Increase in Waste Crime : Waste companies take action to fight waste crime

Waste crime is a serious business. A serious and highly profitable business. In the summer 2022, INTERPOL published a report focusing on pollution crime which showed that not only was transnational organised crime involved in many of the cases, the proceeds of the 27 cases INTERPOL looked at amounted to half a billion US dollars.

Relying on innovative, adaptive and sophisticated methods, the criminals make it very difficult for the police to catch them. And even though centralised mafia or gang-style criminal groups were involved in some cases, the majority of suspects are businessmen and women operating under the cover of a legitimate company or as individual brokers. This decentralised structure also complicates prosecution.

In March 2021, the third edition of INTERPOL’s Operation 30 Days at Sea 3.0 saw simultaneous action by 300 agencies across 67 countries, resulting in 34,000 inspections at sea and inland waterways, coastal areas and ports to detect marine pollution violations. A total of 1,600 offences were detected:

• Nearly 500 illegal acts of pollution committed at sea, including oil discharges, illegal shipbreaking and sulphur emissions from vessels;
• 1,000 pollution offences in coastal areas and in rivers, including illegal discharges of sewage, mercury, plastics and other contaminants;
• 130 cases of waste trafficking through ports.

The law enforcers were able to expose a major criminal network trafficking plastic waste between Europe and Asia. Illegal shipments of contaminated or mixed metal waste falsely declared as metal scraps were reported by several countries from Europe, Asia and Africa. And one of the growing trends revealed by the operation included COVID-19 disposable items such as masks and gloves.

In 2020, a new INTERPOL report on global plastic waste management had already found an alarming increase in illegal plastic waste trade across the world. Within just two years, there was an increase in illegal waste shipments, primarily rerouted to South-East Asia via multiple transit countries to camouflage the origin of the waste shipment, and in the number of illegal waste fires and landfills in Europe and Asia. Another key finding was the significant rise in the use of counterfeit documents and fraudulent waste registrations.

The report also points to the link between crime networks and legitimate waste management businesses, which are used as a cover for illegal operations.

Crime organisations don’t hesitate to turn to violence. A case study describes how the mayor of a small French town was murdered for trying to prevent illegal waste dumping in his area.

Waste crime has many faces. It is also found all over the world. The main waste crimes are:

• Illegal waste sites
• Fly-tipping: criminals simply take someone’s waste away for cash, then dump it in a nearby field or on the roadside.
• Illegal waste burning: taking payment for waste disposal then just burning it.
• Misdescription of the waste sent to landfill to pay lower tipping fees and/or taxes.
• Illegal exports: some types of waste can be legally exported to other countries for processing or recycling without prior approval from the authorities, while other types need the prior consent of the exporting and importing countries. There is a lot of money to be made in exporting misdescribed waste.

The problem of waste crime is widely discussed in the UK. A 2021 report by the Environmental Services Association (ESA), the trade association representing the UK’s resource and waste management industry, and independent consultancy Eunomia – the third ESA report on waste crime after 2014 and 2017 – focused on the cost of waste crime in the UK. Showing a significant increase from the previously estimated costs, the impact is approaching £1 billion per year in England alone. The report states that this is a conservative estimate, since it is based on known waste crime during this period (see Figure 1).

The ESA report ‘Counting the Cost of Waste Crime 2021’ also shows that the costs are steadily rising. The largest increase comes from fly-tipping, followed by illegal waste sites and changes to landfill tax (see Figure 2).

Even though there is increased political awareness – for example, in 2019 the Environment Agency (the Agency) teamed up with eight partners (Natural Resources Wales, the Scottish Environment Protection Agency, the Northern Ireland Environment Agency, the police, the National Crime Agency, HM Revenue & Customs and the British Transport Police) to create the Joint Unit for Waste Crime – ESA sees an urgent need to push forward with further initiatives. “Regulators must also be adequately resourced and equipped to clamp down hard and fast on waste crime,” says Gavin Graveson, ESA Chairman, in the foreword to the report. “We would also like to see fines and penalties that better reflect both the considerable financial gains made by waste criminals and the considerable harm caused to the environment and local communities.”

Prompted by concerns expressed by MPs about the government’s oversight of the waste industry, the National Audit Office (NAO) investigated the issue and published a report in April 2022. Some of the key findings of the report are:

• Lack of data: Even though the Environment Agency and the Department for Environment, Food & Rural Affairs (Defra) have a good understanding of the nature and complexity of waste crime, they currently lack the data they need to understand the full scale of waste crime.
• Decrease in illegal waste sites: The number of illegal waste sites has steadily gone down over the past three years. At the end of 2021, there were 470 active illegal sites known to the Agency from a peak of 685 at the end of 2019. But the current number is unrepresentative because officials were unable to travel much during the COVID-19 pandemic.
• Increase in fly-tipping: Since 2012, the number of reported fly-tipping incidents has been increasing, reaching more than 1.13 million incidents in 2020-21.
• Abuse of permit exemptions: Certain waste activities only require a waste exemption instead of a permit. There are no verification checks for these exemptions. The number of serious breaches to permit conditions has been increasing since 2017.
• Rise in organised crime: Organised crime groups have become more involved in waste crime. Of the 60 organised crime groups monitored for environmental crime across England, Wales and Northern Ireland, 41 are active in England.
• Abuse of the landfill tax rates: The large increase in landfill tax rates has also increased the potential financial return for criminals. Defra and the Agency need to better understand the relationship between landfill tax rates and the incentives to commit waste crime.
• Lenient penalties: The most common actions in relation to illegal waste sites, breaches of environmental permit conditions and major fly-tipping incidents are issuing advice and guidance as well as sending warning letters.
• Decrease in pursued prosecution: The number of prosecutions of waste incidents has dropped from a 2007-08 peak of almost 800 to around 50 per year since 2017-18. The length of time to complete an investigation has increased, as have the average fines awarded per prosecution.

In a speech on waste crime back in April 2022, Environment Agency Chief Executive Sir James Bevan addressed the issues brought to light by the ESA and NAO reports. “One of the most unsettling things about waste crime is that nobody knows exactly its true scale. We do know that it is huge: our latest estimate is that some 18% of waste is currently managed illegally at some point in the waste stream. That is around 34 million tonnes of waste every year – enough to fill 13,500 Olympic swimming pools or Wembley stadium 30 times. So it’s big. And it’s getting bigger,” he said. “There is a reason why organised criminals have moved into waste crime: it’s attractive. The rewards are high (as high as or higher than robbery, drug dealing or contract killing), the chances of being caught have always been relatively low, and the penalties if you are caught are traditionally light,” he added. But the Agency is determined to get tough on waste crime and its perpetrators through deterrence and disruption strategies. They want to target the criminals themselves rather than the crime by taking the ‘4 P approach’:

• preparation
• prevention
• protection
• pursuit of the criminals

“To tip the scales against the criminals we need to be tough on waste crime, with better knowledge, more resources, tougher deterrents; and tough on the causes of waste crime, with smarter policies that keep one step ahead of criminals, shut them out of the system and move us towards an economy in which there is no space for waste crime,” Sir James Bevan added.

In February 2023 Environment Minister Rebecca Pow announced new reforms to crack down on waste criminals and tackle dangerous practices at waste sites.

The government acknowledged that criminals have used the registration scheme, which exempts them from the need for an environmental permit, to carry out illegal waste activities. The Environmental Agency's compliance checks have revealed that certain types of the exemption have been routinely used in recent years to hide illegal waste activities from regulatory oversight. Among those "low-risk, small-scale waste operations" are stockpiling large amounts of undocumented or unsuitable waste and evading Landfill Tax in England and Landfill Disposals Tax in Wales. These abuses cost the English economy an estimated £87.2 million a year.

The UK government plans to close these legal loopholes in the Environmental Improvement Plan, and pledges to seek to eliminate waste crime by 2043. The government is proposing to remove three of the 10 most controversial waste exemptions, covering the recovery of scrap metal, the use of contaminated end-of-life vehicle parts, and the treatment of tyres.

Environment Minister Rebecca Pow said: "This is just one of the measures we're taking to tackle waste crime – we're also giving regulators and local authorities more power to bring criminals to justice."

The government also provides grants to councils to help them tackle fly-tipping and has provided over £450,000 to help several councils purchase equipment to help, such as CCTV.

The EA has also launched a National Waste Crime Survey to help stop criminals. Victims of waste crime, such as landowners, insurance companies and local residents, as well as those who can provide vital information, such as industry, are encouraged to come forward.

Steve Molyneux, the Environment Agency's strategic lead on Waste Regulation, said: "The Environment Agency is determined to make life harder for criminals by disrupting and stopping illegal activity through better regulation and tough enforcement action."

The government also plans to strengthen the EA compliance and enforcement capacity to be able to better control waste exports.

The industry welcomed the announced measures but points out that better funding to fight waste crime is essential. "Whilst we welcome today's measures which are definitely a step in the right direction in the fight against waste crime, the Government must be prepared to give not only more powers but more money to those enforcing the rules," Gavin Graveson, Veolia Senior Executive Vice President of Northern Europe Zone said. "Overall this is a £1 billion illegal industry and only a fraction of what's needed is being allocated to bring these criminals to justice when every pound spent on stopping waste crime brings an immediate return on investment."

Waste crime is harmful to the environment and to people. It also undermines investment, growth and jobs in legitimate waste businesses. As a result, some waste management companies don’t want to wait for policies to be implemented and enforced. They have taken their own steps to protect their brand reputation by hiring specialised security companies. One of these is the Subrosa Group. “Companies are faced with financial risk due to fines and tax paybacks as well as a reputational risk. Especially for big, shareholder-driven companies, this is a key factor”, says Niall Burns, co-founder and CEO of the UK-based security specialist. “Since we are dealing with the most senior level, any strategy we present can be implemented quickly and easily. It’s different for the Environment Agency.” Even though the Agency is now proactively targeting the lucrative loopholes, they are struggling to find resources. “Also, their skill set is limited. They can’t do what we do,” says the ex-military man, who leads a team of security specialists – many of whom have worked in the UK’s elite special forces.

According to the experts, waste crime in the UK mainly falls into the misdescription category. In the UK, the tariffs for disposing of different kinds of waste in landfills vary widely. Less polluting materials – meaning waste that produces low levels of GHG – has a lower tax rate of about £5 a tonne, whereas the tax rate for more polluting waste is about £100 a tonne. The system aims to encourage people to seek better options like recycling. But it is in fact a breeding ground for fraud – because unscrupulous waste haulers use this discrepancy to their advantage. “They load high-tax waste on a truck and cover it with low-tax waste. Coming to the weighbridge, the hauler will be charged the lower tariff. For a ten-tonne load, the discrepancy could be about £900,” says Subrosa’s Chief Operating Officer Martin (who needs to remain anonymous).

The measures to cheat the system range from simply covering one type of waste with another to welding a false bottom onto the vehicle. “They’re very clever and they’re always thinking of new ideas, because it’s a lot of money to them. So they’re prepared to spend the time and effort in researching how to get around your basic security,” says Niall Burns, adding that organised crime is nowadays very much involved in waste crime. “Twenty years ago, they might have gone and robbed a bank with a shotgun because it’s easy cash. But if you get arrested with a firearm in the UK, it’s an instant jail sentence. So this is a very cash-lucrative business with minimal risk.” And even though the general public might not know of the amount of crime connected to waste management, “if you’re in the waste management industry, you will be fully aware of what’s going on,” he adds. For this system of corruption and collusion to work, there needs to be cooperation between the waste haulers and the staff on the site. “I’ve spoken to several site managers who openly say they have been approached by haulers offering them money to allow this to take place.”

Subrosa’s clients usually come to them with a concrete suspicion. With his 30-plus years of experience in waste management fraud, Martin then puts together a strategy: from investigators and audit teams to covert surveillance teams, covert cameras and drones. Whatever is needed.

“To clarify if any malpractice is taking place, I need three points,” he explains. “I call it my eternal triangle: I need to see what is in the vehicle when it comes on the weighbridge, what is booked on the weighbridge for that vehicle and what is being tipped.”

Rather than reacting to a tip-off or a suspicion, some of the company’s clients are becoming more proactive and put instant countermeasures into place to avoid fraudulent activity in the long run. “This also allows for better strategising,” Niall Burns says. “The industry is trying to clean up its act and they are putting pressure on the government to give them the powers to change things.” But at the same time, waste crime is on the rise. “Every single cost has gone up. Take building sites as an example: if builders struggling with the higher costs found a way of getting rid of their waste that is cheaper than normal, they’d probably do it,” he continues.

The security specialists have also seen an inordinate rise in diesel theft since the government practically abolished the lower-taxed rebated diesel, or red diesel, in April, also driven by the extremely high fuel prices. Red diesel is just like standard or white diesel but is dyed red to make it easily identifiable. It is forbidden to use it on public roads. But with only white diesel in use now, “people were filling their cars up as if it was on the forecourt,” Niall Burns says. “We’ve had sites with 20,000 litres of diesel gone missing.” So Subrosa designed a fuel theft mitigation system to prevent this fuel being stolen.

With the rise in waste crime, Subrosa is seeing an uplift in enquiries from companies that want reputational transparency of their processes and procedures and to be part of the solution rather than the cause of the problem.