On tape: regulation in the waste sector

Last month, the Cabinet Office concluded its call for comments to help it “identify unnecessary barriers to growth and productivity in the waste sector”. I responded, as did many others in the sector, and judging by some of the comments posted on its web page I wasn’t alone in finding the red tape review somewhat misconceived. I would argue that the waste and recycling sector, far from being strangled by regulation and enforcement, relies upon it for its survival, let alone its growth.

Of course, there one can identify minor examples where dealing with particular regulations creates a level of administrative burden. Colleagues have recently been dealing with a fairly straightforward application for a permit for a waste site, which has been queued for several months. This is frustrating, and makes the process of establishing a new waste site more costly and risky – but no-one would claim that the permitting process is unimportant or should be done away with. There may be scope for a little streamlining, but fundamentally, it is an issue of human resources: regulators are struggling to fulfil their obligations with the compliment they currently employ.

Draft dodging

The regulatory system in which we work is far from perfect, but that isn’t due to an excess of rules. Rather, there are three issues that I believe make compliance unnecessarily costly:

• Legislation is poorly drafted
• Statutory guidance, which would be helpful in resolving ambiguities, is absent
• There is neither the resource nor the will to enforce legislation, especially where ambiguity exists.

Consider the Waste (England and Wales) Regulations 2011, and in particular Regulations 12 and 13. These Regulations transpose articles of the Waste Framework Directive 2008 (WFD), itself far from a masterpiece of drafting. In line with the principles of subsidiarity and proportionality, the directive is addressed to member states, allowing room for each to act locally to achieve the broad aims of the directive in its own way.

The language used in the WFD therefore isn’t well suited to being applied directly by waste producers, collectors and the like. However, the UK government opted to transpose text more or less verbatim, leading to a number of problems.

• Regulation 12 requires everyone involved in waste management to apply the waste hierarchy.
• Regulation 13 obliges waste collectors to collect recyclables separately (both from other waste and from one another).
• Both of these requirements are complicated and conditional – you have to take action, where doing so is reasonable in the light of various technical, economic and environmental factors, which are mentioned but not further explained.
• The key terms in the legislation (e.g. “facilitate or improve recovery”, “technically, economically and environmentally practicable”) have no clear meaning in law. As a result, even after considerable effort, few collectors can be confident about what a court would rule if decisions regarding their collection system were challenged, creating nervousness and uncertainty.
• Regulation 13 is asymmetrical: it puts a duty on waste collectors, but creates no corresponding obligation on waste producers. This leaves many collectors without the means to require that waste is presented in a way that allows it to be collected in separate streams.

An absolute snip: is the Cabinet Office right to suspect excessive regulation and enforcement in the waste sector? Photo by Province of British Columbia (CC BY-NC-ND 2.0), via Flickr.

• Despite the problematic drafting, the UK Government ultimately opted not to provide any statutory guidance on Regulation 13 – although the Welsh Government rose to the challenge. In England it was left to WRAP and local government to create a Waste Regulations Route Map, which helps fill the gap but has no standing in law.
• The Regulations created new regulatory duties on the Environment Agency and Natural Resources Wales. The regulatory impact assessment indicated that there would be a need for enforcement, but no new resources were provided.
• The law is no clearer for regulators to enforce than it is for collectors to apply. Faced with diminishing resources, they have been very reluctant to take any enforcement action. In the case of the waste hierarchy, even with statutory guidance in place and non-compliance apparently widespread, no enforcement action has ever been taken. One could argue that the Waste Regulations may be practically unenforceable: how could a regulator demonstrate that the law has definitively been broken?

A TEEP asking price

Local government and responsible private waste collectors have spent considerable effort trying to understand what the Regulations mean for them, especially the “TEEP test” under Regulation 13. Understandably, few welcomed the idea that their choice of collection system might be constrained; so much of the deliberation and consultancy on this topic has been on justifying co-mingled collections – not on implementing separate collections.

Unsurprisingly, the end result has been inaction. Perhaps it is still early days, but I am aware of no authority that has changed its choice of collection system as a result of TEEP considerations. Perhaps some authorities that currently separately collect have been made to think twice about going co-mingled, but it certainly hasn’t ruled such changes out: just ask Ealing and Croydon.

While these comments focus on one specific piece of legislation, they apply more broadly to regulation in the sector – for example, Isonomia has recently highlighted the difficulty the Environment Agency seems to have in interpreting the rules on Financial Provision (FP) for landfill sites. Mindful of the desire for “light touch” regulation, regulators appear nervous of applying FP rules to their full extent, even if this means potentially storing up major problems and drains on the public purse for the future.

Better drafted legislation would allow less wiggle room, and make enforcement far more straightforward. Clarity might not be welcomed by those compelled to make changes: the UK Government seems to have preferred to leave the Waste Regulations ambiguous rather than risk creating rules that could be unpalatable to some stakeholders. However, this lack of clarity disadvantages operators that strive to run their businesses properly: they incur costs in trying to understand and apply legislation, when less scrupulous operators don’t bother. Clear laws would be harder to ignore, and allow effort to be focused on improving services, rather than on establishing the bare minimum required for legislative compliance.

Gold meddle?

Part of the story here is the government’s phobia of “gold plating” European legislation. Indeed, every government impact assessment now asks:

“Does implementation go beyond minimum EU requirements?”

A minister might well take some persuading to sign off a policy where the answer is “yes”!

To avoid any risk of exceeding minimum requirements, departments such as Defra shy away from writing anything into domestic law that isn’t explicitly stated in the European original. The result is legislation that is unlikely to achieve its aims and profoundly unhelpful to those required to implement and enforce it. It’s certainly far from gold plating – more like stripping the lead from the legislative roof.

This anxiety about red tape and gold plate even extends to the regulators tasked with enforcing the rules. Indeed, under the Deregulation Act 2015 the Environment Agency was given a rather absurd duty to “have regard to the desirability of promoting economic growth” in carrying out its regulatory functions. To ensure it is effective, the government has even drafted guidance on what the duty means!

One can imagine how this new duty might deter regulators from action that might place a financial burden on certain businesses – even where doing so would manifestly be in the economic interests of the industry as a whole.

The assumption behind the Cabinet Office’s red tape review of waste is that excessive legislation and overly-vigorous enforcement are a problem: in fact, the opposite applies. Our sector relies on regulation for its very existence: without it, we’d still be sticking most of our waste in holes in the ground.

If the Cabinet Office is serious about promoting growth in the waste and resources sector, it should recommend clearer, tougher laws and guidance, and a well-resourced, confident regulator to drive free-riders out of the market and ensure a level playing field in which good practice is the norm.