Examination of Witnesses (Questions 40-59)
DR PAUL
LEINSTER AND
MR STEVE
LEE
WEDNESDAY 18 DECEMBER 2002
40. So you are anticipating a hazardous waste
mountain to follow the fridge mountain?
(Dr Leinster) One of the other things, I think it
is an issue that we need to be addressing now and we are pleased
that a Hazardous Waste Forum has now been established, or called,
and the first meeting will be in the near future, which will bring
together the producers, the managers, Agency and Government to
sit down and say how are we going to manage this issue. The other
complicating factor with hazardous waste is that the definition
of hazardous waste is being extended, so it will start covering
a number of materials which before we did not define as hazardous
in the UK, but now, under the European waste classification, we
will define as hazardous. So that increases the range, increases
the number of producers, at the same time as the number of disposal
outlets for those materials are reducing.
David Wright
41. On that point, how effective do you think
you are at the moment in evaluating some of that European legislation
and applying it to companies? There is a power station, for example,
just next to my constituency that is producing ash product from
coal-firing, now traditionally that substance has been used in
road-laying and surfacing; now they are being told at present
that they cannot continue to do that and they have been waiting
months for you, or a wing of your organisation, to give them an
assessment on whether they can continue to use that product. So
that is holding up the process, is it not?
(Mr Lee) Yes. You have chosen a slightly separate
but, to my mind, just as important issue, and that is that the
definition of what is and is not waste, right across the European
Union, is changing, and the materials that we consider to be waste
now are rather a broader spectrum of materials and further through
their cycle of recovery than we would have treated as waste as
late as the mid to late 1990s. We are obliged to go, I think,
with the European definition of waste; that raises some important
issues, does it not, because if it is waste usually it triggers
the waste controls, whether they be hazardous waste or non-hazardous
waste, or whatever. In following the European definition of waste,
one thing that we want to do is take DEFRA, one of the government
departments, with us; if controls have to be applied to a broader
range of materials, we want to make sure that they are the right
controls and that they are fit for risk. Now some of the tools
are there, all we need to do is make sure that they can be applied
to a broader range of wastes, and coal-fired power station ash
I think is a classic example. It is probably pretty low risk,
it is probably quite a useful secondary material, it has been
used to make construction blocks for many, many years, if it has
got to be regulated it wants to be regulated with the lightest
possible touch that is suitable for its risk to people and the
environment. It can be done, it just takes time.
42. Why does it take so long though? The point
I am making is, I am not criticising, I am talking about resourcing,
would you be able to do it more quickly if you were better resourced,
in terms of staff numbers, or whatever?
(Dr Leinster) The solution is not necessarily with
ourselves, the solution is that if we identify these materials
as waste then, as Steve says, what we are looking for is the lightest
touch commensurate with the risk, and the way that we have available
to do that is through an exemption from waste management licensing.
Now it is the Department who has to issue that exemption, we can
recommend the exemption to the Department, the Department then
has to issue that exemption. And so what we need for exemptions,
especially as we are going forward and a wider range of materials
is likely to become waste in future, is a more rapid process for
determining what an exemption is and then issuing that exemption.
Mr Chaytor
43. Just one final point on the industrial/commercial
side. The Cabinet Office report on waste also focused largely
on household/municipal. Does that disappoint you, and do you think
there is now a need for a further waste strategy focusing entirely
on the industrial, commercial, agricultural, minerals?
(Mr Lee) I will take the answer to that in two halves.
On hazardous waste, we have been calling consistently for a Hazardous
Waste Forum; that Hazardous Waste Forum has got two jobs really.
First of all, it is to marry together the various understandings
of the waste producers, the waste managers, planners and regulators,
and try to forecast forward, how much hazardous waste is going
to be produced, where can it go, where are the pinch-points going
to be, because there will be some, I think it is inevitable. With
that understanding, what we want then is for DEFRA and Government
actually to re-examine their waste strategy and answer the question
"is this strategy good enough to answer the questions that
are being posed to industry and to central and local government
on hazardous waste?". Our guess is that the answer will be,
no, it is not quite good enough and it will need to be extended
or improved to make sure that it does cover adequately hazardous
waste. Now normal industrial and commercial waste, the vast majority
of which is not hazardous, (a lot of it looks like household waste,
it is paper and cardboard and wood), is probably rather better
dealt with under Waste Strategy 2000, but even so we are pleased
to see that one of the recommendations out of the Strategy Unit
is that we want an Industrial Waste Forum, not a Hazardous Waste
Forum but a broader Industrial Waste Forum. And I put it to you
that what we would like to do is exactly the same on general industrial
and commercial wastes as we want done quickly on hazardous industrial
and commercial wastes.
44. So there are no signs there is any movement
on the concept of a Hazardous Waste Forum?
(Mr Lee) Yes, there is, and the first meeting should
be on, I think, 30 January, which we are delighted about.
David Wright
45. Can I turn to the issue of Landfill Tax.
Before the Pre-Budget Statement, you called for a significant
increase, I think, in the level of Landfill Tax, and some two
weeks ago the Environmental Services Association was arguing that
the £3 escalator from 2005 represented, as far as it could
see, the absolute minimum and that the rate of increase actually
should be much steeper. How quickly do you think we should move
to the sort of accepted level of £35 per tonne, and what
sort of rate of increase do you think we should have over the
next few years?
(Dr Leinster) At this stage, as you know, it is only
the first year that the £3 per tonne has been set for, and
a consultation will be coming out in terms of what rate that should
be. Now the question I think that we have to balance is, how fast
is the market able to produce solutions to deal with the waste
that will go other places, on the one side, and how do we ensure
that material does not start leaking out from legitimate waste
management through fly-tipping and people avoiding the tax. And
I do not think we have yet got our heads round how you balance
those things and how quickly you need to get to £35 per tonne,
so I would say you want to get to the £35 per tonne as soon
as possible, commensurate with the market solutions being available
to deal with the waste, and also that you are able to put mechanisms
in place to ensure that you maintain waste within legitimate waste
disposal. And for that I think that, just as there is with other
taxes like VAT or income tax, a percentage of the tax should be
to make sure that the tax works effectively and there is not evasion
of the tax, so mechanisms need to be in place to stop fly-tipping
and illegal waste disposal.
46. So what you are saying is that the approach
the Government is proposing, which is this £3 per tonne escalator,
which I understand will kick in in 2005-6, and then £3 per
year on top of that, is probably an acceptable approach?
(Dr Leinster) What they have said is that 2005-6 will
be £3 per tonne and then in subsequent years it will be at
least £3 a tonne. So what we want to do is, between now and
when the consultation comes out, do some sums and some modelling
to decide what we in our consultation response, and we are happy
to share our response with you, believe that escalator should
be and how fast you get to that £35 per tonne.
Mr Francois
47. To make this work right and prevent leakage
to fly-tipping, was the way you put it, does that mean that there
is also going to have to be some commensurate increase in the
penalties for fly-tipping?
(Dr Leinster) Yes, we think there should be, and there
needs to be additional resource going into the detection and the
ability to prosecute fly-tippers. And there are two parties, local
authorities need an increased and an adequately resourced role
to deal with fly-tipping, and the Environment Agency also needs
an adequately resourced role to deal with fly-tipping. Just on
fly-tipping, one of the things that we are concerned about in
the near term is an increase in hazardous waste fly-tipping, which
will come not because of the Landfill Tax escalator but just because
legitimate routes for its disposal are closing down. So we think
fly-tipping is a real issue that seriously needs to be addressed
and seriously needs to be resourced.
Mr Chaytor
48. You mentioned earlier the rapid change of
regulation and the redefinition of hazardous waste. What else
is going to come out in the form of European Directives in the
near future, and what is the impact going to be of these European
Waste Acceptance Criteria?
(Mr Lee) You have asked a large question. One of the
things that we have identified as being increasingly important
to do is to—I do not care what you call it—horizon-scan
to try to anticipate what the impacts of the various European
or UK regulations and Directives will be, and in particular to
try to identify where the impacts cross over. So, for example,
the change to the hazardous waste list, making some materials
newly hazardous, what impact does that have on things like the
End-of-Life Vehicles Directive, where a used car until it has
been depolluted will be hazardous waste, because it has got 30
to 40 kilogrammes of hazardous material in there. So we have to
do that horizon-scanning. One of the most important early things
that we have identified as a potential problem is quite surprising,
and it is the use of used vegetable oils in the manufacture of
animal feed. Now that is supposed to be being phased out at the
end of this year. We think that the use of used vegetable oils
as some sort of biodiesel has got a big future, but at the moment
it is one of the activities that is still covered by the need
for a waste management licence, so the regulation tends to stifle
the innovation. So one of the things that we have identified to
DEFRA is, "This is something that needs a little bit of attention,
fortunately you are already working on improvements and extensions
to the exemptions from waste management licensing, here's an important
one for you; stick this in because we think it will be beneficial
for the management of this material in the future." It is
a relatively minor example, but it is one that is pretty close
to us. That is a good example. I have already mentioned the End-of-Life
Vehicles Directive and the requirement to depollute the cars,
which will generate a new stream, or set of streams, of newly
hazardous materials because the coolant, the lubricants, the brake-linings,
the explosive devices out of the air-bags, will have to be taken
out of the cars and they will have to be managed separately as
new streams of hazardous waste, and that is something like 150,000
tonnes a year in England and Wales from one comparatively small,
new source. And the big one that you included at the end, the
new Waste Acceptance Criteria, well fortunately I can tell you
that they have finally been agreed on, after years of preparation
and wrangling across Europe, they have not quite been signed up
to formally by the Council of Ministers, but we expect that to
happen before they break for Christmas. And the Waste Acceptance
Criteria now that we know what we will all have to work to are
actually there on the Commission website: hooray. What we can
do now is work with DEFRA, and probably more importantly with
the waste management trade associations, particularly ESA, (Environment
Services Association), because I think what we need to do now
is to turn those Waste Acceptance Criteria into real-world examples
for the people who produce waste. And we need to tell the Chemical
Industries Association, or whoever, "This is what the Waste
Acceptance Criteria mean for the stuff that you produce in 2004,
or 2005, so start thinking about the process that you use now,
do you have to produce this hazardous waste, start thinking about
the disposal or treatment routes that you use currently, because
they may well not be available to you after 2004 or 2005, it is
time to plan for changes now." And really the time to change
is surprisingly little.
49. How do we compare with other European countries,
in terms of our state of readiness and the advice the Government
is giving to industry?
(Mr Lee) Some other European Member States chose their
interim Waste Acceptance Criteria to be rather closer to what
they anticipated the final Waste Acceptance Criteria would be,
so you could say that they have been tougher on their waste producers
in the early years, but then you could say that they have been
kinder because they have been giving the industry longer to think
about what their alternative treatment or management methods are
going to be. In the UK, you could say that we have been kind to
people in the short term but rather tough on them in the medium
term.
50. So our industries are in for a bigger shock
than elsewhere in western Europe?
(Mr Lee) Some will claim that it has been a shock.
These Waste Acceptance Criteria have been long in the preparation,
and anybody who wanted to forewarn and arm themselves with information
about what the Acceptance Criteria were likely to be could have
done so at least two years ago.
51. Given this state of flux and the rapid changes
in terms of new technology that are coming along, do you think
that the use of arbitrary deadlines for the new regulations is
the right way forward, or is that too restrictive, in terms of
the fact that if people have to adapt by a very short deadline
they might not be using the best available technology that will
come along two or three years later?
(Dr Leinster) The adoption of best available technology,
or best available techniques, is a developing area. We have had,
through Integrated Pollution and Control, IPC, quite a bit of
experience since the early nineties in the use of best available
technologies not entailing excessive cost, BATNEEC, which then,
through the European system, has changed into best available techniques
but taking into account economic factors. And what happens is,
the best available techniques will develop with time, and there
is always the possibility of revising permits to take account
of the new technologies and the new techniques as they come through.
So I do not think we should see this as a static process. I think
one of the other things is industry has had relatively cheap waste
disposal options in the UK for quite a while. They have also known
that these Directives have been around. Although, for example,
on the Waste Acceptance Criteria, this has come in at a fairly
late stage, there has been knowledge about what they were likely
to be. The overall dates, in terms of the implementation of the
Landfill Directive, of Pollution Prevention and Control, have
been known for a number of years. So if people are preparing in
advance then I think that there is time to prepare. Just some
other areas that we are dealing with in terms of new and recently
implemented regulations Waste Electrical and Electronic Goods
are on the way, and that will be within the next few years. The
Landfill Directive which we are in the middle of, with various
times and dates associated with it; the Waste Incineration Directive.
In the UK we are catching up and will be in the next year or so
implementing Agricultural Waste Regulations, to bring those in.
There is likely to be a consultation early next year on Waste
Exemptions. Pollution Prevention and Control will apply to certain
waste activities. And then there are some other new Producer Responsibilities,
which are also being thought about in Europe. So I think, in terms
of active regulatory area and active regulatory development area,
waste is a ripe area.
52. Could I ask just one other thing, about
the tension between the short term and the long term. Is it the
case that a lot of waste disposal authorities are now locked into
incineration contracts over a very long period of time, or are
likely to be, and what is your view on that, in terms of the new
Directives that are coming through?
(Mr Lee) You are right to identify that some local
authorities are written into very long-term contracts. Some of
them will have written into energy from waste or incineration
contracts that would actually tie them to minimum tonnages, or
minimum calorific value, of the wastes that they provide. So you
are right there. I think probably a much more serious issue is
that a lot of local authorities effectively are tied into landfill,
because landfill is cheap, in fact, it is so efficient, landfill
is very cheap, and it makes breaking away from the stranglehold
of cheap landfill really quite difficult for individual local
authorities, because any change away is going to cost them a lot
more money, either in terms of investment in capital equipment,
or in terms of a higher revenue cost of whatever the more sustainable
option is, whether it is in-vessel composting, or minimisation,
or separated collection, every option beyond landfill costs more.
Sue Doughty
53. Turning to waste regulation now, what do
you see as the greatest challenges facing you at the present stage?
(Mr Lee) There are several. Clearly, the range of
waste management facilities that we regulate is going to change,
they have to, and increasingly a lot of waste management facilities
will look more like process industries than the relatively low-tech
solutions that we have depended on for the last 200 years. On
top of that, most of the alternatives to landfill, or large mass-burn
incineration, will be lower throughput, so there will be more
of them. So a broader range and a larger number of the facilities
that we regulate, and that means that we will probably need different
skills in the regulators that we deploy. The reason why we are
regulating is changing, because we are moving away from our previous,
I would say, concentration on prevention of impairment of the
environment and increasingly the accent now is on protection of
health. Again, new things to regulate, new emissions from waste
management facilities to monitor for, new skills in the operators
and in the regulators. So the why we are regulating is changing,
the number of facilities that we are regulating is changing, the
type, size and technology of what we are regulating is changing,
and because of those pressures we are already having to work very
hard on the efficiency of the regulation that we do. And that
drives quite rigorous change inside the Agency, to make sure that
we are as efficient and effective with the resources that we have
got as is possible. So the rate of change at the moment in regulation
is difficult enough for the Environment Agency staff to keep up
with, I think the industries that we regulate find it equally
difficult to keep up just with the rate of our consultation on
new tools, techniques and approaches that we are putting out.
So if you are asking me what challenges are we facing as regulators,
they are pretty serious and they are on all fronts.
54. It sounds quite a serious issue, from local
experience with groups dealing with concerns about incineration,
and just the sheer volume as well as the breadth of concern. There
does seem to be a lot of activity, and I quite take your point
about the increasing breadth of activity. How do you plan to manage
it? There is a lot of resources needed, a lot of different skills
that you have identified, so large numbers of sites needing large
numbers of different skills, much more consultation, I suspect,
because you are expected to have the knowledge to be able to advise
others. How are you going to do it?
(Dr Leinster) The Agency gets its funding in two ways,
part of our funding is from grant- in-aid, from Government, and
part of our funding is from charges. We charge for the regulation
of licensed activities, for the application for a licence. So
if we are dealing with those facilities which are licensed facilities
then there will be an increasing revenue stream if there is an
increasing number of facilities, and then it just becomes a normal
management challenge, which is how do you increase the number
of people, how do you make sure that they have got adequate training,
adequate competency. So, from that side, that is our job, to manage
that.
55. And do you feel the grant is adequate combined
with that variable income?
(Dr Leinster) In terms of the grant, as you are most
probably aware, we did not receive any increase in our grant in
aid in Spending Review 2002, so that is putting pressure on our
resources, and also grant in aid is not increased in line with
inflation, so there is an automatic efficiency that you have to
accept because of inflation, and we have a number, as we have
been describing, of new duties and we did not get any additional
grant in aid to deal with the implementation of those new duties.
So just now there is a lot of work going on to work out how we
are going to manage. But certainly some of the activities that
we do, which are funded by grant in aid, we are having to look
at to cut service levels.
56. So are you able at all to increase the charges
you make to the organisations, are you able to pass on any costs?
You are saying that cuts service levels; is increasing charge
an option as well, or not?
(Dr Leinster) No, because the Agency also operates,
just now with our funding we operate under about 70 ring-fences,
and we operate for each of the funding streams, certainly from
charges, on a cost-recovery basis, and you have to be able to
demonstrate, and we do, that the money that we raise from charges
is going into the regulation of those facilities from which we
have raised the charges, and you cannot leak it across.
57. So you cannot put in an element towards
overhead?
(Dr Leinster) It covers overhead but it does not cover
other activities.
58. This is rather worrying, if you are going
to be asked to do an increasingly complex role and yet the income
is not going to be there to allow you to do it. Now looking at
the number of inspections that you have been carrying out over
the last few years, there has been a dramatic decline in the number
of inspections, the figures for the first quarter of this year
show that you are about 10% below your targets, and also you are
describing an increasing workload as well, on top of that. What
is going to happen, what is happening?
(Dr Leinster) Part of the decrease in inspections
has been due to a major reorganisation that the Agency underwent,
we went through a major change programme in which we reorganised
our environmental protection and water management functions throughout
the Agency, and, as with any change programme, that did have an
impact on our service levels. We believe that the service levels
will pick back up again as we go through, because one of the reasons
that we did it was to increase the efficiency of our activities.
So we believe that there will be a catch-up. But there is a second
thing, which is we have reduced the number of inspections that
we do, but we have done that on a risk-based approach, and part
of that has been a deliberate reduction in the number of inspections
through the introduction of tools that we have, like OPRA, which
is a risk assessment tool, and by the use of that risk assessment
tool we have decided to reduce some inspections of particular
types of facilities, if they are low risk and if they are well
managed. And what we are trying to do is move to a situation where
we are not just judged upon the number of inspections but on the
outcomes that we deliver, and if emissions are reduced, if incidents
are reduced, if fly-tipping is reduced, if prosecutions are kept
at the right level then that is what we would like to be judged
on. If we manage to keep more waste within legal waste management
facilities and not leaking out of the system then it is on those
outcomes that we would like to be judged, rather than just on
the number of inspections that we do. And the types of inspections
that we do we are also looking to change, so to reduce the number
of check inspections and increase the number of more detailed
audit inspections, which include a more detailed look at operator
management systems where those facilities have good operator management
systems that we can rely on.
59. I have got a copy of the National Audit
Office press release, I am afraid. This certainly is really beginning
to draw not necessarily the same conclusions as yours but also
expressing concern about the efficiency of the processes you are
using to carry out inspections, about how it is that you are actually
going to really trap the people who are breaching. And there does
seem to be considerable concern about the effectiveness of the
regime you are currently running, I take the point about you looking
for that in the future but certainly this is a thing that National
Audit Office has picked up on as well, about whether in fact you
are going to the right places, doing the right things?
(Dr Leinster) As you will see, in the press release,
then I think an early statement, certainly a statement from Sir
John Bourn, was that they complimented the Agency on an increased
standard of waste regulation since it came into being, and then
made comments, and we accept those comments and we welcome them
and we will seek to learn from them. In terms of waste prosecutions,
waste prosecutions have doubled since the Agency was established,
to last year a level of 466 waste prosecutions, compared with
about 230 when the Agency came into existence. So I think that
those statistics actually show that we are going after those who
are dealing with waste in an illegal manner. There are still things
for us to learn, and we accept that.[7]
7 Please also see supplementary memorandum. Back
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