Reports of the death of recycling ‘greatly exaggerated’

If someone knew little about the recycling industry in Queensland, watching ABC’s Four Corners program in early August might have given the impression the industry is in chaos.

In fact, Queensland’s waste and recycling industry provides an essential service by protecting the environment and public health. It employees more than 15,000 Queenslanders and investment in the sector exceeds $2.0 billion.

The industry recovered more than 4 million tonnes of resources from waste streams in 2015-16. The recovery of secondary resources and efficient management of waste in Queensland results in a variety of tangible environmental benefits including energy savings, avoidance of greenhouse gas emissions, water savings as well a reduction of emissions to air, water and land.

These recovered resources are also a significant contributor to the substitution of raw resources used in manufacturing. Clearly, some recycling markets are not working and require investigation and appropriate intervention.

Waste and recycling enterprises are subject to regulation by both local and state level authorities. These regulations vary enormously across jurisdictions, and this variation produces no economic, environmental or social benefit. It is also adding substantial business costs to the sector. WRIQ supports the establishment of a simple, integrated national system for the identification, classification, treatment, disposal and monitoring of waste materials.

Disharmonious landfill levies create the most significant market distortions. It is this regulatory distortion which is causing waste to flow from NSW to Queensland, although some of this waste is coming to be recycled, and some is captured from local government regions just south of the border. Levies on their own will not drive a circular economy, and only work when they are part of a clearly articulated long term strategy and subject to regular performance review.

Queensland does not, nor ever has had, a fully comprehensive and agreed waste and recycling strategy. In response to this, in 2015 WRIQ published its Economic and jobs growth roadmap for Queensland from the waste management and secondary resources industry.

Internationally peer reviewed, industry’s roadmap has largely been overlooked by all levels of Government – although in defence of the current Government the regulatory reforms industry has long advocated for are being realised and elements of our plans have been considered.

WRIQ’s plan clearly articulates the strategic direction Queensland could adopt that will deliver the ’circular economy’. Industry’s roadmap includes recycling targets, detailed regulatory actions and comprehensive evidence offering confidence that positive outcomes can be realised if it is adopted by Government. Approaches proposed at the time included a;

1. Landfill Product Restrictions Plan,
2. Construction and Demolition Waste Plan,
3. Waste Management and Market Development Plan,
4. Queensland Based Product Stewardship Schemes, and
5. Disaster Waste Management Plans.

If implemented these plans would;

• Reduce where possible and recover waste produced by significant generators,
• Make the best use of waste materials through the adoption of ‘secondary-resource’ thinking,
• Minimise the risks of environmental pollution and harm to human health,
• Increase the proportion of waste managed by options further up the hierarchy.

The waste management and recycling sector is committed to:

• Provide integrated, efficient and dependable services to all waste producers,
• Extract value from wastes generated where this is economically practical and viable,
• Enter into partnerships with waste producers and all other service providers, and
• Assist government and its regulators to oversee delivery of these important policy initiatives.

WRIQ’s plans support a market driven system providing solutions for Queensland’s waste and recycling industry. With public and political interest now heightened as a result of the recent media attention, it is timely industry’s plans are considered in earnest. Queensland must adopt a waste and recycling policy that provides real job opportunities, incentivizes investment and gives confidence in the waste and recycling industry.

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Extended Council and Joint Collection Contract Terms Fail Public Benefits Test

Extended Council and Joint Collection Contract Terms Fail Public Benefits Test

I have long advocated and remain absolutely of the view that the greatest threat to our industry’s operating norms and of the principles to having fair and open competition is Government itself. Whether it is Local, State or Federal the threat is the same.

It comes directly from ill-conceived policy decisions by the very community representatives that we elect as stewards of our democracy, and those that spin the expressions: ‘public’s best interest’, ‘best for ratepayers’ or ‘best for community’.

No better demonstration of the reality of this risk is the continuously increasing number of applications now being made to the ACCC by Local Governments across Australia, seeking approval for joint tendering and extended contract terms for waste, recycling and other sector operations.

In June 2015, an application made by Redland’s City Council on behalf of the Council and Brisbane City Council (applicants) sought approval to conduct a joint tender process for waste, recycling and green waste collection services. The application sought permission for Brisbane City Council to negotiate the contractual framework on behalf of the Applicants to make a ‘joint decision regarding the ongoing management of the contract for the waste and recycling collection services’.

Perhaps unsurprisingly, Redland’s who made the application have left the larger of the two Council’s to do all the work. The devil, however, is always in the detail. The application sought approval for authorisation for a period of 19 years, comprising a three- year tender period and contract term of up to 16 years.

The Request for Proposals (RFP) for Waste and Resource Recovery Services by Brisbane was issued on July 4 2016 to industry, closing on 21 December 2016. The sceptic in me notes this RFP occurred merely 48 hours after the close of local election booths for the 2016 Federal Government election.

Similarly, in November 2015, South Australian Council Solutions (CS) made application on behalf of ve Councils in Adelaide for a similar application for joint tender and contract arrangements for a term of 17 years.

In demographic terms, the Brisbane / Redlands application for a preferred two eight-year terms for waste, recycling and green waste services, effectively represents services to more than 50% of the total Queensland population. In Adelaide, Council Solutions (CS) ve Councils represent around 34% of all Adelaide services. With other existing Adelaide Council arrangements effectively already ‘locked away’, if the CS bid is approved, effectively 86% of the Adelaide market will be controlled by just three groupings/ contracts.

Implications for the industry in Australia are profound, if this ‘bigger is better’ contract mantra continues. The only independent umpire to challenge this bureaucratic nonsense is the ACCC. Despite repeated evidence provided by industry who have the core knowledge to articulate and present sound arguments against such applications being approved, the ACCC fails to see and acknowledge these risks, both in community and industry terms.

Starting at the bidding process, the costs of putting together a tender response to the scale of these bids is significant to ensure that the bid is properly made and project risk and time frame is well measured. Coupled with the scale of what is being offered by Councils and their risk adverse capability to share any of the forward contract risks, this model has substantive commercial implications to any bidder, as a direct result of both the tenure of term, as well as the nature and quantum of the capital costs required to fill the contract terms. Such scale capability also directly limits the numbers of real competitors capable of actually bidding for these Council offerings.

Not to mention, locking not only waste collection methods and valuable resource streams away for such lengthy terms signicantly reduces all incentives for any industry long-term technical development. As an example, in the Brisbane / Redlands situation, if more than 50% of Queensland’s populations waste and recyclables are contracted to a single company (or a single collection or treatment method) and ‘locked away’ for such lengthy periods, there is a real risk for failure that any real innovation will occur. Innovation in this industry is reliant on access to materials and supply. Shut that down and we restrict those creative engineering solutions that the sector has long led.

In terms of equipment, providers and general suppliers to the industry for compactors, GPS systems, lifters lights, truck bodies (the list is endless), their future is also challenged as any unsuccessful bidder, or party to an unsuccessful bid, will be locked out of that opportunity for potentially up to 16 years. Such businesses will need to look to future opportunities outside South East Queensland and, in fact, even out of the state altogether.

 

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