Packaging Waste Regulations

Summary of key points

Regulations
The United Kingdom legislation is: "The Producer Responsibility Obligations (Packaging Waste) Regulations 1997" updated by “The Producer Responsibility Obligations (Packaging Waste) Regulations 2005”. This implements an EC Directive, the aim of which is to reduce the amount of packaging waste going to landfill sites by setting targets for recovery and recycling packaging waste.
 

The UK has set it’s own targets up to 2010 as:

Overall recovery

 The minimum amount of recovery to be achieved through recycling has been set at 92%.

Material specific recovery

The materials specific targets for 2008-2010 are given in Table 1.

Table 1: Targets by material - 2008-2010

 The Government Agencies responsible for implementation and enforcement are:

• Environment Agency (EA) – England & Wales
• Environment and Heritage Service (EHS) - Northern Ireland
• Scotland Environment Protection Agency (SEPA) – Scotland

Links to the websites of these agencies are available from our Links page

 Who is obligated?
Any company which handles 50 tonnes of packaging (or more) per year and which has a UK turnover of £2 million or more. Under the 2005 Amendments, there is a simpler process, the Allocation Method, which can be adopted by SME’s. For the purposes of this amendment an SME is defined as a company with a turnover of between £2 and £5 millions, that handles a minimum of 50 tonnes of packaging per year.

 The law affects companies who:  

• Manufacture materials for packaging (Producer activity).

§         Convert materials into packaging (Converter activity).

§         Put goods into packaging (Packer/filler activity).

§         Sell products to a customer who removes the packaging (Selling activity).

§         Import packaging or packed products from outside the UK (including using second-hand packaging)

§         Lease packaging to another company

§                     In addition, special rules now apply to Franchisors/Pub operating companies.

There is no change to the sharing of responsibility and cost for the recovery and recycling of packaging waste by all sectors of the packaging chain. This is determined by Activity obligation and percentage obligation for 2008 is shown in Table 2.

Table 2: Activity obligation – 2008

What packaging is involved?
For most companies their obligation is for any packaging that they pass on to their customer. This will include packaging around the products supplied and any packaging added (bags, wrap etc.). Packaging that is removed and disposed as waste within the company does not incur an obligation. If a company is responsible for the direct importation of product with packaging they have an obligation for this packaging.

Pub Operating Companies
Any tenanted pub company that meets the £2 million turnover and 50 tonne thresholds individually will continue to register separately for the Producer Responsibility Obligations (Packaging Waste) Regulations 2005.
However, under changes to the regulations, a pub company with a turnover in excess of £2 million that runs tenanted pubs will incur the producer obligation for their tenanted pubs that fall below the packaging thresholds individually, provided that together those pubs meet or exceed the threshold.  The Obligation applies to:-

• Packaging that they supply to the tenanted pubs

§       Any packaging that the tenanted pub is committed to use under the terms of their agreement.

For example:

Pub Chain Co. has a turnover of £14 million and handles circa 100 tonnes of packaging per year. It has 45 tenanted pubs, of which 5 meet the turnover and packaging thresholds. These five pubs must register independently and meet their own obligations. Pub Chain Co assumes the packaging obligation for the remaining 40 pubs in respect of any packaging they supply to the tenants under terms of any agreement between the parties.

Franchisors

Any franchisee that meets the £2 million turnover and 50 tonne thresholds individually will continue to register separately for the producer responsibility obligations (packaging waste) regulations 2005.
 

The Franchisor, providing their own turnover is £2 million or more, will incur the producer obligation for those Franchisees that fall below the weight threshold individually, provided that the group handles more than 50 tonnes of packaging per year. The Obligation applies to:-
 

§         Packaging that they supply to the franchises

§       Any packaging that the franchisee is committed to use under the franchise agreement.

Leased Packaging

The 2005 regulations introduce a new activity of “service provision”. This relates to businesses that lease pallets, crates and similar packaging to other companies. Previously there has been no obligation on leased packaging, whether you lease out packaging (the lessor) to another company or use leased packaging (the lessee). The impact of this has meant that although much of the packaging eventually ends up in the UK waste stream only 15% (from production and conversion activities) of the total obligation is being met.

To correct this, the regulations now require that the lessor will bear the obligation for the packing/filling and selling activities on the first use of leased packaging. If you lease packaging (the lessee), there is no change and you do not incur any obligation under these regulations.

Second hand imported packaging

Under the amended regulations, second hand imported packaging is now obligated, where previously it was not. Therefore any imported second hand transit packaging (such as crates and pallets) that remains in the UK will need to be included in your data submission.

What does a company/business have to do
An obligated company is required, each calendar year, to:

§         Register with the relevant Government Agency (i.e. Environment Agency) or one of it’s officially accredited Compliance Schemes and pay an annual fee (plus a joining fee for some schemes).

§         Calculate the weight of packaging it handles each year, categorised by material

§         Pay levies to a Compliance Scheme, or purchase PRN’s (Packaging Recovery Notes) to provide to the EA, according to its level of obligation for each material.

The Allocation Method

The SME’s must provide the following information to the compliance scheme:

§         Annual turnover (£) in the last financial year in respect of which audited accounts are available before the relevant date, rounded up to the nearest ten thousand pounds.

§         The predominant packaging material handled i.e. paper.

The compliance scheme will then determine the amount of packaging waste, in tonnes, that is the SME recycling obligation using the formula

(Turnover/1,000,000) X Recycling allocation (see table 3)

The SME will still be required (as now) to pay the annual registration fee any compliance scheme fees and the cost of obtaining PRNs by the compliance scheme

Table 3: Recycling allocations

It should be noted that SMEs who opt to use the allocation method are required to use this method for a minimum period of three years, provided their turnover doesn’t rise above £5 million, when they would have to register with a compliance scheme (or direct with the Agency) using the method of full data submission.
Companies defined as "sellers" under the packaging waste legislation also have an obligation (Consumer Information Obligation) to pass on recycling information to their customers.

What are the requirements for data?

• Data must be "as accurate as reasonably possible".

• Returns and back-up data to be kept for a minimum 4 years.
• Clear audit trail with all relevant paperwork.
• Evidence of correct categorisation of packaging.
• Clear indication of methodology.
• Sources of data identified.

 What are the penalties for non-compliance?

• Non-registration involves three offences for each year;

  • Non registration.
  • Not submitting data on packaging handled.
  • Not providing evidence of recovery and recycling (PRN’s).
• Each offence carries a maximum fine at Magistrate’s Court of £5000 (for first offence), a total of £15,000 each year, or larger fines at Crown Court. Continuing offences can incur unlimited fines, imprisonment of directors and even closure of the company.

Think your company may be obligated but is not registered?
If your company is obligated but not registered you are seriously exposed to the risk of prosecution by the Environment Agency. Non-compliance is an offence under criminal law and prosecution carries substantial penalties of fines plus costs, as well as legal fees, adverse publicity and considerable senior management input.

If you think you may be obligated but are not registered we recommend you urgently take expert advice to find the most cost effective way of complying with these Regulations. Contact J Williams & Associates on 01491 872837 or e-mail for advice.