Waste: Mayer Parry Recycling Limited v Environment Agency (9 November 1998) High Court, Chancery Division

United Kingdom
This case addressed the problematic legal definition of waste. Although the proceedings related in particular to the question of whether different categories of scrap metal constitute waste, the judgment will have significance throughout the European Union and for various industries.

Marry Parry Recycling Limited is one of the largest scrap metal merchants in the UK. In association with the British Metals Federation, it commenced proceedings by way of originating summons under Order 28 of the Rules of the Supreme Court seeking declarations as to whether different categories of scrap metals constitute waste and hence whether they are subject to regulation under waste laws. The Environment Agency as the body charged with enforcement of waste laws in England and Wales was the defendant in the proceedings. Cameron McKenna was instructed by Mayer Parry Recycling Limited in this case.

The definition of waste has several practical and commercial impacts for Mayer Parry Recycling Limited. It determines whether Mayer Parry Recycling Limited requires a waste management licence under Section 33 of the Environmental Protection Act 1990 to operate its sites, whether the duty of care as respects wastes under Section 34 of the Environmental Protection

Act 1990 applies to its activities, whether it requires registration as a waste carrier under the Control of Pollution (Amendment) Act 1989 to transport its scrap metal and whether Regulation 259/93 on the supervision and control of shipments of wastes within, into and out of the EU applies to its exports and imports of scrap metals.

The judge, Mr Justice Carnwath, first addressed a point of procedure raised by the Environment Agency. The Environment Agency originally objected to the case being brought by way of the originating summons procedure, stating that the proceedings should have been brought by way of judicial review under Order 53 of the Rules of the Supreme Court. Mr Justice Carnwath, however, took the view that either procedure was available to Mayer Parry Recycling Limited although on balance due to the large volume of affidavit evidence and the fact that the court was being asked to make findings of fact the originating summons procedure was, if anything, more appropriate.

It was common ground that the applicable definition of waste is that in Article 1 of Directive 75/442/EEC on waste as amended by Directive 91/156/EEC. This definition is often referred to in UK domestic law as "directive waste". Article 1 of the Directive provides:

"(a) 'waste' shall mean any substance or object in the category set out in Annex I which the holder discards or intends or is required to discard". The Directive also refers to "disposal" and "recovery" of waste. "Disposal" and "recovery" are defined to mean any of the operations provided for in Annex IIA or IIB to the Directive respectively. One category of recovery operation listed in Annex IIB is "recycling/reclamation of metals and metal compounds".

Both parties and Mr Justice Carnwath noted the purposive approach to be taken in interpreting EC directives and that where the different language versions of a directive diverge, interpretation is to be by reference to the purpose and general scheme of rules of which it forms part.

Mr Justice Carnwath briefly set out the development of the English language version of the definition of directive waste and the apparent discrepancy with other language versions of the Directive, particularly French and Italian. While the word discard was introduced on amendment into the English language version of the Directive to try and resolve the discrepancy the judge suggested that it lead to difficulties of its own making and that the term "get rid off" (rather than "discard") would have more accurately reflected the intention behind the Directive.

Two recent decisions of the European Court of Justice ("ECJ") and the analysis of Advocate General Jacobs in each of them were central to the dispute. These were Euro Tombesi and Others [1997] ECR I-3561 and Inter-Environnement Wallonnie v Region Wallonne [1997] ECR I-7411. Mr Justice Carnwath noted from the Advocate General's opinion in the Tombesi case that difficulty has been found throughout the European Community in interpreting the definition of waste, particularly when applied to residues or by-products from production processes which are suitable for recycling. The Advocate General took the view that "... little is to be gained by considering the normal meaning of the term "discard" which should be taken as having a special meaning encompassing both the disposal of waste and its consignment to a recovery operation". The Advocate General stated that the concept of a "recovery operation" is a matter for the Member States and for national courts to apply on the facts and that there may very well be border line cases.

In answering the specific questions put to it in the Tombesi case, the ECJ did not in the end need to address the issue of the word "discard". The ECJ did not expressly adopt the reasoning of the Advocate General.

In the subsequent Wallonne case the question that was referred to the ECJ which is relevant to this case was as follows: "Is a substance referred to in Annex I (to the 1991 Directive) and which directly or indirectly forms an integral part of an industrial production process to be considered "waste" within the meaning of Article 1A of that Directive?". On that question, the ECJ ruled that a substance is not to be excluded from the definition of waste merely because it directly or indirectly forms an integral part of an industrial process.

Mr Justice Carnwath took the view that the reasoning of the ECJ in the Wallonne case came much closer to an express adoption of the Advocate General's approach. The ECJ recognised that the scope of the term "waste" turns on the meaning of "discard" but adopted the view that the term discard "covers" both disposal and recovery of a substance or object. Mr Justice Carnwath rejected Mayer Parry Recycling Limited's submission that in this context "covers" means "is capable of applying to" but not "necessarily co-extensive with" disposal and recovery operations. Instead, he interpreted the ECJ's position to be an adoption of the Advocate General's approach that "discard" has a special meaning "encompassing" and, seemingly limited to not only the disposal of waste but also its consignment to a recovery operation.

The judge went on to apply this reasoning to the arguments in the present case. The Environment Agency adopted the reasoning of the Advocate General putting the emphasis on the Annex IIB list of recovery operations rather than on the term "discard". In essence, what the Environment Agency argued was that any substance that is consigned to a recovery operation is waste. The Environment Agency contended that the recovery operation "recycling/ reclamation of metals and metal compounds" covers operations which have the purpose of making the metal content of substances or objects reusable as raw material (including any measures which have the purpose of ensuring that the metal is reusable without threat to public health or the environment). This in turn covers all the processes carried out by Mayer Parry Recycling Limited. The Environment Agency agreed, however, that scrap metal which can be used as furnace feed stock without further processing is a raw material and therefore is not waste. Further, it accepted that scrap metal that is at the stage of furnace feedstock but which is further processed or graded solely for economic reasons (i.e. to make it into a more valuable feedstock) is not by such processing of grading subjected to a recovery operation and therefore is not waste.

Mayer Parry Recycling Limited submitted that the concept of "discard" was central, suggesting that in any particular case it is necessary to look at all the facts in order to determine whether a discarding intention is reasonably, on objective appraisal of the surrounding circumstances, to be attributed to the disposal.

Mr Justice Carnwath thought that the Environment Agency's approach was in principle correct. He proceeded to state what he considered to be a reasonably clear general concept but in doing so he may have re-introduced some uncertainty because in some respects his judgment steps back from completely following his interpretation of the ECJ's decision in the Wallonne. Mr Justice Carnwath stated that the term "discard" is to be used in a broad sense equivalent to "get rid of" and is generally concerned with materials which have ceased to be required for their original purpose, normally because they are unsuitable, unwanted or surplus to requirements. In assessing the limits of this category of discarded material Mr Justice Carnwath stated that it is necessary to assess whether the material is put to a disposal or recovery operation. This is because materials, which are to be reused but which do not require any recovery operation before being put to their new use, are not waste and materials which are made ready for reuse by a recovery operation, cease to be waste when the recovery operation is complete.

The judge observed that all the materials referred to in the evidence are capable of being waste as they are "got rid of" by their original users as not wanted or needed for their original purpose. Whether the materials are waste, in his judgment, turns on the scope of the term "recovery". If the discarded materials do not require recovery for their reuse they are not waste. If they do require recovery they are waste and remain waste until those recovery operations are complete. The judge acknowledged the difficulty in drawing a clear line between recovery operations and industrial operations in which recycled scrap is used as a raw material. He did not, however, offer a solution to this difficult issue merely stating that as long as the "recycling/recovery of metals or metal compounds" continues the material continues to be waste.