COMPANIES selling paper for recycling are packing tonnes of water, mud and glass into shipments to add thousands of dollars to their profits. Records from a paper-importing company in China show it received 106 tonnes of water in a 250-tonne load of paper from Hong Kong. Another 150-tonne load contained 57 tonnes of water. The recyclers pay according to weight, so waste paper is often soaked with water to add profitable extra mass in a scam the Environmental Protection Department (EPD) deplores. Better Environment Hong Kong's director Steve Choi Sau-yim said: 'They are almost exporting more water than paper.' An EPD spokesman said the industry would regulate itself according to the rules of supply and demand and the adulteration only occurred from time to time. 'Local recyclers would simply reject the high water content papers when they are delivered to them. Overseas customers would stop trading with the dishonest suppliers or offer a lower price to reflect the low quality of the waste paper,' the spokesman said. Mr Choi said that while wet paper weighed more and temporarily boosted profits, the market price was falling because of the 'negative reputation' Hong Kong had acquired for its waste paper. Newspapers fetched about $671 a tonne last year - plunging more than 30 per cent from the 1995 price of $1,000 a tonne. Paper collected in the United States commanded more than $1,300 a tonne last year. Many exporters were being forced out of business by the falling prices. A decade ago there were about 100 exporters - today there are 10. 'The Government has to intervene,' Mr Choi said. 'Ultimately, the Urban Services Department should take over the recycling scheme, but it's too early for that.' Provisional legislative councillor Ip Kwok-him wants the Government to introduce a 'credibility list' of reputable exporters. Companies must also take responsibility, he said. Hong Kong produces about 1.4 million tonnes of waste paper a year, of which 440,000 tonnes are exported. Another 370,000 tonnes are recycled locally.