Valpak reports full PRN compliance for 2012

The company, which operates the UKs largest packaging producer compliance scheme, said today (February 5) that by working with reprocessors and members and by following its operational plan it has managed to secure the evidence needed to achieve compliance.

“2012 has seen the UK PRN system severely tested again”

Steve Gough, Valpak

The main challenge in 2012, explained the company, was in glass, where the levels of reprocessing carried out in the first three quarters of the year were insufficient to meet the packaging recycling target for the year, thereby requiring an unprecedented level of recycling (565,000 tonnes) in the fourth quarter.

To stimulate this growth, Valpak explained that responsible compliance schemes had had to significantly increase the financial contribution they make to recycling through PRNs, resulting in an unexpected and sharp rise in compliance costs for many producer members. However, the scheme said that many producers recognised that the PRN system over time still delivered compliance at low cost and must be able to react to market fluctuations.

Steve Gough, Valpaks chief executive, said: 2012 has seen the UK PRN system severely tested again. A combination of factors came together to cause some major issues in the market place two years of flat targets, glass reprocessor fraud, tough economic conditions, downturn in exports for some materials and generally difficult trading conditions for us and our members.

With this in mind, we are delighted to announce that Valpak has fully complied for 2012. We would like to thank our members, reprocessors and our staff for the efforts and understanding during what has been one of the most challenging compliance periods in our 15 year history.

Operational Plans

According to Valpak, a key factor in achieving compliance was creating and following effective operational plans. Schemes are required to submit an operational plan to the Environment Agencies detailing how they will deliver compliance, their strategy to acquire evidence and contingency plans in the event of any contracts failing.

Mr Gough said: This year has shown the importance of adhering to some key elements of operational plans, for example steady acquisition of evidence through the year and contingency planning. It may be that proposals to remove or relax the requirement for these plans should be reconsidered.

It is the combination of strong management of the operational plan, together with the efforts and understanding of our reprocessors and members who all take their responsibilities very seriously, that has delivered sufficient glass evidence to ensure Valpaks compliance for 2012. We always aim to create realistic plans, and then follow them wherever possible. As an example of that process, we were able to release some slight surpluses of glass evidence that our reprocessors have been able to produce back into the market to assist other producers and schemes.

Valpak said that it believed the UK reprocessing of glass in the fourth quarter of 2012 was well over 500,000 tonnes and demonstrated that the capacity existed to handle necessary tonnages, despite the trend towards mixed colour/comingled collections.

Mr Gough added: In fact, we are aware that at least 14,000 tonnes of evidence produced in 2012 was not required by obligated producers and was carried over into 2013. The remaining question is whether sufficient material is being collected overall now that the fraudulent activity of one or two parties has been removed and the system has had time toreadjust.

Repercussions

Valpak said it understood that a number ofobligated companieshave considered whether or not the cost of complying in 2012 was acceptable and may have decided to simply not payfor PRNsand hope the repercussions are less costly.

Valpak said the agencies and government would need to consider the implications of this, particularly as producers face very challenging plastics recycling targets over the next five years.

Mr Gough said: Something that Valpak has been suggesting in the packaging regime for a number of years is the concept of a ‘compliance fee’, or a ‘penalty fee’, if evidence is not available after reasonable efforts have been made. There is real concern that some parties may be choosing to drop out from the packaging regulations when the costs rise and will claim that evidence was simply not available. If there is no alternative then these businesses will have gained a significant commercial advantage over their competitors who have done the responsible thing.