Waste Paper Ltd wrote to us expressing anxieties about the effects the system has had upon small companies in their industry. For them, the issue is that the Agency will not accredit them on the grounds that they do not actually carry out the process of turning the waste into a new product, although they "collect, sort, grade and bale the material ... into graded feedstock that can be used by consuming mills".[304] Writing in November 1997, Houghton Waste Paper related the effect of the Agency's decision:

305

The Association, similarly, told us "there is now a real danger that many [processors] will be out of business within the next six to nine months".[306]

164. We sought an explanation from the Agency as to why it refused to accredit these processors although their activities are clearly recovery operations, and they have access to markets for their product. The Agency's Chief Executive, rather surprisingly, wrote back to agree that "These are of course recovery operations in the commonly accepted sense of the word".[307] The drawback is that these operations were omitted from the original wording of the European Directive which specified acceptable recycling options;[308] the purpose of the UK's packaging regulations is to demonstrate compliance with this Directive; to that end, therefore, the activities of these organisations do not count; and thus in the Agency's view a change in the law will be necessary that they may be accredited.

165. We call upon the Minister to take note of the Agency's opinion that the collection, sorting, grading, and baling of waste packaging, paper and card are recovery operations, and to amend the Producer Responsibility Obligations (Packaging Waste) Regulations 1997 to this effect, albeit that this goes beyond the requirements of the associated Directive. We would also expect the Government to relay to the European Commission the concerns we have reported.

166. The Agency, while agreeing that there is a difficulty, did not appear to consider this to be too much of a problem since, as Ms John said, companies do not have to be accredited. Yet the Agency's guidance on the Regulations, and its emphasis upon accredited reprocessors, has had a significant effect upon the market. By implying that the evidence of compliance issued by accredited reprocessors-the standard PRN-will be looked upon more favourably than other evidence by the Agency (and that only "usually"),[309] the Agency has allowed a myth to be propagated that only the standard PRN will be accepted as evidence, causing a market distortion in favour of the accredited reprocessors. This is not only incorrect but deeply unfair when the Agency has been tardy in handling some companies' applications for accreditation and is not permitted to accredit others.[310] We can understand why the Agency would like companies to use the accredited reprocessors since, as they admitted, the use of companies which have not signed up to the Agency's standards entails "a vastly more intensive system on inspection and audit" of those companies by the Agency.[311] However, it is wholly unacceptable that the viability of small businesses should be undermined for the sake of the Environment Agency's convenience in monitoring the Packaging Regulations. We expect that the Agency will, as a matter of the highest priority, revise its publications to eliminate any suggestion that Packaging Recovery Notes are the only acceptable proof of compliance with the law.

287 Q520 Back

288 See Annex 2, also Ev p 174. The recent guide, An Introduction to Household Waste Management, by ETSU identified packaging waste as 25-30% of the household waste stream (ETSU, Didcot, March 1998 p7) Back

289 QQ363, 373 Back

290 QQ345, 341 Back

291 QQ381, 342 Back

292 Q385 Back

293 QQ339, 367 Back

294 Q367 Back

295 Q370 Back

296 See Annex 2 Back

297 Directive 62/94/EC Back

298 Environment Agency Packaging Obligations Registration Pack, 1997 Back