Examination of Witnesses (Questions 80-99)
14 OCTOBER 2004
MR MIKE
WALKER AND
MR PER-ANDERS
HJORT
Q80 Mr Thomas: Are you working with any
member or members at the moment in that way? You do not have to
name them, but I just wondered whether you were.
Mr Walker: We work with all our
members all the time and try to improve standards across the whole
of the industry. We are promoting best practice in recycling,
and have provided information on that. In terms of the Green Alliance
indicators and reporting, we have had a substantial project which
has taken place over the last 18 months to help our SMEs in particular
to put the systems in place to be able to report against the indicators.
Q81 Mr Thomas: Since we were told earlier
by the Environment Agency that SMEs were actually quite responsible
for a great number of the pollution incidents and since you have
also told us that the majority of your members are SMEs, do you
think that there any failures there in terms of education and
disseminating best practice?
Mr Walker: I am not sure whether
the Agency was suggesting that it was SME waste operators who
have caused problems.
Q82 Mr Thomas: No, probably not.
Mr Walker: That is not our experience.
There is a challenge in getting information on environmental regulations
across to SMEs; it is simply a resourcing issue. We do work very
hard. We have an active SME forum which takes presentations from
the Agency, from DTI and Defra to try to get messages out to our
smaller members.
Mr Hjort: The problem is getting
the information out to everybody else, the actual producers of
the waste and getting their understanding on how to deal with
it and that is something which to my knowledge all the operators
do on a regular basis. Whenever new legislation comes in we send
out information and there have been many changes in legislation
recently and we have to inform the waste producers of that.
Q83 Mr Thomas: You can inform your members,
but do you also see yourselves as having a wider role, in informing
your members' customers about how they should also be dealing
with this?
Mr Walker: We do that through
working with the Federation of Small Businesses and the CBI and
we encourage those organisations to get information out to their
members that way.
Mr Hjort: It is commercial; take
the waste acceptance criteria, for example. We are not allowed
to collect waste which is mixed hazardous waste and traditional
waste at the moment. If we do not inform our clients that they
cannot do that, we are in breach of the law, so we as a company
have to inform our clients and we do that on a regular, ongoing
basis. I have some examples of that, if you want to see them.
Q84 Mr Thomas: As a matter of interest,
we heard about some 11 directors who had been personally fined.
Are you aware whether any of those directors were your members?
Mr Walker: I cannot comment on
that one; I do not have the information.
Q85 Chairman: You cannot comment or you
do not know?
Mr Walker: I do not know.
Mr Hjort: We do not know.
Mr Walker: I can come back to
the Committee on that.
Q86 Mr Thomas: If that were ever to happen,
all the cases we have heard involving the Proceeds of Crime Act
or whatever, what action do you then take within your code of
conduct?
Mr Walker: We have the power to
expel or censure members or impose other sanctions.
Q87 Chairman: It just occurs to me that
were any of those 11 to have been members of ESA, you ought to
know. I am surprised that you have not been able to give us a
definitive answer.
Mr Walker: I can check.
Q88 Chairman: Can you tell us what proportion
of waste you think is being dumped illegally?
Mr Walker: It is very difficult
to say that because we do not have information on waste flows.
Waste data is notoriously inaccurate. One of the things which
Defra is proposing is a waste data strategy, something which we
have supported. We have been working with OECD and the EU to try
to develop real-time monitoring of waste flows. At the Hazardous
Waste Forum earlier this week, the Agency stated that it was moving
away from recording compliance through site inspections to a picture
of knowing where 85% of hazardous waste actually originated and
where it was going to. The fact that the first target is knowing
where 85% of hazardous waste is going shows that there is a problem
out there because we really should be aiming for 100%. There are
great difficulties. What we do know is that our members would
have expected greater amounts of hazardous waste to go through
their treatment facilities following the changes both this year
and two years ago. Liquid hazardous waste was banned from landfills
in July 2002. There has been no increase in liquid hazardous waste
going through treatment facilities since. The question is: where
has that gone? Similarly, following the ban on co-disposal this
year, there are reports that hazardous waste is not going to hazardous
waste landfills. Where is it going? Whilst nobody can say how
much hazardous waste has been illegally dumped, it is certain
that some of it is missing, has fallen out of the system, as it
were.
Q89 Chairman: Quite disturbing.
Mr Walker: Yes.
Q90 Chairman: In your evidence you refer
to the adverse impact on reputable companies of bad publicity.
Are there circumstances in which you think that bad publicity
is enough and that a fine is not really necessary?
Mr Hjort: I can answer that question,
because it is a very big concern for our shareholders. SITA is
owned by a company called Suez, which is a listed company in Paris,
working with Energy and Environment. Apart from reporting, financial
figures, because I agree with what was said earlier: in business
the bottom line is important. However, if we are affected by environmental
problems or health and safety problems or big accidents, that
is definitely one of the key problems which we, as a company working
throughout the world, must regard as a priority. Without any doubt
that is one of the areas of concern we discuss. Together with
the financial information we send out to the corporate structure
in Paris there are also included two major areas: health and safety,
and accidents and environmental compliance. These are always the
two key indicators and everything outside parameters of compliance
is a very serious matter. We do not normally put any real payback
mechanism on the investment we need to do from the reputation
standpoint, because it is the key basis for our business as a
whole. The reputation of the company is much more important in
that perspective than the financial impact because the financial
impact can be even worse going forward.
Q91 Chairman: In any case the financial
impact is often so minimal as to be almost laughable. This is
one of the issues which the ESA makes in its evidence to us and
it is something we have heard repeatedly over the course of this
year. There is no real disincentive for people, other than the
shame for a reputable company, to behave badly. What is the answer
to that? How do we create disincentives so that we can encourage
better behaviour and compliance?
Mr Walker: There is a chain of
action: crime first needs to be detected, then prosecuted and
then you need penalties in place. Key to all of that is having
better levels of detection. There can be very high penalties,
but if there is very little chance of being detected, they are
not going to act as a deterrent to criminals.
Q92 Chairman: Have high penalties?
Mr Walker: You can have high penalties,
but if there is very little chance of detection, they are not
going to act as a deterrent. Improved detection is something which
ESA has called for over the last couple of years: there should
be hit squads of trained Agency officers going out and making
sure that detection levels are much higher.
Q93 Chairman: We have a slight advantage
over you in that we have seen the government's response to our
report Environmental Crime and the Courts, which we shall
be publishing shortly. I can tell you that in that the government
say they are looking quite carefully with the Environment Agency
at the whole question of civil penalties. Does the ESA have a
position on civil penalties as a tool for dealing with this problem?
Mr Walker: It is something which
we should be happy to explore. For criminals, the penalties are
less of a problem than the detection rate. If civil penalties
were introduced for legitimate operators, we would have to see
what they would involve. The principle concern at this stage is
that the penalties are less important than the detection rate
for the illegal operators.
Q94 Sue Doughty: Back to one of our favourite
subjects, the EU Landfill Directive. There were many problems
with this, as we are all aware, with 76% of businesses being unaware
of their duty of care to ensure that waste is managed lawfully.
In the preparation you have done, you have highlighted what you
saw as the government's failure to prepare for this and to implement
the Landfill Directive as a more general example of how it has
failed to educate and inform the business community of its responsibilities.
Why are you saying this about the government? What is your opinion
about the government's action in respect of this?
Mr Walker: In terms of the Landfill
Directive, we have had five years since it was agreed at the EU
level and detailed guidance is still only just coming out from
government on what the legal obligations are on responsible
businesses. The whole implementation of the directive has been
very slow. It had led to much uncertainty within the waste management
industry, but also among waste producers. There are serious implications
for waste producers, particularly in terms of separating hazardous
waste. The concern is, in a climate of uncertainty, and where
information is not coming from the government which allows companies
to plan to build new treatment infrastructure, or for waste producers
to change the way they actually produce waste, that we end up
with a system where illegal operators can go in and offer cut
price waste management services which are themselves illegal.
Mr Hjort: I do not have any specific
information, but there are many different businesses and geographical
areas where we do not even bother to invest or even to think about
it because it is not possible for us to compete on price and at
the market level. We may be very costly, so it might be wrong,
but our gut feeling is that the price level which is prevailing
in some parts of the country is not the right price for treating
waste in the correct way.
Q95 Sue Doughty: Do you think government
has done anything to learn from this? I do not think this will
be the last in a line of problems we have had with the government
being proactive as opposed to reactive and very late in its reaction
to further waste directives.
Mr Walker: There is increasing
recognition that we need a plan for each directive as it comes
through, not just implementing it into UK law, but then how it
is going to feed down to the people who actually work within that
law. It needs to involve industry, the waste producers, waste
management industry, the Environment Agency and government at
an early stage so we have a plan. The Better Regulation Task Force
has suggested a road map for every piece of legislation which
comes out of Brussels. We would certainly support that. It is
not just talking to industry during the implementation in the
UK, but it is also agreeing the directives in the first instance
in the negotiations in Brussels to make sure that what is being
agreed is actually practicable within the time period which has
been set.
Q96 Sue Doughty: How confident are you
that the government will actually do this?
Mr Walker: We are getting the
right words from government. There is a recognition politically
and within Defra, but it remains to be seen how the process will
work out. Defra has set up a better regulation unit within the
Department itself and we look forward to working with that to
make sure that regulations are more practicable in the future.
Q97 Sue Doughty: In terms of what the
ESA did to prepare its members, how successful do you think you
were as an organisation in preparing your own membership?
Mr Walker: We have been successful
in preparing our membership on the basis of the information which
was available. One of the problems we have had is that detailed
guidance on technical issues was not settled until a very late
stage. At the moment we are still waiting for detailed technical
guidance on hazardous waste management activity and as soon as
we get that guidance, we shall make sure our members know about
it. Until that is set, our hands are tied.
Mr Hjort: As a member, I fully
agree.
Q98 Mr Thomas: I am interested in Mr
Hjort's comments about areas of the country and types of waste
that SITA does not bother with because you just cannot compete
on price. Presumably if you, as an ESA member, are not able to
compete on price then most other ESA members will not be able
to compete on price either.
Mr Hjort: Yes.
Q99 Mr Thomas: Most other members of
ESA would not be competing in that market either then. I would
assume you see yourself as competitive with other ESA members.
So the implication is that there is a whole sector or area of
the country which is just open to illegal operators.
Mr Hjort: There are different
areas geographically and by type of waste and what I mainly have
in mind is construction waste, which is quite hard to deal with
because there are many small players on all sides. The prices
and the problems with a lot of hazardous waste content are not
something we can deal with.
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