In the fourth part of our series on contract management pitfalls, we look at the risks arising out of varying the terms of construction contracts.
The past decade has seen the UK undergo a transformation in the way it views waste. While 10 to 15 years ago we threw everything in the same bin without a second thought, we are now – correctly – encouraged, and indeed often required, to recycle our refuse. Yet while the improvement in our recycling rates has been nothing short of extraordinary, it remains the case that things could be better.
After a recent judicial review concluded that the Waste (England and Wales) Regulations 2011 fail to comply with European law, local authorities have been left in limbo while DEFRA and the Welsh Ministers look to draw up new regulations that do comply. Our client, UK Recyclate, sought the Judicial Review because it is concerned about the quality of recycling. About half of councils in England and Wales collect recyclable materials through co-mingling, where waste streams (such as paper, glass, plastic and metal) are collected together and then separated later.
However, this approach does not guarantee high-quality waste which can then be recycled, and it does not greatly improve the UK’s true rates of recycling. Given that situation, it is vital that DEFRA and the Welsh Ministers act swiftly to ensure amended regulations comply with Europe-wide rules on recycling to give councils clarity over how they should act.
UK Recyclate, our client, is a leading member of the Campaign for Real Recycling which represents some 80 per cent of the UK’s reprocessing industry, which handles both domestic and commercial recyclable waste. Clearly it is in a good position to judge the quality of the waste that is collected for recycling. After UK Recyclate sought the Judicial Review in December 2011, the defendants, DEFRA and the Welsh Ministers, conceded that current regulations do not comply with the European Directive. They then subsequently announced a consultation and plans to amend the English and Welsh regulations that bind local authorities.
However, in April, during the consultation process, we were forced to challenge the amended regulations because we believed they still failed to comply with European law. At the time of writing, UK Recyclate has just received further-amended regulations. DEFRA and the Welsh Ministers have been put on notice that the further-amended regulations are still not compliant.
The upshot of this is that local authorities have been left in a tricky situation. As mentioned earlier, about half the councils in England and Wales currently use co-mingling, rather than asking people to separate their own waste or separating waste at the kerbside. The majority of those who use co-mingling are in England and it is those who face the largest potential financial liabilities.
Clearly it is likely that in order to comply with European law, DEFRA and the Welsh Ministers will need to amend regulations in a way that makes continued co-mingling impossible for hundreds of local authorities. That would mean huge financial implications for many councils as they make the changes needed to switch to the separate collection of the different waste streams.
However, it is important to stress that this is not unnecessary meddling by a trade consortium. The view of many in the recycling industry, including our client, is that co-mingling does not achieve the high-quality recycling that is needed for the UK to both meet strict targets and ensure that recyclable items can be reused or reprocessed and not lost to landfill.
Unfortunately, because the English government and Welsh Ministers are struggling to effectively amend their regulations to comply, local authorities are currently in a state of limbo. They need to begin putting in place procedures to comply with the requirement to introduce separate collections by 2015 but it is uncertain (and indeed unlikely) whether they will be able to continue to opt for co-mingling. Furthermore, those local authorities that do decide to continue collecting streams of recyclable waste together rather than separately open themselves up to further challenge by another Judicial Review.
Those councils currently tied into waste collection and recycling contracts, whether co-mingling agreements or otherwise, are being forced to watch nervously from the sidelines as DEFRA and Welsh Ministers work to comply with Europe. Worse, however, is that those local authorities without contracts in place are unable to specify the service needed for fear of being locked into recycling practices that contravene the European directive. Bidders from the waste collection industry may be keen to accept broad brush mechanisms to permit changes in the service once a contract is in place.
All of this is impacting on the UK’s reputation as a place that takes recycling seriously. If we expect our citizens to be diligent in separating waste then authorities should be equally rigorous in ensuring regulations are compliant with the EU. Local authorities need clarity to operate within the law and to recycle effectively. We look forward to hearing back from DEFRA and the Welsh Ministers to resolve the situation in a way that suits all parties.
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