Examination of Witnesses (Questions 200
TUESDAY 23 OCTOBER 2001
200. So if you saw the dismantlers doing a lot
of the depolluting, would you take it then that as it went down
the line to the shredder there would not be substantial extra
costs for the shredder?
(Mr Hesketh) I would not have thought so.
(Mrs Allen) No.
(Mr Wemyss) I would not have thought so, no, because
we receive monetary value for it for the metal content; we sell
materials to the shredder for them to turn into a recyclate.
(Mr Hesketh) We do have an existing competitive industry,
to be honest with you.
(Mrs Allen) And, of course, we have got a lot of dismantlers
who are spread all over the country; whereas if you go just to
37 shredder sites I think the abandoned car problem will be escalated.
201. Do you think, however, you say there is
enough in the way of dismantlers, but it has been suggested that
there is an insufficient number of dismantlers to Annex I standard
and that there could be a shortfall in April of next year?
(Mr Wemyss) We entirely agree with you; because, as
you heard earlier, while some people have spent their money in
looking to the future and thinking what the requirement will be,
with great respect, we have yet to have, whilst we have an idea,
the official line of what we have and have not got to do to meet
the Annex I needs. And so I am sure that at April there will be
a shortfall to those standards.
202. There could be a shortfall because there
is ignorance as yet of the standards that are required. Is there
a capacity within the industry at present to pull itself up by
its own boot straps to a standard that could be what was required
in April? It is a hypothetical question, I am sorry to put it
(Mr Wemyss) The date of April, I think, is the crux.
For the suppliers of the type of equipment that may be required,
I think their capacity would be stretched to provide a sudden
influx of orders for 300 sites; so there is going to be the logistics
of actually coping with this. That being said, but also, if I
may say, the Environment Agency's ability, or whoever is going
to police this, their ability to put their infrastructure in place
to police it and to get the permitting in place. There is a will
to do it. I do not think there is any doubt the dismantling industry
wishes to be part of this new standard.
Sir Robert Smith
203. Just following up on that, I wondered if
you had a view at all of what is the geographical distribution
of those that will be able to cope; will there be parts of the
country that will be badly hit and other parts of the country
that may be less badly hit, in terms of ones that are capable?
(Mr Wemyss) It is a commercial decision for those
companies involved, in response to your question. I believe that
if there is a demand to earn some money in a particular area then
somebody will do it in that area. And I think therefore the majority
of the areas will be covered, as they currently are.
204. Just picking you up on that point, when
you said it is a commercial decision. If a company were to become
an Authorised Treatment Facility, would there be any obligation
on them to accept ELVs, or would they only have to accept ELVs
if they felt it was a good commercial decision?
(Mr Hesketh) They would only accept them as a good
commercial decision, in the same way as the shredders would only
accept them as a good commercial decision. We operate businesses.
For example, household waste we pay to have removed; what we are
talking about here now is vehicles which have become waste, because
that is the definition by which they are going to be arrived at,
and all we are saying is that everybody pays to have their waste
dealt with and we are just asking for a little bit of money to
help deal with the waste that we are having to deal with.
205. Can I ask about preparedness for the implementation
of the Directive, it has been around now, the idea of the Directive,
for a considerable number of years, and I am a bit confused about
the comment Mr Wemyss made, because there seems to be a dichotomy
here. You mentioned about those companies who have invested and
then you said you need to know what is required before investment,
and Mrs Allen mentioned about the need to know which way to jump.
Why have not your members generally taken a forward look and made
an assessment of what is required, or likely to be required, as
a result of the Directive, to prepare for it?
(Mr Hesketh) There are a number of reasons for it.
For example, there are some dismantlers who have made the commitment
and the investment; in I think all those cases that investment
has been funded by what is known as the salvage side of their
business, which is the high value business, in trading in motor
vehicles for repair, not dismantling vehicles, and they have done
that, to some extent, because they have taken a look at the future
and said that they can do it, but they have funded it out of their
high value business, their best side of the business. So that
is one reason. But the main reason that the vast majority of dismantlers
have not moved forward, as it were, is because it has been unclear
as to exactly what will be required to be done, there are no specifics,
there is no different definition known of when a vehicle becomes
an ELV. A lot of terminology within the Directive talks in terms
of appropriate sites, or appropriate areas; we do not know what
appropriate means. So it is very hard to formulate a business
plan on supposition that a bank manager is going to accept when
you go to him and say, "I want to borrow the sort of money
that I need to make this sort of investment."
206. So your organisation has not brought a
number together, to look for a strategic way forward for them,
of members? If some have done some work necessary to confront
the implications of the Directive, it seems unfair that if they
have put in that investment the lack of preparedness of other
members is perhaps going to reflect on those that have invested?
(Mr Wemyss) I would not wish to give the impression
that they have not given thought to it, and we, through the written
word and through, in fact, we had a seminar just in September
for our members to update them with as much physical knowledge
as we had available to us of how we think the final written requirements
will be. The Environment Agency is not in a position to give you
that information yet. It is not to say that we have not been involved
with discussions with officials, etc., we have been doing the
groundwork, but people are reluctant, particularly in the current
climate of the economy, people are nervous, particularly in certain
areas, and so they are waiting to be told what the requirement
will be and what will the technical requirements be. They probably
have laid some of the groundwork, they may have put their buildings
up, but they have not yet gone probably to the extent of putting
in depollution equipment, which could be, as you have probably
heard, £50,000, £70,000, etc., they have not taken that
final step; once they know what they will be required to do in
technical terms, they know they have got to take certain things
out, but how it is acceptable to take them out, then they will
make their move. So I would not wish to have given you an impression
of unpreparedness from the industry, the industry is clamouring
to find out, there are people out there very concerned, because
it is their living, it is their businesses, and to be part of
this game, to stay in it, they will have to spend that money.
So they have the preparedness of that, but they are just awaiting
the final comments; and I think it is probably exampled by us
being here today, that people are still investigating and thinking
207. Can we turn to the DTI's consultation and
the options that are there. As an organisation, what is your opinion
of the SMMT's Option 4?
(Mr Wemyss) Mr Hesketh would like to respond to that.
The one thing, if I may just add, I am indebted to the Clerk for
allowing us sight of this particular document from last Friday,
to enable us to try to answer your question, but to make it clear
that SMMT have not involved us in their thoughts, and just to
make that clear to you, that that is their thought and they have
put it down, but we are very grateful to have a chance of seeing
it and responding to it.
208. Just one final point, picking up on something
that Richard said earlier, in your opinion what mechanism could
be used to differentiate between ELVs with a positive and a negative
(Mr Hesketh) Quite honestly, I think it is an unanswerable
question. I just do not think there is a mechanism to do it. As
was said earlier, I think by the BMRA, two vehicles, ostensibly
the same, can have different values, because of the quality of
the parts, they can have different values because of their arising
in different parts of the country, they have different values
just in the fact that possibly one person has got a number of
that particular type of vehicle and one has not. So the issue
of negative value, after all, value is only an agreement between
a willing buyer and a willing seller, and it is a completely subjective
issue. I think, possibly the only way forward on this is to take
a view that the extra treatment that will be required is obviously
going to reduce the value of vehicles and spread that over perhaps
the volume of vehicles that need to be treated. But it really
needs people with a willing mind to sit down to try to arrive
at some solution to it, rather than people just saying, "Well,
that is what it says, that's what we're going to do."
(Mr Wemyss) If I may, Mr Chairman, we did have sight
of Option 4, and for the vehicles to go directly to the shredders,
in our view, and "we would say that wouldn't we," supporting
the dismantling industry, it is not an option. But one must remember
that the shredders would have to depollute that, and one would
question whether they would have, even with the finest of resources,
sufficient space, etc., to handle two million vehicles, or one
and a half million vehicles, in this case, that we are talking
about. So, no, we are not too keen on Option 4, thank you very
much, but we would be delighted to try to work with them to find
209. Fine. Thank you very much; we are very
grateful to you. We realise that, as a trade association, you
are one of the smaller ones, but in coming to us at this time
it is not really a chore and we hope that you find it useful,
and if we need any additional information we will be in touch
with you. So thanks very much indeed.
(Mr Wemyss) We are glad to have the opportunity. Thank
you very much.
Chairman: Thank you.