A text transcription follows.
This transcript is for anyone with a hearing impairment or who for any other reason cannot listen to the MP3 audio file.
The following is the text spoken by OUT-LAW journalist Matthew Magee.
Hello and welcome to the last edition of OUT-LAW Radio for 2008. As always, we'll be helping you to cope with the dizzying, ever-changing world of technology law.
It is late November, and the thoughts of the retail world are surely turning to the weeks of panic, fulfilment headaches and logistical nightmares ahead. It can only mean one thing it is Christmas.
As goods fly around the world and around the country, criss-crossing from shipyard to warehouse to home, they are cosseted and protected by something that is becoming increasingly controversial. E-commerce depends on it; environmentalists and Brussels officials loathe it, and even the world's biggest online retailer has announced a war on it, it is packaging.
This Christmas in the UK we will spend more online than ever before – an eye-watering £13.16 billion according to CapGemini, and that in a year in which overall retail sales will fall.
Every time we shop online, though, we buy not just the goods we ordered but some extra helpings of cardboard, plastic, tape, wire and bubble wrap.
We have all experienced the disorientating feeling as a package is delivered that is several times larger than we expected. You may have only ordered a pen, a USB stick or a CD, but the postman hands you over a large, light box that is filled with more packaging than product.
Well, Amazon has declared that for it the days of over packing are over. Earlier this month it announced a frustration free packaging programme. It has pledged to reduce the volume of packing to help conserve resources and its complexity to help us actually get to the goodies more easily.
Amazon may have hit a nerve. We have been told that other retailers are thinking along similar lines, and that packaging’s volume and complexity could be under more general fire.
Not all the moves are voluntary, though. Kirsty Macarthur is a specialist in environmental law at Pinsent Masons, the law firm behind OUT-LAW. She told me that there are already laws in the UK that govern how you package goods and what you do with the waste packaging.
Kirsty McArthur: The producer responsibility obligations are designed to encourage minimisation of packaging and to incentivise and increase recycling. So if you are a company that is bringing in packaging whether you are supplying raw packaging or importing and selling packaging in the UK that there are a set of regulations which will apply if your turnover exceeds £2 million and if you are handling greater than 50 tons of packaging. So basically if you are a group of companies you must consider your total packaging and total turnover ie an aggregate of subsidiaries basically. So if you are a company importing packaging to the UK a company such as Amazon. If you are importing packaging or if you are selling goods with packaging around it in the UK the likelihood is that the regulations will apply to you.
Online retailers, then have an obligation to recycle a certain percentage of their packaging waste. So how do they do it? They certainly don't come round your house to pick up the box your gadget arrived in, so how does it work?
Well a company has two choices: they can register directly with the Environment Agency and prove it is recycling an amount of cardboard equivalent to a certain percentage of the amount they send out.
Or, as most do, they can get someone else to take care of it. The biggest Company in that field with around half of the market is Valpak. Its director of policy Adrian Hawkes described the magnificent journey that cardboard goes on after it leaves your recycling bin.
Adrian Hawkes: They do not have to get their own packaging back they have to get an equivalent packaging in the same materials. Some of that packaging might come back. So for example if you were a keen recycler and you separated out your cardboard that the book came in and your local authority collected that separately, it might send that to a reprocessor and that reprocessor would generate some evidence of that recycling activity through these weird and wonderful documents called a packaging recovery note. Then we as a scheme might then acquire that evidence by basically having a contract with the reprocessor that says that they have actually reprocessed one ton of cardboard and that that can be used to demonstrate that you have met part of your legal requirements. Then it becomes the equivalent of a new product and somebody who is making new boxes will chose between virgin material or recycled material depending on the economics and their market and all the rest of it.
The sharper ones amongst you will have noticed something amazing. In Hawkes's story, the recycling plant gets paid twice – once by his firm for allowing him to claim credit for some of the recycling which he passes on to his clients, and once by whoever buys the recycled cardboard from which it can make even more boxes.
In fact, those two prices operate in a constant see-saw of flux, and a fall in commodity prices is sending the cost to retailers and producers of recycling their packaging skywards.
Adrian Hawkes: If there is a high market price for the material then the price of the evidence is lower and the converse is the case and there is a dramatic demonstration of that over the last six or eight weeks where certainly for the first half of this year world commodity prices were very high and therefore recycled material products were also high. So the extra financing that was required from producers was actually quite modest. Over the last few weeks that has completely flipped around in that global commodity prices have plummeted down to very low levels which means that in order to continue to recycle that the subsidy if you like has to increase to compensate and that is exactly what has happened. PRN prices have increased significantly.
It is estimated that all of this recycling costs UK business 80 to a £100 million a year, though Hawkes said this could rise to £150 million this year.
It is not a huge cost, but cost is not the only burden on businesses. Jane Bickerstaffe runs Incpen, an industry-funded research organisation dedicated to the cause of sustainable packaging.
She said that companies often understandably find the forest of regulation hard to navigate.
Jane Bickerstaffe: I think one of the issues for online distribution is that very often they are packaging such a wide range of things that they have got to make a decision on how many different sizes of packaging they have available. It is also the regulations are quite administratively onerous. I mean they are not easy to read and understand and so I do have sympathy with them.
But what packaging to use and how is not solely an environmental issue. The innovative approach of companies like Apple has spawned something of a package fetish for some users, where the packaging becomes part of the thrill of acquiring a new product.
The internet is full of demonstrations of unboxing, where a keen buyer of a newly released product photographs every stage of unpacking it for the jealous delectation of online viewers who haven't got their hands on it yet.
And what if the packaging makes it difficult to get to the product at all? That is the other issue Amazon is addressing with its frustration free packaging campaign.
We have all had to get the scissors out or the Stanley knife for a tied up toy or a gizmo stuck in one of those infuriating plastic shells.
But how much worse is it for people with dexterity problems? This is an issue that disproportionately affects older people, and David Sinclair, head of policy at Help the Aged, says it is a real problem.
David Sinclair: We know that actually packaging is a big issue and that people tell us all the time that actually they have not bought the same product because of it and as industry develops I think that it will be increasingly important to recognise the aging society. There are difficulties like just literally getting into some of the packets, the opening up, particularly I think some of the sort of vacuum-packed plastic packs as it were. Historically what we have seen is far too many products and the packaging associated with them designed by the younger population for the younger population and I think what we have got to accept is actually we need to change that and accept perhaps the way as you get older you are more likely to have a disability. You are more likely to find it more difficult to access some of these products and services so we have got to change the way we do things.
Help the Aged actually conducted research and found that older people really do get annoyed at the amount of packaging they faced, and it is now working with the retail industry to help them improve their performance.
David Sinclair: About a year and a half ago Help the Aged set up an organisation called Engaged and we were about to launch an accreditation scheme for companies around those products and the companies themselves. In fact the first year and a half of that programme what we found is that a significant proportion of the time, the big issue has been inclusive design, how we design products and services to meet the needs of an aging society and I really thing that industry is beginning to recognise that we need to do more.
So is anything actually changing? Are retailers improving their packaging performance? Valpak's Hawkes thinks they are.
Adrian Hawkes: I think we have certainly noticed a significant change in that direction in the last year or two where companies, particularly consumer facing companies, retailers particularly, are doing it not only because of the regulatory drivers but also because their customers are starting to say to them we do not like all this packaging it looks a bit unnecessary to us and what are you doing about it. They have, certainly all the big grocery retailers for example have had significant reduction programmes.
In the coming years EU targets will tighten and the UK will have to catch up with its better performing neighbours in recycling rates. Some now seriously doubt if, with the rising cost of recycling, the UK will make its target for this year of the recycling of 60% of waste packaging. But getting it right is hard, and often the twin aims of reducing and improving packaging are at loggerheads, as Incpen's Bickerstaffe explains.
Jane Bickerstaffe: Openability is one of the areas where quite a lot of work has been done but there are trade-offs. To make things really easy to open it often requires the use of more material, so then you have got the environmental angle to balance there as well. I think our bottom line is that the best pack is tailored to protect the product properly but also has to perform all the other things that are required and openability is one of the factors that is really important. So you have got to have it so it is good for the environment, environmentally responsible and good for the consumer and takes their needs into account. You are right we are all getting older and openability is coming up and up the agenda.
That's all we have time for this week and indeed this year. Make sure and catch up with OUT-LAW Radio in 2009, so from all of us here at OUT-LAW merry Christmas, happy New Year and goodbye.