A RADICAL change in the household waste collection regime being planned by Minister for the Environment Phil Hogan could result in “years of court battles”.
In a recent letter to Mr Hogan, the Irish Waste Management Association (IWMA) – it represents most of the firms in the sector – said the new regime would “dismantle entirely a well-established competitive market, with a potential loss of more than 5,000 jobs”.
It said “no credible evidence whatsoever” had been put forward for the proposed change in a discussion document issued by the Department of the Environment last June, yet the outcome of the current consultation “seems to be entirely predetermined”.
The association told the Minister that proceeding in this way to alter the current regime, which was based on competition in the market, to competitive tendering for local authority contracts was “unlawful and exposes the Government to massive compensation claims” .
The letter, dated July 29th and signed by association chairman Jim Kells, said the discussion document, Altering the Structure of Household Waste Collection Markets, was already having a “hugely damaging effect” on the financial viability of waste management firms.
It sought confirmation from Mr Hogan that the Competition Authority was being consulted, that a detailed economic analysis was being prepared on the proposals and that the Government “will compensate our members for any and all unlawful interference” with their business.
The Minister’s private secretary, Eddie Kiernan, wrote back on August 8th saying that a “regulatory impact assessment”, including an economic assessment, would be prepared and submitted to the Government after the consultation period ended on September 2nd.
His letter to the association said Mr Hogan would “very much welcome” its views on the discussion document, but added that “it is not possible to provide any ‘justifying evidence’ . . . at this stage in the policy development process” for the proposed change in regime.
“The IWMA should be reassured that any policy and associated legislative changes will be fully underpinned by ample consultation and a full assessment of the impacts,” it said, calling on the association to engage with the policy development process “in a constructive manner”.
The Fine Gael-Labour programme for government promised to introduce competitive tendering for household waste-collection services, with firms bidding to provide such services in a given area, for a specified period of time and to a guaranteed level of service.
According to the discussion document, “a number of informed commentators have remarked on perceptions of high prices for household waste collection services, which may be accounted for, in part at least, by the current structure of household waste collection markets.
“If costs, and therefore prices, are unnecessarily high, then we must seek to reduce those costs, if necessary by restructuring markets” by introducing “franchise bidding”, with “an arm of the State, such as a regulatory agency or a local authority”, overseeing the process.
The document notes that householders in the State produced more than 1.6 million tonnes of waste in 2009 and that an estimated 128,000 tonnes were not collected. Of the tonnage that was collected, “approximately 70 per cent was sent to landfill”, it says.
“In the context of Ireland’s obligations under the [EU] landfill and waste framework directives, such a situation is unsustainable,” according to the document.
However, it does not mention incineration or any other disposal options rated higher in the EU “hierarchy”.
In the past, it notes, local authorities collected all household waste. However, in recent years, the role of the private sector “has increased very significantly”.
“Private sector firms, which are regulated by local authorities, have gained a considerable share in many . . . markets.
“In many areas, competition is not as vibrant as is preferred,” it says. In other areas, particularly some of the larger urban centres, “there can be a multiplicity of service providers all working the same collection routes, which has both cost and environmental downsides”.
The document says that, following completion of a regulatory impact assessment, the Minister would submit his proposals to the Government and “it is intended that this process will be completed later this year”.
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