Defra reports “no evidence of fraud” in packaging exports

But, the investigation did identify “incorrect administrative practices”.

” The government does not propose adjusting the tonnages of paper packaging waste reprocessed or exported following this mission. “
– Defra
And, it concluded that the amount of packaging waste claimed as being exported from the UK for recycling in recent years “were higher than they perhaps should have been”.

The Department reported back today on its fact-finding mission, which investigated “inappropriate” packaging waste recovery notes (PRNs) sold by recycling companies to packaging producers.

PRNs and their export equivalent PERNs are sold to packaging producers or their compliance schemes to demonstrate that producer responsibility to invest in recycling has been carried out.

Defra was investigating allegations that exporters or reprocessors were wrongly claiming producer funding by issuing PRNs or PERNs when packaging waste was not actually being recycled. But today saw the Department reporting back that “no evidence of fraud was identified”.

Allegations
The mission came after allegations from the Confederation of Paper Industries that packaging export data from HM Customs & Excise did not match Defra's figures for the amount of paper packaging being exported (see letsrecycle.com story).

According to Defra investigators reporting on their findings today, “numerous examples of incorrect administrative practices” were found.

Yet, while the mission suggested that tonnages of packaging waste claimed to have been exported in recent years were higher than they should have been, Defra said it would not adjust UK recycling figures as a result.

It said: “The government does not propose adjusting the tonnages of paper packaging waste reprocessed or exported following this mission, since it was not possible to quantify the amount of tonnage to be deducted.”

Inconsistencies
Defra said inconsistencies in its data when compared to Customs data came because exporters had been using incorrect codes when declaring their exports to customs officers.

The investigation did suggest that exporters were claiming PERNs on packaging material deemed by foreign buyers as too wet to meet industry standards.

Since PERNs and PRNs are issued for the tonnage of material reprocessed or exported, wet material would represent a higher tonnage than dry material when the notes are issued – inflating recycling figures.

Defra explained: “All of the paper packaging waste exporters visited receive claims from time to time from their overseas customers that the moisture content of loads is too high, i.e. more than the industry-agreed level, and whilst all of them credit their customers in some way, all but one make no adjustment to their PERN records.”

Exports of paper packaging waste for recycling rose from just 177,439 tonnes total during 2001 to more than 1.1million tonnes in 2005 according to figures provided by exporters to the Environment Agencies.

Recommendations
Three reprocessors and 17 exporters were visited by external auditors between November 2005 and June 2006 during the investigation.

Their findings have lead to recommendations for action that include:

• Exporters cannot rely on suppliers to confirm loads are packaging waste.
• Exporters must ensure freight forwarding agents use the correct code for the type of packaging waste exported.
• Where moisture content of a paper packaging waste shipment exceeds agreed industry levels, “any adjustment to the price must also be reflected in number of PERNs issued by that exporter”.

Defra said it expects the paper industry and the Agencies to take on board the recommendations in the report, enabling them to carry out a more robust enforcement of exporters and reprocessors of paper packaging waste. Defra's industry focus group, the Advisory Committee on Packaging, will review the issues identified in the report with industry and the Agencies.

Future actions may lead to the developing of a voluntary protocol similar to those that exist for the wood and plastic waste sectors, the Department added.