Review of Waste Policy needed
Local authorities are unfairly advantaged over private operators in the waste management sector as a result of several shortcomings in government policy in the sector. By Malachy Browne
A potential conflict of interest exists in the waste market where local authorities may act as both market players and regulators of their competitors in the private sector. The regulatory anomaly has allowed a situation to arise in one Dublin authority where the regulator (who provides a service to the area) is accused of attempting to ‘monopolise' Dublin waste.
Panda Waste, a private waste collection service, was licenced to collect domestic waste in Dublin in 2001. In November 2006, Panda introduced a wheelie bin service to customers in the Dun Laoighre-Rathdown council at competitive rates. Since then, 15,000 customers have transferred their domestic waste service to Panda.
Following the introduction of Panda's wheelie bin service, the Dublin Waste Management Authority (DA), who also provide a waste collection service in Dublin, issued Panda a letter stating that it was in breach of its licence and may have the licence revoked. After several consultations between the DA and solicitors representing Panda it was resolved that Panda was not in breach of its licence.
The DA oversees waste management in the four Dublin county council areas through Dublin City Council.
In June 2007 the DA issued a public notice of a proposed ‘variation' to the Dublin Regional Waste Management Plan 2005-2010 whereby “the collection of household waste... will be carried out by the local authorities… or the local authorities will make arrangements by way of a public tendering process”.
Panda described the DA proposal as an attempt to gain “exclusive control over all household waste in the entire Dublin area”. Eamon Waters, Managing Director of Panda said that should the proposal be approved, the DA may stipulate that collected waste must be disposed at certain depositories, a “restrictive tender”.
Waters said that while the DA is attempting to gain greater control of Dublin waste via the four county council areas under its contorl, all other local councils in Ireland are privatising their waste services, allowing external operators to collect and direct waste. The Irish Waste Management Association (IWMA) confirmed that the DA are “the first authority to engage the IWMA on this particular issue of domestic waste”.
The IWMA has called for a review of regulatory policy in the waste sector since 1999. In August 2006 the government recognised the IWMA view that a conflict of interest exists in the waste market. However, nothing has been done at the time of writing to legislate against the regulatory issue.
The IWMA outlined further policy shortfalls that advantage local authority operators over private operators. Local Authority operators are not required to have a licence to collect waste while private operators are which, according to the IWMA, results in an unfair regulation of the market. In addition, waste services provided by a Local Athority are exempt from VAT while private operators must include 13.5 per cent VAT on their services.
The VAT paid on waste that goes to landfill is contributed to a public ‘Environment Fund', as does other tax such as the plastic bag levy. The purpose of the fund is to encourage environmental initiatives and €40m of this fund has been given to local authorities to invest in waste management. However, some of this fund has been used by local authorities for infrastructure that has given them a competitive edge over private operators – a situation the IWMA deems “unfair advantage” vis a vis private competitors. Nothing from the Environmental Fund is given to private operators.
Ireland has EU obligations in waste management, and may face millions of Euro in fines if the landfill objective is not met. A report by the Environmental Protection Agency said that 63 per cent of waste went to to landfill in 2005. The Forfás report 2006 says that Ireland's “heavy reliance on landfill... is mainly due to the limited progress being made in delivering infrastructure”.
While the National Development Plan (NDP) 2000 - 2006 proposed that much investment in waste infrastructure be conducted by Public Private Partnership, most investment to date has been provided by the private sector. The NDP 2007 expects this trend to continue.The IWMA criticises the present situation whereby private investment generates taxes, money that in turn advantages local authorities over private operators, who are relied upon to put further investment into the sector.