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Two sentenced for £2m PRN fraud that distorted market and targets

Two employees of a recycling company have been sentenced over a glass PRN fraud that destabilised the market and could hinder efforts to hit glass packaging recycling targets.

Beverley Bradford, 50, and Terrance Aince, 51 were convicted of conspiracy to commit fraud at Nationwide Recycling and both were sentenced on 5 July to two years of imprisonment suspended for two years. They were also each ordered to carry out 200 hours of unpaid work and pay prosecution costs of £3,000 within a year.

The South Wales recycler was raided in December 2010 by the Environment Agency and had its accreditation suspended following the issuance of PRNs against non-existent glass material said to be worth more than £2m.

Two Nationwide directors, Paul and Andrew Thomas, who are currently detained in prison, are due to be sentenced on 19 July.

Fraudulent glass PRNs issued by Nationwide between 2009 and 2010 amounted to as much as 20% of the total glass PRN market, according to Jeff Cooper, producer responsibility manager at the Environment Agency until 2009.

Phil Conran, director at 360 Environmental, told MRW that the large number of PRNs issued by Nationwide boosted figures of glass recycling in the UK, providing Defra and the industry with a “false representation” of the amount of glass that was recycled every year.

On the basis of those inflated figures, Defra set a 81% glass recycling target for obligated businesses under the UK packaging regulations. The target is becoming increasingly difficult to achieve, said Conran.

The fraud also contributed to a distortion of the glass PRN market. As Nationwide operations stopped, PRN issuance dropped by 100-150,000 tonnes - the amount that had been artificially created by the recycler. As a result, PRN prices went up.

However, the initial impact of the drop in availablity was mitigated by the fact that higher PRN prices brought into the market stockpiles of low quality glass that was not viable at lower PRN prices.

However, glass stockpiles are exhausted and 2013 is set to be a low year for glass recycling, said Conran. Q1 figures for 2013 showed that glass PRNs were down 10% year-on-year.

“We are so far behind that it’s impossible to make up the difference and to meet the current target,” said Conran.

He called for Defra to revise down not only the 81%, but also its estimate of glass material placed into the market, which is based on an assumption of continuous growth, because there was evidence that it is not increasing year-on-year. This would ease the pressure on the system, he said.

Glass volume

Source: 360 Environmental

Tim Gent, director at glass recycler Recresco, acknowledged that current PRN remelt prices - which could soon reach £75 per tonne - were not sustainable, but argued that lowering the target was not the right solution. “Targets are where we need them to be,” he told MRW.

Instead more glass material had to go into the recycling system in order to ease pressure, and this could only happen if local authorities increased collections, he said.

A spokesperson for the Local Government Association said that councils will only be able to increase collections of recycled materials, including glass, if it saved them money, and that “councils are collecting more glass than ever before”. He said that the PRN system should be revised to provide greater incentives to councils to collect materials, because high PRN prices do not directly translate to increased council income.

According to Cooper, more enforcement of the current system, rather than an overhaul, was needed to prevent further fraud, claiming other companies had carried out PRN fraudulent activities.

“There should be more checks both at the national and local level,” he said. “The information is collected and collated nationally, and the inspections take place locally, and there is a lack of communication between the two.”

A Defra spokesperson said: “Illegal waste operations pose a threat to both the environment and the vast majority of businesses that comply with the law. We have asked the Advisory Committee on Packaging to investigate the price spike and look at how we can reduce the likelihood of this happening again.”

 

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