Producers of packaging beware – non-compliance is about to become much more costly.
Limited enforcement action and relatively small fines have caused compliance with the UK’s packaging waste regime to be neglected by businesses. However, public agitation and new European legislation (such as the restrictions placed on single-use plastic bags) have forced the issue up the political agenda, resulting in proposals to expand businesses’ liability. In anticipation of increased enforcement activity and potentially new draconian legislation, we revisit the current regime to understand:
- what needs to be done now to comply; and
- what may be needed to comply in the future.
Based on EU Directive 94/62/EC, otherwise known as the Packaging Waste Directive the current regime was implemented in the UK by:
- the Producer Responsibility Obligations (Packaging Waste) Regulations 2007; and
- the Packaging (Essential Requirements) Regulations 2015.
Those national laws will continue in force notwithstanding Britain’s expected exit from the European Union in March 2019.
The regime applies to ‘producers’ – generally those who manufacture packaging materials or packaging; package goods; or who import or sell packaging or packaged goods. ‘Packaging’ is essentially any material used for the containment, protection, handling, delivery, or presentation of goods. The regime also applies to licensors and pub operating businesses.
Producers have responsibility obligations’ in relation to the packaging they deal with and are subject to the regime if they:
- conduct any of the activities mentioned above;
- have an annual turnover of more than £2 million; and
- handle more than 50 tonnes of packaging per year (calculated in the aggregate for groups of companies).
Whilst the level of enforcement action has not always reflected this fact, it cannot be denied that the regime applies, in principle, to a wide range of businesses.
Producers’ responsibility obligations require them to recycle or recover packaging (either themselves or by joining a registered compliance scheme to do so on their behalf). In addition to those duties, producers must:
- register with the appropriate agency (for England, the Environment Agency);
- provide to the appropriate agency a certificate of compliance for their recycling and recovery obligations; and
- if they recycle and recover packaging themselves, provide the appropriate agency with ‘packaging recovery notes’ or ‘packaging export recovery notes’ evidencing they have recovered and recycled the appropriate amount of packaging waste.
Producers who sell packaging or packaged goods must provide buyers with certain information about the regime, including how it operates and the roles of various parties within it.
Should producers fail to comply with their obligations or mislead, intentionally delay or obstruct the appropriate agency, they will have breached the regime. Some breaches may incur criminal liability with the maximum penalty being an unlimited fine. Others may be dealt with by civil penalties, in the form of fines, or the provision of enforcement undertakings, eg a defendant agreeing to reform by taking steps to remedy its wrongdoing and make donations to organisations and charities working on environmental issues. Interestingly, such donations are often greater than fines imposed under the regime. Examples of donations in recent years include:
- olive oil company Filippo Berio donating £250,000;
- pharmaceutical giant Sandoz donating £120,000; and
- drinks producer Gonzalez Byass donating £120,000.
Whilst the penalties for non-compliance to date have not been serious, the legislation permits unlimited fines to be imposed and, given the anticipated change in attitude of the enforcement authorities, it seems likely that increasingly significant fines will occur. In addition, regulation (particularly in relation to single-use plastics) and associated enforcement action have, and will likely continue to, increase. Recent measures have involved the introduction of powers requiring the removal of all waste (rather than merely illegal waste) from ‘problem waste sites’, and the provision of body-worn cameras to officers working on enforcement matters. Imminent changes also include the proposed expansion of restrictions on retailers’ use of plastic carrier bags.
At present, it is estimated that producers bear 10% of the cost of recycling and recovery, with the taxpayer bearing 90%. Under proposals reported following a consultation in early 2018, the Government intends that producers bear 100% of the cost of recovery and recycling, alongside a host of other measures including a tax on single-use plastics; incentivising the use of environmentally-friendly packaging; and possibly a restriction on the use of plastics in certain packaging, where alternatives are available. The proposals mooted are likely to be implemented on a phased basis, over the next few years.
With regulation and enforcement increasing, the potential to be held liable, even for inadvertent defaults, is extensive.