Producer Responsibility Obligations (Packaging Waste) Regulations 2007

17:25:00

The Minister of State, Department for Environment, Food and Rural Affairs (Lord Rooker)
rose to move, That the Grand Committee do report to the House that it has considered the Producer Responsibility Obligations (Packaging Waste) Regulations 2007.

The noble Lord said: Again, I have a short and a long speech. For the convenience of the Committee, I shall use the short one. We are meeting here to debate regulations which make a number of technical changes, including amending some references in the 2005 regulations to reflect the original policy intention, as well as changes to allow for the electronic submission of data and the issuing of packaging waste recovery notes and packaging waste export recovery notes. An online system, the national packaging waste database, has been set up to provide an electronic system alongside the paper-based system, providing a more efficient way of doing business. The regulations before the Committee also contain other technical changes, including a proposal to change the criteria requiring an operational plan to be submitted by individually registered businesses.

Under the new rules, only businesses with an obligation of more than 500 tonnes must provide a plan. Fewer businesses—only 100—will therefore need to submit an operational plan. The proposals bring a further change that affects exporters, giving environment agencies the power to refuse accreditation to exporters who have committed, for example, Transfrontier Shipment of Waste Regulations offences. The new conditions of accreditation will include a specific reference to compliance with the trans-frontier shipment requirements.

In addition, where material is exported for reprocessing overseas, the end destination reprocessor will have to be identified by the exporter, not just by the interim recipient. That is necessary for the exporter to comply with the packaging waste directive requirement that overseas recovery and/or recycling operations can count towards targets only if undertaken in conditions broadly equivalent to those in the EU. I have recently answered several questions on this in your Lordships’ House. It is not possible to export any waste for landfill; that is quite illegal. It is a question of recycling and recovery, and we must know what is going to happen at the end.

Subject to the House’s approval, the regulations will come into effect in the middle of this month. It is a pat on the back for industry that UK packaging waste recovery has risen by 29 percentage points—from 30 to 59 per cent—between 1997 and 2005. Recycling rose to 54 per cent, from around half that figure some 10 years ago.

The proposed changes, supported by a formal consultation last year, will, if adopted by the House, approve accessibility for stakeholders through electronic means, and give us greater confidence in the regulations’ ability to deliver the directive’s recovery and recycling targets which the United Kingdom must meet by 2008. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Producer Responsibility Obligations (Packaging Waste) Regulations 2007. 9th Report from the Statutory Instruments Committee.—(Lord Rooker.)

17:30:00

Lord Taylor of Holbeach
I am pleased to speak on these regulations. I am afraid that I only have one speech on this subject; it is a little long, but I promise to be shorter on the next subject.

The regulations make changes to the producer-responsibility obligations, which are welcome. I particularly welcome the reduction of bureaucracy in the sense that a large number of people will no longer have to file a plan. I can speak to the regulations with some knowledge. Indeed, I have to declare an interest; my family bulb-growing, packing and distribution business is a registered producer and we are members of Valpak, an agency set up for the purposes of these regulations.

Speaking from that experience, I would say that generally the system works well. However, it is complex, and without the investment that we have made in creating a whole section of our IT programme to deal with it, we would find it almost impossible to monitor. Even as a medium-sized business, we have 2,500 product items, all with their own packaging formulations, with a very large number of many-to-many situations. These all require monitoring through the purchasing, packing and distribution process. We also need to pass on information to some of our customers to enable them to file their own obligations.

Even with the support of IT, two senior managers spent two weeks collating the data for filing with Valpak. When we talk about reducing the administrative burden and reducing bureaucracy, the regulations are a classic illustration of what it means to be in business today. The measure is well intentioned, properly directed and effective, but it is still one of those things that government send to test us. It is therefore important to bear in mind the impact of these regulations on business life. It is equally important that they are implemented with fairness and sensitivity.

On the first point, I am not sure that all who might be under an obligation are being properly investigated and audited. Perhaps the Minister can tell us how satisfied he is on that point. He might also tell us how many man days it takes to do one audit, and how many man days of the Environment Agency’s officials are dedicated to that work.

We note the inclusion of producers registered overseas who will now come within the scope of the regulations in respect of their UK operations. At the same time, I wonder how strong a grip the Government have on the internet sale of waste to third countries, particularly plastic waste. What checks have we to ensure that waste exported to overseas sites conforms with the EU directive on those sites? Who does the checking?

I shall continue with some personal observations. We can recycle cardboard and paper quite easily, even though the plant is 20 miles away. We have both baling and shredding facilities, but plastic, particularly if it is dirty, is very difficult to dispose of as no one wants it. We also find some matters of definition difficult. The plant-pot issue is resolved, but we have curious anomalies in display stands, which are excluded, but which are included if the bin, crate or box is used to transport goods, as well as display them.

As I said, the system in the main achieves its objectives. We are given incentives to reduce waste, to recycle what we can and to think carefully about packaging decisions. We accept that the changes that the regulations bring about are designed to make the system work better. We welcome the consultation with the advisory committee on packaging throughout the process.

I turn briefly to the text of the regulations as there are a few anomalies, which I hope the Minister can explain. The sum of “£5,000,000” is mentioned at the bottom of page 7. We all know that there is a de minimis of £2 million on this programme. Why is that not included in the regulations at that point? It is referred to later, on page 31, where the threshold is described, but I am surprised that the £2 million is not included in the opening general comments of the regulations.

On page 17, one finds the same situation under Regulation 16(4)(a) where, again, there is no mention of the £2 million. Sub-paragraph (b) says,

“and, in addition to the fee payable under sub-paragraph (a) or (b)”,

but I cannot understand the relevance of “or” in that statement, because sub-paragraph (a) is totally different from what this power seems to be looking at.

I also find unusual the absence in the regulation, as opposed to the covering literature, of any reference to electronic inputting. There are references to forms as approved by the Secretary of State, so there are words about the forms. But I am surprised that, as far as I can see, the regulation does not refer specifically to electronic inputting, which obviously will be a great advantage. It may help in the prevention of fraud if PRNs, for example, are issued electronically. I welcome the proposal, but I am not sure where it exists in the regulations.

I might have misread Regulation 36, entitled “Collation and provision of information”, but paragraph (1) states:

“The appropriate Agency shall collate and place in the common database every report provided to it under paragraph 1(n) of Schedule 5”.
 

As I read it, every report that is filed with the agency will be placed in a common database. However, paragraph (3) states:

“The Environment Agency shall … in the year following the year in which the reports are due to be provided under paragraph 1(n) … provide the Secretary of State with a copy of every report collated under paragraph (1) above”.
 

I wonder whether that means every report or whether it means the collation of the individual reports that have been submitted. Is it a summary or is it every report? If it is every report, my only comment is that if this information is in the public domain, we should be aware that it can be confidential; it is certainly commercially sensitive for those who are filing their reports. I would be grateful for the Minister’s observations on those points.

A table showing the targets for recycling is on page 34. The Minister has rightly drawn the attention of the Grand Committee to the success that we have had since 1997 in increasing the rates of recycling, and the role that business and industry has played. However, I am disappointed that the new targets leading up to 2010 are relatively modest. I am sure that the Government do not seek to be modest in their intentions, but I am disappointed that the figures are very low in terms of percentages. Take, for example, aluminium, which is a high-value product. We are recycling only 31 per cent of aluminium cans in this country, which is, I think, the lowest figure in Europe. Why are we expecting, even with effort and focus, to increase that by a modest 2.5 per cent from this year to 2010?

Lord Greaves
I, too, thank the Minister for introducing the regulations and the noble Lord for introducing some interesting and detailed questions on them. I shall range slightly more widely. I should start by saying that as the document is not a thin one—it is 50 pages long—it will contribute nicely to the recycling targets of your Lordships’ House in due course. But this is a serious matter.

These are amending regulations in many ways. They are the previous regulations from 2005 in a new form, with a certain number of changes, some of which are fairly minor but some of which are important. Particularly important is the ability of people to operate this system by electronic means; in other words, to submit data electronically and send in reports and information electronically. That in itself will help people to operate it more quickly, efficiently and cheaply. It closes some loopholes and reduces some of the burdens, and on that basis it is welcome. However, I should point out that it is about recovery and recycling targets. What it does not do is tackle the most fundamental problem of all—the quantity of packaging waste generated in the first place.

Despite the fact that the proportion of commercial packaging that is being recovered and recycled has gone up very significantly, having doubled since the original 1997 regulations came in so that it is now approaching possibly more than 60 per cent, which is excellent, the total quantity of waste is still going up. The figure I have is that, since 1999, packaging waste in the UK has risen by 12 per cent. Until we start to get at the origin of the waste, we shall not be tackling the problem.

Over-packaging remains a huge problem, as we all know. You only have to go to supermarkets to see the over-packaging of vegetables and fruit. Most ludicrous of all is the packaging of cucumbers, which come with the perfectly adequate natural package of their skin but which are nowadays invariably marketed in cling film. One could call them sheaths—but I am not sure what that would imply. However, electronic goods at the other end of the spectrum are getting smaller and smaller, while the boxes in which they come are not getting any smaller at all because the marketing of them is designed to make them look exciting, sexy and all the rest of it, whereas really they could be marketed in very much smaller boxes. In the days when I used to buy Hornby 00 railway engines and rolling stock, they came in boxes the size of the rolling stock, not in great big boxes with the thing in the middle. There is no reason at all why iPods and other things that I do not understand should not be marketed in the same way. So there is a lot of work to be done in that regard.

We must tackle these problems in a much more practical way. The Private Member’s Bill that my honourable friend Andrew Stunell presented yesterday or today would make it obligatory for supermarkets and similar shops to take back packaging that shoppers take and dump back on them. That is the kind of thing that we must do; we must make it possible for people to return the packaging to the places where it comes from so that those places would have to dispose of it, which would make them think much more carefully about what they package things in, because they would have to pay for it.

I found some interesting information in the Official Report of the House of Commons discussion in Committee on these regulations. My honourable friend Martin Horwood has dug out the fact that, under existing legislation, prosecutions for wasteful packaging are hardly ever made. Clearly, that is also a way in which producers and retailers could be made to look at packaging. According to his research, there have been only four prosecutions for wasteful packaging in recent years. Yet we know it is there. We all ought to encourage the trading standards departments of local authorities to take a more vigorous approach to this matter. Having said that, however, I do not wish to be too critical. This is a useful piece of delegated legislation, and it has our support.

17:45:00

Lord Rooker
I see that our future is being voted on now in the other place, so we will have to prove that we are doing a really useful job of scrutinising the Government. I thank the noble Lord, Lord Taylor of Holbeach. I have not been in Grand Committee with him before, so I am not certain whether this is his first appearance on the Front Bench. If it is, I congratulate him. He has been in the House for only five minutes, but he is obviously coming up the greasy pole quite fast. I have already heard him in debates in the Chamber, and I know that he brings a good deal of experience to the House. He asked about what is affected, and declared his interest. We do not decide; we are bound by the definitions in the directive, and they included plant pots.

I shall answer as many detailed questions as possible. Some may require a note from me, but I shall get through as many as possible. We do not know how many man hours were used by the Environment Agency, but I can find out. There have been a number of prosecutions, and the noble Lord, Lord Greaves, mentioned some of them. I am not sure whether he mentioned all of them, because sometimes prosecutions are brought not by the Environment Agency but by other bodies. Every effort is made to ensure compliance, and far more effort is now made than ever before.

The definition of a small producer is where the issue of the £2 million and the £5 million de minimis comes in. I have a list of 19 technical changes that do not include the electronic system that I shall come to in a moment. One of them states that the current definition of a small producer is a business that has a turnover of £5 million or less. That needs to be corrected to refer to a turnover of between £2 million and £5 million. Under paragraph 3 of the Schedule, a small producer must have a turnover of more than £2 million. That is where that de minimis comes in in the regulations. I do not know whether to apologise or not, because I assume that every word in these regulations is vital. These are large, detailed and technical regulations. If things are simple, the chances are that they will be unfair, so making the system fairer makes things complex.

The noble Lord could not find the reference to electronic means. Paragraph (5) states that a document may be provided by electronic means. The Environment Agency has put in place an electronic database for every port, and I understand that it aggregates the data for every quarter. I am pleased to say that I have not been on the receiving end because I am not the Minister for waste on a daily basis. It also provides aggregated data for the full year.

The noble Lord is quite right about metal waste, particularly aluminium. I recall from two recent PQs that aluminium can be constantly recycled. Recycling is enormously beneficial in saving energy, bearing in mind the massive energy used to get the aluminium from the bauxite in the first place. Our aims are to meet the business targets that are shown in the regulations and get the UK to meet its directive targets. There is a joint-metals target for steel and aluminium of 31.5 per cent by 2008. That sounds a very modest amount, but enormous amounts of materials are used.

The noble Lord also asked me about electronics and page 17. I am sorry; I wrote “page 17”, but did not write the question down.

Waste exporters will be required to provide details of the final destinations of shipments of waste overseas. This is intended to ensure compliance with the packaging waste directive, which requires that, when exporting to countries outside the European Union, an exporter must confirm that recovery or recycling at that site will be undertaken in conditions that are broadly equivalent to those prescribed by European Union legislation. It is illegal to export waste for landfill. I am not saying that that does not happen, but it is illegal. It is important that the final destination of the waste conforms to the standards we have in the European Union. That is checked. Visits are made to the sites—not a massive number, but I know from briefings for other questions that the Environment Agency and some local authorities have sent people, particularly to the Far East, to make sure that their waste is being dealt in an appropriate manner. That is a legitimate but expensive thing for them to do. It is part of making sure that we are operating in accordance with good environmental practice.

The noble Lord mentioned the complexity of the system. The size and detail of the regulations are consequences of that. These regulations came out of a consultation with industry. I understand there were 53 responses and that, by and large, they were strongly in favour of the proposals. I do not think there has been any dissent, because this is a complex issue. We want to reduce the burden, and only about 100 companies will be affected. Being able to use electronic means of transferring information will save a good deal of time. There will be an increase in the agency fee for this, as there always is. The increased fee proposed is fairly modest: an additional £26 for a large processor on an existing fee of £2,590, and £8 for individually registered producers on their current fee of £768. The additional funds will be ring-fenced and will be used solely to fund further development of the system for the benefit of users. They are not income. They are designed to recover costs.

I agree with virtually everything that the noble Lord, Lord Greaves, said, but important and valuable though his contributions were, they go a bit outside the scope of the regulations—he is nodding. My colleague in the department, Ben Bradshaw, the Minister of State responsible for waste policy, has given robust advice about what ordinary citizens can do at the supermarket checkout when they have been provided with far too much waste. He said that they should leave it at the checkout. I remember reading that that had been tested in eight supermarkets around the country and the responses of the supermarkets were reported, but I shall not go into that now.

The Advisory Committee on Packaging has set up an export taskforce that is examining the export market as a whole—where it is going, what happens to it and associated issues. There is far more work going on now than happened in the past because an enormous amount of waste has left the country and has been dumped in a bad or unsafe manner, and our job is to try to cut that out.

If there are other issues of detail that I have not answered, I am happy to write to the Committee.

Baroness Byford
I follow up my noble friend’s question on the recording of data and his concerns, raised in other spheres, over business sensitivity.

Lord Rooker
Frankly, I can deal with that without advice, but I shall take a nod or a shake from behind me. It is not our intention to breach commercial confidentiality and put businesses at risk by disclosing their plans. I presume that there must be, if not in the regulations then in the legislation supporting them, a measure on the recording of data. Data are aggregated, and there is no publication by company. Although we are down to only 100—the industry will know which 100 they are—there will be no disclosure of a company’s confidential information at all. That would not be appropriate under any circumstances.

On Question, Motion agreed to.