Examination of Witnesses (Questions 200-216)
Dr Martin Gibson, Dr Liz Goodwin, Mr Peter Laybourn
and Mr Nicholas Morley
15 JANUARY 2008
Q200 Lord Crickhowell: Some of us
are slaving away at the moment on the major Bill going through
the House on global warming and we are coming, in our last day
on the Committee Stage, to a number of amendments dealing with
waste. When you talk about strengthening the policy framework
with legislation, are there any particular things we should be
looking at in that as we look at the Climate Change Bill or any
other measures?
Dr Goodwin: The Climate Change Bill has obviously
got the provisions in it for pilot schemes for incentive charging
and WRAP supports that as a principle and as a potential way forward.
There is evidence from overseas that incentive charging can provide
a huge stimulus to increased recycling. The important thing is
that we have got to see whether that learning from overseas can
be translated into a UK environment and hence the idea of actually
running some pilots to see whether that learning can be implemented
in the UK, I think, is a good way forward.
Mr Morley: VAT is charged at a lower rate in
micro-generation. That is an example of where they have looked
at differential rates of charging VAT in order to encourage the
uptake of what is seen as more sustainable products.
Mr Laybourn: I think we are being encouraged
by Defra to focus on some of those waste streams that have got
very high embedded energy. We have a very comprehensive database
to support that sort of approach.
Q201 Lord Crickhowell: How should
sustainable design be promoted to business? Are there currently
difficulties in that respect?
Dr Gibson: Envirowise has a programme to help
companies with improving their design particularly in the areas
of electronics and packaging because that is where there is the
greatest uptake at the moment and indeed we work with WRAP on
packaging as well. There are a number of barriers to improved
design, one of them being cultural in that designers are looking
to design a product and they look a lot at the functionality and
the appeal of the product rather than embedding in the efficient
use of resources and how it is disposed. We have noticed that
when we have worked with designers they are very open to taking
on new ideas about the more efficient use of resources and how
things will be affected when they are disposed of and perhaps
how they are reused. I think it is mainly about education and
embedding into design practice consideration of environmental
issues more.
Q202 Lord Lewis of Newnham: Can I
first of all say that I am most impressed by your remarks about
using resource management because I think the word waste has a
negative side associated with it whereas you are talking about
a very much more positive term in that particular way. It also
means that one can include things that perhaps one would conventionally
regard as waste. To me waste is very often and very much a material
sort of solid thing whereas in your definition we would include
things like energy or even manpower and things of this particular
sort, which I think is a very important part of the whole of this
particular problem. If we turn to a specific point, which has
been the packaging problem because this has been one where legislation
has been in place for quite a period of time, the Courtauld Commitment
has been very successful in encouraging manufacturers to reduce
packaging. What motivates companies to join this commitment and
how can these conditions be replicated for other sections of the
waste streams? It does strike me that in this we have a certain
degree of a success story. Can we apply it to other areas?
Dr Goodwin: Yes, I think we can. I think there
are probably three reasons why the retailers and now some of their
brands are signing up to the Courtauld Agreement. The first was
that their own research was telling them that their consumers
were concerned about packaging and they wanted them to do something
about it; they were getting bombarded with consumer feedback.
Secondly, they realised that there was some cost-saving potential
for them as a business because they would use less packaging themselves
and there was obviously the scarcity of resources, increasing
raw materials and energy prices associated with that. Thirdly,
they saw it as a way to provide an innovation spurt into their
business and in the way they thought about their whole supply
chain and the way they managed getting the materials from the
manufacturer to the householder. I think they felt that they probably
wanted to make sure that the Government did not intervene and
put in more legislation, so they felt they needed to be seen to
be doing something as well. That was probably in the back of their
mind as well. The growing awareness that there has been more generally
about the environment in accordance with climate change has just
increased that pressure. We have seen this momentum building in
terms of the retailers coming out with their own commitments and
setting themselves targets and almost trying to leapfrog each
other in terms of how they are stretching those targets and we
are starting to see some real progress. All the signs are that
we will achieve the first target, which is this year, for packaging
as a result of that commitment. In terms of applicability to other
sectors, yes I think it definitely is applicable. We are currently
working on some plans with the construction sector. We have already
got an agreement for plasterboard as one tiny part of that construction
sector, but we are looking more broadly at the construction sector
as well. I am sure there are other areas where it could equally
be applicable, maybe electricals and maybe even in some of the
energy areas as well.
Dr Gibson: We are working with the Food and
Drink Federation to apply the Federation House Commitment on water
use and reducing water use and companies will sign up to that.
We think one of the key successes behind the Courtauld Commitment
approach that WRAP has taken is following up with support and
advice to the companies after they have signed up and that is
critical. Some of you may remember there was the Making a Corporate
Commitment campaign about ten years ago on energy, which was an
excellent idea, but there was perhaps a lack of follow-up after
it. The implementation was not as great as it might have been.
Hopefully this time it will be better.
Dr Goodwin: It was very noticeable in WRAP,
when we got the first key signatories to the commitment, the amount
of resource required from the organisation to back that up. We
needed technical expertise to provide information and advice to
those companies. We got a deluge of requests for support and we
had to gear up to actually be able to support that need.
Q203 Lord Lewis of Newnham: This
seems a very important point to me, that you must have the support
structure. This is fine, but you mentioned electronics and things
of this nature. Where would you envisage the responsibility for
such a support system would come from?
Dr Goodwin: Good question! It would depend on
who was tasked with doing that job. If WRAP was tasked with that
task then we would have to build the expertise. That is what we
did with the retail sector, we built that expertise before the
Courtauld Commitment. We did not have a team sitting there with
expertise on packaging and expertise around waste minimisation
issues to do with packaging. I think a lot of the retailers have
lost those skills and knowledge in their own design teams and
they are now looking to us to see whether they can fill those
gaps using our expertise. Whoever is given the task would need
to build that expertise.
Dr Gibson: We feel very strongly that government
programmes are there to help market failures, so raise awareness,
show companies the benefits, but it is very important that there
is a point at which the private sector takes over and private
consultancies take over. Once the infrastructure and the understanding
in business is in place that there is actually a commercial market
--- That is part of what we believe that government programmes
are there to do, to stimulate the industry to provide the services
that business needs.
Lord Lewis of Newnham: I also like the point
that Dr Goodwin made, which I think was that one of the most important
incentives with that was that the Government was just there and
possibly going to do something if you did not.
Q204 Lord Methuen: Have you been
successful in getting SMEs to join the Courtauld Commitment?
Dr Goodwin: We do not target SMEs, we have just
targeted large companies and then the impact of that gets fed
through the supply chain. For example, we work with Tesco and
Tesco then goes out to its supply chain.
Q205 Chairman: I get the impression
that what you are doing is you are getting the message through.
Someone referred to the laggards. What do we do with the laggards?
Do we hope that they wither on the vine of their own wastefulness
or do you introduce regulations with all the political difficulties
that that creates for Government?
Dr Gibson: Our belief is that the laggards will
disappear over time. We are already seeing quite a bit of evidence
that major businesses are now embedding good environmental and
even sustainability practice into their day-to-day activity. It
will become part of the way that we do business in this country
and hopefully around the world very much in the way that safety
has changed over the decades to become part of what you expect
today. Hopefully that will be one way that the laggards will go,
but I agree with Nick Morley that there is probably more targeting
we can do to help some who might not be laggards with a bit of
help.
Q206 Chairman: John Maynard Keates
did say that "In the long run, we're all dead"! That
takes rather longer than the planet or ourselves—we wish!
Mr Laybourn: We tend to attract the more proactive
companies and the fitter companies in the programme, but as the
network grows so quickly, like Martin said, we do believe that
the laggards will fall behind and be shown up by the examples
of these other companies. Long-term engagement with companies
does bear more results. I can give you the example of UK Coal
where we had a short intervention, but we kept behind them and
they are now doing some marvellous things. That long-term engagement
with a company is very important indeed.
Lord Crickhowell: Have you any thoughts about
what is one of the central areas of waste among retail organisations
and that is that they have to market their products? They usually
market their products by sending out vast quantities of paper,
usually in quadruplicate or worse, which pour through my door.
Usually once you have ordered a product you then get not just
one repeat offer to come again but probably four or five because
they widen the network. I throw away daily a quantity of paper
of a simply staggering scale. Do your organisations have any thoughts
or ideas about how this dilemma is met? Naturally organisations
want to send out catalogues to persuade people to buy. The network
of catalogues somehow grows in a way that I have never quite understood
so that you then get four or five coming from different sources
and they go on, again and again and again, even if you never buy
their product. I should have thought, compared with the packaging,
this must be one of the largest areas of unwanted and sometimes
extremely irritating waste that the ordinary customer has to deal
with and the householder is now being threatened with possible
charging by local authorities and others to dispose of the waste
over which they have no control at all about input. Do your organisations
have any thoughts? Is this problem being addressed at all?
Q207 Baroness Platt of Writtle: I
wonder if I can just come in and add to that. These catalogues
are in fact also leading to built-in obsolescence; it is leading
to even more waste.
Dr Gibson: The second point is quite difficult.
I think the Direct Marketing Association is looking at best practice
and members of that hopefully will take on board the idea of not
sending you things if you ask for them not to be sent to you.
I am not in favour of regulation because I think it would be a
very difficult thing to police in this area, but I feel—and
this is not from my organisation's viewpoint—that if you
return post then there should be an obligation on those having
it returned to listen to you and not send it to you again.
Q208 Earl of Selborne: In the earlier
session you might have heard us discuss Government procurement
policy and I think we would all recognise that such a significant
procurer as the public sector could make a very great impact on
waste minimisation and promulgating good practice, but our earlier
witnesses said we were not doing a particularly good job compared
to the United States and others. What do you think could be done
to improve public procurement to encourage waste reduction?
Dr Goodwin: I think there is a lot that they
could do in terms of influencing the sustainability of products
that are on the market through specifying what they want to see
as well as in terms of using their purchasing power in other ways.
For example, with the massive amount that the public sector buys
in terms of the construction sector they can specify how projects
are carried out, so they can specify the extent to which waste
management plans are used, good waste management practices, waste
minimisation practices onsite, they can specify recycled content
and they can specify other things around the design of the construction
build. I think the public sector has a huge role to play.
Q209 Earl of Selborne: I think we
all agree that they could, but evidently they do not or we do
not. What is going wrong?
Dr Goodwin: We are seeing some progress. One
of the areas where we have been quite successful is in persuading
people to specify recycled content and that is a potential model
that could be used elsewhere. We have certainly got good support
in Scotland for specifying recycled content. We are starting to
see the public sector starting to specify and that is great. That
requires again the sort of approach of having a high level commitment
and then a massive amount of support for the people doing the
task to help them do it and to show that it does not cost them
any more.
Dr Gibson: Our feeling is that Government policy
on procurement is very good, but the management of the implementation
is not up to the policy in many areas yet and so perhaps there
needs to be more emphasis on how the policies are implemented.
At the moment there is also a lack of expertise in the procurement
profession and that is improving, but anything that could be done
to speed up understanding of environmental issues in the procurement
industry would be a good thing to our mind, eg what procurers
can expect the outcome to be from good procurement. There are
things like the "quick wins" for public procurement
which we think is a good step in the right direction. However,
it is quite a cumbersome list at the moment and it is particularly
cumbersome for new products to get onto. Perhaps that could be
looked at to make it easier for new products to go on to that.
We could help people to understand the idea of purchasing for
the whole life cost or the whole life value when they are purchasing.
People say that they are doing it, but we still see lots of evidence
of people buying on lowest purchase price which does not necessarily
give you the best resource use over the life of the thing that
you are purchasing. One thing that we would also suggest is that
by being over-prescriptive in procurement you can often stifle
innovation. We believe it is quite important to follow the best
practice we have seen in businesses where they specify the outcome
they want rather than telling them how it needs to be done. Any
procurement practice that can say: "This is what we want
delivered. Can we see how you would suggest delivering it?"
would usually help innovation and hopefully help resource efficiency.
Q210 Earl of Selborne: If you are
going to specify for outcome rather than product and process do
you see any danger of discrimination against one particular sector
or supplier? We heard from the Federation of Small Businesses
that they might be concerned that the increased use of standardisation
might discriminate against the small supplier.
Dr Goodwin: I would have thought specifying
for outcome actually would be less of a problem rather than specifying
the specifics about the individual material that is used.
Dr Gibson: I would agree with that entirely.
It would hopefully benefit. In general we find that smaller companies
can be more reactive and react more quickly and can be more innovative
than larger ones that have more complex decision-making processes.
I would see that there would be a benefit for those smaller but
fast moving companies.
Mr Laybourn: I think the Government could do
a lot in the use phase of the procurement. For example, we are
currently doing some work with the MoD and with the National Health
Service and collecting data on materials and uses of their energy
and assets, et cetera. I think a lot could be done there and it
would probably save the MoD and the NHS millions of pounds a year.
Q211 Chairman: What are the most
common gaps in knowledge that prevent businesses from reducing
waste?
Mr Morley: I think one of the greatest barriers
that you have is that of internal budgets of companies, this perennial
problem that if a purchasing department saves money for itself
on its purchasing budget they are not penalised for the knock-on
effects of perhaps the wastefulness or the lack of resource efficiency
of the products because that is operations' or production's problem
and not on their budget. That is on my wish-list of things that
one would like to have, ie internal departments of companies or
organisations that talk to one another and really seriously address
the whole life costing techniques and regard the cost for the
organisation as a whole and not simply perhaps what they were
tasked with and rewarded for.
Dr Gibson: Let me give an example of that. Almost
a decade ago I visited an oil rig manufacturer and I was speaking
to one of the welders who said that they had been given new welding
rods that were cheaper and when you struck the weld it worked
the first time but when you went to do the other side of the weld
it did not work so you threw away more than half a welding rod.
They were cheaper, the purchaser had probably got the brownie
points for that, but in the whole life terms it was not successful.
Mr Morley: Whole life costing is a key lesson
to bring in to an organisation.
Q212 Chairman: This is one of these
kind of questions that really there is not an answer to. At the
moment there is a tremendous encouragement for scientific research
to discover new, more efficient ways of doing things better and
then there are these great areas, the dark side of the moon so
to speak. Which of the two should be given higher priority, should
it be the promotion of further research or actually the sharing
of the experience so far, or do you say both?
Dr Goodwin: I would definitely say both. There
are some fantastic gains to be made out of some very simple things
that an awful lot of businesses have not looked at yet. I agree
that it is this lack of understanding of the whole resource as
a strategic issue for the business. They see it as an end of pipe
cost of disposal and it is a bill that they get every month or
whatever. I also think knowledge is not the only barrier, there
are some other barriers. There is the commercial risk associated
with making some process changes and so sometimes we need to think
of ways of helping the businesses go through that risk management
process to make that change and to make the actual savings overall.
Mr Laybourn: We do think that there is a lack
of knowledge in the advancement of technology and on process innovation
and what we are trying to do to address it is that we have embedded
innovation and technology managers in each of our regional delivery
teams. We are getting more direct contact between the companies
themselves and our research establishments. Something like 20
per cent of the synergies that we have achieved to date have involved
the implementation of new R&D within the year, which I think
is quite exceptional.
Q213 Lord Lewis of Newnham: We have
heard previously that one of the problems here is very often the
fact that waste is not considered in the primary line of costing
and that really in many manufacturing situations you are interested
in the price of the product at the end rather than what happens
to the product afterwards and the various factors involved in
it in that sense. If I understand it correctly, what you are saying
is this is in part a management problem, it is not holistically
looking at the whole situation that is isolating it into individual
divisions which are then operating within their particular remit.
Is this true of other countries as well or is this a unique experience?
Is there something different in Japan or in America?
Dr Goodwin: I think it is something that all
companies and all countries go through. I started work in the
chemical industry and it was about the time when we were starting
to understand the full cost of waste. You started to look at the
cost of lost raw materials as well as the actual cost of the waste.
SMEs are now learning that as well. That parallel can be seen
in other countries.
Q214 Lord Lewis of Newnham: Do things
with multinationals become very much more effective? I was involved
at one stage with ICI and we ran into an interesting problem there
where we discovered that part of their costing was throwing away
large vast amounts of organic solvent. They then began to recover
the organic solvent. Not only did they reduce a pollution problem
with solvents but they were actually making money because they
were able to reuse it. That idea in fact had come primarily from
a visit to Dupont in the States, that is where the whole situation
arose in that way.
Dr Goodwin: I started working for ICI and because
it was an international company, some of those learnings got transferred
to Third World countries as well, so you can get learning across
other countries.
Mr Laybourn: With this business opportunity
industrial symbiosis approach the UK have got the world lead.
We are currently helping China, Mexico and the USA implement these
types of programmes. The business opportunity approach is being
copied out of the UK into other countries.
Dr Gibson: On the question about management
and communication and multinationals, we see everyday that very
few businesses do things as well as they could, so that is a management
and communication issue. Every business would love to learn more
and to be able to do it more quickly. I think there is still a
lot to be done and a lot of gains to be had by increasing our
management expertise, increasing the knowledge of the relevance
of these issues to individual businesses and of the benefits that
they can have. On the multinationals specifically, I was talking
to one about three years ago that ran its own programme based
on the idea of "if only that company itself knew what it
knew", where different sites had expertise that was difficult
to spread and I think that is true of the economy as a whole.
Individuals in sites will have best practice perhaps and getting
that spread more widely is a difficult behavioural change, culture
change and marketing task.
Q215 Lord Methuen: What are the key
waste streams or sectors that most urgently require a waste reduction
approach rather than a recycling approach?
Dr Gibson: We have had a discussion within our
team about where we feel this is most likely to be focused. First
of all, I would start with construction where it has been estimated
that about 13 per cent of materials purchased for construction
goes straight to a site and into the waste skip. We would like
to see those used 100 per cent and that would reduce a lot of
unnecessary material use and the wastage from it. We have also
found that in a lot of the processing industries, such as plastics
for example, within the site they often will recycle product that
is not right and it will go right back up to the start of the
process and that is not always recognised as waste because it
never leaves the factory site. A lot of processing industries
probably have that mentality and if they can think about getting
it right first time then that would help. We would say, as I mentioned
earlier, that paper is possibly a good one to move on to next,
certainly business paper where recycling has now gained a good
foothold, but how can we get people to make sure they use all
the paper before they recycle it? The spirit of the Waste Electronics
and Electrical Equipment Directive was to reduce the use of materials
and to increase the reuse of materials in the first instance,
which is leading to higher recycling. What we would like to see
is more electronics and electrical companies upgrading their equipment
and remanufacturing, as Mr Morley was talking about earlier.
Q216 Lord Methuen: Where do vehicle
tyres come into this?
Mr Morley: There is a very large gain if one
re-treads or remanufactures vehicle tyres over mechanically recycling.
Obviously one can no longer landfill tyres, that is now forbidden.
There are interventions already in the HGV sector where vehicle
tyres are re-treaded and remanufactured regularly, up to seven
or eight times through what are called tyre management programmes.
The idea, which WRAP are funding and we ourselves as a consultancy
are working on, is to look at moving that into the light commercial
vehicle area, so moving it to lighter vans, your Waitrose delivery
van, that type of thing and then the ultimate goal would be to
move that into consumers, but there is consumer resistance because
of a perception about remoulds and re-treads having a slightly
defective performance. The re-treaders would argue that is a false
perception. It was perhaps historically formed many years ago
and should be removed. That is what is happening on re-treads.
From our own point of view, you have to take the difference between
what is manufactured in the UK, in which case you would be looking
in areas like retail, construction and food as key areas, or are
you concerned about all products at end of life because obviously
a lot of the products at end of life are not manufactured in the
UK and if your main concern is end of life waste reduction then
you have to come at that from a consumption point of view and
say what are we consuming and how can we intervene in those ways.
That brings you into some of the interventions that Defra tried
to bring together in road mapping from a consumption perspective
rather than from a production perspective.
Dr Goodwin: I would agree with both construction
and manufacturing, retail and food and drink. Just in terms of
food, we estimate that around 20 per cent of the UK's carbon emissions
comes from the production, distribution, storage and transport
of food and then we waste a third of it. That is obviously an
important area. There is also wastage in the supply chain as well.
Mr Laybourn: I think that in any area where
you can substitute for virgin resources you often get a double-whammy
and virgin resources are often coming from high energy intensive
mining industries and are invariably imported into the UK. Where
we can substitute for virgin raw materials I think it is a good
thing to do.
Chairman: Thank you very much. We have had two
good sessions this morning. If you have something that you would
like to leave with us or if there is any additional information
that you would like to pass on to us, please feel free to do so.
We will reserve the right to come back to you if we think there
is anything we would like you to expand on. Thank you very much.
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