Compliance Concerns Us All

09 Jul 2019 by Paul Cox

Why Compliance is key

 The impact of waste crime is not limited to the high profile ‘illegal export’ or ‘waste mountain’ stories we read about in the media. Reconomy's Business & Industry Divisional Director, Harvey Laud, looks at why all businesses should prioritise compliance to protect their own reputation and the regulatory framework in which they operate.

 Doing the simple things right is vital in maintaining any organisation’s reputation and helping to reinforce a positive perception of responsibility and accountability.  Similarly, when we see examples of businesses failing to be fully compliant it naturally raises questions as to what else is not being done correctly and the potential impact that this may have.

 The waste sector, which now adds £6.6 billion of value to the UK economy and provides around 120,000 jobs, could be seen as a victim of its own success when it comes to waste crime.  The introduction and escalation of Landfill Tax has served to commoditize waste and given it a value which in turn has made it attractive to those operating outside the law. Whilst waste crime takes many forms it is often associated with avoiding the tax and gate fee associated with legitimate disposal.  Common offences include fly-tipping, illegal dumping or burning of waste, deliberate mis-description of waste, operation of illegal waste management processes and illegal waste export.

 The scale of the problem is evidenced by the fact that waste crime is now believed to cost over £600 million per year in England alone, with some estimates putting it considerably higher. To put that figure into context, it is roughly equivalent to building 34 new secondary schools or paying for 4137 NHS hospital beds per year.

 This situation has been further fueled by the fact that the industry has changed beyond all recognition in recent years and regulation has struggled to keep pace with its growth and diversification. Systems have become outdated or unfit for purpose and frankly there is a significant shortage in the resources available to the UK’s primary regulators.  Our regulators lack the necessary authority, relevant powers and funding to counter criminal groups operating without fear in an industry with low barriers to entry and very few serious penalties.

 It is too easy however, to lay all the blame at the door of large-scale criminal gangs.  Ultimately, we must all take responsibility in ensuring that our waste is being managed in a compliant manner and vitally, we must also be prepared to pay the costs associated with doing this.  It still amazes me to see businesses being prepared to ‘take the risk’ when considering their environmental obligations. These may only seem like small transgressions, but they undoubtedly contribute to a culture where avoidance is acceptable and only serves to further reduce regulator funding at the time when we need it most. Moreover, the very people (Millennials and Generation Y) these organization often want as their customers would view indiscretions in a very dim light and could potentially vote with their feet.

 Awareness or lack of it can also be another contributing factor. Equipment suppliers offer innovative solutions to customers that mitigate waste problems, but they do not offer any statutory support to operate the processes legally. This creates a situation where the customer could be operating outside of the regulatory controls without actually knowing it, but is a lack of knowledge a reasonable defense?

 Outside of the obvious and direct implications, this avoidance also has the potential to have a negative impact on mindset and behavior.  Seeking to avoid the costs associated with managing waste counteracts the thinking that waste is not waste at all, but a valuable secondary resource that can have a positive social, environmental and commercial value. These benefits are unlikely to ever be realised if a business’s only consideration is to pay as little as possible to manage it.

 If however an organization strives to raise awareness and promotes a responsible attitude to the environment and resource management, then in turn their employees are more likely to become ambassadors and partners in promoting the sustainable values that the organization aspires to.

 Reconomy works with some of the UK’s best-known brands to ensure that their waste is managed legally and responsibly, but also to help minimise its production throughout their organisation and its supply chain.  We believe waste has a value far greater than that associated solely with the cost for disposal and always welcome the opportunity to work with like-minded businesses who are keen to develop more sustainable business models and realise the social, commercial and environmental benefits associated with modern and effective resource management.