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Is your waste management company putting your reputation at risk?

30/09/2021

Paul Jackson, Director of the UK’s leading network of independent waste operators, National Resource Consortium (NRC), reflects on how the recent environmental convictions issued against a waste market leader pose more questions we should be asking the waste management and recycling sector and its customers.  

News that one of the largest waste companies in the UK has been prosecuted for illegally exporting waste to Asia has dominated headlines in recent weeks.

With two prior convictions on record, it’s not the first time the firm has been prosecuted. In 2019, Biffa was found guilty of sending contaminated household waste to China in 2015 and received two fines totalling £590,000. In July 2021, Biffa received a larger £1.5m fine for including tins, nappies, hairpieces, plastics, clothing and food packaging inside sixteen 25-tonne containers labelled as paper in 2019.

The fact that Biffa’s most recent fine was less than 0.15% of the company’s annual turnover makes you wonder, if the fine doesn’t impact on the company financially, how can we deter future breaches? And if our sector can’t be trusted to do the right thing, what price must be placed on ensuring our environment is protected? Perhaps most importantly, who is most responsible for driving this change – Biffa, its customers, or our sector?

Because we don’t know whether the other twenty-six containers that had already left the port were contaminated, it really begs the question, how many potentially illegal exports have gone unchecked? If not on this particular day, then how many over the past five years? Other pertinent questions are have some waste companies saved money by exporting contaminated waste as paper or other acceptable materials; do these savings outweigh any fines they may receive for random spot checks; and have waste firms won contracts from being able to offer cut-price services because of these savings? Whilst it might be hard to give a clear figure on the amount of damage this approach could bring about, it’s easy to connect the dots.

With this much room to speculate on how our sector is disposing of its waste, it seems only logical that an environmental prosecution should cost a business the trust of its customers. You might think so, but Biffa in a statement said, “no public interest had been served by the Environmental Agency in bringing this prosecution”. It seems apparent that even their most reputable customers – ones that care about doing the right thing – are disconnected from the fact that the contaminated waste they see in the news might be their own waste and that they might inadvertently be contributing to the damage.

What’s more, the firm continues to win new contracts with institutions that have robust sustainability policies in place. It seems that, so long as the price is right, environmental prosecutions don’t seem to hold much weight when bidding for new work, regardless of the customer’s sustainable values. The same question can be asked of their shareholders who continue to invest in them when even though they have broken the law.

The firm’s lack of contrition to the prosecution arguably diminishes the reputation of companies they service and work with and their fellow players in the market. Their contestation against the EA actions potentially damages the reputation of all the legitimate businesses who work within the law and guidelines, exporting waste correctly.

 

How are smaller waste firms affected?

Whilst independent waste firms have also occasionally been subject to fines for instances of contaminated waste, these instances have been only few and far between. But as we start to see more environmental prosecutions against a market leader, the fundamental difference in attitude between both players becomes clear. As a leading company, with a large PR team behind them, it’s easier to mask accountability when you can counter all the negative news with positive stories about green credentials.

Yet, how can we really expect the attitude of larger organisations to change when the prosecutions they receive have little impact on the business? It’s clear from historic illegal waste export activity that larger companies can rebound from their prosecutions in a way that independent players can’t. Thanks to deep internal layers of structure, larger organisations’ responsible officers are possibly more likely to be able to avoid personal liability for repeated prosecutions when compared to independent operators. This discrepancy between how larger and smaller organisations may be treated can be exacerbated when it comes to financial penalties. In this case, Biffa received a fine of less than 0.15% of its annual turnover, but if a smaller organisation were to commit the same crime, it’s quite possible that the fine would be a significantly higher percentage of its annual turnover.

 

So, whose responsibility is it to fix this systemic problem in our sector?

In Greenpeace’s report published May 2021, it states that the UK generates more plastic waste per person than any other country apart from the US. Yet, Turkey, Malaysia and Poland received the largest amounts of plastic waste exports from the UK in 2020.

With the UK generating more plastic waste per person than any other country, everything must start with the customer. After all, it’s their waste, right? So why shouldn’t they take a greater interest in where it ends up? It might be easy for businesses to read news of UK recycling lining the roads of foreign countries, but when it comes to choosing a waste provider who can deal with waste responsibly, too many are happy to distance themselves from the environmental damage they’re contributing to with cost being the main driver of choice. So, whilst customers will likely choose the most cost-effective option as a means of protecting their business, they probably haven’t considered how their decisions could seriously damage their own reputation as a business. For example, what do you think supporting a company that breaks the law and damages our planet, says about your company values?

We constantly see plastic making headlines, and just last month the shocking landmark UN report delivered a stark warning on human’s influence on the climate emergency*. Yet, it’s disappointing to see businesses not acting on this when it comes at a small price increase. Whilst sustainability may be front of mind in business and customer conversations, until customers start to take responsibility for their own waste, our environment and economy will continue to suffer as firms supply to meet the demand.

As NRC represents the smaller independent players in the market, we hope to contribute to this fundamental change, driving grass-roots action, as well as encouraging better practice from our market leaders at the top.

 

How do we do this? The approach is twofold.

We encourage all waste producers and waste operators to uphold their responsibilities of completing duty of care checks on their chosen waste and recycling partners, and duty of care checks on their treatment and disposal partners respectively. These checks give producers confidence that operators have the correct licenses and permits in place, and the power to only use reputable partners when disposing of their waste. Or, in the case of waste operators, it ensures they meet all the regulations and laws in the way that they manage their customers waste materials – establishing them to be, in fact, fit and proper.

But what does it mean to be “fit and proper”? And at what point does a waste management operator become not “fit and proper”?

There’s scope to argue that operators should lose this status when they are prosecuted for offences when managing customer waste material, and perhaps more so if they are prosecuted twice in a short period of time.

What’s interesting is that The Environmental Protection Act 1990 supports this view, with the definition of “fit and proper person” stating that a person may not be classed as fit and proper by the appropriate authority where they have been convicted of a relevant offence**.

 

How can our sector ensure our waste operators are “fit and proper”?

Operating an extensive network of processing facilities, NRC provides its customers with additional checks on the fit and proper status of its members through its compliance processes. It’s this additional layer of validation that is carried out by businesses dealing with waste management companies directly, that makes our compliance process so robust.

But what is also true is that once these checks are completed, the system still relies on the waste management company working within the rules and not straying into unlawful practices.

Based on all these facts, we must question that if Biffa has the potential to be classed as not fit and proper to operate as a waste management licensee for some of their customers, then do these customers not have an obligation to remove them from their supply chain?

Also, as a customer, what are the consequences of supporting such a company? Could it destroy the reputation you’ve worked so hard to build and is it worth the risk so long as you’re saving money? Is cost still your main driver of choice?

 

NRC is a resource management network with unrivalled waste collection and processing capacity to offer businesses across the UK an alternative to national waste operators, brokered solutions and outsourced services. Contact Paul Jackson on paul.jackson@uk-nrc.com or call 0845 299 6292 to find out how NRC can help your business.  

 

*Click here for more on the UN report: https://www.bbc.co.uk/news/science-environment-58141129

**Click here for the meaning of “fit and proper person”:https://www.legislation.gov.uk/ukpga/1990/43/section/74#reference-key-37987dab937ccfd07fca6314e2a7eb1a