Code of Practice not made perfect?

Defra’s much-delayed Materials Recovery Facility (MRF) Code of Practice and the accompanying Quality Action Plan have now been published. Most of the reaction has been positive, but not from the Resource Association which represents the businesses that have to use the output of the recycling system. I think they are right to be disappointed and need support in persuading Defra that their current proposals will not achieve their stated objective. Defra’s aims are set out clearly enough:

We want relationships and transactions between the different actors in the supply chain to be based upon and informed by robust, consistent and transparent information on quality and end destination. (Defra Quality Action Plan, 1 Feb 2013)

The key elements in Defra’s proposals to achieve this is for MRFs to be obliged as a condition of their environmental permits to sample their input and output streams and publish – in some form – the results. An independent annual audit of the process will probably be required to give assurance that things are being done properly.

Buyer beware?

Underlying the proposals is Defra’s acceptance of the argument, put forward by the Environmental Services Association, that there is an international market in recyclate and MRF operators should be allowed produce the quality of material for which they can find willing buyers, provided they meet the Transfrontier Shipment Regulations. It follows from this acceptance that government should only intervene to correct market failures. In this case the failure is found to be lack of “robust, consistent and transparent information” about the quality of the materials being offered for sale by MRFs. From the perspective of a global market, questions about how any particular quality standard affects the competitiveness of existing UK reprocessors or the willingness to invest in new domestic reprocessing capacity are not seen as relevant.

There are certainly positive elements to the proposals. The use of the permitting regulations to ensure that the requirements apply to all save the smallest MRFs is clever and meets the ESA’s demand for a level playing field.

But there are at least two respects in which the proposals are defective. First no quality standards are set for outputs. When I asked Defra’s Colin Church about this at the Associate Parliamentary Sustainable Resource Group (APSRG), he explained that quality requirements varied between reprocessors and were likely to change over time, so no absolute thresholds could be set. While that doesn’t dispose of the argument for a baseline minimum standard to deal with the worst offenders, providing information about quality and letting the market decide what it was prepared to pay for different standards seemed to be his preference. It is perhaps plausible that, if reprocessors had confidence in the reported quality of MRF outputs, they could make an informed choice about what they were prepared to pay for different qualities.

Information underload

A lot of weight is therefore being placed on the provision of “robust, consistent and transparent” data, and it is here that the main failing of the proposals is found. The sampling proposals are woefully incomplete. Defra admits as much in the consultation document when is says disarmingly:

“3.7 Discussions have been held with stakeholders regarding a sampling and testing system that provided full statistical validity but it was felt that they would be too onerous for smaller facilities, and so have not been included in the proposals.”

The proposed monitoring system is being asked to do the heavy lifting, but doesn’t inspire confidence. Photo by By Wen-Yan King (Flickr), via Wikimedia Commons.

Instead what is on offer is a sampling frequency related to tonnage throughput, the basis of which is not explained, and an independent annual audit designed to provide:

“Confirmation that the MRF has taken representative samples and at a frequency that complies with the regulations, that the results recorded are accurate, and that all other records required by the regulation are accurate.”

Certifying accuracy may be a problem since it is accepted that the sampling regime proposed will not provide statistical validity. But even assuming the audit proposal survives – and it is being lobbied against – the problem is the lack of recognised standards for drawing representative samples from input and output materials. This means that any company offering audit services will be operating with at least one arm tied behind their back. Auditors will risk being sacked if they are too demanding, and standards will vary between auditors, undermining the consistency of results on which reprocessors are meant to base their judgments. Defra risks creating a race to the bottom – instead of a market based on the quality of materials. They – or WRAP – need to create a proper sampling standard which is balanced and universally used. This cannot be left to the warring parties or the market.

A little more action…

Accompanying the consultation on the permitting regulations is a Quality Action Plan covering a number of other possible actions. This seems both confused in some parts and lacking in urgency in others.  The treatment of exports is one example. At one point the plan accepts that the Waste Shipment Regulations mean that materials can only be exported as “green list” if no further sorting is required before being reprocessed, but later says that the test is what is acceptable to the importing country. The proposed action here is to ask the Environment Agencies to look at improving their enforcement of exports – as if they haven’t been looking to do that for years – without apparently backing this up with any new resources.

At the moment the system is biased in favour of exporting poorly sorted materials to markets that will accept them. Bad sorting is cheaper than good. Valuable material is bulked out with lower value stuff and landfill costs are avoided on material that should have been picked out. And a full value PERN is available for everything sent to be recycled whether it is or not – unlike domestic reprocessing. Defra do say they are going to review this disparity sometime in the next financial year which suggests that nothing could be in regulations before April 2015.

Defra’s proposals for the MRF Code of Practice don’t adequately address this problem. Although they start with an intellectually coherent view, the details don’t follow through or show enough conviction to deliver. At the moment they risk imposing costs while delivering minimal practical benefit. If this exercise is designed to show how continued co-mingled collections fit with the separate collection requirements of the Waste Framework Directive, they will need to do more.

Questions have been asked about whether Defra has the people and resources to carry this through, particularly in the face of lobbying. I hope they have. Getting it right first time is cheaper in the long run.