The EPR scam and need for Reforms

Extended Producer Responsibility (EPR) is an environmental policy in India that mandates producers, importers, and brand owners (PIBOs) to manage the end-of-life disposal of their plastic products. This initiative aims to reduce plastic waste by holding companies accountable for recycling and waste management. However, recent investigations have uncovered significant fraud within the EPR framework, involving the issuance of fake recycling certificates and other malpractices.

Unveiling the EPR Scam

In 2023, the Central Pollution Control Board (CPCB) conducted audits revealing that over 600,000 fraudulent EPR certificates were issued by four plastic recycling companies in Gujarat, Maharashtra, and Karnataka. These certificates falsely claimed the recycling of plastic waste, allowing PIBOs to meet their regulatory obligations without actual compliance. The companies implicated include:

• Enviro Recyclean Pvt. Ltd (Karnataka): Issued certificates for recycling 348,000 tonnes of plastic waste without operational facilities.
• Shakti Plastics Industries (Maharashtra): Involved in generating fake certificates exceeding their processing capacity.
• Technova Recycling India Pvt. Ltd (Gujarat): Accused of issuing fraudulent certificates beyond their actual recycling capabilities.
• Asha Recyclean Pvt. Ltd (Gujarat): Also found to be part of the fraudulent certification scheme.

These malpractices undermine the integrity of the EPR system and hinder efforts to manage plastic waste effectively.

Modus Operandi of the Fraud

The fraudulent activities typically involved recyclers issuing EPR certificates for quantities far exceeding their actual processing capacities. In some cases, facilities were non-operational or lacked the necessary infrastructure, such as effluent treatment plants, yet still generated certificates. This allowed PIBOs to purchase these certificates to falsely demonstrate compliance with EPR obligations, thereby evading penalties and continuing their operations without adhering to environmental regulations.

Impact and Response

The issuance of fake EPR certificates has significant environmental and regulatory implications:

• Environmental Degradation: The lack of actual recycling leads to increased plastic pollution, negating the objectives of the EPR policy.
• Regulatory Challenges: The prevalence of fraudulent certificates complicates the enforcement of EPR regulations and undermines public trust in waste management policies.

In response, the CPCB has initiated stricter audits and imposed penalties on offending companies. For instance, Enviro Recyclean Pvt. Ltd faced a proposed penalty of ₹5,000 per tonne for the 348,000 tonnes falsely certified, amounting to over ₹174 crore.

Deccan Herald

Here are 10 recommended reforms to minimize fraud in the EPR domain:

1. Strengthen Third-Party Audits: Increase the frequency and rigor of third-party audits for both PIBOs (Producers, Importers, and Brand Owners) and Plastic Waste Processors (PWPs) to ensure compliance and authenticity of the EPR certificates.
2. Implement a Certification and Accreditation System for PROs: Establish a formal recognition and accreditation system for Producer Responsibility Organizations (PROs) to ensure accountability and competence in the EPR ecosystem.
3. Real-Time Monitoring of Recycling Activities: Utilize digital tools like blockchain for real-time tracking of recycling activities and to prevent the issuance of fraudulent certificates.
4. Introduce Hefty Penalties for Non-Compliance: Enforce strict penalties for PIBOs and PWPs that engage in fraudulent activities, including revocation of licenses and heavy fines.
5. Transparency in Certificate Trading: Make the details of EPR certificate transactions publicly accessible to increase transparency and discourage fraudulent practices.
6. Incorporate Informal Sector Participation: Formally integrate the informal waste collection sector into the EPR framework with incentives and safeguards to ensure that these stakeholders are recognized and compensated fairly.
7. Limit Certificate Trading Loopholes: Restrict the trading of certificates to only genuine recycling and end-of-life disposal activities, and ensure that each certificate corresponds to actual plastic waste management.
8. Mandatory Physical Verification: Require mandatory and periodic physical verification of plastic waste processing facilities to validate their operational capabilities and capacity.
9. Cap the Number of Certificates Issued per Facility: Limit the number of EPR certificates a facility can generate based on verified processing capacity to avoid over-certification.
10. Establish a Grievance Redressal Mechanism: Create a dedicated body to address grievances related to EPR compliance, fraudulent certificates, and disputes among stakeholders(http___cdn.cseindia.org…).

Conclusion

The EPR scam in India highlights critical vulnerabilities in the country's waste management and regulatory systems. Addressing these issues requires robust monitoring, stringent enforcement of regulations, and increased transparency within the EPR framework to ensure that environmental objectives are met and public trust is restored.

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