Central audit reveals plastic recycling scam in Karnataka

Bengaluru: Unravelling a scam in Karnataka's plastic recycling sector, an audit by the Central Pollution Control Board (CPCB) found that a factory issued fake certificates of recycling 3.48 lakh tonnes of plastic when the unit had not even become operational.

The development prompted officials to launch an inspection of 89 recyclers in Karnataka.

Extended Producer Responsibility (EPR) certificates enable plastic producers to comply with rules and avoid legal action, including penalty, to continue manufacture. The certificates are issued by plastic waste processing units which are duly recognised and certified by the authorities.

The Union government introduced EPR rules in 2022, mandating plastic producers, importers and brand owners to reuse and recycle plastic. Starting with recycling 30% of the quantity of plastic sold in the previous financial year, progressive targets were set for producers.

Following a complaint, central officials inspected Enviro Recyclean Pvt Ltd, a company in Ramanagara which had received clearances from the Karnataka State Pollution Control Board (KSPCB) to process 3.5 lakh tonnes of plastic waste per annum.

The CPCB team found that the unit was not operational but had transferred EPR certificates for 3.48 lakh tonnes to producers, importers and brand owners.

“Quantifies mentioned in the invoices uploaded on the EPR portal are fallacious and very high as compared to the declared production capacity since the plant operations had not yet commenced,” the audit report said adding that the factory had claimed that invoices were generated for services towards collection and recycling, and not for the requisite actual sales of recycled plastic.

In “gross violation” of the rules, KSPCB officials issued consent to operate the factory within seven working days after issuing consent to set up the plant. “It is not clear as to how the unit, which is a large-scale unit, was established within seven days,” the report said.

Though the factory issued a certificate of recycling 3.48 lakh tonnes of plastic, it had no effluent treatment plant (ETP). “The ETP was found to be under construction during the audit, despite the fact that the consent to operate was granted by the KSPCB,” it said.

Central authorities have directed the KSPCB to conduct a detailed inquiry into the irregularities and impose a penalty of Rs 5,000 per tonne on the company besides issuing show-cause notice and debarring the unit. The penalty for 3.48 lakh tonnes would cross Rs 174 crore.

As per the KSPCB, there are 263 producers, importers and brand owners (PIBOs) of multi-layered plastic, who generate 17,222 tonnes per annum. Sources in the KSPCB said about 140 units had applied for licence to process plastic and most of them were far away from applying scientific methods.

A KSPCB official said the board had issued final clearances to 89 recycling units. “All the units are under the scanner. Action will be taken against those found to be in gross violation of the rules. However, considering that the plastic recycling sector has been largely informal, we will try to correct those found with minor violations,” a source said.

About the involvement of officials in the scam, KSPCB Member Secretary PC Ray said an internal inquiry was ongoing. “We are expecting a preliminary report within a few days following which action will be taken as per the rules,” he said.