Examination of Witnesses (Questions 360
TUESDAY 2 JULY 2002
360. There is something peculiar going off here,
because the Minister told us yesterday that it was the market
that would operate, and the market would find a way, and this
was a private sector operation, and you would see the light and
show us how to do it?
(Mr Hazell) Of course, the market will operate if
the framework for that market operation is set; but waste is,
in a sense, a distress purchase. I do not imagine that any member
of this Committee spends his quality time going round at the weekend
looking for waste to buy. People want to get rid of their waste
in the cheapest way the law allows, and sometimes, unfortunately,
in ways that the law does not allow. So if you want to build a
hazardous waste infrastructure it has got to be driven by regulation,
and the Government has got to set a strategy within the European
framework; and that, we would submit, they are signally failing
361. Can I just pick up that last point, before
I deal with something I was going to pick up. Would you regard
the Government being more clear on regulation as being a strategy,
or how do you see clear regulation and a strategy going together;
you seem to interchange between the two, I was not quite sure
whether you see a strategy as something separate from the Government
being clear what regulations he wants to see enforced?
(Mr Hazell) The Government has got to say what outcomes
it wants to achieve. We are very clear, and I have to say that
we are sometimes brought into the turf war between the Agency
and the Government, and we would actually prefer, we want the
Agency to be very well resourced to do its core regulatory function,
we do not really think we need yet another green NGO, but we want
the Agency to focus on that, and we want the Government to govern.
We have not got any signals about the strategy; and Leslie can
certainly give you examples of imminent issues, in the next two
weeks, where we do not actually know what the regulatory framework
is going to be. Do you want to comment?
(Ms Heasman) Yes; if I could follow up on that. One
of the bottom lines of a strategy is to set out the dates and
the criteria which are to be met, and then you go on to discuss
how best they can be met. In 14 days' time, hazardous liquids
will be banned from landfill; we still do not have an agreed definition
of what a liquid is. In 14 days' time, corrosive hazardous waste
will be banned from landfill; we do not have an agreed definition
of what corrosive is, in terms of what will be banned and where
the line will be drawn. We do not have a date on when the Acceptance
Criteria for hazardous waste will be brought in; we do not have
a date on when the Acceptance Criteria for non-hazardous waste
will be brought in. We do not have a date on when the pre-treatment
requirements for non-hazardous waste will be brought in; we do
not know what the Acceptance Criteria are. We have been told,
as Mr Hazell has mentioned, that the draft Criteria were not going
to change much, the industry should go ahead and invest, and,
lo and behold, to the surprise of the Agency and, indeed, of DEFRA,
to the surprise of everybody, these standards, indeed, changed
in the draft decision document last week. There are huge additional
uncertainties in interpretation, in ambiguity, in the wording
of the Directive, which has been transposed, almost verbatim,
into the Landfill Regulations, for obvious, understandable reasons
of minimising infraction proceedings. But alongside that what
is absolutely necessary, and has been asked for, for many, many
months, is some decision on how these ambiguities are going to
be interpreted, what the policy is on what the meaning is going
to be, of each of those aspects of the Directive; and there is
huge confusion out there. And these are issues that are going
to begin to bite in 14 days' time, there is going to be an absolutely
crucial decision period in 2004, and if we do not know now what
the answers to these things are the industry is not able to make
decisions on what to spend these amounts of money.
(Mr Hazell) Can I ask how that affects Cleanaway,
in terms of the immediate future?
(Ms Weeks) I think Leslie has more or less set it
out. You cannot go to your shareholders and ask them for vast
amounts of money, because most of the hazardous waste infrastructure
facilities will cost in the millions of pounds to set up, you
cannot go there and ask for those kinds of resources, unless you
can actually put forward a business plan, saying that, "If
you give me this amount of money, I will get this amount of waste
in over a period of time." The UK waste management industry
is in private hands, and it is no embarrassment to say, yes, we
have to make a profit, so we need to know where the waste is coming
from and we need to know that, if we build the facility, waste
will be directed towards it, and not be allowed to go to the cheapest
legal option down the road.
362. I wonder if you could elaborate a little
bit more on the perceived turf war between the Environment Agency
(Mr Hazell) We always resist invitations to get involved;
but the Agency
363. Do not resist too hard here, this is the
time to tell us; you have wetted our appetite now, on this?
(Mr Hazell) What I would preface my comments by saying
is that, with the appointment of the current Chairman and current
Chief Executive of the Agency, the rhetoric that is applied towards
our industry has vastly improved, and there is a much greater
realism, and at personal levels we have quite good relationships
with some officers of the Agency. But, particularly when relevant
skills are so scarce in officialdom, we really do need certainty
about who is supposed to be doing what; and there is an uncertain
boundary, in our perception, about who is driving waste policy.
And ESA's position has been a very, very consistent one, it is
difficult really to go too far beyond it, which is that the Government
should govern by setting the strategic policy, should set the
law, and then it is for the Agency to apply the law. And I would
just offer the thought that it creates perhaps unnecessary complexity
when the Agency start making expressions of views on policy, particularly
when they conflict with the policies of the Government, where
those policies happen to exist. So we do need a bit more focus,
and we certainly need, from our point of view, much more engagement,
in a much more detailed way, with DEFRA officials; as I said,
I do not think that the Sixth Environmental Action Programme has
ever been discussed with us, in a context where there is co-decision
with the European Parliament, and, as you know, a strong Environment
Committee in the European Parliament, with a British Chairman.
It cannot make sense for DEFRA to fail to discuss with us the
long-term strategy at the European level, because, sooner or later,
it is going to hit home here. So I am going to resist the temptation,
I think, to get too specific, if I may, because I think one starts
to get into personalities; that is not very helpful. But I think
it is pretty clear, from public statements made by the Agency,
that they have policy-making aspirations, and we would resist
364. Could you possibly find one or two examples;
if there are written and publicly available differences, it would
be very helpful for us, at your earliest convenience, to have
some examples of those?
(Mr Hazell) Yes, we will do that.
365. I wonder if I could just go back to Ms
Heasman's evidence. I just wanted again to take an understanding
in an area which I still find complicated; but you were making
it very clear, in your list of criteria, as yet undefined, that
there were going to be problems. Am I right in thinking that,
against that background, by 16 July, people are going to have
to decide whether or not they are going to be in the hazardous
or non-hazardous waste business, in terms of landfill sites?
(Ms Heasman) Yes; the decision needs to be made and
the documents submitted by 16 July at the latest, the Site Conditioning
Plan, where the site operator determines whether or not they wish
to be hazardous.
366. Just to be clear, and this is a matter
of fact, that decision is going to have to be taken by companies
against a background that, if we had the Heasman list here, of
the ill-defined or undefined, they are going to make a decision
about what they want to do on their landfill sites, whether they
become a mono-site for hazardous waste or they stay in the field
of non-hazardous disposal, against a background where there are
not clear definitions of exactly what it is they are actually
going to have to deal with?
(Ms Heasman) That is absolutely right. Just to confuse
it slightly further, there is one choice that they can put off
for another two years; they can opt to be, what is being called,
an interim hazardous site, between the period 2002 and 2004, and
then at 2004 they must make the final decision on whether they
are going to go back to being a non-hazardous site or remain as
a hazardous site.
367. Again, if I have understood correctly,
what you are saying is that we could have a situation, because
of this evolving policy, that materials would be put into hazardous
waste sites, in such a way that we are not quite clear what happens
to them in the future, there are liability issues which are as
yet undefined, because of this lack of clear definitions; so there
is really a sort of growing recipe for uncertainty, both in terms
of the physical security, the degradation of the material, as
well as the legal liabilities?
(Ms Heasman) That is correct, yes.
368. And that means, presumably, that people
are not going to want sites designated as hazardous, because it
is going to be a long-term problem, like a run-down nuclear power
site, or something, there is going to be leachate pouring out
all over the place, and people do not want that kind of problem?
(Ms Heasman) The problem is not leachate pouring out
all over the place; the problem is the investment and the infrastructure
necessary to collect and treat that leachate in the long term.
369. But your evidence says, you are saying,
so far as I hear it, that if it is a mixed site, you have got
hazardous and non-hazardous waste all jumbled together, there
is some biological, or whatever it is, interaction, which makes
the hazardous waste safer, right; that does not occur if it is
just hazardous waste?
(Ms Heasman) That is correct.
370. So it is more of a long-term problem?
(Ms Heasman) It is a long-term problem. If the waste
is treated to meet the Waste Acceptance Criteria before it is
landfilled then that problem is lessened. The particularly difficult
period, which is not acceptable, is if co-disposal is banned on
the date that is set in the Directive, which is `04, and the Acceptance
Criteria are not brought in at exactly the same time.
371. And treatment is not required?
(Ms Heasman) Exactly; in the interim period, yes.
372. But the uncertainty about this could well
mean that we will not have the number of hazardous waste sites
that we need; is that the problem?
(Ms Heasman) That is certainly a very likely problem.
You must also remember that there are opportunities for non-hazardous
waste sites to accept stable, non-reactive hazardous wastes that
have been subject to an even greater level of treatment than those
that can go into hazardous waste sites. So it is not that there
is no route for hazardous waste disposal, it is a different route,
and more stringent treatment criteria will apply.
373. So is there a danger that, if this is not
decided, there is landfill disposal of untreated hazardous waste?
(Ms Heasman) I do not think that will be acceptable
374. But is there a danger that that will happen,
if there is not a requirement to treat it?
(Ms Heasman) I do not think the Agency will permit
that to happen, because the risk assessments would not permit
that to happen.
375. But there could be a shortage of facilities?
(Ms Heasman) Indeed, there could be a shortage of
facilities, which would require, potentially, storage until the
treatment facilities were available.
376. And the facilities could be patchy all
over the country, because there is no national strategy?
(Ms Heasman) Exactly.
377. I want to be clear in my mind on the question
of self-interest. What you are saying, when you are saying "We're
all alone in the world and the Department doesn't consult us and
they wont talk to us, and we're getting such a chilly reception,
we've got to go back and huddle round our incinerators to get
warmed up again," is that your self-interest is a more high
profile industry, the firms do business in Europe as well as here,
they want that level of standards, and that level of investment,
that level of power, you want to aggrandise your industry. Whereas
you are accusing the Department of wanting a cheap-jack industry,
which they might interpret as a lower burden of costs on British
industry generally. Is that the essence of the self-interest on
both sides, or am I being unfair, as usual?
(Mr Hazell) I am not accusing DEFRA of wanting to
continue with the cheapest possible arrangements they think the
law will allow; we simply do not know, and the PIU has yet to
report, and, as far as the municipal waste stream is concerned,
the current public sector spending round has yet to be announced,
so we simply do not know. And what I am trying to signal, as clearly
as I can, is that what the industry desperately needs is certainty;
and once we have certainty about the types of outcomes the Government
wishes to achieve, our members can then start to consider what
type of infrastructure it is appropriate to invest in. The reality
is that the European Union, as an entity, is trying to drive forward
environmental standards in a particular way for the European economy,
which is pretty well the largest in the world, as you know, and
the overriding priority for the European Union is to try to tackle
global warming, and the second priority is to try to deal with
waste management. And various components of the Sixth Environmental
Action Programme then, the resource use and the recycling component
particularly, deal with our sector. So we are looking at a restructuring
of the economy, which, whatever happens, will increase the amount
that is spent on environmental services; we are about half a per
cent of GDP at the moment, if you take The Netherlands, it is
about one and a half per cent of GDP, and we think, probably,
if you get up to about 1 per cent of GDP here, you have got broadly
the right outcome for this industry. So, of course, there is selfinterest,
but self-interest can be very enlightened. I think, with the greatest
respect to you, when you go to your voters, you put forward a
package that you think will be attractive and in their interest
and in yours, and that is, I think, a very good analogy with what
this industry is trying to do. But we are also being, I think,
very, very responsible in what we are saying as an industry about
untreated hazardous waste going to mono-landfill. And there is
another analogy that you could use, it is not perfect, but it
is to say that, if you, as Parliament, decided you wanted to change
the side of the road on which people drive in this country, you
have got to have one day on which you do it, you cannot just let
everybody do it at their own speed, because you will get unfortunate
results. So we are trying to be responsible, but, I think, in
a context where so much of the investment in infrastructure has
yet to be made, you probably have more reason for trusting our
motives than you would with a sector that already had a great
deal of infrastructure in place; because the reality is there
is a shortfall, and, as Ernst & Young said, I think it is,
six to seven billion of infrastructure, and it is obvious, when
you look at the rest of the European Union. So we can go whichever
way the Government sends us, but we just need to be told.
Mr Mitchell: I accept that, I am not arguing
that, there is virtue in getting up to European standards, certainly.
Can I turn to Gill Weeks now. I did not have the pleasure of visiting
your high temperature incinerator, which has so enthused the Chairman
that he seems to want to spend the rest of his career as close
to it as possible.
Chairman: I have got plenty of rubbish in my
office to get rid of.
378. It has obviously been an impressive experience.
I could not come because there was a Mayor-making in Grimsby,
where we do not use high temperature incineration. But, as I understand
it, the cement industry uses waste as a kind of substitute fuel,
and that is classified as recovery, whereas the high temperature
incinerators are classified as disposal. Now you want, I take
it, more of the material classified as recovery status going to
high temperature incineration; so what is the future of high temperature
(Ms Weeks) At this particular moment in time, the
future of high temperature incineration is bleak, really; we have
gone from four merchant plants down to two, so the UK has just
the two plants, one up in Ellesmere Port and one down in Fawley;
and this is substantially less hazardous waste incineration capacity
than is available in most other similar Member States. And the
reason for that, we believe, is because the hazardous waste in
those Member States is being more directed, so, again, the strategy
of those countries is saying that certain wastes are suitable
for blending, certain wastes must be incinerated. The market is
being totally skewed, at the moment, because we are getting hit
from all sides in the hazardous waste incineration market; we
are not being afforded recovery status, so the customer who produces
the waste has a driver, because of Government policy and strategy,
which is quite correct, to say that he should recycle or recover
more of his waste, rather than dispose of it, so that is pushing
waste towards the cement kilns and away from the hazardous waste
incineration. So even if we take our prices down to the cost of
the cement kilns, blending, the customers are saying, "Well,
we'd still rather send it to the cement kilns because we get more
points on our EMAS score." Now we feel particularly aggrieved
about that, obviously, because we have to have a lot of back-end
clean-up on our incineration plant, we have to have the plant
complying in all respects with the Waste Incineration Directive,
so the wastes are moving in that way. The other issue is that
waste can be blended, so something with a very low CV, or with
a high metal content, can be blended into the clean waste streams,
and that producer still gets recovery status as well. And one
of the earlier Select Committees, one of their recommendations
was that the Government or the Agency should draw up a list of
wastes which were, I cannot remember whether it was more suitable
or not suitable to go to cement kilns, but, in other words, directing-waste
in the right way. And I think this comes back really to what we
are asking for in a strategy is, quite simply, does the UK Government
want high temperature incineration for the future; because if
it does then we need to have wastes coming in our way, the market
alone will not deliver, because it will always be cheaper to blend
waste and burn it in a cement kiln than it will to burn it in
a hazardous waste incinerator, just simply because of the technology
employed. And you have to remember that in the cement industry
it is replacing coal, so they are paying for coal and then replacing
that with wastes that they get paid to take; so the net gain to
the cement industry is quite significant. We do not have that;
we may have to burn fossil fuel in order to burn the more hazardous
wastes, if we cannot keep getting the high calorific value.
379. But you recover energy from high calorific
(Ms Weeks) We use the high calorific value energy
in our plant to burn the wastes which are the most hazardous.