Fraud / Waste Crime Position Statement

Fraud and waste crime is a concern for the plastics industry, as it not only undermines the industry, but it also makes it harder for legitimate companies to operate due to the impact it has on markets.Waste crime happens at an international level and can involve organised waste criminals. 

PRN System

Within the PRN system there are a number of areas of potential fraud which include:

• Packaging waste being landfilled or sent for energy recovery which has had a PRN / PERN issued for it.
• Double counting (claiming a PRN / PERN for the same bale of material twice
• Non-packaging waste being passed off as packaging waste.

Fraud distorts the system, which is designed to have high prices when evidence is low and more investment is needed in recycling, and low prices when there is sufficient material to reach the target. Fraudulent evidence is particularly prevalent when prices are high, which then brings down prices even if, in real terms, recycling has not increased. 

It is important to note that despite there being an upcoming replacement to the PRN system on the horizon, this does not mean waste crime will disappear.

Are there other examples of fraud in the plastic waste export market?

Export of plastic for recycling is currently needed, as the UK does not have the capacity to reprocess all the material collected. However, there have been several reports of material that has been sent for recycling being dumped in the export destination and not recycled (e.g. certain cases in the export of some agricultural films). This type of waste crime in particular undermines the image of recycling, as public trust in the recycling process is lost. This has further costs to both the recycling sector and also producers. Current legislation, including the PRN system, also gives exporters an advantage in some scenarios over UK reprocessors, which can further increase incidents of this type of fraud. (Please see the section on Split targets and PRN reform for further details.) 

Waste Shipment Regulations were amended in January 2021 to implement the Basel Convention amendments, which means more material needs notification to be shipped. The impact of this is still to be understood but further restrictions are expected. Some countries have also put their own restrictions in place on material being imported. There is a concern that to bypass restrictions, material will be exported to a country with less restrictions then re-exported again to another country. 

Verification / Certification of Recycled Content

With upcoming legislative changes in the UK and Europe incentivising the uptake of recycled content, the verification/certification of material becomes even more important to reduce fraud further. International and national efforts to certify material will ensure a level playing field for legitimate companies and ensure the circular economy is not undermined.

Fraud and waste crime is a concern  for the plastics industry, as it not only undermines the industry, but it also  makes it harder for legitimate  companies to operate.

Based on the evidence, the BPF believes…

A verification/certification scheme is needed for recycled content. This is to ensure that claims made on recycled content inclusion are legitimate, and virgin material is not being sold as recycled material where there are financial gains to be made, and fraudulent claims are not being made for particular food contact items. 

• The current enforcement action is not sufficient to deter criminal activity and therefore needs to be tightened.
• The regulator should monitor those companies who increase PRN / PERN evidence when prices are high.
• Auditing needs to take place when material is exported to ensure it is managed in an environmentally sound manner. A database of licensed export facilities would assist with this. 
• Investment in UK recycling infrastructure is required. This will make material easier to trace and reduce the opportunity for criminal activity. 
• More emphasis should be placed on full traceability, duty of care requirements and the principle of broadly equivalent standards. 

Reviewed: 10 June 2021