​Reuse Abuse

Despite good intentions, recycling programs may overstate their success and incentivize bad practices.

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​The U.K.'s national recycling system is prone to fraud and error, the National Audit Office (NAO) reports. Although the U.K. government previously estimated the nation had exceeded its overall packaging target each year since 1997, businesses may be overstating how much paper, plastic, and other materials they recycle, according to The Telegraph.

The NAO estimates that 10 percent of packaging sent to recycling plants cannot be recycled because of contamination. Meanwhile, some materials are shipped to other countries where it is likely they will not be recycled, and worse, may be thrown into the sea.

Plastic recycling is particularly susceptible to fraud because of financial incentives. In addition, the NAO report found some of the U.K.'s largest companies have not paid into the recycling system — some for more than a decade.

Lessons Learned

There is at least one striking comment made within the NAO's review of the U.K.'s plastics recycling programs: "The government should have a much better understanding of the difference this system makes and a better handle on the risks associated with so much packaging waste being recycled."

Based on reviewing the limited number of audits conducted of recycling programs in Canada, Europe, the U.K., and the U.S., not only are there issues with potential overstatement of recycling levels, but also the measured achievement of program goals are declining over time. This observation extrapolates to recycling programs more generally.

While recycling programs are not new, the scope and scale of modern approaches to this societal issue certainly is. Moreover, auditors' involvement and experience in helping governments identify risks such as fraud and recommending improvements to these programs appears to still be emerging. Here are some key elements of an effective recycling audit program, with a particular eye to the issues the NAO identified.

  • Define the scope of recycling programs. Even the basic definition of recycling is important to clarify. A Canadian Standards Association (CSA) definition is among the clearest and most comprehensive:

    "The amount of material recycled as a percentage of the amount of targeted material collected (inbound) minus reuse and shrinkage. The recycling efficiency rate must reflect the net mass balance of all processing of that material, not simply one service provider's gate-to-gate efficiency rate."

    The current reality is that these definitions vary, at times considerably, from country to country and within particular country jurisdictions. Adding to this is the need to clearly identify the policy goals and expected outcomes of recycling programs. Prevention and reuse are commonly articulated policy goals, but they are not necessarily consistently defined or scoped among jurisdictions. Program components such as composting, separating, processing, and disposal services need clear definition and alignment with other relevant jurisdictions to permit useful comparisons.
     
  • Establish, monitor, and report on a recycling program performance measurement framework. This work needs to address performance measures adequately enough to provide sufficient and reliable information to conclude on the effectiveness and efficiency of the program. It should cover the completeness, measurability, and consistency across the entire recycling program.

    Public transparency in communicating and reporting results also is critical. For example, many recycling programs identify and measure both gross and net recycling targets. But as this story notes, a considerable percentage of recycled materials cannot be used as intended.

    There are even better measures of recycling system performance that also support improvement of program and policy objectives. Rather than setting percentage recycling targets based on weight measures, a kilogram/capita disposal target may be better. According to the recycling policy literature, reduction is more important than recycling. Therefore, reducing waste should decrease total quantities for disposal, even if there is no increase in recycling rates.
    Auditors also need to review performance measure calculation methodologies to ensure they provide reliable, comparable, and consistent information to demonstrate achievement of program goals and support management decision-making.
     
  • Monitor the cost-effectiveness of recycling program operations. Formal and regularly conducted operational performance monitoring and reporting processes must be in place that allow management to ensure recycling operations are meeting cost performance expectations. Rather than adopting a simple cost–benefit analysis perspective, organizations also must consider policies such as the need to influence behavior toward conservation and reduced use/disposal.
     
  • Recommend an effective process to plan for and manage the recycling program and its projects. This process should include business cases for new strategies and projects. Business cases must provide assurance that information presented is complete, accurate, and supported.

    The process should include project management practices such as regular inspections of all facilities (whether contracted or owned) to ensure standards are being met. Project management considerations should incorporate strategies to manage and maintain the recycling facilities (including equipment), on-site mobile equipment, and asset management processes. Such assets include any equipment used to classify, sort, construct, and demolish recycled materials.

    A further component is research and development to support future strategies and ensure capacity remains sufficient to meet evolving requirements.
Art Stewart
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About the Author

 

 

Art StewartArt Stewart<p>​Art Stewart is an independent management consultant with more than 35 years of experience in internal audit, financial management, performance measurement, governance, and strategic policy planning.​​​</p>https://iaonline.theiia.org/authors/Pages/Art-Stewart.aspx

 

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