Recycling industry is open to fraud and error, says National Audit Office

The UK’s recycling system is open to fraud because the government is failing adequately to check what is being reprocessed or sent overseas, according to the spending watchdog.

Packaging waste shipped abroad for recycling could be ending up in landfill because of inadequate monitoring by the Environment Agency, the National Audit Office (NAO) said in a report published today.

It found that planned compliance visits in England to reprocessors and exporters to check they accurately reported the amount of packaging recycled were below target and had fallen from just over 400 to about 100 in five years. Exporters rated as “high risk” were far less likely to receive a visit from the agency than those it judged low risk, a report from the NAO said.

Mary Creagh, chairwoman of the Commons environmental audit committee, said: “Waste is exported with no guarantee that it will be recycled, producers are not made to pay to recycle their packaging and the system is open to fraud and error. The government must fix this broken system in its upcoming resources and waste strategy.”

Under the packaging scheme, firms with recycling obligations contributed £73 million in 2017 to the cost of dealing with their waste by paying for “recovery evidence notes” from reprocessing plants or exporters.

Since 2002 the amount of waste sent overseas to countries including China, Turkey, Malaysia and Poland has increased sixfold, accounting for half of the packaging reported as recycled last year.

The NAO report said: “We are concerned that the agency does not have strong enough controls to prevent the system subsidising exports of contaminated or poor-quality material.”

There was a risk that some material was not recycled to UK standards “and is instead sent to landfill or contributes to pollution”.

It added: “We do not consider it is realistic to assume that undetected fraud and error is negligble; there is a financial incentive for companies to overclaim, and a particular risk that some of the material exported overseas is not fully recycled.”

In 2016-17 the agency carried out 124 out of 346 planned compliance visits on reprocessors and exporters, the NAO said.

Despite a 2015 internal plan requiring all reprocessors and exporters to receive one unannounced and one announced visit annually, in 2017-18, the agency made only three unannounced visits, representing 1.4 per cent of accredited reprocessors and exporters. It had planned to reduce the number of reprocessors and exporters rated as red or amber risk to 16 in 2017-18 but at the end of the year there remained five red and 33 amber sites in England. Nineteen had been flagged as amber or red throughout the whole year, the NAO said.

The report said that in 2017-18, 51 shipments of green list waste — items containing little contamination — were stopped by UK port inspectors for not complying with transfrontier shipment regulations.

Sir Amyas Morse, head of the NAO, said: “If the UK wants to play its part in fully tackling the impacts of waste and pollution, a tighter grip on packaging recycling is needed.”

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