Regulations focus to avoid food industry non-compliance penalties

19-Jun-2016 - Last updated on 20-Jun-2016 at 11:30 GMT

‘When companies don’t comply, it’s usually a matter of ignorance’, said Elizabeth Shepherd

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Government agencies are hoping that a redrafted version of the 2007 Producer Responsibility Obligations (Packaging Waste) Regulations, incorporating subsequent amendments, will focus industry attention on the requirements and avoid the sometimes hefty penalties resulting from non-compliance.

Law firm Eversheds said that the consolidated regulations were likely to be introduced in the autumn.

But partner Elizabeth Shepherd noted that they were being actively enforced already by the Environment Agency (EA), and that there was a need to “nudge” some food and drink businesses about non-compliance.

“In my experience, when companies don’t comply, it’s usually a matter of ignorance,” she explained. “When a business starts, it’s normally outside the scope of the regulations. Then, as it grows, lo and behold, it finds itself in scope.”

The three main offences under the regulations are: failure to register either with a compliance scheme or directly with the regulator; failure to buy the correct number of Packaging Recovery Notes (PRNs); and failure to provide a certificate of compliance.

Compliance scheme

Businesses that do not register with a compliance scheme are most likely to fall foul of the second and third types of offence.

Conversely, those registered with a scheme tend to have the other elements of compliance taken out of their hands, said Shepherd.

According to the law firm, where cases of non-compliance are picked up, they are often self-reported. In other words, a company may be undergoing some sort of change of personnel or due diligence process ahead of an acquisition when it discovers that it is in breach of the regulations.

“On these occasions, we recommend that the business goes to the EA and self-reports,” said Shepherd.

“Otherwise, if the company simply makes a new registration at that point, there is a risk that this gets noticed, and questions are asked about the previous 10 years, for example.”

Impose civil penalties

As well as fines, the EA has the power to impose civil penalties, where sums saved on unpurchased PRNs are paid instead to environmental charities.

In October 2015, babyfood producer Hipp UK paid £415,000 to three charities when “confronted with [its] environmental offences” under the regulations, said to be the “largest-value enforcement undertaking” the EA had ever accepted.

In February this year, biscuit importer Bahlsen self-reported, and paid just under £40,000 to two charities.

According to the regulations, companies that handle (or use) more than 50t of packaging a year and have a turnover of more than £2M have to comply with the regulations.