Deposit return scheme for Scotland: BRIA

8.0 Test Run of Business Forms

212. Following passage of the secondary legislation to establish DRS, all new forms required for the scheme will be designed and test run with stakeholders to ensure they are clear, simple and easy to complete. BRIA guidance[76] requires that 6 to 12 businesses likely to be affected by DRS be involved in the development and testing of the new forms. Full details of the new forms and how they were developed in partnership with business stakeholders will be published in the final BRIA.

213. Existing forms from several global DRS systems have been reviewed. The matrix below in Table 17 identifies new business processes and forms that are likely to be required in a Scottish DRS and Annex D provides a series of example forms that already exist from other DRS models around the world. These example forms (as well as guidance documents and contract terms) provide an indication of forms and documentation that are likely to be developed under the Scottish system.

214. Table 17 is divided into five key process activities and eight key process stakeholders. It identifies which stakeholder, under which activity, will be exposed to a new business form or process.

215. The key stakeholders and transaction points are:

• Producers – companies that put a deposit-bearing product onto the market
• Return Points – location points for the return of a deposit-bearing product
• RVMs – reverse vending machines for the return of a deposit-bearing product
• Hauliers – transport for the collection of deposit-bearing products from return points to counting/processing centres
• Counting centres – locations owned and operated by the Scheme Administrator where the deposit-bearing products are taken to be counted, separated and sorted
• Consumers – individuals who have purchased a deposit-bearing product
• Charities – charities that register to receive returned deposits if chosen by the consumer
• Scheme Administrator – the appointed entity managing the Scottish DRS

216. The key process activities are:

• Registration - of producer companies, return point locations and charities, as well as registration and testing of beverage container products to ensure that they meet quality standards and criteria for return via RVMs
• Payments In/Out - of fees and refund of deposits
• Container identification and collection - throughout the material flow via suitable labelling and sorting
• Reporting - of data to track material and deposit movement throughout the system, and management of any arising complaints or feedback

Table 17. Stakeholder/Transaction Point

			Producer	Return Point	RVMS	Haulier	Counting Centre	Consumer	Charity	Scheme Administrator
Activity	Registration	Company Details	Form	Form	Form				Form	Process
		Bank Details	Form	Form	Process			Form	Form	Process
		Service Agreement	Form	Form		Form				Process
		Product	Form/Process		Process					Process
	Payments In	Producer Fee	Process							Process
		Deposit Fee	Process							Process
	Payments Out	Deposit Fee		Process	Process			Process	Process	Process
		Handling Fee		Process						Process
		Service Fee				Process				Process
		Transaction Process	Process	Process						Process
	Container Identification & Collection	Drinks Container Barcode & Deposit Mark	Process		Process		Process			Process
		Stick-on Drinks Container Labels	Form/Process							Process
		Bags & Tags		Form/Process						Process
		Collections		Form/Process						Process
		Unique Barcode Identifier		Form/Process		Process	Process			Process
	Reporting	Sales	Form/Process							Process
		RVM Data			Process				Process	Process
		Manual Return Point Data		Process		Form/Process	Process			Process
		Haulier Data				Form/Process				Process
		Counting Centre Data					Process			Process
		Complaints	Form/Process	Form/Process	Form/Process	Form/Process	Form/Process	Form/Process	Form/Process	Process

217. These matrix entries are discussed below, providing further detail on new forms and processes which are not considered business as usual activities for the stakeholders involved. It also provides reference to form examples in Annex D.

8.1 Registration

218. Company Registration: To register as producers, return points (including RVMs) and charities, there will be a requirement to complete and submit a registration form to the Scheme Administrator. Producer companies accepted as members of the scheme will also be required to sign a service or supplier agreement form, outlining the terms of participation. Scheme registration will not be a new concept for some stakeholders, since larger retailers and producers will have previously registered with compliance schemes to meet their Producer Responsibility Obligations (Packaging)[77] or to other global DRS. Examples of company registration forms used by other schemes have been provided in Annex D.1 and examples of service agreement documents in Annex D.2. Subject to any exemptions in relevant regulation, some retailers may have the ability to opt-out as a return point. As a result, the retailer may need to register as opting-out via an appropriate form.

219. Product Registration and Testing: Producers wishing to sell beverage containers onto the Scottish market will be required to register their containers with the Scheme Administrator and provide technical specifications to confirm physical compliance and labelling as per a published technical specification manual. Containers accepted by the scheme will be registered on a central database, the data from which will be programmed into RVMs and counting centre sorting equipment to ensure that they pay out deposits on deposit-bearing products only. Producers will be informed if containers do not meet the acceptance criteria and will have the option to modify and re-submit their containers. If the producer chooses not to adhere to the labelling requirements, they can opt to pay a higher producer fee or alternatively purchase adhesive labels from the Scheme Administrator. An example of a technical specification manual can be found in Annex D.3 and a product testing process example in Annex D.4. Additionally, if a registered project is changed or if it is discontinued and needs to be removed from the register, the producer will need to inform the Scheme Administrator. Examples of a product registration form can be seen in Annex D.5, a product cancellation form in Annex D.6 and a product database example in Annex D.7.

8.2 Payments In

220. Producer Fee: Producers will be required to pay a producer fee to the Scheme Administrator for every container placed on the market – this fee will cover the overall running of the system and the cost of registering, testing and recovering each container. A payment process will be set up to facilitate the transaction. Payment of fees/invoices will not be a new or unique activity for producers, however it may add to the volume of administration activity for smaller businesses.

221. Deposit Amount: Producers will be required to pay a deposit amount to the Scheme Administrator for each container they sell onto the market. This may be held in security for the duration of the company’s membership to compensate for any shortfalls in producer payments (e.g. producer going out of business). A payment process will be set up to facilitate the transaction. Payment of fees/invoices will not be a new or unique activity for producers, however it may add to the volume of administration activity for smaller businesses.

8.3 Payments Out

222. Handling Fee: The Scheme Administrator will pay a handling fee to every company registered as a return point (either an RVM or manual return point). The handling fee will be set to compensate the financial impact of collecting, sorting and packaging containers for collection. Return points will need to register their bank details with the Scheme Administrator to receive handling fee payments. A payment process will be set up to facilitate the transaction. Receipt of payment will not be a new or unique activity for these companies, however it may add to the volume of administration activity for smaller retailers and HORECA (Hotel/Restaurant/Café).

223. Service Fee: Depending on the final scheme design and contractual arrangements for logistics, a service fee may be paid to contractors such as hauliers to cover transportation costs. The utilisation of and payment to haulage contractors is not a new process, however it is noted here for reference.

224. Deposit Fee Refund - Consumer: The mechanism by which money is returned to the consumer will be subject to further stakeholder engagement to explore the options available and therefore the processes and forms that may be required. If the deposit return is made available via online banking or PayPal, the consumer will be required to register relevant details via a new process/form. Return points may also offer consumers the option to donate the money to charity, should the consumer wish to select this option rather than receiving the deposit back themselves. RVMs will record this data and submit it to the Scheme Administrator to ensure that the correct donations are made to the registered charities and a clear financial record of these transactions are kept.

225. Deposit Fee Refund – Return Points: Deposits will be returned to retailers and hospitality, restaurants and cafes (HORECA) that have registered as a return point. For those hosting RVMs, data collected from each machine will inform the deposit refund payment due. For manual return points, the owner of the manual return point (small retailers, HORECA etc) will be required to pay out the deposit and will receive a credit payment after the containers have been collected and counted centrally. Return points will need to register their bank details with the Scheme Administrator to receive deposit refund payments. A payment process will be set up to facilitate the transaction.

226. Transaction Process: The deposit cost of a container will need to be displayed appropriately on invoices and receipts as the intention is that the deposit amount should not be subject to tax. This will have implications on retailers, electronic point of sale (EPOS) providers and finance departments throughout the supply chain, to ensure that the charge is displayed correctly on all invoicing/receipts.

8.4 Container Identification and Collection

227. Container Labelling: It is expected that the majority of containers sold onto the Scottish market will incorporate new identifying marks once the DRS is implemented, allowing them to be easily distinguished as part of the scheme. In common with other DRS schemes, these would be expected to include a DRS identifying barcode, which would facilitate automatic collection via an RVM, and a DRS symbol allowing easy visual recognition for manual returns.

228. Labelling changes are not mandatory and a series of options will exist to mitigate any potential competition impact. These options are:

1. To amend primary packaging to include an identifying deposit mark and barcode;

2. To purchase adhesive labels from the Scheme Administrator displaying the deposit mark and barcode;

3. Make no amendment to current labelling but pay a higher producer fee to account for the increased risk of fraud.

229. These three approaches offer an array of options to suit the size of the producer/importer. Guidance on labelling and barcodes will be provided by the Scheme Administrator. An example of deposit symbol and barcode specifications can be found in Annex D.3 within the technical specification document. An example of label ordering forms for adhesive labels can be found in Annex D.8.

230. Bags and Tags: Stakeholders involved in manual take-back of containers will be required to order branded bags and tags from the Scheme Administrator (or an approved contractor) to correctly store and label the containers. An example of bag and tag ordering forms can be found in Annex D.8.

231. Bag Label Barcode: Manual return points will be required to label their bags with a unique barcode identifier which will be issued by the Scheme Administrator when the company registers as a manual return point. The haulier may scan the barcode upon uplift and the counting centre will scan the barcode on receipt. Stakeholders involved in manual take-back of containers will be required to order these unique barcode identifier labels from the Scheme Administrator (or an approved contractor). An example of label ordering forms can be found in Annex D.8.

232. Collections: Guidance on the collection and storage of containers will be provided by the Scheme Administrator to all registered return points. Companies that are registered as return points may have the option to request additional collections outside of standard collection times if the need arises. Additionally, consumers that purchase their goods online and receive home delivery may require the option of requesting the uplift of used drinks containers from their online retailer during their next/upcoming delivery. This collection request service will need to be made available by the retailer, potentially via their website or by phone.

8.5 Reporting

233. Sales Data: Producers will submit monthly reports to the Scheme Administrator regarding monthly sales onto the Scottish market. This data will be used to calculate the appropriate producer fees and deposit amounts due. An example of a sales reporting form can be found in Annex D.9.

234. RVM Data: Each RVM will have an individual IP address so that it is identifiable. Data from RVMs will automatically upload to the Scheme Administrator’s central IT system on a regular basis. This will track data such as the number of deposits returned, type of container returned and charitable donation submissions. This data will be used to calculate the appropriate handling fee and deposit refund to the RVM hosts, and to calculate the appropriate financial donations to registered charities.

235. Manual Return Point Data: Counting centres will count the materials received from the manual return points and refund the deposit amounts and handling fees as appropriate. The bags of materials received from the manual return points will be identifiable via the unique barcode identifier label.

236. Haulier Data: Hauliers will issue waste transfer notes for the containers collected (not a new process), however they may also be required to scan the identifying barcode or manually report their collections in order to track the transfer of materials from the return points to the counting centres. It may be possible to integrate barcode data into waste transfer notes to avoid the duplication of these records. The introduction of edoc (electronic duty of care) will also allow these records to be held electronically.

237. Counting Centre Data: Counting centres will count the materials received from the manual return points and refund the deposit amounts and handling fees as appropriate. Data from counting centres will be automatically uploaded to the Scheme Administrator central IT system on a regular basis.

238. Complaints: A complaints system will be put in place to ensure that complaints can be effectively received and processed by the Scheme Administrator or the relevant impartial adjudicator. Complaints could be made by, or regarding, any of the listed stakeholders. An example of a complaints/feedback form can be found in Annex D.10.