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ESA/IWM/EA Landfill Directive Seminar
Strategic Impacts of the Landfill Directive Part Tw What does the Future hold?
Dirk Hazell, Chief Executive, ESA
16 April 2002
Ladies and Gentleman.
On behalf of ESA may I thank you for inviting me to speak at today's seminar, which brings together those who will be leaders-for example in national and local government and as regulators, waste producers and waste managers-in the national challenge of implementing, regulating and delivering the Landfill Directive.
Future generations will look back to this period as one of fundamental change in the process of public and corporate decision making. We are crossing a threshold into a period where sustainability will become a central component of decision making at all levels of government and in all sectors of the economy.
It is timely that the implementation of the Landfill Directive, which is the single most important driver towards sustainable waste management anywhere in the world, comes during the year when the International Summit for Sustainable Development takes place in Johannesburg to review progress since the first summit in Rio 10 years ago.
A sustainable waste management industry, both environmentally and economically, is an integral component of the broader church of Sustainable Development. Sustainable economic growth must go hand in hand with a sustainable environment. New partnerships will be needed to ensure that while the world's productivity grows, depletion of primary resources and the release of complex and toxic chemicals into the environment falls, and that more secondary resources are returned to the productive economy.
This is reflected in the Government's decision to ask the Performance and Innovation Unit of the Cabinet Office to review waste strategy in England and Wales in light of the challenges of the Landfill Directive and the statutory targets which must be met by local authorities. ESA welcomed the announcement of the Waste Study last year and we have been contributing actively to the PIU throughout the duration of the study. It is a measure of the importance the Secretary of State for Environment Food and Rural Affairs, Margaret Beckett, and the Prime Minister himself place on sustainable waste management as part of this country's move towards a more resource efficient future.
The requirements of the Landfill Directive, and the targets set by the Government's own waste strategy targets, present an immense challenge, but more importantly, present a huge opportunity for Britain's waste management industry, which is already among the very best and best regulated in the world, already accounting for 0.5% GDP in the UK, the world's fourth largest economy, and already evolving into a secondary resource management sector. The turnover of this industry is expected to double over the course of this decade, and will make up a significant proportion of the domestic environmental technologies market, which the DTI has predicted will exceed £15 billion per annum by 2010.
High standards of waste management can, over time, be provided only by healthy businesses. Only healthy businesses will be able to make the £0.5-1 billion per year investment in new treatment and processing infrastructure over the next ten years which will be necessary to fulfil the UK's legal requirements. There does perhaps need to be a broader public perception that what is good for environmental sustainability is also good for Britain's waste management industry. We are the cure, not the ill. To cure, we must have adequate resources.
In terms of the excellent value for money they receive from ESA's Members, industry and local authorities have clearly benefited from the vigorous competition our industry has offered. That said, ours is an unusual industry in that its main driver is not market led consumption. It is regulation.
However, the National Waste Strategies remain largely unfunded. While we welcomed the Government's recognition that additional funds are needed to increase the UK's recycling rates for municipal waste, it is clear that the £140 million waste minimisation and recycling fund-which is actually equivalent to just over 1 pence per person per week over the two years of the funding period-is nowhere near enough to deliver local authority statutory recycling targets or the biodegradable municipal waste diversion targets of the Landfill Directive. In fact it is only about 5% of what is actually needed to get the UK up to the average EU standards to which this Government clearly aspires.
In reality, the UK's spending on municipal waste probably needs to double to £3 billion per year to achieve average EU standards and to treble to £4.5 billion per year to achieve the very best EU standards. For £1 per person per week, the UK can deliver the average EU standard for municipal waste. If the Government has other priorities for public spending, then there is a simple solution: give householders price incentives through direct charging.
The attraction of direct charging for this government is the removal of the costs of municipal waste management from the public finances, and the consequent savings of billions of pounds which could be ploughed back into publicly-funded services.
Although direct charging may be seen by many as another Poll Tax, there are countless examples of how direct charging has been successfully employed on an equitable basis under a wide range of national cultures and local conditions by municipalities in the Europe and North America.
Waste charges could be primarily applied through the council tax as a visible waste charge or through volume or weight based schemes.
International experience indicates strongly that the introduction of variable charging for household waste has been successful in encouraging a reduction in waste going for final disposal, increasing recycling rates, increased landfill diversion rates, and to a more limited extent, encouraging waste minimisation.
Therefore, it is the provision of the right economic, legal, planning and regulatory framework by the Government that will overwhelmingly determine this industry's fortunes and, in the process, whether this Country will indeed comply with the Landfill Directive. If the Government can provide the right framework, this industry will deliver compliance with the Landfill Directive and achieve greater sustainability.
The Landfill Directive has been a reality for some time and there is no doubting that it is a quite substantial commercial opportunity for this industry. The specific requirements of the Landfill Directive have been with us since last July, but it is only now that we can welcome the fact that the Landfill Regulations have been laid before Parliament.
The key to whether this country delivers what is required by the Landfill Directive and whether the industry charged with delivering that compliance is profitable depends very much on the implementation of the Directive by the Government, and the provision of the right frameworks in which this industry can operate.
Our industry's wish is for partnership with all levels of government, with regulators, with waste producers and with legitimate mainstream NGOs operating within the law. If anything, that wish is stronger than ever. It is also clear to us that to an overwhelming extent we share common interests. Through partnership, compliance with the Landfill Directive will be achieved.
Delays such as the ones we have experienced during the lengthy preparation of the Landfill Regulations, and the delays we are still experiencing with the drafting of the Waste Acceptance Criteria by the Technical Adaptation Committee at a European level, have severely hindered the substantial investment our industry wants to make.
The delays in drafting the Landfill Regulations we believe are indicative of the passivity, complacency and failure to engage of the old DETR during the last Parliament. This has been further reflected in the current difficulties local authorities are experiencing in managing End of Life Fridges, the frustrations of our Members after the non-implementation of European rules governing the transport of clinical waste and the reasoned opinion recently sent to the British Government over the failure to implement the Landfill Directive on time. Add to this the prospect of infraction proceedings for the failure to implement the requirements of the Waste Framework Directive to bring agricultural waste within the scope of the waste management licensing regime, and the UK can rightly be accused of a general failure to take advantage of the international regulatory climate to move towards a more sustainable future.
Having said that, however, we look forward to a more inclusive and productive relationship with DEFRA in addressing at an early stage the impact of, and the opportunities associated with, future legislation, one which we believe has been signalled by the Secretary of State in convening the Waste Summit and the PIU study alluded to earlier in my speech.
For example, last week ESA applauded the European Parliament's leadership in approving the recommendations of the British-chaired Environment Committee to strengthen the collection and recycling targets of the Waste Electrical and Electronic Equipment Directive.
Producer Responsibility is another example of forward thinking European legislation which will be a driver both for environmental and economic sustainability, providing our industry with the commercial opportunities of the new, more resource efficient economy. Therefore, we hope the British Government and other Members of the Council of Ministers will agree to the European Parliament's proposals during the conciliation procedure later this year, and we urge the Government to initiate dialogue with stakeholders with an interest in the Directive to make the best of this opportunity to derive greater value from waste and to promote economic growth based on greater environmental sustainability.
Although the funding of the National Waste Strategies and creating the right economic climate in which our Members can operate is essential, it is even more pressing that our industry is given the right regulatory framework in which to operate. As I said earlier, ours is an unusual industry in that its main driver is not market led consumption. It is regulation.
It is essential that we have an effective and competent regulator to help demonstrate the legitimacy of both the industry and the regulator, and the Environment Agency has a key role to play in ensuring effective and consistent regulation of current and future legislation.
This week we will be responding to the DEFRA consultation on the Secretary of State's Statutory Objectives for the Environment Agency, and while we welcome the proposals for greater accountability contained therein, we remain concerned that within the specific objectives for waste management there is no reference to regulating the Landfill Directive or any other current or future European legislation.
Therefore, we would urge the Secretary of State to ensure the statutory objectives reflect accurately the Agency's central role in ensuring the consistent and effective regulation which is central to the future profitability of our industry.
Whilst it is important that the Government and the Agency in partnership with our industry work together to identify the right regulatory framework, we must also find a balance between regulation and a market oriented solution. Overly prescriptive regulation will stifle investment and innovation.
Unfortunately, this is already being experienced by our Members in relation to landfill siting. And while landfill remains an important waste management resource, albeit at a lower level than hitherto, the Agency's capricious approach to regulation has also begun to militate against raising our industry's activity higher up the waste hierarchy.
It is precisely this sort of action, which prevents the development of essential waste management infrastructure, which will adversely affect the commercial opportunities available to this industry and the passage towards greater sustainability in waste and secondary resources management.
Therefore, we would urge the Government to issue the statutory guidance to the Agency in relation to its future role in regulating the Landfill Directive as this will determine the Agency's approach to issues such as the implementation of the dates for bans to landfill of non-hazardous liquid wastes, the pre-treatment requirements of the Landfill Directive and the operation of landfill sites in relation to the prevailing hydrogeology.
While uncertainty remains over the introduction of these dates, combined with the absence of the Waste Acceptance Criteria, which will dictate the level of waste treatment, our Members will be unwilling to make the £0.5-1 billion per annum investment in infrastructure they want to make.
However, there is much to welcome in the Environment Agency's approach to regulation, notably through project BRITE, which aims to move to more sophisticated and smarter methods of regulation. Furthermore, we welcome the announcement of the recently published consultation on the development of OPRA in relation to the PPC regime.
ESA's Members include companies of very high repute, which operate in many countries, which are used to public accountability and which already maintain externally verified environmental management and audit systems. It is most fortuitous that, as the Agency is preparing to introduce smarter regulation, our industry has evolved to an extent where more than ever before it can respond to this framework. Smarter regulation will be better suited to an industry adding higher value and with more emphasis on closed loop systems.
Finally, if ESA's Members are to be enabled to deliver the UK's compliance with the Landfill Directive and other international legal duties for the Government, it is imperative that the Government promptly and radically improves the waste management planning regime. Without such a guarantee our industry will be unable to deliver the infrastructure in which it wants to invest.
Domestic and international legislative drivers impose very challenging timetables for delivering compliance and have very significant planning implications for both producers and managers of waste. Over the next five years progressively more waste streams such as end of life tyres and liquid wastes will be banned from final management in landfill, requiring alternative treatments and the delivery of new infrastructure.
Therefore, ESA is disappointed that the Government's Green Paper on reforming that planning system, does not propose any new reforms to improve the efficiency of a planning system which is failing to bring forward the new infrastructure which will deliver compliance for government. There will be no fundamental change as envisaged by Mr Byers.
Delivering on the Landfill Directive, and the Government's own waste strategy and Best Value targets, is an immense challenge and one which will require a fundamental change in the way we manage waste. It will also lead to a fundamental change in the way this industry operates, and sources from which it derives its profitability.
As I have outlined here today, the route to a profitable future through more sustainable waste management is reliant on the frameworks we are presented with. Our challenge is to form the partnerships which will deliver those frameworks and the profitability that a sustainable future promises. 
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