How the Construction Fair Payment Charter Could Affect Your Business
Construction firms can now sign up to the fair payment charter – but it’s proving controversial already. Find out why.
How many days?
Like many businesses, you’ve probably been thinking about the Construction Supply Chain Payment Charter. If your company has signed up to the voluntary scheme, it commits you to paying your suppliers within 30 days, starting from January 2018. Needless to say, the fair payment charter is already causing controversy – and it was only launched in April.
Who is up for it?
We’re not the only ones pondering about it. Truth is, only a few big firms have grasped this particular nettle so far. When the fair payment charter was launched, just nine of the firms on the 30-strong Construction Leadership Council were able to commit to the voluntary charter.
However, it’s recognised that it will take time for large businesses to adjust their business models over the next few years. So we’ll see…
What about SMEs?
The Construction Leadership Council says the charter signifies its commitment to small and medium-sized business, and the important role they play in the construction industry.
As we’re all aware, SMEs with limited resources to back them up are often unduly hit by late payment. For instance, a small business such as a plumbing subcontractor will typically be running on a slender margin.
A payment delay of weeks or months is often the final straw. Most small companies fail through lack of cash. But… The fair payment charter has prompted worries that it might drive up general pricing in the industry, or perhaps result in larger firms developing a monopoly.
You call that fair?
Well, yes! In its best aspects, this charter is exactly what the industry needs. Giving the supply chain a shake and speeding up payment throughout the entire construction process.
We’ve all come across companies that like to charge but hate to pay out, and that helps no-one but themselves. Suppliers who get paid promptly are more likely to pay their own suppliers (in an ideal world – I’m a realist), and so on down the line.
If it works, it could help the economy to keep on rolling. Also, if payments are fair then retentions should pose no problems, so we believe. Retentions are quite possibly the bane of any construction employee’s life, but are they really that bad?
They can actually be quite good for business if controlled and managed successfully.
Lend us a tenner
Encouraging news is also coming from finance firms, who hope the fair payment charter will boost the flow of lending to construction companies.
Many lenders consider construction high risk, and slow payment is one of the risk factors. Some specialist lenders have dedicated finance products for the construction industry, but other lenders have simply turned away from the sector. The charter, by bringing more certainty to payment terms, may ease the concern of lenders and create more opportunities for construction companies to borrow.
All in this together?
All of this is pie in the sky, of course, if no-one actually signs up to the voluntary charter. It’s going to take everyone working together – including clients, contractors, supply chain and the Government – to make the fair payment charter a go-er.
So let’s start talking about it now. Who knows? It could end up benefiting everyone from customer to supplier and developer; but only if we’re all in it together.
Environment Agency clamps down on plastic films and wraps
Businesses in the waste and construction industries must ensure they deal with waste plastic properly to stop illegal exports, the Environment Agency (EA) has warned.
The warning comes as the Agency is increasingly aware of plastic film and wrap from the construction and demolition sector being illegally exported.
Exports are frequently being classified as ‘green list’ waste of low risk to the environment, but are often contaminated with materials such as mud, sand, bricks and wood, posing a risk to the environment and human health overseas, and undermining legitimate businesses in the UK seeking to recover such waste properly.
During the last year, the EA has intercepted shipments to prevent the illegal export of this material on numerous occasions. The Agency inspected 1,889 containers at English ports and stopped 463 being illegally exported. This, combined with regulatory intervention upstream at sites, prevented the illegal export of nearly 23,000 tonnes of waste.
Those convicted of illegally exporting waste face an unlimited fine and a two-year jail sentence. But construction firms could also face enforcement action if contaminated construction and demolition waste plastic is illegally exported.
Malcolm Lythgo, Head of Waste Regulation at the Environment Agency, said it is seeing a marked increase in the number of highly contaminated plastic film and wrap shipments from the construction and demolition industry being stopped by officers.
“I would strongly urge businesses to observe their legal responsibility to ensure waste is processed appropriately, so we can protect human health and the environment now and for future generations. It’s not enough just to give your waste to someone else - even a registered carrier. You need to know where your waste will ultimately end up to know it’s been handled properly. We want to work constructively with those in the construction and waste sectors so they can operate compliantly, but we will not hesitate to clamp down on those who show disregard for the environment and the law.”
There are a number of simple, practical steps that businesses can take to ensure that C&D site waste is handled legally.
Construction businesses should check what’s in their waste
- Different waste types need different treatments and so must be correctly categorised to ensure it goes to a site that is authorised to handle it safely. Businesses can also check if their waste is hazardous as different rules might apply.
- If you are removing the waste yourself, you must be a registered waste carrier- registration can be carried out here. When a waste collector is transporting your site waste, you must check they have a waste carrier’s licence from the EA.
- You must also check that the end destination site any waste is taken to is permitted to accept it and has the right authorisations in place. Keep a record of any waste that leaves your site by completing a waste transfer note or a consignment note for hazardous waste which record what and how much waste you have handed over and where it is going.
Waste management industry must adhere to export controls
- Contaminated C&D waste plastic - including low-density polyethylene (LDPE) wrap and film - must be exported with prior consent from the EA as well as competent authorities in transit and destination countries.
- Those involved in the export of such waste must ensure that it meets the requirements set under the relevant export controls, such as being almost free-from contamination; the destination sites are appropriately licensed to receive and treat the waste; and waste is correctly managed once received.
The EA will continue to actively target those who export contaminated C&D plastic waste illegally, including any accredited packaging exporters who issue Packaging Waste Export Recovery Notes (PERNs) against such material in breach of their Conditions of Accreditation.
Businesses involved in the shipment of waste are required to take all necessary steps to ensure the waste they ship is managed in an environmentally sound manner throughout its shipment and during its recycling.
Anyone with information regarding the illegal export of waste including C&D waste plastics can contact the EA’s Illegal Waste Exports team at: [email protected] or anonymously via Crimestoppers on 0800 555 111 or via their website