Renewable Matter # 06-07 / October-December

Why Waste is Not Treated in the Same Way

by Giovanni Corbetta

Different management approaches for different waste flows. An ethical code proposed for compliance schemes. 

 

To regularly ensure the best environmental results and the lowest costs for citizens, adequate waste treatment – from collection or where waste is generated, up to the end of the treatment process – not only requires a number of efficient and effective (physical) operations, but also, when it is not economically self-sustained, careful management based on a constant supply chain vision, planning and monitoring of activities, operators supervision and flow tracing. For these to reflect a modern and liberalistic economic approach, operations should be entrusted to one of the numerous skilled, expert, specialized and oftentimes multicode companies operating on the Italian market. Said companies, operating in a free competition environment, can ensure the best results in terms of costs and service level.

A more delicate step lies in defining the national framework for management of the different flows, also depending on the type of waste, that is:

  • originated from public domain or road sweeping;
  • urban waste, generated by households;
  • special waste, generated in industrial sites, small-owner operated companies, commercial sites.

The industry creating waste, its origin, as well as “the environment” waste belongs to, lead to extremely different flows, which, in their turn, not only require different operating treatments, but also different management approaches.

 

The Four Basic Approaches 

The basic framework must be established by the Ministry of the Environment, as the highest decision-maker in the country that, directly or via an Agency, may alternatively:

1. directly report to all management operators. This approach may only work if citizens and businesses have profound civil conscience, but especially if the central Authority, in charge of the system operations, can ensure excellent governance and supervision. This may be defined as an individual responsibility approach for operators or the free market, involving competition-driven costs and service levels;

2. hold local authorities accountable for management, as they can partially operate directly and indirectly. This approach requires competent and efficient public administration (PA), having large organization, management and executive skills. This is a PA responsibility approach, involving costs depending on taxation and service levels imposed;

3. hold a representation of supply chain operators accountable for planning and supervision. This is a supply chain responsibility approach, involving costs, service levels and operations depending on the constant compromise between different interests and priorities;

4. hold manufacturers accountable, according to the principle of extended responsibility of producers, which are the ones that, more than anyone else, aim at limiting costs for citizens and providing the highest service level.

 

Extended Responsibility: The Most Rewarding Approach

For most flows, non-municipal waste and industrial waste, extended producer responsibility (EPR) is considered as a rewarding approach (as confirmed by the EU Legislature). Indeed, it is intrinsically successful, as producers:

  • are committed to managing waste to prove that their products do not harm the environment or human health; 
  • are stimulated to decrease selling prices as much as possible (environmental fee) and to consequently design goods and products that can be more easily recycled, eliminating construction materials and solutions that increase costs for waste recovery; 
  • are motivated to ensure good service levels in downstream production, distribution facilities and to consumers;
  • are excluded from the different steps of waste management, having more opportunities, on the one hand, of ensuring supply chain independence and integration and on the other, of facilitating role distribution, thus significantly reducing conflicts of interest;
  • are interested in returning derived products to the market (basic concept of the circular economy). 

Furthermore, extended producer responsibility (EPR) facilitates dissemination in public services of the efficiency culture typical of business. On the other hand, the public administration maintains its original rights to represent citizens, establishing targets and monitoring progresses made towards them.

 

The Essential Principles of EPR Organizations

For organizations based on extended producer responsibility (EPR) to be successful, some essential principles must be complied with. They could be summarized as follows:

  • management bodies must be independent, having adequate legal entity, totally committed to achieving their aims and being excluded from other activities;
  • Statutes must be specifically approved by the Ministry of the Environment; 
  • no direct or indirect (via shareholding) profit making must be permitted;
  • bodies in charge of management must exclusively include producers/importers, that is parties that put goods on the market;
  • Boards of Auditors must include one appointed member of the Ministry;
  • Statutes must include procedures of reporting to the Ministry of the Environment, both in compliance with ministerial provisions and to aim at achieving complete traceability of flows managed;
  • top representatives must sign a voluntary “Ethical Code,” possibly fostered in cooperation with the Ministry of the Environment;
  • the entire national territory must be served, for all types of waste included in the framework of the relevant management mandate;
  • operations must not be entrusted to companies owned, subsidiaries or companies controlled directly or indirectly. Contracts must be assigned by open tendering in which all companies having minimum requirements may participate;
  • transparency must be ensured, via the publication on the Internet of relevant information and data (organization model, members, partners, financial statements) envisaged by the Ministry of the Environment;
  • the relevant fee must be established in proportion to global management costs and must not take into account any commercial or financial aspects. Documentary evidence of calculation of said fee must be provided to the Ministry of the Environment.

 

 

Weaknesses of non-EPR organizations

Different management approaches, other than EPR, may be adequate for certain types of waste flow. However, they involve some delicate issues: 

  • the “Public Administration responsibility” approach involves two relevant concerns: the conflict of interest between the controlling party (the PA as administrator) and the controlled party (the PA as representative of service recipients) and the mismatch between tools available (established to manage public resources) and tools required to ensure high efficiency and effectiveness;
  • currently, the “free market” approach is not in line with civil conscience of citizens, businesses and other stakeholders and with the PA’s possibilities to carefully and frequently monitor and supervise;
  • the “supply chain responsibility” approach involves distribution among the relevant representatives of production materials supply, goods production, collection, transport and treatment of waste and use of derived materials. A self-referential hub risks being created, which must constantly achieve a delicate internal balance. Indeed, supply chain stakeholders have conflicting operating and economic targets and often tend to favor their representatives and not citizens/consumers. 

It is often reported that the aforementioned three types of approaches involve waste of resources, inefficiencies, increasing costs, unsatisfactory service, non-transparent conduct. Therefore, if such approaches were implemented, it would be necessary to make some amendments. 

 

Ethical Code For Compliance Schemes: a Draft to Be Discussed

The proposal envisages for organizations willing to obtain and keep the authorization given by the Ministry of the Environment to manage a waste supply chain, to mandatorily deliver their Statute, but also their Ethical Code, signed by the top management members (chairman, CEO, general director), envisaging at least the following commitments:

1. Incorporate/maintain organizations with independent management:

  • completely and exclusively dedicated to the waste supply chain, as identified in their Statute and having the sole aim explicitly described (e.g.: planning, control and tracing of flows; management of current activities, of development and of communication; administration of the relevant fee);
  • involving activities limited to those strictly required to achieve their aim and not any other activity, in particular operating activities, to avoid any conflicts of interest with their role as impartial supply chain managers;
  • constantly based on objectivity, transparency and non-discrimination.

2. Avoid any related marketing activities for the organization and avoid any potentially disruptive competitive conduct, regarding management of both waste and products generating it. Ensure the highest confidentiality to all members, both inside and outside the organization. 

3. Exclusively accept membership of companies selling specific goods/materials that will be part of their management scope, once at the end of their life. Ensure all members fair treatment.

4. Facilitate the involvement and activity of a member appointed by the Ministry in the Board of Auditors.

5. Avoid transferring any direct or indirect economic benefit to the other members.

6. Outsource individual operating activities that cannot be carried out by companies owned, subsidiaries or companies controlled directly or indirectly, to companies selected via tendering procedures open to all companies having minimum requirements declared.

7. Ensure that the entire national territory is served, for all types of waste included in the scope envisaged by regulations, with no discrimination in terms of collection and treatment. 

8. Constantly disclose to members opportunities to put on the market goods/materials that can be more easily recycled, redesigning products and eliminating construction materials and solutions that increase costs of waste recovery.

9. Ensure citizens actual transparency on all activities conducted, via the publication on the Internet of relevant information and data (organization model, members, partners, profit and loss account, development projects).

10. Immediately report to the Ministry of the Environment any changes made to the Statute and to the Ethical Code after they are approved.