Corporate report

Compliance monitoring and enforcement activity 2020

Updated 11 May 2021

Applies to England

This report provides a statement on the actual monitoring done and successes during 2020 for the packaging regime.

1. Executive summary

The Environment Agency published its 2020 policy and monitoring targets in the packaging producer responsibility monitoring plan 2020. We set a target of monitoring 203 persons during the 2020 calendar year. We monitored a total of 221 persons.

Using an intelligence led and risk based approach, we carried out compliance monitoring of accredited reprocessors and exporters, packaging producers and compliance schemes. We completed site inspections through pre-arranged or unannounced visits, or remote auditing processes that were put in place this year in response to the coronavirus (COVID-19) pandemic.

Where we identified non-compliance, we followed our enforcement and sanctions policy and associated guidelines to determine the appropriate enforcement action. Over the year our various interventions have resulted in disrupting approximately 200,000 tonnes of waste, with an estimated packaging recycling note (PRN) value of £30 million, of what we regard illegitimate or fraudulent evidence.

During 2020, we:

• suspended 8 accredited operators
• cancelled 5 accreditations
• refused 17 accreditation applications
• caused 13 companies to withdraw their accreditation applications

We accepted a total of 44 enforcement undertakings from packaging producers in 2020. This resulted in £593,081 in financial contributions to environmental projects. Since the introduction of civil sanctions for the packaging regulations in 2011, we have accepted 334 enforcement undertakings. These have made financial contributions of £6,783,128 to environmental projects.

Provisional figures indicate that in 2020, the reported UK packaging recovery rate was 73.9%, of which 68.33% was reported as being recycled. These recovery and recycling rates exceed the EU directive targets of 60% recovery and 55% recycling.

In summary:

• the final 2020 UK total recovery obligation was 8,235,955 tonnes (an increase of 35,921 tonnes on the 2019 final UK obligation)
• all UK schemes met their 2020 obligations (the UK scheme obligation was 7,864,341 tonnes)
• all but one UK direct registrant purchased their PRNs to meet their obligations (this obligation was 371,614 tonnes)
• carry over PRNs increased from 441,403 tonnes into the 2020 obligation year to 585,361 tonnes into 2021
• the year ended with the highest number of accredited plastic reprocessors (112) and accredited plastic (160) and paper exporters (78)

1.1 Compliance monitoring 2020

	2020 target	2020 actual	Compliance with plan
Producers	83	38	46%
Accredited operators	110	175	159%
Compliance schemes	10	8	80%
Total	203	221

2. Monitoring and enforcement

2.1 Performance in 2020

In 2020, we set a target of monitoring 203 persons during the calendar year. We exceeded this target and monitored 221 persons.

2.2 Monitoring of registered producers

We continued to monitor producers who are registered directly with us and those registered through compliance schemes.

Our monitoring programmes are inclusive with respect to the registration route. When we establish our national monitoring priorities or local monitoring programmes, our approach is driven by risk and we do not currently differentiate between:

• direct registrants
• those registered through compliance schemes
• those registered with different compliance schemes

At registration stage, we assessed the submitted information and data from 7,820 registered producers. This was 2,420 more registered producers than in 2019. This included comparing data submissions with those from previous years. We reviewed and validated all direct registration applications to make sure the national publication contains accurate data. Where necessary we sought explanations and corrections where we deemed submitted data to be inaccurate.

Our officers audited 38 producers in 2020.

The effects of the COVID-19 pandemic caused officer capacity issues throughout 2020 and meant we had to refocus our efforts on other areas of compliance monitoring. This therefore had a negative impact on the amount of producer audits we could conduct in 2020, with 45 less audits then we’d originally targeted for 2020.

Every year before the end of the compliance period we provide advice and guidance to direct registrants that have not purchased sufficient evidence to meet their obligations. This work supported all but one direct registrant meeting their obligations in full for 2020.

2.3 Monitoring of unregistered producers (freeriders and drop offs)

Where we investigated and identified an obligated producer as not being registered (‘free riding’), our initial approach is to bring the producer into compliance. Alongside this we also investigate the severity of the non-compliance and determine the most appropriate enforcement responses. These were in line with our enforcement and sanctions policy. In certain cases, we accepted an enforcement undertaking offer.

An enforcement undertaking is a form of civil sanction. We accepted a total of 44 enforcement undertakings from packaging producers in 2020. This resulted in £593,081 in financial contributions to environmental projects, bringing the overall amount paid to environmental projects through enforcement undertakings to over £6.7 million since 2011.

The 44 enforcement undertakings accepted this year is a 110% increase on 2019. This resulted in an extra £73,000 being donated to environment projects in 2020 when compared to 2019.

The largest enforcement undertakings in 2020 were for Walsh Mushrooms at just under £55,000, The Works Stores Limited at just under £36,000 and Jet2.com Limited at just over £35,000. We are in the process of investigating additional freeriders that appear to have had past offences.

After the registration deadline in April 2020, we had 491 businesses (in England) that failed to re-register.

During 2020 we worked closely with all our customers to understand the impact that COVID-19 was having on their ability to operate and comply with any required regulations. This promoted the Environment Agency to publish a regulatory position statement (RPS).

The aim of the RPS was to support packaging producers who were unable to register or provide accurate and complete information by the regulatory deadlines due to COVID-19 and the measures introduced by the government. We provided a 2 month deadline extension for those businesses impacted by COVID-19.

Before the RPS deadline, the Environment Agency contacted all businesses that had not yet registered to remind them that the registration deadline was approaching. We told them they must submit a registration either directly with the Environment Agency or through a packaging producer compliance scheme.

Following the extended RPS deadline, 314 businesses had failed to register. We worked alongside packaging producer compliance schemes to contact these businesses and bring them into compliance. As a result of this work, 284 businesses either re-registered or were identified as no longer being obligated.

Where businesses failed to register, the Environment Agency will consider its enforcement options in line with our enforcement and sanctions policy. The remaining 30 businesses had a combined obligation in 2019 of 10,290 tonnes. This represents 0.12% of the total UK obligation.

2.4 Monitoring of compliance schemes

In 2020 there were 22 approved packaging compliance schemes registered with the Environment Agency. We principally monitor scheme operators through:

• analysing data returns
• record keeping

We compare them with data we obtained from monitoring individual scheme members (producers). Our aim is to check conditions of approval have been complied with and to identify and address any failures.

We carried out quarterly desktop monitoring of all 22 compliance schemes throughout 2020, which also involved a discussion about their compliance position and ability to meet their obligation (where appropriate). We audited 8 packaging compliance schemes during 2020. All of our approved schemes submitted a statement of compliance and met their obligations for the 2020 compliance period.

2.5 Monitoring of accredited reprocessors and exporters

The Environment Agency accredits and monitors the activities of reprocessors and exporters of UK packaging waste. This activity involves an initial site inspection to determine the application and compliance monitoring activity during the period of accreditation. Accreditations have to be renewed each year.

Due to the COVID-19 pandemic, the majority of the initial site inspections conducted this year were done remotely using new remote auditing practices and processes.

We monitored (on an intelligence led and risk basis) sampling and inspection plans at the application stage of accreditation. This was to ensure they were robust and reliable. We carried this out through desk based monitoring, site visits or remote inspections.

Once accredited we monitored the application of all sampling and inspection plans both during site inspections and through desk top monitoring.

During 2020 we monitored a total of 175 operators for compliance through site inspections (against a target of 110). As a result of compliance assessments (both site based and desk based) we suspended 8 and cancelled 5 accreditations. We communicated these decisions to industry. This was to inform them:

• of reduced availability of evidence onto the market
• to send a deterrent message on the consequences of non-compliance

This shows we’re working towards our priority of identifying non-compliance, including possibly fraudulent activity and encouraging compliance. This enforcement activity has also helped to inform decisions on applications for accreditation.

2.6 Impact of the COVID-19 pandemic

We recognise that the COVID-19 pandemic has changed the way many organisations operate, including the Environment Agency. Throughout 2020 we remained fully operational, with the majority of our staff working from home. Our frontline teams were and remain active, where necessary, on the ground tackling priority issues such as flood risk and pollution.

Within the Environment Agency, we have adapted our ways of working and embraced remote compliance monitoring and auditing of the customer groups we regulate. We are working with the wider organisation to restart our field and site-based regulatory activities in a coordinated and safe manner to:

• protect people and the environment
• support those we regulate

Further information on this can be found in the:

• Coronavirus: Environment Agency update news story
• Environment Agency regulatory response to coronavirus

The pandemic meant resource available to undertake audits and to support officers who did have capacity was still significantly reduced. We’ve adapted to maintain a regulatory presence by developing a new remote auditing process. We are regularly reviewing this process as we learn best practice in remote auditing and how we can maintain some remote auditing once we restart the majority of our field and site-based regulatory activities. We are also starting to move to a more agile way of working, targeting our audits to where there are spikes in data reported by operators that might indicate a fraud risk.

Officers have been using video conferencing software to ensure remote audits reflect face-to-face audits as closely as possible. With operators screen sharing, we can ask to see whatever documents we need, as if we were sat next to them and their laptop, which has significantly reduced an operator’s ability to send us anything fraudulent.

We also contacted many of our producer responsibility customers to gauge whether they were still operational during the pandemic and at what capacity. This informed our compliance monitoring activities, risk profiling and added to our intelligence picture. We also dedicated resource to helping operators who might be struggling during the pandemic by offering advice and support.

As lockdown measures ease, we are returning to a more business as usual approach to any non-compliances we identify.

Therefore it’s a significant achievement that we conducted more audits than last year for packaging accreditations, 175 audits in 2020 compared with 169 in 2019, despite all the challenges that this year has caused.

2.7 Successes

We completed our ‘lessons learned’ review following 3 internal reviews and 3 appeals. This proved a great success as all appeals and reviews have been upheld to date.

We put significant resource into preparing for one of the appeals, in regards to our decision to cancel and refuse an accreditation. As a result the appeal was subsequently withdrawn by the operator. The investment of our resources into this appeal has strengthened and reinforced our decision making on cancelling and refusing accreditations

Refusing applications is an important tool, as it gives us the opportunity to prevent potentially fraudulent companies entering the regime before non-compliance is committed. The 3 companies involved are each believed to have gained millions of pounds in revenue from the packaging waste regime. The outcomes of the review will improve our already strong processes for refusing and cancelling operators.

Some of the key lessons learned were that, as a regulator, we do not have to act as a consultant for applicants and that there is now precedence for non-compliance from previous years to be linked to operator’s applications.

We had further success with the compliance monitoring of accredited reprocessors and exporters undertaken by the Environment Agency and our teams. This resulted in actions taken with the support of Producer Responsibility Regulatory Services, including:

• cancelling 5 exporter accreditations where either the seriousness or type of breach meant they could not be brought back into compliance
• bringing 4 exporters back into compliance through actions given as part of suspensions
• bringing 4 exporters back into compliance through formal advice and guidance
• sending 2 exporters warning letters resulting from offences identified
• keeping 3 exporters and 1 reprocessor suspended after they failed to comply with the actions within their notice

Through improvement of processes and closer working amongst teams, we have been able to act on non-compliance promptly.

We have requested Annex VII forms from some packaging exporters 3 days before exports take place. We are targeting those exporters we consider present the highest risks, based on a range of factors. The Annex VII documents are requested using an ‘information notice’ sent under the Transfrontier Shipment of Waste Regulations.

Further to the Annex VII collection, the team has an additional responsibility of maintaining and overseeing the overseas reprocessing facility database, with the recovery facilities compiled and risk rated using direct correspondence with the competent authority.

The information we receive is extremely useful to our compliance monitoring work. Some of its uses and successes of the work are that:

• it is used alongside other data sets to target shipments deemed to be higher risk
• it helps us develop intelligence to better understand the risk from the operators and load sites
• it has enabled us to target container and trailer shipments which have then been deemed to be illegal
• it has helped us to identify interim sites that are not final recovery facilities, meaning the Annex VII was illegal
• companies have stopped exporting to certain sites following our interventions
• containers and trailers have been stopped based on the Annex VIIs provided due to not meeting the legislative requirements
• shipments have been cancelled by shipping lines following our enquiries
• companies have had their accreditation cancelled due to intervention assisted by the project
• regulatory reform has received evidence to support numerous changes thanks to the project
• shipments have been stopped based on the information collated in the overseas database

• our understanding of local restrictions and legislation and significantly increased through the contacts made through the project