Paper industry blasts Defra fraud investigation

The criticism came after this week's report on the government's fact-finding mission, which failed to find any evidence of fraud, but did identify “incorrect administrative practices” (see letsrecycle.com story).

” Reprocessors and exporters are under no obligation to become accredited and if financial costs outweigh the benefits. “
– Peter Seggie, CPI
The Confederation of Paper Industries said today it was “disappointed” that Defra's fact-finding mission had taken 14 months to complete and said the auditory team had failed to investigate key allegations of fraud.

The industry organisation said the investigation had failed to clarify whether there was any double-counting of producer responsibility evidence, known as PERNs, when passed between different accredited exporters. It also said the investigation had ignored concerns regarding PRNs or PERNs being issued against mixed waste loads.

The CPI believes practices dismissed as “incorrect” rather than fraud by the Defra investigation were in fact breaches of the law.

“No obligation”
It said failure by Defra or the environmental agencies to regulate the packaging waste recovery note (PRNs, or their export equivalent PERNs) system could see reprocessors refusing to participate.

Such an occurrence could mean the UK failing its packaging recovery targets under the European Packaging Directive.

Peter Seggie, the CPI's recovered paper sector body manager, said: “Paper PRN/PERN prices have collapsed to such a level as to warrant paper exporters and reprocessors to question whether the income generated covers the administrative costs of the system. Reprocessors and exporters are under no obligation to become accredited and if financial costs outweigh the benefits they may choose to consider remaining outside of the Regulation.

“This would have huge impacts for the UK in meeting its 2008 European obligations, especially as the HM Revenue and Customs data has been proven unreliable at product classification level,” Mr Seggie added.

Codes
Concerning one of the major findings of the Defra investigation, that exporters were using the wrong shipping codes for materials, the CPI said the shipping code system for waste paper were “among the simplest groups to follow”.

The organisation clarified that the six-digit “combined nomenclature” (CN) classifications had only four classifications. The CPI suggested better checks on the CN codes at key ports would provide a deterrent to fraud.

Mr Seggie said: “It is clear that an enforcement of the exporter CN classifications would allow a simplified audit check on tonnages declared within the Regulation, and those actually leaving the UK for overseas reprocessing.

“It would also allow simpler port checks to identify, especially in the case of waste corrugated materials, that the actual material inside the container matched the classification given on the documentation,” the CPI recovered paper sector body manager explained.

The CPI insisted it would continue to press government “until an effective and enforced system is in place.”