How Thoroughly do UK Businesses Need to Investigate What Happens to Their Waste After They Have Transferred It?
A recent prosecution by the Environment Agency, where a company was ordered to pay £327,000, has highlighted potentially difficult issues for businesses in complying with the statutory waste duty of care.
What is the Statutory Waste Duty of Care?
All businesses generate waste of some description: from paper and kitchen waste in offices, to hazardous waste in manufacturing facilities. Section 34 of the Environmental Protection Act 1990 provides, amongst other things, that it is the duty of any business that produces, carries, or disposes of waste to take all steps that are reasonable in the circumstances:
to prevent any other person from unlawfully depositing waste or treating, keeping or disposing of waste in a manner likely to cause pollution of the environment or harm to human health;
to prevent any other person from operating a waste facility without, or in breach of, an environmental permit (or, where an exemption applies, otherwise than in accordance with that exemption);
to prevent the escape of the waste from its control or the control of any other person; and
on the transfer of waste, to ensure that the person who takes the waste has the proper authorisation to do so, and that the waste is accompanied by a written description to help properly identify it.
It is an offence not to comply with this duty of care for which the maximum penalty is an unlimited fine. Although prosecutions for breach of the duty of care have declined from around 90 per annum in 2000, to around 10 per annum now, average fines have substantially increased in the intervening period.
Facts of the Case
Biowood Recycling Limited of Derby sourced waste wood and delivered it to a site in Great Staughton, Cambridgeshire. The site was subject to a registered waste exemption which allowed for 500 tonnes of material to be stored there in any seven-day period. However, the Agency estimated that 1,000 tonnes of waste wood were taken to the site every week for five weeks. After operating for 6 weeks, wood was found stacked 4 metres high at the site, with some falling into a hedgerow and a ditch, and it was considered to pose significant fire risk.
Two individuals involved in the operation of the site were prosecuted and given custodial sentences. However, Biowood was also prosecuted for breaching its statutory duty of care. After pleading guilty, Biowood was fined £12,690 and ordered to pay £314,426 in compensation to the landowner who had to clear the waste from the site. In sentencing, the judge noted that Biowood had no previous convictions and had assisted the Agency with its investigation, but still said that it had been “at least reckless” in its dealings with the operators of the site.
Following sentencing, Biowood was reported to have released a statement advising that it had no grounds to suspect the site was going to be operated illegally, that it had paid the market rate gate fees at the site, and that there were no ‘red flags’ that gave rise for concern. It insisted that it had made numerous checks prior to supplying material to the site, including a site visit, and verified that the operator had a lease from the site owner allowing the storage and treatment of waste wood on his site and a registered waste exemption which allowed waste wood to be treated by shredding. However, Biowood accepted that a further check would have revealed that the site, through its waste exemption, did not have the capacity to store the amount of waste that was being supplied.
What does case this mean for businesses? The Waste Duty of Care Code of Practice published by DEFRA and the Welsh Government recommends that businesses should check whether a person or another business is authorised to take waste before transferring waste to them, by asking for a copy of their waste carrier, broker or dealer registration and/or their site permit or registered exemption, and check the Agency’s public register for any information they provide. However, from the Biowood prosecution, it seems that simply following this guidance (and even inspecting the site) would not necessarily be enough. Arguably, a higher standard may have been required of Biowood, compared to, for example, a professional services firm, because Biowood specifically operates in the waste sector. As with so much regulation, whilst requiring businesses to do what is “reasonable in the circumstances” allows the law to be flexible enough to adapt to a myriad of different scenarios, it does not offer businesses much by way of certainty. Furthermore, the duty of care continues down the supply chain until such time as the waste is finally disposed of or recovered, so a business may have to carry out checks, not just against the first party downstream, but against several other downstream parties. This could tie up an inordinate amount of management time without any definite guarantee that a business has done all that is required of it under the duty of care.
Businesses should adopt a risk-based approach to the issue. For example, apart from checking the relevant authorisation(s) as per the Code of Practice, businesses can check whether the carrier, broker and/or dealer or site operator has convictions for waste offences via the Agency’s public register for companies or via a request for confirmation from its National Customer Contact Centre for individuals (including company directors or managers). More caution should be applied when dealing with smaller sites which are covered by exemptions, as they are generally less strictly regulated than sites subject to permits. If these checks suggest an elevated risk, businesses (especially those already in the waste sector) should seek to inspect the waste sites and ask whether recent audits of the site carried out by third parties (consultants or regulators) are available for review. Records should be retained of what due diligence is carried out so that, if a business is required to demonstrate that it took all reasonable steps to comply with its duty of care, it has evidence to justify its position.