Waste site operator forced to pay back record amount under the Proceeds of Crime Act 2002

An illegal waste site operator from Reading, jailed for 22 months for waste offences in 2011, has been ordered to pay back a record £917,000 under the Proceeds of Crime Act 2002 (POCA).

POCA is one of the enforcement tools that the Environment Agency (EA), through the criminal courts, can use to ensure that individuals and companies acting in breach of waste regulations do not profit from their crimes. Under POCA, the courts have a duty in relation to certain offences, including waste offences, to decide whether a defendant has benefited from their criminal conduct and, if so, to issue a confiscation order obliging the defendant to pay back all, or part of an equivalent amount.

In this case, the EA worked with Scotland Yard to identify profits made illegally and applied to the court for the confiscation order. The EA commented that it “wants to make sure that serious waste crime doesn’t pay”.

HMRC makes controversial decision on landfill tax

On 18 May 2012, HMRC published its ‘Revenues and Customs Brief 15/12’ on the assessment of material disposed of in landfill sites and the classification of waste for landfill tax purposes. The brief addresses two points: the classification of materials used to provide protection or support for the regulating layer at the top of a landfill cell and the requirements for inert waste to qualify for the lower tax rate under the Landfill Tax (Qualifying Materials) Order 2011.

The first point is relevant to those landfill site operators seeking to claim back tax incorrectly paid prior to 1 September 2009 following the 2008 Court of Appeal case HMRC Commissioners v Waste Recycling Group Limited. HMRC has decided that material used as the ‘top fluff layer’ to sit below the regulating layers, which overlie the top of the landfill cell, is, and always has been, waste and so is subject to landfill tax. However, tax can be reclaimed in respect of the regulating layer itself as it is specifically engineered for the purpose of protecting the geo-synthetic cap so is not waste.

The second point is relevant to skip operators and those involved in the production and disposal of construction and demolition waste. Qualifying inert waste is subject to the lower tax rate of £2.50 per tonne rather than £64 per tonne. Residue wastes such as trommel fines, grit and screening, made up of the ‘left-overs’ following treatments at transfer stations, have previously been assumed to be qualifying inert waste. However, HMRC has clarified that waste can only qualify as inert waste if the description in the waste transfer note accurately relates to the categories in the order. HMRC has confirmed that these residues cannot be treated as qualifying inert waste because it is “impossible to determine the origin and exact nature of the source material”. This clarification has been criticised by skip operators who fear that the tightening of the definition of inert waste could leave them with no option but to significantly increase the cost of skip hire.

Intermediary dealers must disclose waste producer names

A German waste dealer, Interseroh Scrap and Metals Trading, recently lost its case in the European Court of Justice (ECJ) to protect its ‘trade secrets’ by failing to include the names of its suppliers on waste consignment notes.
Interseroh operates as an intermediary dealer that organises for the collection of waste from producers and supplies the waste-to-disposal facilities without itself taking physical possession of the waste.

Interseroh was concerned that by including the names of producers on consignment notes, it would reveal the names of its suppliers to its customers, thereby allowing them to cut Interseroh out of the transaction altogether. To prevent this occurring, Interseroh put its own name on the consignment notes in place of its suppliers’ names. The German authorities believed that this was in breach of shipments of waste regulations.

Interseroh argued that the obligation to include the name of the producer was damaging to its business because it amounted to disclosing its trade secrets and that it had already lost customers as a result of the obligation. The ECJ agreed with the German authorities and held that there is no right for dealers to omit producer names on consignment notes to protect their businesses. The shipments of waste regulations place an obligation on those arranging shipments of waste to include the names of producers on consignment notes and the only confidentiality requirements are limited to interactions between parties to the transaction, or the authorities, and third parties.