On 23 March, DEFRA launched a consultation (closing on 19 April) on the proposed consolidated version of the Producer Responsibility Obligations (Packaging Waste) Regulations 2007 (“Regulations”). Whilst the legal position will not change, amendments made since 2007 are consolidated into one piece of legislation that can be easily understood. It’s a timely reminder of the packaging waste regime and will once again draw attention to the obligations it places on businesses.
Non-compliance is a criminal offence and if prosecuted can lead to large fines. The Environment Agency, who regulates this regime, can also impose civil sanctions as an alternative to criminal prosecution. In our experience, this is the route that is frequently being taken. It usually takes the form of an enforcement undertaking whereby the offending company offers to make a donation to an environmental charity. Between August and December 2015, around £76,000 was donated to such charities by businesses that had failed to comply with their packaging waste obligations.
Despite the Regulations being in force for 9 years, we are still routinely coming across businesses (both small and large) that are unaware of their packaging waste obligations and therefore failing to meet their legal requirements. Where this issue arises on merger and acquisition transactions, it can require prompt remedial action and the negotiation of indemnities to cover any associated costs.
Are you obligated?
Any company that “handles” more than 50 tonnes of packaging and has a turnover of more than £2 million has obligations under the Regulations. You “handle” packaging if you:
- manufacture packaging
- put goods into packaging
- sell packaged goods to end users
- import packaging or packaged goods into the UK
If you are obligated, and your turnover is below £5 million, you will be a “small producer” and able to benefit from a simplified calculation and reporting procedure.
Have there been changes to your corporate group?
Where there is a corporate group, obligations are considered at group level. If your group structure has changed recently, for example, following an acquisition or disposal, you need to be sure that packaging handled by all relevant companies is covered.
Are any European operations covered?
The packaging waste regime comes from a European Directive and therefore all Member States have implemented similar rules. This means that if you have any European operations you also need to consider what local regimes are in force and whether you meet the thresholds to be obligated there.