Examination of Witnesses (Question Numbers
426-439)
DR PAUL
LEINSTER, MS
LIZ PARKES
AND MR
DAVID JORDAN
4 NOVEMBER 2009
Q426 Chairman: Good afternoon and welcome
to this additional evidence session with reference to the Committee's
inquiry into the Government's Waste Strategy for England 2007.
May I formally welcome Dr Paul Leinster, the Chief Executive of
the Environment Agency, supported by Liz Parkes, the Head of Waste,
and Mr David Jordan, the Director of Operations. Part of the reason
that we decided to reconstitute ourselves in this inquiry was
the concerning events over the summer when a number of containers,
which contained waste of a less than savoury nature, ended up
in Brazil. The committee felt that this was a serious enough event
for us to want to quiz the Environment Agency and the Secretary
of State on it, hence the fact that we have invited you back here.
I do appreciate that there may be legal matters which may constrain
what you are able to say on the particular subject, but I think
the facts of what happened are well known. Can I start with a
very simple question? From what you have learnt so far, what are
the lessons that the agency has learnt from the fact that a relatively
large consignment of waste managed to get out of the United Kingdom
and end up in Brazil where it should not have been?
Mr Jordan: The export of waste
is closely linked with recycling in the UK. As the recycling rates
of domestic waste have risen, so have the exports of waste and
the two are inextricably linked, not least because there are significant
markets abroad and because we cannot actually make use of all
of the waste in the UK. Most of the waste which is exported in
this way is done under a set of regulations which are described
as green list. It is supposed to be a self-regulating mechanism
and in actual fact it is potentially a very good system indeed.
Very large quantities principally of paper and plastic from domestic
sources are exported abroad under the green list auspices. That
works when the quality of the exported product is good and when
the receiving country is happy to receive it, and that essentially
conforms with the green list regulations. Our own observations,
probably five years ago, suggested that we had a very high rate
of non-compliance with the green list in that form of exported
waste. In the interventions that we were making at ports, we were
turning back probably something of the order of 50 per cent of
wastes arising. We have done a great deal of work in this arena
in the intervening five years and I would say that the picture
has been transformed in that period of time. Notwithstanding the
fact that the export of these wastes is continuing to rise, our
clear observations are that the quality of the waste exported
as green list in the form, as I say, principally of paper and
plastic has improved very markedly indeed. Although I think the
Brazilian case is a very bad example, or in a sense a very good
example, of where things have gone wrong, our very clear view
is that this is now a relatively infrequent event and not a frequent
example of abuse of the green list regulations.
Q427 Chairman: Help me to understand.
Was the company that was involved, and I presume a company was
involved, operating in the legitimate waste field or was it illegitimate?
Mr Jordan: Can I give you a generic
example of how this might work by way of example? It may be that
a country abroad wants to import some waste under the green list
auspices to recycle in their own country; it happens a great deal.
They might contact an exporter in this country, who might then
source it through a broker. In theory, within that overall supply
chain, we can have a whole series of legitimate operators. Somewhere
in that supply chain you get an illegal operator, and very clearly
that is exactly what has happened in this instance. I would rather
not be too specific about this particular case.
Q428 Chairman: I understand that
and you must stop yourself where you trespass over because there
may be prosecutions pending. We understand that. I was going to
ask you if you had any idea of the scope and scale of the problem
that we are dealing with. The question comes down to: was this
a one-off or is it the tip of a big iceberg or is there a small
continuing export of these types of material, simply because of
the difficulties in policing green materials where you get a large
number of potential movements and there is a limited amount of
enforcement potential? What I was trying to understand is this.
For somebody to go to all the trouble of loading up these containers,
from the public representation of this, things like rotten nappies
and real rubbish as opposed to a recyclable material, it must
have been worth somebody's while to spend all that money gathering
them together, shipping them halfway round the world and for people
at the other end to be going to make a return on the money in
terms of what was happening. Can you just explain something of
the economics of this?
Mr Jordan: Yes. Firstly, most
of the containers which leave the UK are empty and so taking advantage
of that opportunity is very cheap. Secondly, the disposal of waste
in the UK is relatively expensive. You have landfill tax; you
have the other costs associated with the disposal—transport
and charges at the landfill operators and so on. There is a significant
cost per tonne. If you can effectively sell what you describe
as plastic waste for recovery abroad for, say, £40 per tonne,
you are getting £40 per tonne, you are avoiding £60
per tonne landfill costs, you are avoiding the other costs associated
with the disposal. You are actually making a good deal of money
already and the costs of export are very low. If you do that,
wilfully getting rid of what is essentially mixed domestic waste
and a variety of other products as we have observed having opened
most of the containers coming back from Brazil, you are probably
taking a chance that by the time it gets to the exporting country,
they are not going to bother to send it back. In a sense, you
have a criminal mind which is taking advantage of an opportunity
and taking a chance on the product not being returned. In this
particular case, very pleasingly, the authorities intervened and
brought it to our attention and, as we have done in a number of
cases, we have stepped in and repatriated it. We are now going
through the process of examining those containers to find out
exactly what was in there and, as you can imagine, building an
enforcement case.
Q429 Chairman: Just to come back
to the specific question, in terms of tempering your enforcement
activities, we have to have some estimate of the scope and scale
of the problem we are dealing with. Can you advise the committee,
within the context of your opening comments which gave the impression
that within the green list you thought the proportion of illegal
exports was relatively low, what is your working hypothesis?
Mr Jordan: The green list covers
metals, plastic, cardboard and paper. Those are the main products;
metals are about 50 per cent by weight and largely not arising
from households; a very significant proportion of the paper and
plastic comes from households. The route to market is that essentially
they are collected by contractors on behalf of the local authorities,
taken to recycling facilities and then sorted, baled and sold,
some for export and some obviously for recycling within the domestic
market. What we did as a consequence of our investigations in
round about 2004 and beyond was to go back to the sources in most
cases and deal with the recycling facilities to try and drive
quality into the product there, rather than seeking to intervene
at the port. You can imagine the chances, even using intelligence
which we have used, of intercepting illegal waste become diminishingly
small as the quality gradually improves. Part of our success,
and it is a broad success and it is indeed a very successful story,
has been working with the trade association, the Environmental
Services Association, to drive quality through their businesses.
We have worked directly with the materials recovering facilities—that
is where it is essentially sorted and baled—to drive quality
through that process as well. That has been very successful but
we have, for example this year, undertaken something like 200
unannounced site visits to facilities of that nature to check
the quality of the end product. We have also worked closely with
WRAP, that is the Waste Resources Action Programme, that is very
keen to ensure that the markets are sustained because one of their
concerns, as indeed for all of us, is that if you have a poor
quality product, then its saleability is reduced. What we have
actually seen in the recession is that because it has become a
buyer's market, the ability for the purchaser to specify a higher
quality has increased. All of these factors have come together
to combine to create a set of circumstances which is very different
from five years ago. I cannot give you an estimate of the overall
percentage which is non-compliant, but if you put that full package
together with our interventions at a whole variety of points in
the supply chain, if you like, we are very confident indeed that
we have driven a significant improvement in the overall quality.
Q430 Chairman: We are going to come
on to look in detail at compliance and enforcement, but obviously
resources are a key part in terms of dealing with this. For the
record, can you tell me if a shipper accepts materials on board
to transmit and they are supposedly in accordance with the green
list requirements, does the shipper have any responsibly for what
is subsequently shipped? I understand in the case of the repatriation
of the containers in the Brazilian case, the shipping companies
have brought them back effectively at their expense. Do they have
any obligation about what they carry?
Mr Jordan: Yes, they do. They
have a legal responsibility and if indeed they do export products
which are non-compliant, we can prosecute them. We have used this
to good effect in building our relationships with the shipping
lines. A good deal of the intelligence, in fact probably the majority
of the intelligence, that we now get around illegal exports—and
that includes electrical and electronic equipment by the way which
we are concentrating on a great deal at the moment—comes
from the shipping lines. They have been extremely co-operative.
Q431 Chairman: In that context, are
shipping companies empowered to make inspections of what it is
they are being asked to carry?
Mr Jordan: Absolutely. They supply
the container; they know where the containers are located; they
know in theory the products that are in the containers. They seal
the containers and therefore they have a responsibility for knowing
what they contents are. Indeed, the contents are described in
a very clear way and those descriptions are passed on to HMRC,
so there is theoretically a very clear audit trail.
Q432 Chairman: You have mentioned
HMRC; they are but one of a number of agencies and organisations
that are central to this together with the security forces obviously,
the UK police and yourselves. You were talking theoretically about
an intelligence-led type of operation. In the nicest sense, without
giving away the trade secrets of how you put all of this together,
are you satisfied that there is sufficient understanding of the
problem by others and is there sufficient co-ordination and communication
about matters connected with illegal export of waste to give you
comfort that everybody recognises the problem and is actually
working in a properly co-ordinated fashion to deal with it?
Mr Jordan: I think there are still
some gaps. We, the Environment Agency, have powers to intervene
at ports. It is quite a cumbersome process, as you can imagine,
because we need to gain access into some secure areas. We believe
that there is a better model based on the Dutch model whereby
the intelligence from the HMRC database, which I have just described
as coming from the shipping lines, has a number of electronic
flags in it which then trigger what we believe will describe waste
being exported. We would like that information then to be passed
to the UK Borders Agency to enable them, the practical on-site
presence at the exporting port, to be able to intervene and undertake
inspections in co-ordination with HMRC and the Environment Agency.
There are a couple of legal impediments to that being enabled
at the present time.
Q433 Chairman: We focused in our
opening exchanges on the green list. I can remember from the time
when the Committee did its work on hazardous waste that there
are some pretty noxious substances around which are, for understandable
reasons, becoming increasingly expensive to dispose of properly.
You could imagine that the temptation stakes to cheat are rising.
Is there any evidence that for example organised crime has seen
this as an area of opportunity for exploitation and, if so, are
we equipped to deal with that kind of challenge?
Mr Jordan: If you look at the
regime which covers hazardous wastes exports, it is covered by
the Transfrontier Shipment of Waste Regulations but we are the
competent authority and the rules are extremely clear: if you
want to export waste, it has to be for recovery; it has to be
in agreement with the exporting country; and it has to be in agreement
with the receiving country. There are many countries to which
legally we cannot export such hazardous waste. We receive around
300 to 400 notifications a year for the export and indeed import
of waste for recovery. That, in our view, operates extremely well.
The engagement of organised crime in that area within the UK is
not something that has come to our attention, nor is it causing
us significant concern.
Q434 David Lepper: Could you say
something about international co-operation between the Environment
Agency that deals with these issues and your equivalent organisations
in other countries, the countries to which the exports are going?
What are the kinds and the sorts of contact there?
Dr Leinster: We work with the
competent authority within those receiving countries. We check
with them that they are content to receive the waste or, if we
are receiving waste from those countries, they will contact us.
There is a very structured way with clear timetables in which
that information is exchanged. On illegal waste, we are working
very closely with our colleagues internationally. In fact, we
are leading an Interpol group working with the US, Canada, the
Dutch and the Belgians primarily to look at some of these issues.
We also have bilateral agreements that have been working for a
number of years with colleagues in the Netherlands because so
much material goes through Rotterdam at some stage. They do a
lot of investigation work and we work very closely with them.
Q435 Paddy Tipping: Can I ask you
about the legal framework? Are you satisfied with that? I think
you told us just a minute ago, Mr Jordan, that there are a couple
of areas where you have concerns. Could you spell those out for
us?
Mr Jordan: Are you referring to
my reference to the co-operation between the UK Borders Agency
and HMRC?
Q436 Paddy Tipping: Yes.
Mr Jordan: My understanding is
that HMRC is not legally entitled to pass on other intelligence
to the UK Borders Agency. My understanding is that that could
be resolved through a relatively minor change in legislation,
through a statutory instrument.<ep[1]<nh<rs
Ms Parkes: More generally on our
powers, in 2006 we worked very closely with Defra on the implementing
regulations to go with the new European regulation. Since 2007,
we have had much tighter powers, for instance to serve notices
requiring information, stop notices. The point was made earlier
about the shipping lines. Since 2007, they have been one of the
responsible parties against whom we can take action, but obviously
as a modern regulator we are actually working with them to get
them to co-operate with us and thereby it is their intelligence-sharing
with us that is really helping us to target our interventions
where they can be most effective.
Q437 Paddy Tipping: So the law does
not need to be strengthened here? You are happy with the current
framework?
Ms Parkes: We are content with
the current legal framework around the export of waste.
Dr Leinster: There is one particular
area that Defra has recently consulted on where again we would
like to see changes, and that is around duty of care.
Q438 Paddy Tipping: They have just
finished the consultation, have they not?
Dr Leinster: Yes. What we want
is for the producers of waste to take responsibility for it all
the way through to knowledge of where it is ultimately going.
Too often, out of sight can be out of mind. We would like the
originators of the waste to be clear about where their waste is
going.
Ms Parkes: We would also like
to see an offence there on passing waste on to somebody where
you know it may be exported illegally. Too often the brokers are
the people that are profiting from this business but not actually
bearing their share of responsibility and when they are operating
outside the UK, it can be quite challenging to take any action
against them,.
Q439 Paddy Tipping: Does the duty
of care consultation look at this particular point?
Ms Parkes: Yes.
1 Note by witness: HMRC have helpfully pointed out
that HMRC can pass on other intelligence to the UK Borders Agency
and so this statement was inaccurate. Mr Jordan had intended to
refer to the legal bar on the transfer of information from HMRC
to the Environment Agency. If the words "UK Borders Agency"
were to be replaced by the words "Environment Agency"
in the above answer that would represent an accurate statement
of the problem that needs to be resolved by a relatively minor
change in legislation referred to in the subsequent sentence. Back
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