Last reviewed 3 November 2015

The first convictions of a company for failing to comply with the requirements of three producer regimes — packaging waste, batteries and waste electrical and electronic equipment (WEEE) — followed a guilty plea by the defendant company, Babz Media Ltd, in Ealing Magistrates' Court. Sarah Holmes of Bond Dickinson LLP reports.

Fines totalling £45,500 were imposed by the Court and the company was ordered to pay over £8700 to the Environment Agency (EA) in respect of avoided registration fees and prosecution costs.

Facts

Babz Media grew rapidly from start-up in 2008 as an importer and online supplier of blank media and batteries, largely through eBay. By 2011, it was operating as a VAT registered limited company. By 2014, the company had a turnover of £19 million and an expanding product range. However, it had not appreciated that its growth brought it within the scope of three producer responsibility regimes. For three years the company failed to comply with obligations under the regimes.

Thirteen breaches of producer responsibility regimes were the subject of charges. The Magistrates' Court heard that between 2011 and 2013 Babz Media imported 163.7 tonnes of batteries for sale in the UK, that between 2012 and 2013 the company imported 188 tonnes of electrical equipment and that in the packaging waste compliance year for 2013 it was obligated to fund the recycling of 76 tonnes of packaging waste.

In respect of the Producer Responsibility Obligations (Packaging Waste) Regulations 2007, Babz Media was charged as a producer who had failed to comply with the following producer responsibility obligations in respect of the 2013 compliance year.

  • The producer registration obligation: the obligation to be registered with the EA for any part of the compliance year in which a company was not registered with a compliance scheme, contrary to Regulation 4(4)(a).

  • The recovery and recycling obligations: to take reasonable steps to recover and recycle packaging waste for the 2013 compliance year in respect of the classes of producer to which it belonged, contrary to Regulation 4(4)(b)(i).

  • The certifying obligation: the obligation to submit a certificate of compliance in respect of its recovery and recycling obligations for the 2013 registration year to the EA, contrary to Regulation 4(4)(c).

In respect of the Waste Electrical and Electronic Equipment Regulations 2006, Babz Media was charged as a producer who had failed to comply with the following obligations for both the 2012 and 2013 compliance years.

  • To be a member of a compliance scheme, contrary to Regulation 10.

  • To fail to finance the costs of the collection, treatment, recovery and environmentally sound disposal of WEEE from private households, contrary to Regulation 7.

In respect of the Waste Batteries and Accumulators Regulations 2009, Babz Media was charged as a producer for failing to comply with the following obligations for each of the 2011, 2012 and 2013 compliance periods.

  • To join a compliance scheme, contrary to Regulation 9.

  • To finance the costs of the collection, treatment, recovery and environmentally sound disposal of portable waste batteries, contrary to regulation 7.

The Magistrates’ Court took into account the company's early guilty pleas and its willingness to co-operate with the EA. However, ignorance of the law is no defence and the company was duly convicted of the offences with which it had been charged and fined accordingly.

Commentary

Fast-growing businesses can find themselves subject to obligations under producer responsibility regimes without appreciating that such regimes exist. It may not be until legal due diligence in a share transaction, a tip-off to a regulator by a disgruntled competitor or customer, or a review by a regulator that a breach is identified.

In contrast to more widely known environmental regimes that control direct impacts on land, water and air, the producer responsibility regimes reflect the move of environmental law into the marketplace. The focus turns to influencing the way in which economic operators make decisions about materials used in the manufacture of products and the way in which those products are imported, exported, transported, distributed, sold and ultimately reused, recycled, recovered or discarded.

In pursuing the prosecutions against Babz Media, the EA made clear that one of its objectives was to ensure that the company did not benefit from or maintain an unfair commercial advantage over other businesses operating in the same marketplace. Undertakings that fail to comply with producer responsibility regimes gain commercial benefit by failing to pay the costs associated with joining compliance schemes and in discharging obligations to finance the costs allocated to them in respect of the collection, treatment, recovery and disposal of the relevant products and their packaging.

The scale of the fines and costs awarded against Babz Media emphasises the importance of ensuring effective governance within operators of all sizes. All undertakings should be aware of the legal obligations placed on them and have processes in place to keep up to date. The company in this case pleaded guilty and so the information available is limited to that contained in the EA press release, which makes no reference to the Proceeds of Crime Act and whether any confiscation proceedings have been brought against the company.

The WEEE regime is now set out in the Waste Electrical and Electronic Equipment Regulations 2013, which has revoked the 2007 Regulations. When considering the taking of enforcement action in respect of offences under the packaging waste and WEEE regimes the EA can use civil sanctions rather than bringing a criminal prosecution. However, offences under the batteries regime are not currently subject to the civil sanctions provisions. The EA’s position on enforcement and sanctions is available on its website.

The Government intends to make the producer responsibility regimes more effective and to reduce regulatory burdens on businesses. A current consultation proposes changes to the operational and administrative requirements imposed under the following.

  • The Waste Batteries and Accumulators Regulations 2009.

  • The Producer Responsibility Obligations (Packaging Waste) Regulations 2007.