HC Deb 28 January 1999 vol 324 cc335-7W
Mr. Stunell

To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the financial cost to the packing industry of complying with EU law relating to recoverable packaging waste. [67682]

Mr. Meale

An assessment of the cost implications of the Producer Responsibility Obligations (Packaging Waste) Regulations 1997, which implement the EC Directive on Packaging and Packaging Waste (94/62/EC) was published when the Regulations came into force in March 1997. This assessment will be updated when measures to amend the Regulations are introduced in due course.

Mr. Burgon

To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on the outcome of his review of the Producer Responsibility Obligations (Packaging Waste) regulations 1997. [68346]

Mr. Meacher

I have considered the conclusions of the Advisory Committee on Packaging as set out in Sir Peter Parker's letters to me of 24 June and 22 December 1998, together with the other representations that were made to me in the course of the review. Subject to Parliamentary approval and, in the case of certain matters, the conclusion of the period for consulting European Union colleagues, I propose to make a number of changes to the Regulations as follows. As these changes are intended to take effect this year, I will introduce measures as soon as possible.

(i) The recovery and recycling targets will be increased in 1999 and 2000 as follows:

1999 2000
Recovery 43 45
Material-specific recycling 10 13
Recovery and recycling targets for 2001 will remain unchanged for now, at 52 per cent. recovery and 16 per cent. recycling, in effect, the Directive targets. I will keep these under review in light of further information, including the development of the new Waste Strategy for England and Wales, further work by the Department on packaging data and data returns from businesses and compliance schemes to the Agencies in 1999.

(ii) The Regulations provide that the financial turnover threshold falls from the present £5 million to £1 million in 2000. However, I have concluded that businesses with a financial turnover of between £1 million and £2 million are unlikely to be handling significant quantities of packaging and so, in 2000, only those businesses who have a financial turnover of more than £2 million will come within the scope of the Regulations.

(iii) Currently, the Regulations provide for "wholesalers" to take on the selling obligation for the small retailers that they supply. The Advisory Committee noted that removing this obligation would significantly simplify the obligation on wholesaling businesses, who, in any case, have obligations for the activities they perform on packaging. I consider that the removal of the "wholesaler" obligation is likely to be beneficial provided other incentives are in place to promote the collection and recycling of the packaging passing through small shops and I therefore propose to remove the "wholesaler obligation" from the Regulations.

(iv) I agree with the Advisory Committee that there is considerable potential for increased involvement of consumers in business efforts to increase the amount of packaging waste recovered, to supplement the initiatives of local authorities, voluntary groups and other organisations. I note that some obligated businesses are better placed to ensure that consumers are informed than others, while other businesses have little or no contact with the consumer. It will therefore be a requirement on obligated businesses whose main activity is "selling" to provide information to consumers about the role they can play in increasing recovery and recycling of packaging waste, and in encouraging greater re-use of packaging. A similar requirement will be placed on compliance schemes.

(v) The packaging Regulations are also intended to reduce the amount of packaging used in order to avoid creating waste as far as possible. I attach great importance to further progress on minimisation and want to see what industry can do on a voluntary basis to develop indicators against which performance can be measured.

(vi) A rigorous monitoring and enforcement policy on the part of the Agencies is essential if the mandatory Directive targets are to be met in 2001. The Regulations are based on an approach which shares the burden between the different players in the packaging chain and depends on effective "free rider" deterrence. Currently some 8,900 businesses are covered by " registration and this number will rise in 2000 when the turnover threshold test falls. If least-cost compliance is going to be achieved, business needs to be sure that all those who have legal obligations under the Regulations will register and comply with their full obligations. To this end, the Agency fee will rise to £900 with effect from 1999. I welcome the efforts made by the Agencies to strengthen enforcement programmes and I understand that the Agency has started taking proceedings against a number of companies who failed to register in 1998. With effect from this year I will be asking the Agencies to publish their monitoring programmes and report half yearly on number, size and sector of businesses checked for registration, for data provision, and for compliance with the recovery and recycling obligations. I also want to see a report on the allocation of Agency fee income to activities in this area. To help the Agencies in their monitoring duties, I intend that compliance schemes will be given a deadline of 15 April for the full provision of data relating to all their members, and 30 June for the provision of updated operational plans. The registration deadline for individual businesses and compliance schemes will be 7 April each year.

(vii) I am aware of the challenging nature of the data requirement but I note that business is itself keen to have as accurate as possible a base-line figure for the tonnage of packaging in the waste stream against which to plan. My Department's provisional estimate of packaging in the waste stream is approximately 8.5 million tonnes, rising to some 9.7 million tonnes once wood and other packaging materials are included. The more accurate the data provided by obligated parties, the more effective will be the efforts to plan for increasing recovery of packaging waste and meeting targets in 2001. An improved data form is proposed for immediate use, and with a view to easing the data requirement on businesses obligated in 2000 for the first time, the Department has commissioned work to develop "off-the-shelf' data forms for these smaller firms who will have the option of using these forms or collecting and providing data themselves. I am prepared to consider further whether there are alternative ways of collecting data that would meet all Directive requirements and enable business to plan confidently for continued compliance with the Directive targets.

(viii) I have seen the Advisory Committee's recommendation that business concerns about hardship needed to be addressed and their advice that businesses in some sectors could face significant net costs of compliance, particularly if they are not able to pass costs on; that particular concerns had been demonstrated by the convertor sector: and that some interim changes should be made to the percentage activity obligations. The changes the Committee is recommending are a 2 per cent. reduction in the convertor activity obligation (from 11 per cent. to 9 per cent.); a 1 per cent. increase in the activity obligations of packer/fillers (from 36 per cent. to 37 per cent.) and retailers (from 47 per cent. to 48 per cent.). The Committee has also recommended that a cross-sectoral, independent audit of net compliance costs of all sectors should be carried out in 1999. I welcome the Packaging Federation's support for both these proposals. I am inclined to accept the Committee's recommendations on these points but it will first be necessary to consult more widely on the proposed changes and the Department will be setting this in hand as early as possible.

(ix) I remain concerned that not enough is being done to ensure that sufficient household packaging waste will be available to contribute, as it will have to, to the achievement of the Directive targets in 2001. However, I have noted the advice of the Advisory Committee on this point and the views of the Environment Agency and others. Although separate targets for household waste were proposed in our consultation paper, I do not propose to introduce separate targets for household waste this year. I will be giving further consideration to ways of increasing recovery of packaging waste from the household waste stream. I am also proposing to make some "technical" amendments to the Regulations to clarify or simplify existing provisions or deal with unintended omissions. I also intend to provide the option for those businesses investing in identifiable re-use systems to spread the cost of their obligations. I will also made a separate statement shortly about the Packaging Waste Recovery Note (PRN) system.